Tax Lien Purchaser Loses $1 Million Breach of Contract Suit against the Law Bulletin

A company that purchases tax liens in order to obtain tax deeds to properties sued Law Bulletin for breach of contract over a misprinted hearing date in a Take Notice, which the company alleged cost it $1 million when the circuit court denied the company’s tax deed application due to the misprint. Following a trial, the jury entered a verdict in favor of Law Bulletin and against the company finding that the company had not fully performed its obligations under the parties’ contract. The First District Appellate Court affirmed finding that the trial court had not committed an error in denying the company’s pre-trial motion for summary judgment or mid-trial motion for a directed verdict.

Every year, Wheeler Financial purchased hundreds of tax liens from the Cook County Treasurer’s Office at the annual auction to sell tax liens on properties with delinquent tax bills. Under the Illinois Property Tax Code, if the property owner fails to satisfy a tax lien by paying the amounts due within the applicable redemption period, the tax lien purchaser may obtain fee simple title to the property. To obtain title to the property, the tax lien purchaser must apply to the circuit court for a tax deed and publish a Take Notice in a newspaper giving the property owner certain information including the hearing date on which the petition for tax deed will be heard by the court.

Law Bulletin publishes these Take Notices in its newspaper, the Chicago Daily Law Bulletin. Wheeler Financial used the Law Bulletin exclusively to publish its Take Notices for 15 years, publishing between 1000 to 1600 Take Notices annually with the Law Bulletin during that time. In one instance, Law Bulletin misprinted the hearing date for the tax deed for a particular property. When the circuit court discovered that the wrong hearing date had been published in the Take Notice, it denied Wheeler Financial’s petition for a tax deed.

Wheeler Financial filed a two-count complaint against the Law Bulletin, alleging breach of an oral contract and alternatively a breach of an implied contract. After the court denied Wheeler Financial’s motion for summary judgment, the case proceeded to trial. Law Bulletin defended the case by arguing that Wheeler Financial had not performed all of its obligations under the parties’ contract when Wheeler Financial’s agent, Midwest Real Estate Company, failed to review the first publication of the Take Notice or notify Law Bulletin of the error in the hearing date in time for it to republish a corrected version.

At trial, Law Bulletin presented evidence of a 15-year course of dealing between the parties, which it argued, qualified the terms of the contract and required Midwest to review the first publication of the Take Notice for accuracy and notify it of any errors. Law Bulletin also presented evidence that the masthead, an introductory paragraph located on the inside of the newspaper, of the Chicago Daily Law Bulletin, stated that Law Bulletin was not responsible for errors in advertisements after the first publication if not advised of the error by the advertiser. The jury ultimately found that Wheeler Financial did not fully perform its obligations under the contract and entered a verdict in the Law Bulletin’s favor. Wheeler Financial appealed.

On appeal, the Court began its analysis of Wheeler Financial’s breach of contract claims by noting that “[a] prior course of dealing between the parties may be considered when determining the terms of an oral contract.” After reviewing the evidence presented at trial, the Court concluded that “Wheeler was contractually obligated to have Midwest check the first publication of each batch of Take Notices . . . and report any errors to [the Law Bulletin], who would republish the corrected Take Notices.”

You can read the Court’s full opinion here.

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