Condemnation actions—In rem or quasi in rem?
State and local authorities with the power of eminent domain routinely condemn land necessary for public purposes, such as roads and bridges. In acquiring land for public purposes, it is vitally important for the governmental authority to obtain clean title to such land so that it does not face some competing claim to the property at some point in the future, perhaps even after the public project has been completed.
Until fairly recently, an Illinois condemnation proceeding was thought to be in rem in nature. In such a proceeding the condemnation is brought against the property itself as opposed to the persons having an interest in the property. The advantage to this type of proceeding to the condemning authority is that a judgment is binding on “the world” and not just on those who were named as parties in the lawsuit. Therefore, the condemning authority would obtain title free and clear of any previously existing encumbrances.
In addition, an in rem action cannot be collaterally attacked, even by a person who was not named as a party but should have been. The proper course of action for such an aggrieved party would be to seek that person’s appropriate share, if any, from the condemnation proceeds.
However, unlike in rem jurisdiction, quasi in rem jurisdiction is only binding upon the parties properly before the court. If someone with an interest in the property being condemned is not properly brought before the court in a condemnation proceeding considered quasi in rem, then any judgment granting title and possession to the condemning authority could be attacked by such person after the judgment has been entered.
In reality, there have been very few Illinois cases concerning how an eminent domain action should be viewed. One of the few cases to address this issue was City of Crystal Lake v. LaSalle National Bank, 121 Ill.App.3d 346 (2d Dist. 1984), in which two different municipalities filed condemnation actions involving the same land. Because there were no cases directly on point, the trial court relied on a California case holding that, because a condemnation case was an in rem proceeding, the first authority to obtain jurisdiction over the property by the filing of a condemnation action would have priority. The 2nd District appellate court found this reasoning persuasive and so ruled. (It should be noted that, at the time the California case was decided, the California eminent domain statute provided that a condemnation judgment “shall have the force and effect of a judgment in rem.”)
Over 25 years after the Crystal Lake decision, the 2nd District appellate court (again) issued its decision in Village of Algonquin v. Lowe, 2011 IL App (2d) 2100603. The Village had filed a condemnation action to acquire some platted streets and parkways, some of which had never been built. In its pleadings, the Village alleged that there might be unknown persons existing with assorted interests in the property and named those persons as defendants under the designations of “unknown owners” and “non-record claimants “(claimants). The Village sought to provide sufficient service of process over these claimants by having notice of its condemnation action published. The trial court then entered a default judgment against all parties who had not appeared, including these claimants, and entered a final judgment for the Village.
About two and a half years later, the Nagels, claiming that they had a driveway that existed in part on the land taken by the Village, filed a petition to vacate the judgment claiming that they had not been properly served. They also argued that the Village knew, or should have known, about their use of the driveway based on letters written to the Village. The trial court granted the Nagels’ petition, thereby finding that the judgment was not binding on them, and the Village appealed.
In affirming the trial court’s decision, the appellate court found that condemnation actions do not “bear formal markers of being in rem” (such as the property itself being named as the defendant) and that the Illinois Eminent Domain Act did not contain the specific language stating that condemnations should be treated as in rem actions, as the California statute did. Therefore, the court did not consider the case an in rem proceeding. As a result, because the Village provided no evidence of any specific attempts to locate non-record owners, the requirements of the statute providing for service by publication had not been met, service by publication was not effective against the Nagels and they were not bound by the judgment.
While the Illinois Supreme Court or another appellate court could reach a different conclusion, it appears that current Illinois law views condemnations as quasi in rem proceedings that will only be binding against parties properly named and served in the case.
The Illinois Code of Civil Procedure contains provisions under which a condemning authority can make “unknown owners” and “non-record claimants” party defendants. In view of the Lowe decision, it now appears that condemning authorities will need to specifically demonstrate what steps were taken to identify both “unknown owners” and “non-record claimants” prior to attempting to serve those parties by publication. However, the Lowe case seems to indicate that if a condemning authority knew or should have known that a party had an unrecorded interest in the property, service by publication may not be sufficient and any judgment rendered in the condemnation action would not be binding on any party not properly before the court. ■