Court Finds Foreclosure Filing Fee Unconstitutional

Court Finds Foreclosure Filing Fee Unconstitutional

Industry Update
August 5, 2021

Source: DS News

Additional Resource:

Diaz Anselom & Associates P.A. (Illinois Supreme Court Finds Fifty Dollar “Add-On” Foreclosure Filing Fee Unconstitutional)
*Original article

Editor’s note: This article initially appeared in the newsletter of Diaz Anselmo and Associates, a member of The Five Star Institute’s Legal League 100 group. 

The Illinois Supreme Court accepted jurisdiction and consolidated two appeals to consider the constitutionality of section 15-1504-1 of the Illinois Code of Civil Procedure (“Code”) and sections 7.30 and 7.31 of the Illinois Housing Development Act (“Act”).i Walker v. Chasteen, 2021 IL 126086 (IL June 17, 2021). The Code created a $50 add-on filing fee to be paid by foreclosure plaintiffs upon filing a foreclosure complaint while the Act created programs to be funded by the fee.ii The $50 fee was earmarked for the Foreclosure Program Prevention Fund which funded programs aimed at preventing foreclosure through counseling and education and funded grants used to maintain and improve abandoned properties.iii

The appellants were foreclosure plaintiffs who were required to pay the $50 fee but challenged the constitutionality of the fee claiming it violated the equal protection, due process, uniformity, and ‘free access’ clauses of the Illinois Constitution of 1970.iv The plaintiffs “sought declaratory and injunctive relief and a return of all filing fees paid pursuant to section 15-1504.1.” The defendants (all Illinois circuit court clerks and the State of Illinois through the Attorney General) argued the statutes were constitutional and even if not “that the voluntary payment doctrine precluded plaintiffs’ claims because they did not pay the filing fee ‘under protest.’”

The circuit court considered the issues on cross-motions for summary judgment and found in favor of the plaintiffs. The court concluded the statutes were “facially unconstitutional” in violation of the “free access, equal protection, due process, and uniformity clauses of the Illinois Constitution…” The court also concluded the voluntary payment doctrine did not apply because the plaintiff’s paid the $50 filing fee under duress. The Attorney General and the clerks from two counties (Cook County and Will County) appealed the permanent injunction which enjoined the circuit courts from charging the filing fee and enforcing the statutes.

The Illinois Supreme Court accepted jurisdiction and first considered whether the voluntary payment doctrine applied; explaining, if it applied, then the constitutionality of the $50 fee would not be considered.v Under the voluntary payment doctrine, one who voluntarily pays money “with knowledge of the facts” cannot later recover that money “on the ground that the claim was illegal.” The Court reasoned that plaintiffs did not have a real choice not to pay “since they would have lost a substantial right” – access to the court system – if they opted not to pay the fee.vi The Court concluded “that duress necessarily and inherently exists in court-filing fee cases.”

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