Forfeited Land Comm'n of Bamberg Cnty. v. Beard, Appellate Case No. 2014-002727
| Decision Date | 20 June 2018 |
| Docket Number | Appellate Case No. 2014-002727,Opinion No. 5570 |
| Citation | 424 S.C. 137,817 S.E.2d 801 |
| Court | South Carolina Court of Appeals |
| Parties | The FORFEITED LAND COMMISSION OF BAMBERG COUNTY, Plaintiff, v. Eartha Dean Moody BEARD, et al., Ralph Johnson, et al., of whom Ralph Johnson is answering as Defendant-Third Party Plaintiff, v. Bank One, N.A., Conseco Finance Servicing Corp., Equity One, Inc., JPMorgan Chase Bank, National Association, as trustee for the C-Bass Mortgage Loan Asset-Backed Certificates, Series 2005-CB2, and Mark D. Johnson, John Doe and Mary Roe, fictitious names representing any unknown minors, incompetents, persons in the military, persons imprisoned and persons under any legal disability and Richard Roe and Sarah Doe, fictitious names representing unknown devisees, distributees, or personal representatives of Lillian G. Brown, Geraldine G. Reed, Retha G. Greggs, Lillie D. Gray, George Davis, Julia Davis, Vivian Davis, Margaret Davis, Lillie Mae Davis, Lecia Rice, Roy H. Setzler, Dyan Setzler, Lucious Wright, Julia Jones, Edith K. Gilmore, Eddie Grimes, Henry C. Guess, Willie Thompson, Bessie Thompson, Annie Mae White, and also all other unknown persons claiming any right, title, estate, or lien upon the real estate which is the subject of this action, Third Party Defendants, Of Whom Ralph Johnson is the Respondent and Coretta McMillan is the Appellant. |
Michael C. Tanner, of Michael C. Tanner, LLC, of Bamberg; Zipporah O. Sumpter, of Sumpter Law Office, and Thomas Ray Sims, Sr., of Thomas Ray Sims Attorney, both of Orangeburg, for Appellant.
James Martin Harvey, Jr., of Harvey & Kulmala, of Barnwell, for Respondent.
Coretta McMillan appeals a circuit court order quieting title in favor of Ralph Johnson for a property he purchased at a tax sale. On appeal, she argues the circuit court erred in (1) failing to overturn the tax sale despite concluding the notice of levy was not posted on the property, (2) finding the two-year statute of limitations expired prior to McMillan filing her counterclaim, (3) ruling the Forfeited Land Commission properly assigned its bid to Johnson, and (4) declining to find the tax sale void as a matter of law because it was not held in strict compliance with statutory requirements. We reverse and remand.
Bessie and Willis1 Thompson (collectively, the Decedents) died in 2004 and 2005, respectively. At the time of their deaths, the Decedents owned a single-family home in Bamberg County (the Residence). Willis devised the Residence to McMillan and his two other grandchildren; however, the Decedents' estate was not submitted to probate and the Decedents remained the record owners of the property.2
Although McMillan paid the 2005 property tax for the Residence, she did not notify Bamberg County of the Decedents' death nor did she provide a substitute address where the tax notices should be mailed. In the spring of 2007, Bamberg County sent a letter to the Residence stating the 2006 property tax remained unpaid. In May 2007, Bamberg County sent a second notice to the Residence via certified mail. According to Bamberg County records, the certified envelope was returned as undelivered with the receipt marked "Deceased" above the Decedents' names. McMillan did not receive the delinquent tax notices, and in the summer of 2007 she rented the Residence to Bernard Hallman.
After the second delinquent tax notice was returned as undelivered, Bamberg County referred the Residence to its Delinquent Tax Office (Tax Office) to post a notice of levy on the property and to include the property in a tax sale. The tax sale took place in November 2007, and pursuant to statute, the Tax Office submitted a minimum bid on behalf of the Forfeited Land Commission (FLC)—a commission within each county which exists to bid on real property otherwise not sold at a tax sale, and which holds title to that property until it can be sold or disposed of on such terms as appear to be in the county's best interest.3 However, following the tax sale, Johnson contacted the Tax Office with an offer to purchase several dozen of the properties that had not been sold, including the Residence. The Tax Office agreed to assign Johnson the bids it had submitted on behalf of the FLC, thereby allowing Johnson to purchase the Residence and thirty-eight other properties for the minimum bid amount.
In January 2009, McMillan, apparently unaware the Residence had been sold in 2007, paid a portion of the outstanding property taxes. Bamberg County subsequently sent McMillan a letter acknowledging receipt of her payment and informing her there were still delinquent taxes on the Residence. The letter did not mention the tax sale.
When Johnson acquired a deed for the Residence in February 2009, he learned it was still occupied. Johnson first personally contacted the tenant, Hallman, requesting that he move out of the Residence. In January 2010, after Hallman had still not vacated the Residence, Johnson filed an eviction action against him in magistrate's court.
Hallman subsequently notified McMillan of the eviction action. McMillan responded by contacting Johnson to inform him she had recently paid a portion of the outstanding property taxes and would be challenging the eviction action. However, the magistrate held Johnson's eviction action in abeyance when, in February 2010, the FLC filed a separate action in the circuit court to set aside the tax deeds for the Residence and the thirty-eight other properties Johnson acquired following the tax sale.
In its lawsuit against Johnson, the FLC alleged the Tax Office had inappropriately assigned its bids to Johnson without the FLC's authority and had not conducted the tax sale in compliance with the "rigid statutory structure." Johnson answered, denying the tax sale was improper and asserting he had negotiated the purchase with the Tax Office, who was acting on behalf of the FLC when it assigned Johnson the bids. Johnson further claimed his deeds could not be challenged due to the lapse of the two-year statute of limitations contained in section 12-51-160 of the South Carolina Code (2014). Johnson also filed a cross-claim and third-party complaint seeking to quiet title as to McMillan and the owners of the other properties.
At a November 2013 hearing on the FLC's action, McMillan appeared and informed the court she was an heir of the Decedents. The FLC abandoned its suit, and the circuit court dismissed the FLC's complaint and Johnson's counterclaims against the FLC with prejudice. The circuit court then entered a default judgment in favor of Johnson on his cross-claims to quiet title for all of the properties he acquired by virtue of the tax sale except for the Residence.
On April 8, 2014, McMillan filed an answer and counterclaim to Johnson's quiet title action. In his reply, Johnson maintained McMillan could not contest the validity of the tax sale because the claim was barred by the two-year statute of limitations. The circuit court held a bench trial in September 2014.
At trial, Johnson acknowledged he did not attend the tax sale but contended he had received a valid assignment of the bid for the Residence from the Tax Office, who was acting on behalf of the FLC. Johnson also testified he had paid over $3,000 in property taxes since acquiring the Residence.
Sharon Williams, the Delinquent Tax Collector for the Tax Office, testified as to the county's procedure for collecting delinquent taxes. She explained that after the second tax notice was returned to their office with the envelope marked "Deceased" above the Decedents' names, the next step would have been to post a notice of levy at the Residence. When asked if the Residence was properly posted, she said she believed so because only the copy of the notice of levy was in the county file, not the brightly colored notice that would have been posted on the property. However, she acknowledged she had no personal knowledge regarding whether the Residence was posted because she was not the Delinquent Tax Collector at the time. Williams noted that although the file contained places for witnesses to the posting to sign, no one had acknowledged witnessing the posting of the Residence. She testified the Tax Office's current posting process involved a witness and photographs but was unaware of the previous posting process.
Although Hallman had lived at the Residence since 2007, he testified he did not receive any mail regarding property taxes nor did he ever see a notice of levy posted on the property. Hallman acknowledged receiving a letter from Johnson explaining Johnson had purchased the Residence and wanted Hallman to vacate; Hallman said he subsequently forwarded the letter to McMillan.
McMillan confirmed Hallman gave her the letter from Johnson, but testified Hallman had not forwarded any delinquent tax notices. McMillan also denied seeing a notice of levy posted on the Residence or receiving any notices at her personal address notifying her of the tax sale.
Following the bench trial, the circuit court issued an order quieting title in favor of Johnson. The circuit court found (1) the Tax Office was authorized to assign the bids to Johnson; (2) Bamberg County and the Tax Office had complied with all of the statutory procedures for conducting a tax sale except for posting a notice of levy on the Residence; (3) McMillan waited an excess of four years after learning of Johnson's deed to challenge the tax sale; and (4) Johnson's action to evict Hallman was an affirmative step that triggered the two-year statute of limitations, which ran on January 26, 2012. This appeal followed.
"An action to remove a cloud on and quiet title to land is one in equity." Bryan v. Freeman , 253 S.C. 50, 52, 168 S.E.2d 793, 793 (1969). In actions at equity, tried before a judge alone, we are free to find the facts according to our own view of the preponderance of the evidence. Townes Assocs. v. City of...
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