Horry County v. Ray, No. 4501.

CourtCourt of Appeals of South Carolina
Writing for the CourtKonduros
Citation674 S.E.2d 519
Parties2003-CP-26-01786 HORRY COUNTY, a body politic, Appellant, v. Michael R. RAY, Park-Ray Landscape, Inc., Horry County State Bank, Coastal Federal Savings Bank, Coastal Management Associates, Inc., ARS, and United Video, Defendants, of whom Horry County State Bank is Respondent. 2003-CP-26-05799 Horry County State Bank, a South Carolina Corporation, Respondent, v. Park-Ray Landscape, Inc., Michael R. Ray, Individually and as Officer of Park Ray Landscape, Inc., Horry County, a body politic, Branch Banking & Trust, S.C. Department of Revenue, Coastal Federal Bank, Sunbelt Rentals, Inc., United Video, Coastal Management Associates, Inc., Jill Allen, Ernest Holt, Walter Nalepa, and Margaret Dvores, on behalf of themselves and others similarly situated and derivatively as homeowners in Oakmont at River Oaks Homeowner's Assn. Inc., Defendants, of whom Horry County, a body politic is Appellant.
Decision Date10 February 2009
Docket NumberNo. 4501.
674 S.E.2d 519
2003-CP-26-01786
HORRY COUNTY, a body politic, Appellant,
v.
Michael R. RAY, Park-Ray Landscape, Inc., Horry County State Bank, Coastal Federal Savings Bank, Coastal Management Associates, Inc., ARS, and United Video, Defendants,
of whom Horry County State Bank is Respondent.
2003-CP-26-05799
Horry County State Bank, a South Carolina Corporation, Respondent,
v.
Park-Ray Landscape, Inc., Michael R. Ray, Individually and as Officer of Park Ray Landscape, Inc., Horry County, a body politic, Branch Banking & Trust, S.C. Department of Revenue, Coastal Federal Bank, Sunbelt Rentals, Inc.,

[674 S.E.2d 520]

United Video, Coastal Management Associates, Inc., Jill Allen, Ernest Holt, Walter Nalepa, and Margaret Dvores, on behalf of themselves and others similarly situated and derivatively as homeowners in Oakmont at River Oaks Homeowner's Assn. Inc., Defendants,
of whom Horry County, a body politic is Appellant.
No. 4501.
Court of Appeals of South Carolina.
Heard December 3, 2008.
Decided February 10, 2009.

[674 S.E.2d 521]

John B. McCutcheon, Mary Ruth M. Baxter and Lisa A. Thomas, all of Conway, for Appellant.

Andrew C. English, III, and Mary Dameron Millken, both of Columbia and Carroll D. Padgett, Jr., of Loris, for Respondent.

KONDUROS, J.:


Horry County (the County) appeals the special referee's order finding the County failed to establish an equitable lien on certain property and giving priority to Horry County State Bank's mortgage. We affirm.

FACTS

Branch Banking and Trust Company (BB & T) initiated a foreclosure action against certain property in Horry County. The property was sold by the County at auction to Michael R. Ray as representative of Park-Ray Landscape, Inc. (Park-Ray). Ray issued a cashier's check to the County as payment for his bid on the property. By all accounts, the check appeared on its face to be regular and valid. The County disbursed funds to BB & T in satisfaction of its outstanding mortgage on the property before the check cleared. The County then discovered the cashier's check from Park-Ray had been dishonored. On July 31, 2002, the County filed a lis pendens on the property. Within a few days, Park-Ray delivered a second cashier's check to the County. That check was subsequently found to be fraudulent as was the first check. On August 1, Park-Ray gave a mortgage on the property to Horry County State Bank (HCSB). HCSB investigated the title to the property and on August 19 recorded its mortgage. The County cancelled its lis pendens on August 27.1

Park-Ray defaulted on the mortgage held by HCSB and HCSB sold the property. The proceeds from that sale are being held in escrow by HCSB subject to the County's claim to the proceeds. At trial before the special referee, the attorneys who handled the loan closing testified the title examiner's documents indicated a lis pendens was filed against the property on July 31. They further testified the examination sheet did not indicate the lis pendens had been removed. The special referee determined the lis pendens filed by the County was invalid and ineffective because the County did not commence a lawsuit within twenty days after the filing of the lis pendens. Consequently, the County's claim to the proceeds did not take priority over the claim of HCSB. The special referee further found the County did not meet the requirements to establish an equitable lien on the property that would take

674 S.E.2d 522

priority over HCSB's mortgage. This appeal followed.

STANDARD OF REVIEW

The appellate court's standard of review in equitable matters is our own view of the preponderance of the evidence. Williams v. Wilson, 349 S.C. 336, 339-40, 563 S.E.2d 320, 322 (2002). "An action to establish an equitable lien and to establish lien priorities is an action in equity." Fibkins v. Fibkins, 303 S.C. 112, 115, 399 S.E.2d 158, 160 (Ct.App.1990) (citations omitted). "By the same token, an action to foreclose a mortgage is an action in equity." Id.

LAW/ANALYSIS

I. Constructive and Actual Notice

The County contends the special referee erred in finding the lis pendens did not provide notice to HCSB of the County's interest in the property. We disagree.

Section 15-11-10 of the South Carolina Code (2005) sets forth the timing requirements for filing a notice of lis pendens. In an action affecting the title to real property, a party may file, not more than twenty days before filing a complaint, notice of the pendency of an action containing the names of the parties, the object of the action, and the description of the property affected. Id.

Section 15-11-20 of the South Carolina Code (2005) explains the effect of filing a lis pendens.

From the time of filing only, the pendency of the action shall be constructive notice to a purchaser or encumbrancer of the property affected thereby, and every person whose conveyance or encumbrance is subsequently executed or subsequently recorded shall be deemed a subsequent purchaser or encumbrancer and shall be bound by all proceedings taken after the filing of such notice to the same extent as if he were made a party to the action. For the purposes of this section, an action shall be deemed to be pending from the time of filing such notice.

Id.

"The purpose of a notice of pendency of an action is to inform a purchaser or encumbrancer that a particular piece of real property is subject to litigation." Pond...

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24 practice notes
  • Bank v. Wingard Properties Inc., No. 4846.
    • United States
    • Court of Appeals of South Carolina
    • June 22, 2011
    ...a judgment or decree subjecting the property to the payment of the debt or claim is rendered.” Horry Cnty. v. Ray, 382 S.C. 76, 83–84, 674 S.E.2d 519, 524 (Ct.App.2009) (internal citation and quotation marks omitted). Even though an equitable lien is not judicially recognized until a judgme......
  • Carrington Mortg. Servs., LLC v. Riley (In re Riley), Bankruptcy No. 09–04740–DD.
    • United States
    • United States Bankruptcy Courts. Fourth Circuit. U.S. Bankruptcy Court — District of South Carolina
    • September 25, 2012
    ...equitable principles must also be considered in determining the existence of an equitable lien. Horry County v. Ray, 382 S.C. 76, 674 S.E.2d 519, 524 (Ct.App.2009). South Carolina courts have repeatedly held that if a mortgage requires the mortgagor to maintain insurance on the mortgaged pr......
  • Carrington Mortg. Servs. LLC v. Riley (In re Riley), C/A No. 09-4740-DD
    • United States
    • United States Bankruptcy Courts. Fourth Circuit. U.S. Bankruptcy Court — District of South Carolina
    • September 26, 2012
    ...well-established equitable principles must also be considered in determining the existence of an equitable lien. Horry County v. Ray, 674 S.E.2d 519, 524 (S.C. Ct. App. 2009). South Carolina courts have repeatedly held that if a mortgage requires the mortgagor to maintain insurance on the m......
  • Carrington Mortg. Servs., LLC v. Riley (In re Riley), C/A No. 09-4740-DD
    • United States
    • United States Bankruptcy Courts. Fourth Circuit. U.S. Bankruptcy Court — District of South Carolina
    • September 26, 2012
    ...well-established equitable principles must also be considered in determining the existence of an equitable lien. Horry County v. Ray, 674 S.E.2d 519, 524 (S.C. Ct. App. 2009). South Carolina courts have repeatedly held that if a mortgage requires the mortgagor to maintain insurance on the m......
  • Request a trial to view additional results
24 cases
  • Bank v. Wingard Properties Inc., No. 4846.
    • United States
    • Court of Appeals of South Carolina
    • June 22, 2011
    ...a judgment or decree subjecting the property to the payment of the debt or claim is rendered.” Horry Cnty. v. Ray, 382 S.C. 76, 83–84, 674 S.E.2d 519, 524 (Ct.App.2009) (internal citation and quotation marks omitted). Even though an equitable lien is not judicially recognized until a judgme......
  • Carrington Mortg. Servs., LLC v. Riley (In re Riley), Bankruptcy No. 09–04740–DD.
    • United States
    • United States Bankruptcy Courts. Fourth Circuit. U.S. Bankruptcy Court — District of South Carolina
    • September 25, 2012
    ...equitable principles must also be considered in determining the existence of an equitable lien. Horry County v. Ray, 382 S.C. 76, 674 S.E.2d 519, 524 (Ct.App.2009). South Carolina courts have repeatedly held that if a mortgage requires the mortgagor to maintain insurance on the mortgaged pr......
  • Carrington Mortg. Servs. LLC v. Riley (In re Riley), C/A No. 09-4740-DD
    • United States
    • United States Bankruptcy Courts. Fourth Circuit. U.S. Bankruptcy Court — District of South Carolina
    • September 26, 2012
    ...well-established equitable principles must also be considered in determining the existence of an equitable lien. Horry County v. Ray, 674 S.E.2d 519, 524 (S.C. Ct. App. 2009). South Carolina courts have repeatedly held that if a mortgage requires the mortgagor to maintain insurance on the m......
  • Carrington Mortg. Servs., LLC v. Riley (In re Riley), C/A No. 09-4740-DD
    • United States
    • United States Bankruptcy Courts. Fourth Circuit. U.S. Bankruptcy Court — District of South Carolina
    • September 26, 2012
    ...well-established equitable principles must also be considered in determining the existence of an equitable lien. Horry County v. Ray, 674 S.E.2d 519, 524 (S.C. Ct. App. 2009). South Carolina courts have repeatedly held that if a mortgage requires the mortgagor to maintain insurance on the m......
  • Request a trial to view additional results

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