Johnson v. Arbabi

• Decision Date: 25 June 2001
• Docket Number: No. 3362.,3362.
• Citation: 553 S.E.2d 453,347 S.C. 132
• Parties: Gary JOHNSON, Plaintiff, v. Mohammad B. ARBABI and Akram Arbabi, Defendants/Third Party Plaintiffs, v. Beaufort County Treasurers Office and Joy Logan, Treasurer, Third Party Defendants. Of whom Gary Johnson is, Respondent, and Mohammad B. Arbabi is, Appellant.
• Court: South Carolina Court of Appeals

347 S.C. 132

553 S.E.2d 453

Gary JOHNSON, Plaintiff, v. Mohammad B. ARBABI and Akram Arbabi, Defendants/Third Party Plaintiffs, v. Beaufort County Treasurers Office and Joy Logan, Treasurer, Third Party Defendants.

Of whom Gary Johnson is, Respondent, and

Mohammad B. Arbabi is, Appellant.

No. 3362.

Court of Appeals of South Carolina.

Heard November 9, 2000.

Decided June 25, 2001.

Rehearing Denied October 17, 2001.

Thomas J. Finn, of Mullen Law Firm, of Hilton Head Island, for appellant.

J. Ray Westmoreland, of Hilton Head Island, for respondent.

ANDERSON, Judge:

Dr. Mohammad B. Arbabi appeals the trial court's decision confirming title in Gary Johnson for a condominium Johnson purchased at a tax sale. We reverse.

FACTS/PROCEDURAL BACKGROUND

In January 1981, Dr. Arbabi and his wife, Akram Arbabi, as tenants in common, executed a contract to purchase a condominium in the Island Club Horizontal Property Regime on Hilton Head Island from the Island Club Investment Company ("ICIC"). The sale price was $90,000. ICIC financed the transaction. Title to the property was to remain in ICIC's name until the Arbabis paid their debt in full.

The Arbabis decided in 1989 or 1990 to pay off the balance due ICIC. Prior to recording the deed in the Arbabis' names, Dr. Arbabi's attorney requested copies of the property tax bills for 1988, 1989, and 1990 from the Beaufort County Tax Assessor. The attorney additionally asked the Tax Assessor's office to send all future tax bills to the Arbabis' primary address at 3739 White Trillium Drive East in Saginaw, Michigan. The Beaufort County authorities never responded to this letter. On September 3, 1991, the Arbabis recorded their deed in the names of "Mohammad B. Arbabi and Akram Arbabi."

The property taxes for 1990 were not paid. The Beaufort County Treasurer issued a warrant of execution against ICIC. On May 1, 1991, Herschel J. Evans, Jr., the Deputy County Treasurer, sent a notice of the delinquent tax sale to ICIC. Evans seized the property on July 2, 1991, and the County took exclusive possession. The County Treasurer advertised the tax sale in the name of ICIC. Johnson bought the property at the tax sale for $7,000.

Dr. Arbabi moved out of the couple's White Trillium Drive East home in July 1992 due to marital difficulties. By letter dated September 1, 1992, which was addressed jointly to Dr. and Mrs. Arbabi, the County Treasurer stated the property had been sold and could be redeemed by paying $2,329.40 by October 7, 1992. The notice was sent to the White Trillium Drive East address.

In November 1992, the County Treasurer issued Johnson a tax deed, which indicated the defaulting taxpayer was ICIC. The deed additionally stated the tax collector mailed "to the owner of record on February 1, 1992 (year of expiration of redemption period) a Notice addressed to Mohammed B. and Akrem Arabi [sic] (owner of record on February 1, immediately preceding the end of the redemption period)."

Johnson commenced an action to quiet title in January 1993. Dr. Arbabi filed an answer and brought a third-party complaint against the Beaufort County Treasurer's Office and the County Treasurer, individually, seeking to have the tax deed voided.¹ Mrs. Arbabi did not make a return. Both Johnson and Dr. Arbabi moved for summary judgment. The Circuit Court held the County had complied with S.C.Code Ann. § 12-51-40(d)² in advertising the property in the name of ICIC, the delinquent taxpayer for the 1990 taxes. Dr. Arbabi's motion was denied upon this ground. The court decided, however, the County did not comply with § 12-51-120.³ The judge found: "Each owner had an interest in the property and the statute requires that each owner receive notice by `certified mail return receipt requested—deliver to addressee only.' One notice addressed to two owners does not comply with the notice requirements of S.C.Code Ann. § 12-51-120." Consequently, the court granted summary judgment to Dr. Arbabi and the tax deed was declared invalid. Upon Johnson's motion to alter or amend the judgment, the court modified its order. The judge declared Mrs. Arbabi to be in default. He additionally granted Johnson the relief requested in the complaint, but only as to the undivided half-interest of Mrs. Arbabi. Dr. Arbabi was ordered to pay Johnson one-half of the bid price and other amounts associated with the sale.

Dr. Arbabi appealed the Circuit Court's decision. In an unpublished opinion, Johnson v. Arbabi, Op. No. 96-UP-008 (S.C.Ct.App. filed January 8, 1996), this Court deemed the trial court's issuance of relief to Dr. Arbabi was erroneous: "Dr. Arbabi did not state as a ground for his motion the County's failure to comply with § 12-51-120.... Hence, the circuit court should not have addressed this ground." This Court determined the parties were back to the respective positions they occupied before the summary judgment order and the case would continue as if the ruling on Dr. Arbabi's motion had not been made.

On remand, the trial court found the County Treasurer complied with § 12-51-40(d) when it advertised the property in the name of ICIC because: (1) ICIC was the defaulting taxpayer; and (2) the County Treasurer was not aware of the unrecorded land contract between ICIC and the Arbabis. The judge additionally ruled the County Treasurer satisfied § 12-51-120 when it sent only one notice via restricted delivery to the White Trillium Drive East address. Mrs. Arbabi signed for the notice, which was addressed jointly to Dr. and Mrs. Arbabi; however, Dr. Arbabi no longer lived at the residence. The court decreed Mrs. Arbabi acted as Dr. Arbabi's agent; thus, her knowledge of the proceedings in Beaufort County was imputed to him. Further, Dr. Arbabi was found to have ratified the actions of his wife: "[Dr.] Arbabi made Mrs. Arbabi his agent by not returning to the White Trillium address after they separated ... [Dr.] Arbabi did not stop Mrs. Arbabi from receiving his mail ... [Dr.] Arbabi ratified the actions of his wife that were done on his behalf and the conduct of the parties establishes the agency relationship." Dr. Arbabi's argument regarding the County Treasurer's lack of adherence to § 12-51-130,⁴ a provision that in part specifies the recital of certain procedural information in the issuance of a tax deed, was rejected. The judge noted the issue was not raised in Dr. Arbabi's pleadings and asseverated he would have ruled against Dr. Arbabi even if the issue had been properly before the court. Johnson was declared to hold a valid title to the condominium.

STANDARD OF REVIEW

This is an action in equity. See Godfrey v. Webb, 277 S.C. 246, 285 S.E.2d 883 (1982)

(ruling suit to set aside a tax deed is in equity); Bryan v. Freeman, 253 S.C. 50, 168 S.E.2d 793 (1969) (holding an action to quiet title is equitable in nature). Therefore, this Court may find facts according to our own view of the preponderance of the evidence. Townes Assocs. v. City of Greenville, 266 S.C. 81, 221 S.E.2d 773 (1976). In addition, this appeal presents novel issues of law. In such a circumstance, we are free to decide issues presented to us with no particular deference to the trial court's findings. S.C. Const. art. V, §§ 5 & 9; S.C.Code Ann. §§ 14-3-320 & -330 (1976 & Supp.2000); S.C.Code Ann. § 14-8-200(a) (Supp. 2000); I'On, L.L.C. v. Town of Mt. Pleasant, 338 S.C. 406, 526 S.E.2d 716 (2000).

ISSUES

I. Did the trial court err by declaring Mrs. Arbabi was Dr. Arbabi's agent when she received the notice of the right to redeem from the Beaufort County Treasurer?

II. Did the trial court err in holding the Beaufort County Treasurer complied with the provisions of § 12-51-120 by mailing only one notice of the right to redeem to Dr. and Mrs. Arbabi?

LAW/ANALYSIS

I. Agency Relationship Between Dr. and Mrs. Arbabi

Dr. Arbabi argues the trial court erred in holding Mrs. Arbabi was his agent at the time she received the redemption notice and that consequently, her knowledge of the tax sale was imputed to him. We agree.

In 1992, the law required tax authorities to send property owners notice of the redemption period's approaching end by "certified mail, return receipt requested—deliver to addressee only." S.C.Code Ann. § 12-51-120 (Supp.1991). The General Assembly amended the statute in 1996 to substitute "restricted delivery" for "deliver to addressee only" to conform with postal regulation terminology. Act No. 431, 1996 Acts 2622. The United States Postal Service describes "restricted delivery" service as permitting "a mailer to deliver only to the addressee or addressee's authorized agent." In re Ryan Inv. Corp., 335 S.C. 392, 394-95, 517 S.E.2d 692, 693 (1999) (quoting United States Postal Services Domestic Mail Manual § S916.1.1) (emphasis added).

On remand, the trial court concluded an agency relationship could be implied from the relationship that existed between Dr. Arbabi and Mrs. Arbabi. This Court holds an implied agency cannot satisfy the requirements relating to the receipt of a redemption notice. An addressee's "authorized agent" can only be a person acting pursuant to the express authority of the addressee. See United States Postal Services Domestic Mail Manual § S916.3.1 ("Mail marked `Restricted Delivery' is delivered only to the addressee or to the person authorized in writing as the addressee's agent to receive the mail....").

During the trial, the following colloquy occurred:

Counsel for Dr. Arbabi: I would ask that there is certainly no evidence here that there was [an] agency relationship.

The Court: Well, let me ask you this. A husband is always an agent for a wife and a wife is always an agent for her husband in a situation like this. I mean—

....

The Court: I'm just thinking. You know, just like you have parents are natural guardians[,] so you've got natural agents....

The court's pronouncement on this facet of agency law was incorrect.

A spouse, whether husband or wife, is not the agent of the other...