K & a Acquisition Group v. Island Pointe

Decision Date10 August 2009
Docket NumberNo. 26696.,26696.
Citation682 S.E.2d 252,383 S.C. 563
CourtSouth Carolina Supreme Court
PartiesK & A ACQUISITION GROUP, LLC, Appellant, v. ISLAND POINTE, LLC; South Carolina Department of Transportation, Elizabeth S. Mabry, in her Official Capacity as Executive Director of the South Carolina Department of Transportation; and City of Folly Beach, South Carolina, Respondents.

C. Mitchell Brown, of Nelson, Mullins, Riley & Scarborough, of Columbia, Robert H. Brunson and Erin E. Richardson, both of Nelson, Mullins, Riley & Scarborough, of Charleston, for Appellant.

Beacham O. Brooker, Jr., of Columbia, Ellison D. Smith, IV, of Smith, Bundy, Bybee & Barnett, of Mt. Pleasant, James B. Richardson, Jr., of Columbia, Michael R. Daniel, of Elloree, Otis B. Peeples, Jr., of Charleston, for Respondents.

AFFIRMED AS MODIFIED

Justice BEATTY:

In this declaratory judgment action, K & A Acquisition Group, LLC (K & A), appeals the master-in-equity's order finding that a .42 acre parcel of coastal property, which was part of a former Folly Beach toll road, was "abandoned" by the South Carolina Department of Transportation (SCDOT) and properly conveyed by a quitclaim deed to private landowners. Pursuant to Rule 204(b), SCACR, this Court certified this appeal from the Court of Appeals. We affirm as modified.

FACTUAL/PROCEDURAL HISTORY

In March 2005, K & A purchased Long Island located to the east of Peas Island across from Folly Creek. Long Island is annexed into the City of Folly Beach. K & A purchased this property with the expectation that it would construct a residential development on Long Island with approximately fifty to sixty home sites.

Because there is no means of vehicular access to Long Island across Folly Creek, K & A sought to purchase a .42 acre parcel of property on neighboring Peas Island from Henry and Linda Walker ("the Walker tract"). This parcel constituted a portion of the "old" Folly Beach toll road which originated in 1923 and has a lengthy procedural history.

Prior to 1923, the Folly Beach Corporation, which owned and developed a significant portion of Folly Island, built a private road which: started on James Island, crossed Peas Island, bridged Folly Creek to Long Island, crossed Long Island, extended from Long Island to Big Oak Island and Little Oak Island, and ultimately crossed Folly River and ended on Folly Island.

On March 16, 1923, the General Assembly created the Folly Roadway Company "for the purpose of constructing, maintaining, and operating a toll and turnpike road from a point on James' Island, in the County of Charleston, to Folly Island in the said county, over the route of the existing road, causeways and bridges now connecting said islands, with the right to charge tolls on said route as fixed by law, and to erect one or more gates on said route for the collection of the same." ("1923 Legislative Act"). Act No. 288, 1923 S.C. Acts 557.

Subsequently, the Folly Beach Corporation conveyed the existing road to the Folly Roadway Company by deed recorded on April 13, 1923.

After two years of operation, the Folly Roadway Company decided to rebuild the road and bridges and straighten the route of the toll road by extending the causeway, which connected James Island and Peas Island, all the way to Folly Beach. The construction of this new route would eliminate a portion of the original toll road which crossed Peas Island, Long Island, and two other marsh islands.

By legislative act, the General Assembly authorized the Folly Roadway Company to implement its plan to relocate the toll road. Act No. 34, 1926 S.C. Acts 1441. In order to finance the construction of the "new" Folly Beach Road, the Folly Roadway Company issued $380,000 in bonds secured by mortgage of its properties, including the property underlying the "old" toll road route, to Citizens and Southern Bank of Savannah, Georgia. According to the Folly Roadway Company, the project resulted in "practically a new road with its necessary bridges, causeways . . . connecting said Folly Island with James Island, S.C."

On November 28, 1939, Charleston County offered to purchase the toll road. The Folly Roadway Company rejected the offer on the ground it refused to sell the roadway for less than the amount due on its outstanding bonds. Subsequently, the bank securing the bonded indebtedness foreclosed on the Folly Roadway Company's property. At the foreclosure sale, Charleston County purchased all of the property owned by the Folly Roadway Company.

On April 3, 1943, the General Assembly authorized and directed the State Highway Commission (n/k/a "SCDOT") to purchase from Charleston County the "Folly Beach Road in Charleston County, to Free the Said Road of Toll Charges and to Authorize Charleston County to Sell Said Road to the Said Commission." Act No. 64, 1943 S.C. Acts 85.

According to the SCDOT's records, there was no maintenance performed on the remnants of the "old" route to Folly Beach which remained on Peas Island, Long Island, Big Oak Island, and then ran into private property. These records also reflect that no portion of the "old" route was ever assigned a number as part of the State Highway System.

Not until 2002, did the SCDOT realize that it owned the property at issue. At that time, an attorney for the Walkers requested a quitclaim deed from the SCDOT to remove a cloud on the title to their property. The Walkers, while attempting to sell their property, discovered that their house on Peas Island was located on top of a portion of the "old" Folly Beach Road toll route.

By quitclaim deed dated April 3, 2002, the SCDOT conveyed to the Walkers the .42 acre tract of land on Peas Island for consideration in the amount of $1.00.

Because K & A believed the "chief and most available means of access from Long Island to Folly Road" was a portion of property located across neighboring Peas Island, it sought to purchase the Walker tract and to obtain regulatory approval for a bridge connecting Long Island to Peas Island. K & A claimed the purchase of the parcel was necessary to ensure a right of way from the residential development on Long Island to the mainland.

Shortly after K & A purchased Long Island, Island Pointe, LLC ("Island Pointe") purchased Peas Island and obtained title insurance on the entire tract which included the Walker tract.1 After the City of Folly Beach approved the residential development of Peas Island, Island Pointe proceeded with its development plan.

K & A filed this declaratory judgment action against Island Pointe, the SCDOT, and the City of Folly Beach. In terms of relief, K & A essentially sought for the trial court to declare that the Walker tract remained a public right of way. In support of this request for relief, K & A claimed the SCDOT did not abandon the property and did not properly convey it to the Walkers.

After a hearing, the master-in-equity ruled against K & A, finding: (1) the right of way dedicated to the public on the "old" Folly Beach toll road was transferred to the "new" Folly Beach toll road, (2) the SCDOT properly abandoned the portion of its property that once comprised the "old" Folly Beach toll road, (3) the SCDOT properly disposed of a portion of the property by means of a quitclaim deed to the Walkers, and (4) it did not have jurisdiction to declare that a public right of way still existed over the "old" route in question given such a decision would deprive landowners along this route, who were not joined as parties, an opportunity to protect their property interests. The master-in-equity denied K & A's motion for reconsideration.

K & A appealed the master-in-equity's decision to the Court of Appeals. Pursuant to Rule 204(b), SCACR, this Court certified this appeal from the Court of Appeals.

ISSUES

I. Should the court enforce a deed that purports to convey a fee simple interest from the State to a private party if the State did not "vigorously attempt to sell the property by advertising for competitive bids in local newspapers or by direct negotiations" as required by South Carolina Code Ann. § 57-5-340?

II. If a deed states that it is "subject to any and all existing reservations, easements, rights of way, [and] control of access," does the deed transfer the public right of way existing on the property conveyed in the deed to the grantee?

III. Is a dedicated public right of way on the path of a former toll road "abandoned" when the route of the toll road is moved but there was no "unequivocal act showing a clear intent to abandon" the right of way and undisputed evidence supports continued public use of the road after the supposed "abandonment in fact?"

IV. Are current owners of property potentially subject to a public right of way "indispensable parties" to litigation in which a non-adjoining property owner is challenging a deed potentially subject to a similar public right of way?

STANDARD OF REVIEW

"A suit for declaratory judgment is neither legal nor equitable, but is determined by the nature of the underlying issue." Felts v. Richland County, 303 S.C. 354, 356, 400 S.E.2d 781, 782 (1991).

The determination of whether property has been dedicated to the public is an action in equity. State v. Beach Co., 271 S.C. 425, 248 S.E.2d 115 (1978); Mack v. Edens, 320 S.C. 236, 464 S.E.2d 124 (Ct.App. 1995). "If the action is viewed as interpreting a deed, it is an equitable matter and the appellate court may review the evidence to determine the facts in accordance with the court's view of the preponderance of the evidence." Slear v. Hanna, 329 S.C. 407, 410, 496 S.E.2d 633, 635 (1998).

Because this is an action in equity referred to a master-in-equity for final judgment, we may find facts in accordance with our own view of the preponderance of the evidence. Thomas v. Mitchell, 287 S.C. 35 336 S.E.2d 154 (Ct.App.1985). We, however, are not required to ignore the findings of the trial judge, who heard and saw the witnesses. Id. at 38, 336...

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