King v. James

• Decision Date: 20 April 2010
• Docket Number: No. 4676.,4676.
• Citation: 694 S.E.2d 35,388 S.C. 16
• Parties: Sheila KING, Respondent,v.Margaret JAMES, Beaufort County, a political subdivision of the State of South Carolina and Joy Logan, in her capacity as Treasurer for Beaufort County, South Carolina, Appellants.
• Court: South Carolina Court of Appeals

388 S.C. 16

694 S.E.2d 35

Sheila KING, Respondent,v.Margaret JAMES, Beaufort County, a political subdivision of the State of South Carolina and Joy Logan, in her capacity as Treasurer for Beaufort County, South Carolina, Appellants.

No. 4676.

Court of Appeals of South Carolina.

Heard Dec. 10, 2009.

Decided April 20, 2010.

COPYRIGHT MATERIAL OMITTED

Mary B. Lohr, of Beaufort, for Primary Appellants; J. Thomas Mikell, of Beaufort, for Secondary Appellants.

Alysoun M. Eversole, of Beaufort, for Respondent.

WILLIAMS, J.

In this case, Beaufort County (the County) argues the Master erred in finding the two-year statute of limitations in South Carolina Code section 12-51-160 (Supp.2008) did not apply to Sheila King's (King) action to set aside the 1999 tax sale of her property even though the action was brought in 2006. The County also contends the Master erred in finding the defenses of laches, estoppel, abandonment, acquiescence, and stale demand were inapplicable in this case. We affirm.

FACTS AND PROCEDURAL HISTORY

This case involves a parcel of real property located in Hilton Head Island, South Carolina (the Property). King acquired title to the Property by deed from her brother-in-law in 1976 and has used the Property as her primary residence since that time. When King first acquired the Property, the address was Route 2, Box 328. At some point thereafter, the address changed to 92A Gumtree Lane. In the late 1990s, the address changed once again to 9 Holmes Lane, which is King's current address. King testified before the Master that the changes in the Property's address have occasionally caused her mail to arrive late or not at all.

King lived with her husband and daughter, Salina, on the Property. Because King does not drive, she always paid her property taxes by traveling with her husband to the courthouse and paying in cash. However, King's husband died in 1997 after a prolonged battle with lung cancer. According to the County's tax records, King failed to pay taxes on the Property for 1998. As a result, on October 4, 1999, the County sold the Property to Margaret James (James) for $2,100.¹

Beaufort County Deputy Treasurer Herschel Evans (Evans) testified that leading up to the tax sale, the County sent tax delinquency notices to King in accordance with all statutory requirements. Pursuant to South Carolina Code section 12-51-40(a) (Supp.2008), the County first sent notice to King on or about April 1, 1999, that she had not paid her 1998 property taxes. After the taxes remained unpaid for thirty days, the County sent King another tax bill via certified mail pursuant to section 12-51-40(b). The certified mail notice was returned undelivered. In response to the return of the certified mail notice, Evans claimed the County took exclusive possession of the Property by posting the Property pursuant to section 12-51-40(c). Although Evans did not personally post the Property, he supported his assertion that it was posted by noting the County's tax records, which indicated Walter Mack, an agent of the County, posted the Property on August 6, 1999.² Evans testified that the County followed all statutory mandates leading up to the tax sale of the Property; however, the County concedes on appeal the notices to King were defective under Hawkins v. Bruno Yacht Sales, 353 S.C. 31, 577 S.E.2d 202 (2003).³ Thereafter, pursuant to section 12-51-40(d), the County advertised the Property and sold it at a tax sale to James in 1999.

Although the Property was very close to James' home, she testified she had only a rough idea of the Property's location until she had it surveyed in March 2005. In fact, James believed she had purchased the land adjacent to the Property. After the survey showed James was the owner of the Property, James visited the Property and spoke with King and Salina. James first offered to sell the Property back to King for $50,000. However, the sale never materialized. Subsequently, James offered to lease the Property to King and Salina for $500 per month, and they entered into a lease agreement from September 2005 until September 2006.

In April 2006, King brought an action against James and the County to set aside the tax sale. James and the County answered, asserting as defenses the two-year statute of limitations under section 12-51-160, laches, estoppel, waiver, abandonment, acquiescence, and stale demand. The case was tried in Beaufort County before Master-in-Equity Marvin H. Dukes (the Master) in 2008.

King and Salina testified at the hearing before the Master they had never received any notice from the County that the taxes on the Property were delinquent, nor had they seen any posting by the County on the Property. King testified when she attempted to pay taxes on the Property in 2000 at the Beaufort County courthouse, an employee told her the County would not accept her money, that there was an unspecified “problem” with her property taxes, and she should contact an attorney. King hired an attorney, Doug MacNielle, in 2001. According to King, MacNielle informed her he had “run a survey,” and it showed her name “was still on the [Property].” When asked whether she thought to ask anybody else at the treasurer's office why she was not receiving any tax bills for the Property after 2000, she responded, “Honestly, no.”

The Master held the statute of limitations in section 12-51-160 ⁴ was inapplicable to King's action because King remained in possession of the Property at all times and, to the extent the execution of the lease in 2005 constituted an “ouster,” King brought her action to set aside the tax sale within two years of the ouster. In reaching this conclusion, the Master relied on Dibble v. Bryant, in which our supreme court held the earlier version of section 12-51-160 ⁵ “was intended to bar a defaulting and ousted taxpayer from maintaining an action to defeat the title of the tax sale purchaser and recover the land if brought more than two years from the date the purchaser came into possession.” 274 S.C. 481, 487, 265 S.E.2d 673, 677 (1980).

As to the actual tax sale, the Master noted: “[T]ax sales must be conducted in strict compliance with statutory requirements.” Hawkins, 353 S.C. at 36, 577 S.E.2d at 205. In light of the County's stipulation that notice was improper under Hawkins, the Master found the County failed to meet the “strict compliance” standard, and therefore, the tax deed was void and of no effect. The Master further held the County had failed to prove by a preponderance of evidence that King ever received any delinquent tax notices. Finally, the Master found “[n]o competent evidence was presented that [the Property] was properly posted,” because Evans-the County's only witness-had no personal knowledge of the posting other than what was in the County's records, and both King and Salina testified they never saw a posting on the Property.⁶ This appeal followed.

STANDARD OF REVIEW

An action to set aside a tax sale lies in equity. Smith v. Barr, 375 S.C. 157, 160, 650 S.E.2d 486, 488 (Ct.App.2007). Our scope of review for a case heard by a Master permits us to determine facts in accordance with our own view of the preponderance of the evidence. Id. However, this scope of review does not require this court to disregard the Master's factual findings because the Master saw and heard the witnesses and was, therefore, in a better position to judge the witnesses' credibility and demeanor. Id.

LAW/ANALYSIS

1. Tax Sale

King argues the tax sale and resulting tax deed are invalid because the County failed to strictly comply with statutory notice requirements leading up to the tax sale. We agree.

“Tax sales must be conducted in strict compliance with statutory requirements.” In Re Ryan Investment Co., 335 S.C. 392, 395, 517 S.E.2d 692, 693 (1999) (citing Dibble, 274 S.C. at 483, 265 S.E.2d at 675). “[A]ll requirements of the law leading up to tax sales which are intended for the protection of the taxpayer against surprise or the sacrifice of his property are to be regarded [as] mandatory and are to be strictly enforced.” Donohue v. Ward, 298 S.C. 75, 83, 378 S.E.2d 261, 265 (Ct.App.1989) (citing Osborne v. Vallentine, 196 S.C. 90, 94, 12 S.E.2d 856, 858 (1941)). “Even actual notice is insufficient to uphold a tax sale absent strict compliance with statutory requirements.” Ryan Inv. Co., 335 S.C. at 395, 517 S.E.2d at 693. “Failure to give the required notice [of a tax sale] is a fundamental defect in the tax sale proceedings which renders the proceedings absolutely void.” Rives v. Bulsa, 325 S.C. 287, 293, 478 S.E.2d 878, 881 (Ct.App.1996).

Appellants have conceded the tax sale was not proper under Hawkins due to the defective stamp in the notices to King. Moreover, neither of the Appellants has appealed the Master's finding that the tax sale was not conducted in strict compliance with statutory requirements. Therefore, this ruling is the law of the case. See ML-Lee Acquisition Fund, L.P. v. Deloitte & Touche, 327 S.C. 238, 241, 489 S.E.2d 470, 472 (1997) (holding an unappealed ruling, right or wrong, becomes the law of the case). Accordingly, we affirm the Master's finding as to the invalidity of the tax sale and tax deed.

2. Statute of Limitations

Appellants argue even if the tax sale was improper under Hawkins due to the defective notice, the Master nevertheless erred in failing to apply the two-year statute of limitations from section 12-51-160 to bar King's claim because (1) section 12-51-160 clearly states the statute begins to run “from the date of the [tax] sale,” and (2) alternatively, even if King did not have actual knowledge of the sale, the statute began to run against her in 2000 when an employee of the treasurer's office told her there was a “problem” with her taxes. We disagree.

One purpose of a statute of limitations is to relieve the courts of the burden of trying stale claims when a plaintiff has slept on his or her rights. McKinney v. CSX Transp., Inc., 298 S.C. 47,...