RIVERWOODS, LLC v. County of Charleston

• Citation: 349 S.C. 378,563 S.E.2d 651
• Decision Date: 06 May 2002
• Docket Number: No. 25462.,25462.
• Court: United States State Supreme Court of South Carolina
• Parties: RIVERWOODS, LLC, North Bluff North Charleston, Limited Partnership, Brackenbrook North Charleston Limited Partnership, Arthur Booth, M.D. and Linda M. Booth, Respondents/Appellants, v. The COUNTY OF CHARLESTON, Peggy A. Moseley in her official capacity as Charleston County Auditor, and D. Michael Huggins in his official capacity as Charleston County Assessor, Appellants/Respondents.

349 S.C. 378

563 S.E.2d 651

RIVERWOODS, LLC, North Bluff North Charleston, Limited Partnership, Brackenbrook North Charleston Limited Partnership, Arthur Booth, M.D. and Linda M. Booth, Respondents/Appellants, v. The COUNTY OF CHARLESTON, Peggy A. Moseley in her official capacity as Charleston County Auditor, and D. Michael Huggins in his official capacity as Charleston County Assessor, Appellants/Respondents.

No. 25462.

Supreme Court of South Carolina.

Heard March 20, 2002.

Decided May 6, 2002.

Samuel W. Howell, IV, of Howell & Linkous, LLC, of Charleston, County Attorney Joseph Dawson, III, and Assistant County Attorney Bernard E. Ferrara, Jr., of Charleston, for appellants/respondents.

G. Trenholm Walker, Andrew K. Epting, Jr., Clayton B. McCullough and Matthew D. Hamrick, of Pratt-Thomas, Epting & Walker, P.A., of Charleston, for respondents/appellants.

Burnet R. Maybank, III, of Nexsen Pruet Jacobs & Pollard, LLC, of Columbia, for amicus curiae, State Chamber of Commerce.

Justice WALLER:

Respondents-appellants (collectively "Taxpayers") brought this action against the County of Charleston, Peggy A. Moseley in her official capacity as Charleston County Auditor, and D. Michael Huggins in his official capacity as Charleston County Assessor (appellants-respondents, collectively "the County") challenging a county ordinance which grants a property tax exemption solely to owner-occupied primary residences. Taxpayers moved for summary judgment, which the trial court granted. The County appeals on the merits, and Taxpayers appeal from the trial court's denial of injunctive relief. We affirm.

FACTS

In November 2000, Charleston County adopted Ordinance 1163 ("the Ordinance"). The Ordinance grants an exemption from ad valorem property taxation to owner-occupied primary residences where the property's value increased over 15 percent due to a county-wide reassessment.¹ The exemption imposes a tax cap on these properties such that they are not taxed on any increase in value over 15 percent.

The Ordinance was enacted pursuant to S.C.Code Ann. § 12-37-223A (Supp.2001) ("the Enabling Act"). The Enabling Act states in pertinent part:

As authorized by Section 3, Article X of the South Carolina Constitution, the General Assembly hereby authorizes the governing body of a county by ordinance to exempt an amount of fair market value of real property located in the county sufficient to limit to fifteen percent any valuation increase attributable to a countywide appraisal and equalization program conducted pursuant to Section 12-43-217. An exemption allowed by this section does not apply to:

(1) real property valued for property tax purposes by the unit valuation method; ²

(2) value attributable to property or improvements not previously taxed, such as new construction, and for renovation of existing structures;

(3) property transferred after the most recent countywide equalization program implemented pursuant to Section 12-43-217; provided, however, at the option of the governing body of a county which is in the process of first implementing a countywide equalization program under Section 12-43-217, property transferred on or after January first of the year of implementation of the most recent countywide equalization program.

§ 12-37-223A(A) (emphasis added).

The County decided to enact the Ordinance pursuant to the Enabling Act; however, it chose to limit the exemption solely to owner-occupied primary residences. See S.C.Code Ann. § 12-43-220(c) (2000).³ In the text of the ordinance, the County set forth several reasons for its decision to selectively grant the tax exemption to these residential properties only.⁴

Taxpayers are: (1) three corporate entities which each own an apartment complex in Charleston County; and (2) the Booths who are residents of Georgia but own a second home in Kiawah Island. Taxpayers are all taxed at a six percent assessment ratio. Due to the countywide reassessment completed in 2001, their properties increased in value anywhere from 31.8 percent to 138.4 percent.

Prior to the countywide assessment which was completed in 2001, the total value of all assessed real property in Charleston County was approximately $15.6 billion. For the 2001 tax year, the total value of all assessed real property in the County was approximately $25.4 billion. As a result of the Ordinance, $2.4 billion was exempted from taxation. Thus, the applicable millage rates for tax year 2001 were calculated, and taxes were assessed, based on approximately $23 billion worth of property. In addition to being excluded from application of the exemption, Taxpayers alleged that implementation of the exemption required the County to set higher millage rates resulting in higher taxes for them.

Taxpayers filed a complaint seeking a declaratory judgment that the ordinance was invalid. Although they alleged several causes of action in their complaint, Taxpayers moved for summary judgment to invalidate the ordinance based upon two grounds: (1) the ordinance violated the enabling legislation; and (2) the ordinance violated specific tax provisions of the South Carolina Constitution. As relief, Taxpayers requested an injunction if the trial court granted summary judgment, or, if their motion was denied, a preliminary injunction.

The trial court found in favor of Taxpayers on both grounds asserted. However, the trial court refused to grant their request for an injunction or a writ of mandamus. Instead, citing the hardship on the County and potential for reversal on appeal, the trial court issued a writ of supersedeas staying enforcement of the order. Taxpayers subsequently petitioned this Court for a writ of supersedeas to dissolve the supersedeas issued by the trial court. We denied Taxpayers' request. We granted the parties' joint motion to expedite the case.

ISSUES

The County's appeal raises the following two issues:

Did the trial court err in ruling that the Ordinance conflicted with, or exceeded the power granted by, the Enabling Act?

Did the trial court err in ruling that the Ordinance violated the South Carolina Constitution?

On cross-appeal, Taxpayers raise the following issue:

Did the trial court err in refusing to grant injunctive relief?

DISCUSSION

1. Does the Ordinance violate the Enabling Act?

The County argues that the Ordinance does not violate the Enabling Act. The County maintains that: (1) the Ordinance is a valid exercise of discretion as granted by Home Rule powers; and (2) the Enabling Act did not require the County to apply the exemption to all real property in Charleston or prohibit the County from applying the exemption to only certain classes of property. We disagree and find the trial court correctly concluded that the Ordinance exceeded the authority granted by the Enabling Act.

Determining whether a local ordinance is valid is a two-step process. The first step is to determine whether the county had the power to adopt the ordinance. If no power existed, the ordinance is invalid. If the county had the power to enact the ordinance, the second step is to determine whether the ordinance is consistent with the Constitution and general law of the State. Bugsy's, Inc. v. City of Myrtle Beach, 340 S.C. 87, 93, 530 S.E.2d 890, 893 (2000).

At issue is whether the Ordinance is consistent with the Enabling Act, and this necessarily involves the statutory construction of the Enabling Act. The cardinal rule of statutory construction is for the Court to ascertain and effectuate the intent of the legislature. E.g., Grant v. City of Folly Beach, 346 S.C. 74, 551 S.E.2d 229 (2001)

. The trial court found that if a county enacted an ordinance pursuant to the Enabling Act, then all property, except those properties specifically listed under subsections 12-37-223A(A)(1), (2) & (3), was intended to receive the exemption. We agree.

"The canon of construction `expressio unius est exclusio alterius' or `inclusio unius est exclusio alterius' holds that `to express or include one thing implies the exclusion of another, or of the alternative.'" Hodges v. Rainey, 341 S.C. 79, 86, 533 S.E.2d 578, 582 (2000). As we explained in Hodges v. Rainey: "`The enumeration of exclusions from the operation of a statute indicates that the statute should apply to all cases not specifically excluded. Exceptions strengthen the force of the general law and enumeration weakens it as to things not expressed.'" Id. at 87, 533 S.E.2d at 582 (quoting Norman J. Singer, Sutherland Statutory Construction § 47.23 at 227 (5th ed.1992)).

Citing West Virginia Pulp & Paper Co. v. Riddock, 225 S.C. 283, 82 S.E.2d 189 (1954), the trial court employed the principle of expressio unius est exclusio alterius to find that the Enabling Act granted only three exceptions to the application of the exemption. Thus, the trial court found that the County was unauthorized to enact an ordinance which, in effect, excluded all real property other than owner-occupied primary residences.

In Riddock, a manufacturer challenged Charleston County's demand for taxes levied for the servicing of county bonds. The manufacturer argued it was entitled to a statutory exemption from these taxes. The statute stated that an "[e]xemption from county taxes (but not from school taxes or public service district taxes) is hereby granted to [certain manufacturing plant construction]." Id. at 285, 82 S.E.2d at 189 (emphasis added). The trial court in Riddock applied the principle expressio unius est exclusio alterius and concluded that "the Legislature must have intended that the exemption should apply to taxes levied for all County purposes save for those purposes specifically excluded." Id. at 287-88, 82 S.E.2d at 189. In other words, except for school and public service district taxes (the express exceptions), the exemption applied, and taxes servicing county bonds were exempt for qualifying manufacturers. The Court agreed with the trial court and adopted its order as the opinion for ...