Belle Hall Plantation Homeowner's Association, Inc., Plaintiff,
John A. Murray, Trustee of John E. Murray & Gloria C. Murray Family Trust, Respondent, and David Conor Keys & Karen Keys, Appellants. Appellate Case No. 2014-002018
December 7, 2016
From Charleston County Mikell R. Scarborough,
Conor Keys, of Charleston, for Appellants.
Megan Reece, of Reece Law Firm, LLC, of Mount Pleasant, for
foreclosure action, D. Conor Keys and Karen Keys (the Keys)
allege the Master-in-Equity erred by vacating a foreclosure
sale, denying their motion to stay the order vacating the
sale, and denying their motion to strike affidavits presented
to the master. We affirm.
22, 2013, Belle Hall Plantation Homeowners Association (Belle
Hall) filed a complaint for foreclosure of its lien on
property located at 378 Jardinere Walk in Mount Pleasant,
South Carolina. The property, originally bought by John E.
Murray and Gloria C. Murray, was transferred to John A.
Murray as Trustee for the John E. Murray and Gloria C. Murray
Family Trust. The complaint alleged John A. Murray
(Murray) failed to pay assessments to Belle Hall and owed
$1590.31 in principal, late fees, and interest.
Hall attempted to serve Murray with notice of the suit at
three different addresses, two of which were nursing homes,
but was unsuccessful. Belle Hall filed an Affidavit for Order
of Publication on September 30, 2013. Accompanying the
affidavit were four documents. The first was a Westlaw search
for John E. Murray. That document showed five separate
addresses for John E. Murray. The remaining pages showed
Belle Hall attempted service at the first three addresses but
was unable to effect service. On October 4, 2013, the
Charleston County Clerk of Court issued an Order for Service
Via Publication. In its order, the clerk of court stated,
"the Defendant, Murray, Trustee of John E. Murray and
Gloria C. Murray Family Trust, on whom service of the Summons
and Complaint is to be made cannot, after due diligence, be
found in this State . . . ." The order provided that
service could be effected by publication in the Moultrie
News. Belle Hall published the notice as
failed to file a responsive pleading and Belle Hall filed an
affidavit of default. The case was then referred to the
Master-in-Equity for Charleston County for a hearing. The
master held a final hearing on March 18 and filed an order
foreclosing Belle Hall's lien and ordering the property
sold to pay the lien on April 8, 2014. On March 26, 2014, the
tenants staying at the 378 Jardinere Walk property left
Murray a letter at his home giving him notice of the final
hearing. That same day, Murray attempted to contact counsel
for Belle Hall by telephone and email, offering to pay any
money owed. He never received a response and retained an
attorney on May 9, 2014. Murray's counsel checked the
court's docket, which reflected the house was not to be
sold before May 20, 2014.
master sold the property to the Keys for $100, 000 on May 6,
2014. Pursuant to the master's order, the
Keys paid the required deposit and had twenty days to pay the
remainder of their bid.
15, 2014, Murray served a motion to vacate the entry of
default and set aside the sale. Also on May 15, Murray's
counsel called an area attorney to discuss "a host of
legal developments and caselaw." During that
conversation, Murray's counsel described his case to the
other attorney. The attorney then asked Murray's counsel
if the case involved Belle Hall. The attorney notified
Murray's counsel that the winning bidder at the
master's sale worked as an attorney in her office. The
two did not discuss the case any further.
16, 2014, the Keys paid the remaining balance of their bid
amount. That same day, the master issued a deed to the Keys
conveying the property. The Keys presented the deed to the
Register of Mesne Conveyances on May 23, 2014, and the
Register recorded the deed.
master held a hearing on Murray's motion to vacate on
July 3, 2014. Murray argued the judgment should be vacated
pursuant to Rule 60(b), SCRCP,  and "there was an
[a]ffidavit of [s]ervice that was a misrepresentation to the
[c]ourt. And that misrepresentation to the court we would
argue is fatal." Murray presented the master an
affidavit he prepared detailing the issues with service and
an affidavit from Peter Tecklenburg, the Charleston County
Auditor, which detailed that the property tax records
indicated the property tax bill for the property was sent to
Murray at his home address.
Hall argued it searched the Charleston County property
records website and the mailing address it showed was 3100
Tradition Lane, a location at which Belle Hall attempted
service. Belle Hall also argued that in order to vacate the
foreclosure sale, Murray must prove something more than
misrepresentation-he must prove fraud. Belle Hall asserted it
attempted to find an address to serve Murray but could not
Keys presented the master with a memorandum in opposition to
the motionand argued Murray's motion was untimely
under Rule 59(e), SCRCP,  and there was insufficient evidence to
support Murray's 60(b) motion. The Keys also argued they
were bona fide purchasers. Finally, the Keys asserted the
price they paid for the property was not so grossly
inadequate as to shock the conscience, such that the sale
should be voided.
master took the matter under advisement and issued its formal
ruling on July 22, 2014. The master's order stated,
"The [c]ourt finds that in the interest of equity and
for good cause shown that [Murray's] motion be
granted." The order then provides an accounting of funds
held by the master, disperses those funds accordingly, and
voids the master's deed issued to the Keys.
to the master's written order, he notified the parties he
would be ruling in favor of Murray. On July 22, 2014, before
the master filed its written order, the Keys filed a motion
to stay the order vacating the sale and for an order of
August 1, 2014, the Keys filed a motion pursuant to Rule
59(e) to alter or amend the order vacating the judgment. The
Keys again argued they were bona fide purchasers, that Murray
did not contest that the Keys were bona fide purchasers,
Murray failed to show evidence of extrinsic fraud as required
under Rule 60(b)(3), SCRCP, the master used an incorrect
standard to vacate the sale, the master had no authority to
overrule the Clerk of Court's order of publication, and
Murray came to the court with unclean hands because he slept
on his rights.
August 4, 2014, Murray also filed a motion pursuant to Rule
59(e) to alter or amend the master's order. Murray
asserted the master should amend its order to make specific
findings of fact and conclusions of law.
August 18, 2014, the master held a hearing on the motions
filed by the Keys and Murray. The Keys first argued the Clerk
of Court made a finding that Belle Hall acted with due
diligence in attempting to serve Murray and the master was
without authority to overrule the Clerk of Court absent fraud
or collusion. The Keys again argued they were bona fide
purchasers. The Keys argued any affidavits produced by Murray
at this stage to rebut his bona fide purchaser argument were
inappropriate in a 59(e) hearing. During the hearing, the
Keys acknowledged they had actual notice of Murray's
intent to file a motion to vacate the sale prior to paying
the remaining bid amount.
asserted he did not discover when the Keys paid the balance
of their bid until August 7, so any questions about bona fide
purchasers should be treated as newly discovered evidence.
Murray also argued his 59(e) filing should be considered
responsive to the factual allegations in the Keys' 59(e)
motion. Murray asserted actual knowledge of his impending
motion disqualified the Keys from bona fide purchaser status.
Keys again argued Murray failed to present any evidence or
argument regarding their bona fide purchaser status during
the first hearing and should therefore be prohibited from
arguing those points during a 59(e) motion. The Keys also
asserted the only ground for Murray's motion to vacate
was under Rule 60(b)(3) and any other finding was not
presented to the court previously.
master stated, "This [c]ourt has inherent equitable
powers and in the interest of justice as to make decisions
that impact other people's lives. . . . I don't find
there was fraud, but I do find there was negligence in the
failure to notify Mr. Murray." The master orally granted
Murray's motion and requested he prepare a proposed
order. The master also denied the Keys' motions to stay
the order vacating the sale and to strike the affidavits
presented prior to the 59(e) hearing. The master declined to
rule on the bona fide purchaser issue.
master filed its amended order on February 10, 2015. The
master included the findings of fact Murray requested in his
motion to amend and found Belle Hall's actions in
attempting to serve Murray to be grossly negligent.
Recognizing the fraud or collusion standard generally
required in cases regarding orders of publication, the master
found the service process in this case "a
'structural defect in the constitution of the trial,
(defying) analysis by harmless error standards.'"
Because of the defective service, the master found it lacked
personal jurisdiction over Murray; therefore, the judgment of