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Inc. v. Hale

Court of Appeals of South Carolina

April 4, 2018

Winrose Homeowners' Association, Inc. and Regime Solutions LLC, Respondents,
v.
Devery A. Hale and Tina T. Hale, Appellants. Appellate Case No. 2015-001807

          Heard May 3, 2017

          Appeal From Richland County Joseph M. Strickland, Master-in-Equity

          Phillip Anthony Curiale and Brian L. Boger, both of The Law Office of Brian L. Boger, of Columbia, for Appellants.

          Stephanie Carol Trotter, of McCabe, Trotter & Beverly, P.C., of Columbia, for Respondent Winrose

          Homeowners' Association, Inc.; Eric Christopher Hale, of Clarkson Law Firm, LLC, of Columbia, for Respondent Regime Solutions, LLC.

          THOMAS, J.

         Appellants Devery A. Hale and Tina T. Hale filed this appeal following the denial of their motion to set aside a foreclosure sale. Appellants claim the successful bid at the foreclosure sale shocked the conscience and violated equitable principles. We affirm.

         FACTS/PROCEDURAL HISTORY

         In February 2014, Respondent Winrose Homeowners' Association, Inc. (Winrose) filed a foreclosure action alleging Appellants failed to pay their association dues. In July 2014, the master filed a judgment of foreclosure ordering the property sold to satisfy the debt. The judgment of foreclosure stated the sale "shall be subject to . . . senior encumbrances" and specifically subject to a senior mortgage but did not disclose the outstanding balance of the mortgage. Regime Solutions, LLC (Regime) was the successful bidder at the foreclosure sale, which took place in August 2014. Regime's successful bid was for $3, 036.

         In November 2014, Appellants filed a motion to vacate the foreclosure sale. Appellants claimed the property's fair market value as of October 31, 2014, was $128, 000 and the mortgage balance for the property was $66, 004. During the hearing on Appellants' motion to vacate, Appellants claimed the master should compare Regime's successful bid of $3, 036 to the amount of equity Appellants had in the property, which they calculated to be $61, 996. Comparing the successful bid to their equity, Appellants concluded the bid was for less than 10% of the fair market value and, thus, shocked the conscience. Appellants also asserted the master had "the ability in [his] gavel to do equity where perhaps equity should be done." Appellants went on to contend they were "hard working people" and "deserve[d]" the property. Appellants failed, however, to argue any irregularities with the foreclosure sale process. They failed to participate in any of the proceedings until filing the motion to set aside the sale despite admittedly receiving notices of the proceedings. They simply "put the papers in a drawer and forgot about them."

         In response, Respondents argued the outstanding mortgage balance must be added to the successful bid to calculate an effective bid price for consideration under the "shocks-the-conscience" standard. Regime concurred with Appellants' assertion the property's fair market value was $128, 000. The master issued his ruling in April 2015. The master noted Regime purchased the property subject to the mortgage balance of $66, 004. The master agreed with Respondents that the appropriate calculation was to combine the successful bid amount with the mortgage balance to create an "effective sale price." Under this calculation, the master concluded Regime effectively bid $69, 040 for the property, which constituted 54% of the fair market value. The master determined a bid of 54% of the fair market value did not shock the conscience, and he denied Appellants' motion to vacate the foreclosure sale. The master further explained "the practice of homeowners' association foreclosures would effectively be eradicated if [Appellants]' position came to bear." This appeal followed.

         ISSUES ON APPEAL

         1. Whether the master erred by denying Appellants' motion to vacate the foreclosure sale because the successful bid shocked the conscience.

         2. Whether the master erred by denying Appellants' motion to vacate the foreclosure sale because equitable circumstances of the foreclosure demanded the sale be vacated.

         STANDARD ...


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