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The Forfeited Land Commission of Bamberg County v. Eartha Dean Moody Beard

Court of Appeals of South Carolina

June 20, 2018

The Forfeited Land Commission of Bamberg County, Plaintiff,
v.
Eartha Dean Moody Beard, et al., Ralph Johnson, et al., of whom Ralph Johnson is answering as Defendant -Third Party Plaintiff,
v.
Bank One, N.A., Conseco Finance Servicing Corp., Equity One, Inc., JPMorgan Chase Bank, National Association, as trustee for the C-Bass Mortgage Loan Asset-Backed Certificates, Series 2005-CB2, and Mark D. Johnson, JOHN DOE AND MARY ROE, fictitious names representing any unknown minors, incompetents, persons in the military, persons imprisoned and persons under any legal disability and RICHARD ROE AND SARAH DOE, fictitious names representing unknown devisees, distributees, or personal representatives of LILLIAN G. BROWN, GERALDINE G. REED, RETHA G. GREGGS, LILLIE D. GRAY, GEORGE DAVIS, JULIA DAVIS, VIVIAN DAVIS, MARGARET DAVIS, LILLIE MAE DAVIS, LECIA RICE, ROY H. SETZLER, DYAN SETZLER, LUCIOUS WRIGHT, JULIA JONES, EDITH K. GILMORE, EDDIE GRIMES, HENRY C. GUESS, WILLIE THOMPSON, BESSIE THOMPSON, ANNIE MAE WHITE, and also all other unknown persons claiming any right, title, estate, or lien upon the real estate which is the subject of this action, Third Party Defendants, Of Whom Ralph Johnson is the Respondent and Coretta McMillan is the Appellant. Appellate Case No. 2014-002727

          Heard October 5, 2017

          Appeal From Bamberg County Edgar W. Dickson, Circuit Court Judge

          Michael C. Tanner, of Michael C. Tanner, LLC, of Bamberg; Zipporah O. Sumpter, of Sumpter Law Office, and Thomas Ray Sims, Sr., of Thomas Ray Sims Attorney, both of Orangeburg, for Appellant.

          James Martin Harvey, Jr., of Harvey & Kulmala, of Barnwell, for Respondent.

          LOCKEMY, C.J.

         Coretta McMillan appeals a circuit court order quieting title in favor of Ralph Johnson for a property he purchased at a tax sale. On appeal, she argues the circuit court erred in (1) failing to overturn the tax sale despite concluding the notice of levy was not posted on the property, (2) finding the two-year statute of limitations expired prior to McMillan filing her counterclaim, (3)ruling the Forfeited Land Commission properly assigned its bid to Johnson, and (4)declining to find the tax sale void as a matter of law because it was not held in strict compliance with statutory requirements. We reverse and remand.

         Facts and Procedural History

         Bessie and Willis[1] Thompson (collectively, the Decedents) died in 2004 and 2005, respectively. At the time of their deaths, the Decedents owned a single-family home in Bamberg County (the Residence). Willis devised the Residence to McMillan and his two other grandchildren; however, the Decedents' estate was not submitted to probate and the Decedents remained the record owners of the property.[2]

         Although McMillan paid the 2005 property tax for the Residence, she did not notify Bamberg County of the Decedents' death nor did she provide a substitute address where the tax notices should be mailed. In the spring of 2007, Bamberg County sent a letter to the Residence stating the 2006 property tax remained unpaid. In May 2007, Bamberg County sent a second notice to the Residence via certified mail. According to Bamberg County records, the certified envelope was returned as undelivered with the receipt marked "Deceased" above the Decedents' names. McMillan did not receive the delinquent tax notices, and in the summer of 2007 she rented the Residence to Bernard Hallman.

         After the second delinquent tax notice was returned as undelivered, Bamberg County referred the Residence to its Delinquent Tax Office (Tax Office) to post a notice of levy on the property and to include the property in a tax sale. The tax sale took place in November 2007, and pursuant to statute, the Tax Office submitted a minimum bid on behalf of the Forfeited Land Commission (FLC)-a commission within each county which exists to bid on real property otherwise not sold at a tax sale, and which holds title to that property until it can be sold or disposed of on such terms as appear to be in the county's best interest.[3] However, following the tax sale, Johnson contacted the Tax Office with an offer to purchase several dozen of the properties that had not been sold, including the Residence. The Tax Office agreed to assign Johnson the bids it had submitted on behalf of the FLC, thereby allowing Johnson to purchase the Residence and thirty-eight other properties for the minimum bid amount.

         In January 2009, McMillan, apparently unaware the Residence had been sold in 2007, paid a portion of the outstanding property taxes. Bamberg County subsequently sent McMillan a letter acknowledging receipt of her payment and informing her there were still delinquent taxes on the Residence. The letter did not mention the tax sale.

         When Johnson acquired a deed for the Residence in February 2009, he learned it was still occupied. Johnson first personally contacted the tenant, Hallman, requesting that he move out of the Residence. In January 2010, after Hallman had still not vacated the Residence, Johnson filed an eviction action against him in magistrate's court.

         Hallman subsequently notified McMillan of the eviction action. McMillan responded by contacting Johnson to inform him she had recently paid a portion of the outstanding property taxes and would be challenging the eviction action. However, the magistrate held Johnson's eviction action in abeyance when, in February 2010, the FLC filed a separate action in the circuit court to set aside the tax deeds for the Residence and the thirty-eight other properties Johnson acquired following the tax sale.

         In its lawsuit against Johnson, the FLC alleged the Tax Office had inappropriately assigned its bids to Johnson without the FLC's authority and had not conducted the tax sale in compliance with the "rigid statutory structure." Johnson answered, denying the tax sale was improper and asserting he had negotiated the purchase with the Tax Office, who was acting on behalf of the FLC when it assigned Johnson the bids. Johnson further claimed his deeds could not be challenged due to the lapse of the two-year statute of limitations contained in section 12-51-160 of the South ...


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