Court Opinion

ID: 4703388
Source: CourtListenerOpinion
Date Created: 2021-07-14 14:18:03.248187+00
Date Added: 2024-06-11T08:06:31.054627
License: Public Domain

THE STATE OF SOUTH CAROLINA
              In The Court of Appeals

Alterna Tax Asset Group, LLC, Appellant,

v.

York County, York County Treasurer, York County
Delinquent Tax Collector, Robert Clay Sparrow, Mickey
Crowe, Fort Mill Holdings, LLC, and David Baucom,
Respondents.

Appellate Case No. 2018-000944

                 Appeal From York County
     S. Jackson Kimball, III, Special Circuit Court Judge

                   Opinion No. 5836
       Submitted April 1, 2021 – Filed July 14, 2021

                        AFFIRMED

Robert Daniel Dodson, of Law Offices of Robert Dodson,
PA, and Matthew B. Rosbrugh, of MBR Law, LLC, both
of Columbia, for Appellant.

Paul S. Landis, of Fayssoux & Landis Attorneys at Law,
P.A., of Greenville, for Respondents Fort Mill Holdings,
LLC and David Baucom.

Margaret Nicole Fox and James Mixon Griffin, both of
Griffin – Davis, of Columbia, for Respondents Robert
Clay Sparrow and Mickey Crowe.
             Michael Kurt Kendree, Sr., of York, for Respondent York
             County.

HILL, J.: The subject of this action is a parcel of real property York County sold
at a 2014 tax sale. The appellant, Alterna Tax Asset Group, LLC, claims in its
complaint that it bought the property at the tax sale. Alterna seeks to void the sale
and cancel its ownership, relying upon § 12-61-10 of the South Carolina Code
(2014), which states in part:

             Any . . . person . . . , [that] has purchased at or acquired
             through a tax sale and obtained title to any real or personal
             property, may bring an action in the court of common
             pleas of such county for the purpose of barring all other
             claims thereto.

In its complaint, Alterna maintains its title to the property is clouded because the
sale was defective due to York County's failure to provide proper notice. Under this
theory, Alterna alleges four causes of action against York County and the other
Respondents: (1) declaratory judgment, (2) injunctive relief, (3) quiet title, and (4)
unjust enrichment.

After hearing Respondents' Rule 12(b)(6), SCRCP motions to dismiss, the Master
consulted York County's public real property records and took judicial notice that
Alterna was neither the purchaser of the property at the tax sale, nor the owner
currently listed on the deed. Accordingly, the Master ruled Alterna was not a real
party in interest and lacked standing to sue Respondents regarding the sale. As an
alternative ground for dismissal, the Master ruled that § 12-61-10 does not create a
valid cause of action to void a tax sale. Alterna now appeals.

                                          I.

A. S.C. Code § 12-61-10 and Alterna's claims for declaratory judgment and
injunctive relief

Alterna claims the Master erred in taking judicial notice of the real property public
records. See Rule 201, SCRE (providing when judicial notice is permitted). The
Master's use of judicial notice at the motion to dismiss stage in these circumstances
was problematic, but this appeal may be decided by a more fundamental issue:
whether, as the alleged tax sale purchaser, Alterna may seek to rescind its successful
purchase based on the facts alleged here. See Rule 220(c), SCACR (appellate court
may affirm upon any ground appearing in record). The plain language of § 12-61-10
states one who has acquired title through a tax sale "may bring an action . . . for the
purpose of barring all other claims thereto." We agree with the Master that the
purpose of § 12-61-10 is to clear a tax title, and we hold Alterna states no viable
cause of action under § 12-61-10 when its prayer for relief is to defeat rather than
defend its title. Accepting, as we must at the 12(b)(6) stage, Alterna's allegation that
it purchased the property at the tax sale, we must also conclude Alterna states no
valid cause of action for declaratory judgment and injunctive relief. Accordingly,
we affirm the dismissal of these causes of action as Alterna has failed to state a claim
upon which relief can be granted under § 12-61-10.

B. Alterna's claims for quiet title and unjust enrichment

Whether a winning bidder at a tax sale may use the quiet title doctrine or claim unjust
enrichment to defeat rather than affirm the bidder's title appear to be novel questions.
Novel questions of law should not ordinarily be decided at the motion to dismiss
juncture unless, as here, the issues present pure questions of law that need no further
factual framing. See Evans v. State, 344 S.C. 60, 68, 543 S.E.2d 547, 551 (2001).

A quiet title action is governed by § 15-67-10 of the South Carolina Code (2005).
We have held the intent of this statute was "to enlarge the power of the court to
determine adverse claims to land so as to authorize the quieting of title in cases where
an action would not lie under the strict rules of equity practice. . . . Such a statute,
being of a remedial nature, should be liberally construed and be held to embrace all
cases coming fairly within its scope." Benson v. United Guar. Residential Ins. of
Iowa, 315 S.C. 504, 509, 445 S.E.2d 647, 651 (Ct. App. 1994). Therefore, a plaintiff
in a quiet title action is not required to allege a trespass or even damages, and as long
as the alleged adverse claim "cannot be classified as imaginary or speculative, the
complaint states a cause of action under the statute." Id.

Despite this broad reading of the quiet title statute, Benson affirmed dismissal of a
complaint that challenged the enforceability of a judgment attaching to the plaintiff's
land. Id. at 509–10, 445 S.E.2d at 651. The plaintiff was not alleging the judgment
was invalid, only that it was unenforceable because it was placed against a previous
owner's interest in the land and the previous owner had no equity due to existing
mortgage liens. Id. We held the plaintiff's complaint failed to state a cause of action
for quiet title because there was no dispute the adverse claim (the judgment lien) was
valid. Id. at 510, 445 S.E.2d at 651.

Like the complaint in Benson, Alterna's complaint does not allege a proper cause of
action for quiet title because there is no existing "adverse claim." Neither the County
nor anyone else is challenging Alterna's tax title, so Alterna's complaint is
"imaginary or speculative." Alterna is not seeking to quiet its title but to end it.

That brings us at last to Alterna's unjust enrichment cause of action, which claims
the County was enriched by pocketing the tax sale proceeds yet delivering a
defective, clouded title. This claim collides fatally with § 12-51-160 of the South
Carolina Code (2014), which establishes as a matter of law the presumption that a
tax deed is prima facie evidence of good title. See also Wilson v. Moseley, 327 S.C.
144, 147, 488 S.E.2d 862, 864 (1997); Shell v. Duncan, 31 S.C. 547, 555, 10 S.E.330,
330–31 (1889). We further note the very clouds Alterna claims it can now see—
York County's allegedly defective notification—were matters of public record
visible to Alterna before the tax sale.

C. Justiciable controversy

There is yet another reason to affirm. Each of Alterna's claims rests on the belief
that its presumptively good legal title is hopelessly clouded and will someday be
snatched away by someone with a superior claim. Alterna therefore prays that the
court deem its title void and undo what has been done. This is the hallmark of a
non-justiciable controversy, one Alterna has created quite on its own. For many
good reasons, courts may not be called upon to tame paper tigers or pass upon issues
not subject to a genuine, concrete dispute. Byrd v. Irmo High Sch., 321 S.C. 426,
430–31, 468 S.E.2d 861, 864 (1996). It is true that the Uniform Declaratory
Judgment Act, S.C. Code Ann. §§ 15-53-10 to -140 (2005), is to be liberally
construed so courts may sort out the legal rights of parties when there is "at least the
ripening seeds of controversy" without awaiting an actual invasion of a party's rights.
Sunset Cay, LLC v. City of Folly Beach, 357 S.C. 414, 423, 593 S.E.2d 462, 466
(2004). But nothing is ripening here, and any ruling we could make would be
abstract and advisory.

Finally, we are mindful that trial courts should not dismiss pleadings with prejudice
at the 12(b) stage without allowing the pleader to amend its complaint (unless
amendment would be futile). Skydive Myrtle Beach, Inc. v. Horry County., 426 S.C.
175, 189–90, 826 S.E.2d 585, 592–93 (2019). Because any amendment would be
futile here, the judgment of the Master dismissing Alterna's complaint with prejudice
is

AFFIRMED.1

1
    We decide this case without oral argument pursuant to Rule 215, SCACR.
WILLIAMS and THOMAS, JJ., concur.