January 5, 2016
by Ronald C. Scott and Reginald P. Corley
Scott & Corley, P.A. – USFN Member (South Carolina)
A decision has been issued by the South Carolina Supreme Court in Wachesaw Plantation East Community Services Association v. Alexander, 2015 WL 6735746 (S.C. Nov. 4, 2015). The underlying case arose out of the foreclosure of a lien for delinquent homeowners association fees against Alexander, who had purchased a home for his elderly father. After a hospitalization, Alexander’s father did not return to the home. Alexander did not pay the regime fees, and the homeowners association commenced an action to foreclose the lien.
Alexander was served process, but never responded to the summons and complaint. He also failed to make any appearance in the case until after the property was sold to a third-party purchaser at judicial sale. Two months after the judicial sale Alexander tendered, in full, the homeowners association fees. However, the homeowners association would not accept payment because of potential liability to the third-party purchaser.
The foreclosure was not appealed by Alexander, although he moved to vacate the underlying judicial sale. The master-in-equity denied the motion because Alexander failed to allege improper service, lack of notice, lack of jurisdiction, or excusable neglect; offered no reason for not sending a check to pay the homeowners association fees in full once he received the summons and complaint; and failed to appeal the foreclosure judgment. After denying Alexander’s motion, the master-in-equity issued a foreclosure deed to the third-party purchaser. Alexander appealed the denial of his motion.
The third-party purchaser moved to dismiss the appeal on the ground that the issue appealed is moot because the foreclosure sale was finalized before Alexander filed and served his appeal. The Court of Appeals agreed, concluding that the appellant did not comply with South Carolina Code Section 18-9-170, which requires the posting of a bond and a written undertaking making assurances to not commit waste to the property and to pay rent if the foreclosure judgment is affirmed.
The South Carolina Supreme Court granted certiorari to review the appellate decision and to address the question of whether the subsequent issuance of a foreclosure deed mooted a timely filed appeal of an order denying a motion to vacate the sale of a foreclosed property. The Supreme Court’s opinion begins with a discussion of mootness and the exceptions to the general rule that a court will not render a decision when the controversy is moot. In its analysis, the court quickly concludes that South Carolina has established precedent that the issuance of a foreclosure deed does not moot an appeal. The court cites numerous decisions reaching the merits of the appeal despite a master-in-equity having already issued a foreclosure deed, as well as case law where the merits were decided despite the appellant failing to post a bond.
The Supreme Court did not offer an opinion on the merits of Alexander’s appeal, but did say that the issuance of a foreclosure deed clearly does not moot the appeal of a foreclosure sale, and that an appellate court may reach the merits of the underlying foreclosure case.
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