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South Carolina: Appellate Court Upholds Judicial Foreclosure Sale

Posted By USFN, Tuesday, October 10, 2017
Updated: Tuesday, October 3, 2017

October 10, 2017

 

by Ronald Scott and Reginald Corley
Scott & Corley, PA – USFN Member (South Carolina)

In Wachesaw Plantation East Community Services Association, Inc. v. Alexander (S.C. Ct. App. June 28, 2017), the lower court’s decision to uphold the judicial foreclosure sale of a parcel of property was affirmed. Todd Alexander, the homeowner, contended that the judicial sale should be vacated because the sale price was inadequate. Moreover, due to his health problems, he asserted that he lacked knowledge regarding the scheduled judicial sale. The homeowner further argued that because the sale price of the property was $135,000 less than the tax valuation, and his inability to attend the judicial sale, the winning bidder was unjustly enriched.

Sale Price & Notice of Judicial Sale
Regarding the first issue surrounding the allegedly inadequate sale price, the court found that a judicial sale can be set aside if, “(1) the sales price ‘is so gross as to shock the conscience[;]’ or (2) the sale ‘is accompanied by other circumstances warranting the interference of the court’” [citing Wells Fargo Bank, NA v. Turner, 378 S.C. 147, 150 (S.C. Ct. App. 2008), which quotes Poole v. Jefferson Standard Life Ins. Co., 174 S.C. 150, 157 (1934)]. As stated in Turner, “the determination of whether a judicial sale should be set aside is a matter left to the sound discretion of the trial court,” citing Investors Sav. Bank v. Phelps, 303 S.C. 15, 17 (S.C. Ct. App. 1990). Moreover, in the event that a party seeks “to set aside a judicial sale on the ground that the price” is merely inadequate (as opposed to shocking the conscience), the moving party “must show excusable neglect.” (See Turner, note 1.)

In Wachesaw Plantation, the homeowner did not contend that the sale price “shocked the conscience,” stating rather that it was simply inadequate. The homeowner claimed that his health problems (which included periodic hospitalization) prevented him from responding to, or having knowledge of, the judicial sale. The court found that not only was public notice (advertisement in a newspaper of general circulation) properly given, but the foreclosure judgment and notice of sale were among the uncollected mail items in the homeowner’s post office box (and brought to the homeowner’s hospital room prior to the judicial sale). Given these circumstances, the homeowner failed to demonstrate excusable neglect. The court determined that proper notice was given and furthermore — despite being hospitalized and unable to personally attend the judicial sale — the homeowner could have sent an agent to the judicial sale. Based on these reasons, the master in equity judge did not abuse her discretion in declining to set aside the judicial sale of the property.

Redemption
A second issue raised by the homeowner was whether he had an equitable right to redeem the property up to the time that the bidder complied with the bid and received the foreclosure deed. The appellate court cites to the state statute protecting a bona fide purchaser at a judicial sale who does not have notice of any irregularities. [See S.C. Code § 15-39-870 (2016).] South Carolina has long protected the rights of good faith purchasers at judicial foreclosure sales. Robinson v. Estate of Harris, 378 S.C. 140, 144-45 (S.C. Ct. App. 2008). Additionally, S.C. Code § 15-39-830 (2015) states: “Upon a judicial sale being made and the terms complied with the officer making the sale must execute a conveyance to the purchaser which shall be effectual to pass the rights and interests adjudged to be sold.”

Conclusion
In the present case, no deficiency judgment was sought against the homeowner; therefore, the bidding did not need to remain open for an additional 30 days post-sale (as required by statute) and, again, no claim was made that the sale price “shocked the conscience.” The court found no irregularities with the judicial sale in Wachesaw Plantation.

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