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South Carolina: Appellate Review of Quiet Title Action after Tax Sale

Posted By USFN, Tuesday, April 17, 2018
Updated: Monday, April 16, 2018

April 17, 2018

by Ronald Scott and Reginald Corley
Scott & Corley, P.A. – USFN Member (South Carolina)

In the recent 2018 South Carolina Court of Appeals case, Equivest Financial, LLC v. Ravenel, which involved a quiet title action on a property sold at tax sale, the appellant (Ravenel) raised multiple issues on appeal. Specifically, the appellant asserted that: (1) the trial court erred in failing to take testimony; (2) the tax sale was void because the property was not levied, advertised, and sold in the name of the true owner; (3) judicial estoppel does not apply because Ravenel was not a party to the previous action; and (4) the delinquent tax collector did not comply with statutory requirements in sending notice to Ravenel. The court addressed these arguments by finding that: (1) the attorney for the appellant did not preserve the first issue for appeal, and (2) the doctrine of res judicata applied, barring the appellant from raising the other issues.

The facts, briefly, are that Ravenel (just prior to filing bankruptcy) conveyed the subject property to her children for five dollars in consideration. In the subsequent bankruptcy proceeding, Ravenel failed to indicate this perceived fraudulent conveyance in her schedules; likewise, Ravenel did not tell her children about the conveyance or physically deliver the deed to them. After Ravenel filed bankruptcy she failed to pay her annual property taxes. As required by statute, the Charleston County Delinquent Tax Collector (DTC) sent notices to the children based on their addresses listed on the most recent deed of record. After multiple attempts to notify the children of the delinquent taxes on the property (i.e., notice by publication, issuance of a final notice of property redemption, and a failure of Ravenel to pay the redemption amount of $27,849.06), the property was sold at tax sale to Equifunding, who conveyed the property to the respondent in this action, Equivest Financial LLC. After this conveyance, Ravenel’s children brought a quiet title action, seeking to have the tax deed set aside. This case deals with the appeal of that action.1 The main issues in the appeal related to the doctrines of judicial estoppel and res judicata.

Judicial Estoppel

First, the court considered whether Ravenel was judicially estopped from claiming a position inconsistent with the one that she held in a previous court action. The five elements of judicial estoppel are: (1) two inconsistent positions taken by the same party or parties in privity with one another; (2) the positions must be taken in the same or related proceedings involving the same party or parties in privity with each other; (3) the party taking the position must have been successful in maintaining that position and have received some benefit; (4) the inconsistency must be part of an intentional effort to mislead the court; and (5) the two positions must be totally inconsistent.2

In the present case, with respect to the third element, the court found that Ravenel was not successful in establishing that she was the true owner of the property. Here, Equivest Financial LLC was found to be the true owner of the property by the trial court; therefore, the court of appeals found that judicial estoppel did not apply.

Res Judicata

Second, the court considered whether the elements of res judicata were met and thereby barred all other claims. The court found the three-element test was met: (1) the action involves the same identity of the parties or their privies; (2) the subject matter is identical; and (3) the prior suit adjudicated the issue with a final, valid judgment on the merits.3

In this case, Ravenel’s interests were essentially the same interests as her children’s interests in the property. Accordingly, Ravenel was deemed to be the real individual in interest with regard to the subject property. Further, the court found that the subject matter element was met because the case presented to the court was the identical issue surrounding whether the tax sale was valid. Finally, the court found that the trial court heard the first case in full and made a ruling on the issue, which the court of appeals affirmed. Due to the fact that the three elements of res judicata were met, all claims were barred.

1 Equivest Fin., LLC v. Scarborough, 2013 WL 8541673, Op. No. 2013-UP-495 (S.C. Ct. App. filed Dec. 23, 2013).
2 Auto-Owners Ins. Co. v. Rhodes, 405 S.C. 584, 598, 748 S.E.2d 781, 788 (2013).
3 7 S.C. Jur. Estoppel and Waiver § 27 (1991).

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Note for consideration of the USFN Award of Excellence: This article is not a "Feature."


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