Wachesaw Plantation East Community Services Ass'n v. Alexander , 414 S.C. 355 ( 2015 )

THE STATE OF SOUTH CAROLINA
In The Supreme Court
Wachesaw Plantation East Community Services
Association, Inc., Respondent,
v.
Todd C. Alexander, Petitioner.
Appellate Case No. 2012-213400
ON WRIT OF CERTIORARI TO THE COURT OF APPEALS
Appeal From Georgetown County
The Honorable Joe M. Crosby, Master-in-Equity
Opinion No. 27585
Heard November 19, 2014 – Filed November 4, 2015
REVERSED AND REMANDED
Charles T. Smith, of Georgetown, for Petitioner.
Hal LaVaughn Beverly, Jr., of McCabe, Trotter &
Beverly, P.C., of Columbia, for Respondent.
Jack M. Scoville, Jr., of Law Offices of Jack M. Scoville,
Jr., P.A., of Georgetown, for Third-Party Bidder William
George.
JUSTICE BEATTY: This action arose out of the foreclosure of a lien for
delinquent homeowner regime fees against Todd C. Alexander. Alexander did not
appeal the foreclosure; however, he moved to vacate the resulting sale.
Alexander's motion to vacate the sale was denied and Alexander appealed. The
Court of Appeals dismissed the appeal, finding Alexander failed to comply with
section 18-9-1701 of the South Carolina Code to stay the sale and, therefore, the
master-in-equity's issuance of the deed rendered the appeal moot.
I. Facts
Alexander purchased a home for his elderly father in Murrells Inlet, South
Carolina. After his father was released from a second hospitalization, he did not
return to the house. Alexander neglected to pay the regime fees on the home and
subsequently the homeowners' association's attorney informed him that a lien had
been placed against the house.
The homeowners' association initiated a foreclosure action and served a
summons, complaint and lis pendens on Alexander. He signed the certified receipt
acknowledging that he received the documents. However, he never responded to
the complaint, which led to a default. He was subsequently served with notice of
the hearing, affidavit of default, and the order of default at the same address. He
made no appearance and filed no appeal.
1
Section 18-9-170 reads in relevant portion:
If the judgment appealed from direct the sale or delivery of possession
of real property, the execution of the judgment shall not be stayed
unless a written undertaking be executed on the part of the appellant,
with two sureties, to the effect that during the possession of such
property by the appellant he will not commit or suffer to be committed
any waste thereon and that if the judgment be affirmed he will pay the
value of the use and occupation of the property from the time of the
execution of the undertaking until the delivery of possession thereof
pursuant to the judgment, not exceeding a sum to be fixed by a judge
of the court by which judgment was rendered and which shall be
specified in the undertaking.
S.C. Code Ann. § 18-9-170 (2014).
The homeowners' association properly proceeded to have the home
auctioned off to the highest bidder at a foreclosure sale. Jerry Callahan, William
George's authorized agent, was the highest bidder. By Report and Judgment of
Foreclosure Sale filed on April 29, 2011, the master-in-equity sold the property but
did not issue the deed.
Alexander, who lives in Pennsylvania, employed a property management
company to inspect the house bi-weekly and maintain the property and grounds
during the two years that the house had been vacant after his father moved out. In
June 2011, while he was hospitalized2, he learned from the property management
company that the home had a new owner. He then asked a friend to bring his mail
to the hospital. He alleges he first received notice of the foreclosure action and
sale at that time.
He immediately tendered the regime fee payment in full to the homeowners'
association's attorneys but they declined to accept it because of potential liability to
the third-party bidder. Alexander then filed a motion to vacate the sale. In his
memorandum in support of the motion, Alexander argued four grounds: (1) the
sale price was inadequate and the sale was accompanied by other facts warranting
the court's interference; (2) the sale should be vacated to avoid forfeiture; (3) the
sale should be vacated to avoid the third-party bidder's unjust enrichment; and (4)
he timely redeemed the property.
The master-in-equity denied the motion for several reasons. He found that
Alexander failed to allege improper service, lack of notice, lack of jurisdiction,
excusable neglect and offered no reason for not sending a check once he received
the summons and complaint. Moreover, the master-in-equity found Alexander's
failure to appeal the Decree of Foreclosure waived his equity-of-redemption rights.
The master-in-equity then issued the deed to Callahan, as agent for George,
and it was duly recorded. Alexander timely filed and served a Notice of Appeal
from the master's order denying his motion. George filed and served a motion 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 with George in its order of dismissal. It
concluded that Alexander failed to stay the foreclosure sale because he did not
2
Alexander was not hospitalized at the time of the foreclosure sale.
comply with section 18-9-170 and the appeal is now moot because the master-in-
equity properly issued the deed. This Court granted certiorari to review the Court
of Appeals' decision.
II. Issue Presented
Does the subsequent issuance of a deed moot a timely appealed order
denying a motion to vacate the sale of foreclosed property?
III. Discussion
A. Mootness
"A case is moot where a judgment rendered by the Court will have no
practical legal effect upon an existing controversy because an intervening event
renders any grant of effectual relief impossible for the Court." S.C. Ret. Syst. Inv.
Comm'n v. Loftis, 402 S.C. 382, 384, 741 S.E.2d 757, 758 (2013). "[M]oot appeals
result when intervening events prevent a decision on appeal from having an
immediate impact on the parties." 15 S.C. Jur. Appeal and Error § 19 (Supp.
2014). "Appellate court[s] will not pass on moot and academic questions or make
an adjudication where there remains no actual controversy." Linda Mc Co., Inc. v.
Shore, 390 S.C. 543, 558, 703 S.E.2d 499, 506 (2010).
"In the civil context, there are three general exceptions to the mootness
doctrine." Curtis v. State, 345 S.C. 557, 568, 549 S.E.2d 591, 596 (2001). "First,
an appellate court can take jurisdiction, despite mootness, if the issue raised is
capable of repetition but evading review." Id. "Second, an appellate court may
decide questions of imperative and manifest urgency to establish a rule for future
conduct in matters of important public interest." Id. at 568, 549 S.E.2d at 596.
"Finally, if a decision by the trial court may affect future events, or have collateral
consequences for the parties, an appeal from that decision is not moot, even though
the appellate court cannot give effective relief in the present case." Id. at 568, 549
S.E.2d at 596.
B. Arguments
Alexander posits three arguments for why the Court of Appeals erred in
issuing an order to dismiss the appeal. First, a nonparty filed the motion to dismiss
the appeal in contravention of Condon v. State, 354 S.C. 634, 583 S.E.2d 430(2003). Alexander notes that George could have intervened pursuant to Rule 24 of
the South Carolina Rules of Civil Procedure and Rule 213 of the South Carolina
Appellate Court Rules. Second, the dismissal created a new rule that a judicial
sale cannot be appealed unless a writ of supersedeas has been issued and a bond
posted, which runs counter to the rule in Ex Parte Moore, 346 S.C. 274, 550
S.E.2d 877 (Ct. App. 2001). Finally, the dismissal conflicts with McLemore v.
Powell, 32 S.C. 582, 10 S.E. 550 (1889), in that it holds the issuance of a deed
renders an appeal from a judicial sale moot.
C. Analysis
Alexander argues the Court of Appeals' order conflicted with established
precedent that the issuance of a deed does not moot an appeal. Although we offer
no opinion on the merits of Alexander's appeal, we agree that the Court of Appeals
erred.
Our jurisprudence establishes that, despite the master-in-equity's issuance of
a deed, an appellate court may reach the merits of the appeal. See Antrum v.
Hartsville Prod. Credit Ass'n, 228 S.C. 201, 89 S.E.2d 376 (1955) (deciding on
petition to set aside foreclosure sale and declaring deed to purchaser void); Nichols
v. Andrews, 157 S.C. 334, 154 S.E. 305 (1930) (deciding appeal from foreclosure
and sale of property where deed was issued and no bond posted) ; Ex Parte
Andrews, 152 S.C. 325, 150 S.E. 313 (1929) (explaining that purchaser of property
was entitled to possession of property pending appeal because no bond was posted;
remanding the case to be heard on the merits); Muckenfuss v. Fishburne, 68 S.C.
41, 46 S.E. 537 (1903) (deciding defendant's appeal from order to set aside
judgment of foreclosure where deed was executed to the purchaser); Scott v. Scott,
29 S.C. 414, 7 S.E. 811 (1888) (deciding an action to enjoin the foreclosure of a
mortgage for the sale of a mortgaged property after a deed was issued to plaintiff);
Heritage Fed. Sav. & Loan v. Eagle Lake & Golf Condominiums, 318 S.C. 535,
458 S.E.2d 561 (Ct. App. 1995) (deciding homeowners' association appeal from
foreclosure and sale where a master deed was issued).
Based on the above-cited cases, it is clear that the issuance of a deed does
not moot the appeal of a foreclosure sale and an appellate court may reach the
merits. Accordingly, we find the Court of Appeals erred in declaring the case
moot because a deed was issued after the sale of the property.
IV. Conclusion
The issuance of a deed does not render a motion to vacate the foreclosure
sale moot. Our state appellate courts have reached the merits of such appeals time
and again.
We therefore reverse and remand3 this matter to the Court of Appeals to be
considered on the merits.
REVERSED AND REMANDED.
TOAL, C.J., HEARN, J., and Acting Justice James E. Moore, concur.
PLEICONES, J., concurring in a separate opinion.
3
See State v. Grovenstein, 335 S.C. 347, 354 n.6, 517 S.E.2d 216, 219 n.6 (1999)
(explaining that remaining issues would be remanded to the Court of Appeals since
they were not considered by that court previously).
JUSTICE PLEICONES: I agree with the majority that the Court of Appeals
erred in dismissing petitioner's appeal as moot because the master issued a deed
while the appeal was pending. I reach my conclusion by a different route,
however, and therefore concur only in the result reached by the majority.
Here we are concerned with an appeal from an order refusing to set aside a judicial
sale. Petitioner's timely appeal of that order acted as an automatic stay of further
proceedings, including the issuance of a deed, pursuant to S.C. Code Ann. § 18-9-
220 (Supp. 2014). As the Court has explained,
The defendant certainly had the right to appeal from [the order
confirming the judicial sale]4 and obtain the judgment of the
tribunal of last resort as to its correctness before any
proceedings could be had under it [here, the buyer seeking
possession], for until such final judgment was obtained, it could
not be known whether there was any valid order of
confirmation. The notice of appeal from that order [confirming
the judicial sale] operated as a stay of further proceedings under
the provisions of section 3565 of the code.
LeConte v. Irwin, 23 S.C. 106, 112 (1885).
In my view, the parties, the Court of Appeals, and the majority are in error when
they analyze the question whether the appeal prevented the master from issuing the
deed under S.C. Code Ann. § 18-9-170 (1985), and decisions applying that statute
in appeals from orders of foreclosure.6 While § 18-9-170 applies to an appeal from
an order that directs the sale or delivery of possession of real property, such as an
4
Recall that under our earlier practice almost all foreclosure matters were referred
to the master-in-equity to make a report, which was not final until confirmed by the
circuit court. See Wachovia Bank of South Carolina, N.A. v. Player, 341 S.C. 424,
535 S.E.2d 128 (2000).
5
Now codified as § 18-9-220.
6
An appellant's failure to post the statutory bond required by § 18-9-170 does not
moot the foreclosure appeal. However, since the failure to post this bond permits
the foreclosure sale to proceed during the appeal, Ex parte Andrews, 152 S.C. 325,
150 S.E. 313 (1929), the remedy available to the mortgager is limited to the
recalculation of the debt owed. E.g., Nichols v. Andrews, 157 S.C. 334, 154 S.E.
305 (1930).
order of foreclosure,7 it does not apply to an appeal of an order refusing to vacate a
judicial sale. LeConte, supra.
I agree that the master should not have issued a deed during the pendency of
petitioner's appeal because that appeal acted as an automatic stay pursuant to § 18-
9-220. I agree that this erroneous action did not moot the appeal. I agree that
petitioner is entitled to have the merits of his appeal decided by the Court of
Appeals. I therefore concur in the majority's decision to reverse the Court of
Appeals' dismissal order and to remand the matter to that court for consideration of
the direct appeal.
7
See, e.g., Gerald v. Gerald, 30 S.C. 348, 9 S.E. 274 (1889).