Ballard v. Benson

PREHEARING REPORT

THIS OPINION HAS NO PRECEDENTIAL VALUE. IT SHOULD
NOT BE CITED OR RELIED ON AS PRECEDENT IN ANY PROCEEDING EXCEPT AS PROVIDED
BY RULE 239(D)(2), SCACR.

THE STATE OF SOUTH CAROLINA

In The Court of Appeals

Vernon C. Ballard,       
Respondent,

v.

Alvin K. Benson, Rey’s Jewlers, Henry Taylor d/b/a Taylor Electric, Bobby
Mosley, United States of America and Joyce Equipment Company,       
Defendants,

Of Whom Alvin K. Benson is       
Appellant,

and

Rey’s Jewelers, Henry Taylor d/b/a Taylor Electric, Bobby Mosley, United
States of America and Joyce Equipment Company are       
Respondents.

Appeal From Anderson County

Ellis B. Drew, Jr., Circuit Court Judge

Unpublished Opinion No.  2004-UP-646

Submitted November 1, 2004 – Filed December
21, 2004 

AFFIRMED

Richard E. Thompson, Jr., of Anderson, for Appellant.

Harold P. Threlkeld, of Anderson, James D. McCoy, III, of
the U.S. Attorney’s Office and  Michael Stephen Chambers, of Greenville, for
Respondents.

PER CURIAM:  Alvin K. Benson appeals
the circuit court’s withdrawal of an earlier order and the subsequent issuance
of a decree of partition.  We affirm. [1]

FACTS

In August 1989, Best Amusement, Inc., conveyed 2.075
acres of property to Samuel L. McMullin and William M. Mattison.  In 1992, McMullen
and Mattison failed to pay taxes on the property. To settle the default, Anderson
County sold the easternmost acre to Vernon C. Ballard at a tax sale in October
1993.  Exactly one year later, following the statutory redemption period, Ballard
received his title.

On April 20, 1994, the federal government filed
a forfeiture action in the United States District Court for the District of
South Carolina against McMullen and Mattison for illegal drug activities.  The
complaint alleged McMullen and Mattison began purchasing cocaine from various
sources in 1984 and used money from cocaine sales to make the down payment on
the property. The complaint further alleged that the property should be forfeited
to the United States pursuant to 21 U.S.C.A. § 881(a)(6) (1999).  Anderson County
was notified of the action on April 21, 1994.

On September 25, 1995, a forfeiture order was entered
whereby McMullen and Mattison forfeited their interest in the property to the
United States. On November 19, 1998, the United States Marshal for the District
of South Carolina sold the property.  Alvin K. Benson successfully bid on the
property and received a deed, releasing the United States’ interest in the tract. 
A few months later, on February 26, 1999, the marshal executed a corrected deed
which specifically excluded the one-acre tract already sold by the County to
Ballard.  In late 2000, Ballard petitioned the circuit court for partition of
the property.  Benson responded, arguing the Marshal’s sale conveyed title to
the entire property and was superior to Ballard’s deed received from the county
tax sale.

The circuit court initially found for Benson. 
Ballard, however, filed a motion to alter or amend the order pursuant to Rule
52(b), SCRCP.  In support of his motion, Ballard submitted an affidavit from
Nancy Prince Mackey, Aiken County Treasurer, dated January 28, 2003.
[2]   Mackey asserted she conferred with the U.S. Attorney handling the
forfeiture and both agreed the United States’ interest in the property was subject
to Ballard’s deed.  After reviewing the affidavit, the circuit court withdrew
its earlier order.

In its final order, the circuit court recognized
Ballard’s one-acre interest in the property.  After determining the property
could not be practically divided or partitioned, the court ordered it be appraised
and sold, with proceeds distributed between Benson and Ballard according to
their respective interests. This appeal followed.

STANDARD OF REVIEW

The determination of title to real property is
at law.  Wigfall v. Fobbs, 295 S.C. 59, 60, 367 S.E.2d 156, 157 (1988). 
In an action at law tried without a jury, the trial judge’s factual findings
will not be disturbed on appeal unless wholly unsupported by the evidence or
controlled by an error of law; however, this court may correct errors of law
without deference to the lower court.  Simmons v. Bellamy, 349 S.C. 473,
476, 562 S.E.2d 687, 688 (Ct. App. 2002).

LAW/ANALYSIS

Benson argues he gained title to the entire property,
including the one-acre tract the County sold to Ballard, by virtue of the 1998
Marshal’s sale.  We disagree.

The federal government secured its interest
in the property pursuant to 21 U.S.C.A. § 881(a)(6) (1999), which provides that
any property furnished by any person in exchange of controlled substances is
subject to forfeiture by the United States.  When property is subject to forfeiture
for the violation of law, title vests absolutely in the sovereign at the date
of the illegal act. 21 U.S.C.A. § 881(h) (1999).

Benson argues that this relation back theory applies
here; thus, the forfeiture relates back to 1989, when McMullen and Mattison
used proceeds from controlled substances to purchase the property.  The corrected
deed issued to Benson by the U.S. Marshal, however, added an exclusion for the
acre that had already been sold by the County to Ballard. This supports the
circuit court’s finding that the United States never acquired any interest in
the acre claimed by Ballard.

As noted previously, Ballard submitted an affidavit
from Mackey, the Anderson County treasurer, with his motion to reconsider. She
asserted the property’s easternmost acre was sold at a tax sale to Ballard in
1993 and a deed was conveyed to him in 1994.  Since the sale, Ballard has paid
taxes on the parcel.  The remaining 1.075 acres was not sold to Benson until
1998.  Although there was some confusion on the U.S. Attorney’s part about the
description of the forfeited property, the matter was clarified in a conference
between Mackey and the U.S. Attorney handling the forfeiture action. The U.S.
Attorney agreed with the Mackey that the sale of the one-acre tract predated
the forfeiture and was not subject to forfeiture. The affidavit also confirms
that Benson had no interest in the one-acre tract.  

Assuming for the sake of argument the
federal government did gain an interest in the entire tract by forfeiture, Ballard
is protected by the innocent owner defense.  Ballard was never given any notice
of the forfeiture action.  At the time the action took place, the federal forfeiture
statute contained an exception which provided that “no property shall be forfeited
under this paragraph, to the extent of the interest of an owner, by reason of
any act or omission established by that owner to have been committed or omitted
without the knowledge or consent of that owner.” 21 U.S.C.A. § 881(a)(6) (1999).
[3]   The South Carolina forfeiture statute contains similar language, providing
that the court may return any seized property to the owner if the owner shows
that he “was not a consenting party to, or privy to, or did not have the knowledge
of, the use of the property which made it subject to seizure and forfeiture.” 
S.C. Code Ann. §44-53-586 (2002). 

We note the overriding purposes of civil
drug forfeitures are deterrence and retribution.  Forfeitures are viewed by
the government as a necessary tool to deter drug trafficking, and are not intended
to punish innocent owners.  Michael D. Dautrich, The “Innocent Owner”
Defense in Civil Drug Forfeitures after United States v. 92 Buena
Vista Avenue: Still an Uphill Battle for Third-party Claimants, 3 Widener
J. Pub. L. 995 (1994).  With this in mind, we conclude Ballard qualifies as
an innocent owner as he had neither knowledge of, nor consented to, the illegal
activity leading to the forfeiture.  Though there is no case directly on this
point in South Carolina, other jurisdictions have held that a bonafide purchaser
is entitled to protection as an innocent owner.   See United States
v. One Single Family Residence Located at 6960 Miraflores Ave, 731 F. Supp.
1563, 1568 (S.D. Fla. 1990).

Because Benson failed to prove that the entire
tract had been forfeited to the United States and conveyed to him, the circuit
court’s decision is

AFFIRMED.

HEARN, C.J., GOOLSBY and WILLIAMS, JJ., concur.

[1]   We decide this case without oral argument pursuant
to Rule 215, SCACR.

[2] The affidavit was made part of the record without
objection.

[3] Congress struck the innocent owner defense from § 881(a)(6), which
became effective for any forfeiture commenced on or after 120 days from April
25, 2000.  See Civil Asset Forfeiture Reform Act of 2000, Pub.L. No.
106-185, § 21, 114 Stat. 202, 225 (2000).  However, the government’s forfeiture
in this case predated the effective date for elimination of the innocent owner
defense.