H & K Specialists v. Brannen

THE STATE OF SOUTH CAROLINA

In The Court of Appeals

H & K Specialists,       
Respondent,

v.

William D. Brannen, Lavada Brannen, The Beaufort County Treasurer, The
Beaufort County Tax Collector and the County of Beaufort,       
Defendants,

Of Whom The Beaufort County Treasurer, The Beaufort County Tax Collector,
and The County of Beaufort are the       
Appellants.

Appeal From Beaufort County

Thomas Kemmerlin, Circuit Court Judge

Unpublished Opinion No. 2003-UP-513

Submitted May 12, 2003 – Filed August
27, 2003  

AFFIRMED

Mary Bass Lohr, of Beaufort, for Appellants.

Gregory Milam Alford, of Hilton Head Island, for Respondent.

PER CURIAM:  The Beaufort County Treasurer,
the Beaufort County Tax Collector, and the County of Beaufort (collectively,
the County) appeal the master-in-equity’s order granting judgment against it
for $4,000 plus statutory interest found owing to H & K Specialists (H &
K).  This award was a refund for a tax sale that was later set aside.  On appeal,
the County argues the master erred in awarding judgment against it for the overage
and statutory interest.  We affirm.

FACTS/PROCEDURAL BACKGROUND

In 1991, William D. Brannen and Lavada A. Brannen
failed to pay their taxes on property they owned in Beaufort County.  On October
5, 1992, H & K purchased the property at a tax sale for $4,000.  The County
applied the $4,000 proceeds to satisfy the Brannens’ $646.36 tax debt, after
which a $3,353.64 overage remained.  After the Brannens failed to redeem the
property within the one-year statutory redemption period, title passed to H
& K in January 1994. 

In February 1994, First Atlanta
Mortgage Corporation, using a power of attorney granted by the Brannens, requested
the $3,353.64 overage from the County.  The County paid the Brannens the overage
within a few days, as required by statute. 

The Brannens brought an action
to set aside the tax sale in 1995, alleging the County failed to provide them
proper notice of the sale. [1]  
The Beaufort County Master-in-Equity agreed and set the tax sale aside. 
The Brannens were issued a new deed.  However, the Brannens did not return the
overage which they had previously received from the County.  Additionally, the
County did not refund to H & K the $4,000 it paid for the property at the
tax sale.   H & K requested a refund of the overage, which had been
paid by the County to the Brannens, but the County refused. 

H & K instituted the present
action in November 1998, seeking a refund of the purchase price it paid to the
County for the property.  The County moved for judgment on the pleadings,
which the master granted based on two grounds.  First, the master reasoned that
because the Brannens received both possession of the property and the overage,
they, rather than the County, owed H & K a refund of its purchase price.
Second, the master concluded the County was immune from liability under the
South Carolina Tort Claims Act.  H & K appealed from the master’s ruling.

In H & K Specialists v. Brannen, 340
S.C. 585, 532 S.E.2d 617 (Ct. App. 2000) (hereinafter “Brannen I”), this
court reversed and remanded the master’s order, finding that both the County
and the Brannens could be liable for refunding the purchase price to H &
K.  Specifically, this court held the County was not immune from liability because
H & K’s loss did not result from the County’s “assessment or collection
of taxes or . . . enforcement of tax laws.”  S.C. Code Ann. § 15-78-60(11). 
Instead, we held H & K’s loss resulted from the County’s failure to refund
the purchase price when a tax sale was set aside, an act separate and distinct
from assessing, collecting, or enforcing tax laws. 

More importantly, we held in Brannen I that
section 12-51-100 of the South Carolina Code of Laws requires the County to
refund H & K its purchase price plus eight percent interest.  No appeal
was taken from this court’s decision in Brannen I.

On remand, the master entered judgment against
the County for $4,000 plus interest at eight percent from the time of H &
K’s payment of the purchase price.  He further awarded judgment against the
County for the amounts H & K paid for the 1992 and 1993 taxes on the property,
plus eight percent interest starting from the respective dates of the payments. 
The master entered an identical judgment against the Brannens.  

The County made a motion for reconsideration, which
the master denied.  {R. 4}  This appeal follows.

LAW/ANALYSIS

I.       Overage

The County argues that since
it was statutorily required to pay the overage to the Brannens, the master erred
in entering judgment against it for the tax sale overage.  Specifically, the
County contests the master’s finding that the County “erred in refunding the
purchase price to the Brannens rather than H & K.”  We find this argument
unavailing.

In Brannen I, this court considered whether
H & K was limited to pursuing a legal remedy against the Brannens, or if
it could also pursue a legal remedy against the County.  There, this court stated: 
“[The County] created this inequitable situation . . . and erred in refunding
the purchase price, less the tax delinquency, to the Brannens rather than to
H & K.  Therefore, we do not believe H & K is limited to pursuing a
legal remedy solely against [the] Brannens.”  Brannen, 340 S.C. at 589,
532 S.E.2d at 620.  The County did not appeal these findings. Thus, they are
the law of the case.  See Buckner v. Preferred Mut. Ins. Co.,
255 S.C. 159, 160-61, 177 S.E.2d 544, 544 (1970) (holding “an unchallenged ruling,
right or wrong, is the law of the case”).  Accordingly, we find the master did
not err in entering judgment against the County for its error in refunding the
overage to the Brannens rather than to H & K.

II.      Statutory Interest

The County maintains that the master lacked the authority
to award statutory interest on the overage to H & K.  We disagree.

The County argues that the master’s authority for
granting interest is based on a purportedly erroneous holding in Brannen
I.  In that case, this court held that the judicial voidance of a tax sale
constituted “the ultimate redemption” and, as such, required the County to pay
the tax sale purchaser statutory interest. [2]   The County now argues that in Brannen I,
this court “was in clear error in likening the judicial revocation of a tax
sale to a redemption” because “no such provision statutorily exists.”  However,
the County failed to appeal this court’s ruling in Brannen I, so that
ruling is now the law of the case.  Buckner, 255 S.C. at 160-61, 177
S.E.2d at 544.   Accordingly, we find that the master properly awarded statutory
interest on the overage to H & K.

CONCLUSION

For the forgoing reasons, the order of the master is

AFFIRMED.

HEARN, C.J., CONNOR and STILWELL, JJ., concur.

[1]   These facts are not explicit from the record,
but are allegations from H & K’s complaint that the County admitted in
its answer. 

[2] South Carolina Code Ann. § 12-15-100
(Supp. 1997) provides:

Upon the real estate being
redeemed, the person officially charged with the collection of delinquent
taxes shall cancel the sale in the tax sale book and note thereon the amount
paid, by whom and when. The successful purchaser, at the delinquent tax sale,
shall promptly be notified by mail to return the tax sale receipt to the person
officially charged with the collection of delinquent taxes in order to be
expeditiously refunded the purchase price plus the eight percent interest
provided in § 12-51-90.

Effective July 6, 1998,
the General Assembly amended section 12-51-100 and substituted “interest provided
in Section 12-51-90” for “eight percent interest provided in § 12-51-90.”
See S.C. Code Ann. § 12-51-100 (Supp. 1999).