Month: November 2021

Finkel Firm files suit against Charleston ROD for neglect of duties

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Real estate practitioners don’t often get excited about litigation, but this lawsuit should bring cheers from dirt lawyers in every part of the Palmetto State! The Finkel Law Firm, LLC, as plaintiff, filed suit on November 24 against Michael Miller, individually and in his official capacity as the Charleston County Register of Deeds. You can read the complaint in its entirety here.

The complaint points to Miller’s chronic and willful failure to timely record real estate documents within one month of delivery. The allegations state that Miller has allowed substantial delays since late 2019, and that these delays have increased significantly in 2021, sometimes amounting to as long as four months.

Further, the complaint states the Charleston ROD routinely files documents that are hand delivered immediately while allowing hundreds or even thousands of documents delivered to his office by mail or parcel delivery to be stored for later filing.

We all know that South Carolina is a race notice state. Delay in filing real estate documents will, of course, create liability for parties and their lawyers. The complaint makes this point clearly.

The law firm alleges that these failures have substantially interfered with its ability to meet its professional obligations to protect the interests of its clients and has exposed the firm to potential liability for correcting title problems resulting from the ROD’s dereliction of duty.

The complaint seeks a writ of mandamus ordering the ROD:

  • To immediately file all real estate documents that have been delivered and have not been filed within one month of delivery;
  • To mark the recorded real estate documents as being recorded on the same date that they were delivered; and
  • To record all real estate documents in the order of the times at which they were brought to the ROD, regardless of whether they are personally delivered or are delivered by U.S. mail or parcel post.

The complaint asks the court to maintain jurisdiction for a reasonable time to monitor the continued operations of the ROD.

Every real estate practitioner in South Carolina should thank their friends at the Finkel Firm for taking this action. And every ROD in the State should take notice!

Did Columbia destroy an archeological structure?

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Court of Appeals holds the City is not responsible

On November 10, the South Carolina Court of Appeals affirmed a summary judgment order in favor of the City of Columbia concerning the alleged destruction of an archeological and historical bridge abutment during a sewer rehabilitation project*.

The Brinkmans, Colemans, Fosters and Collins (property owners) own real estate on Castle Road on the banks of the Broad River in Richland County. The City of Columbia owns and operates sewer lines that run beneath portions of the property and has a permanent, 15-foot easement across the property for the purpose of maintaining the sewer lines. In 2014, the City began a sewer rehabilitation project which required access to the sewer lines.

According to the property owners, two bridge abutments stood on their property located outside the easement. The owners claim these abutments, which were made of carved rock, were built in the 1700s and were the “oldest existing structures in the Midlands.”

One of the owners testified that he shouted to the City’s contractors and said there was a valued monument on the property. Unfortunately, while the City and the contractors were clearing the land, they destroyed the stones that allegedly comprised the bridge abutments. The City acquiesced to the owner’s request that all work cease, and the property owners brought the subject lawsuit alleging various causes of action, including the destruction of archaeological resources in violation of §16-11-780 of the South Carolina Code.

This statute states that it is unlawful for a person to willfully, knowingly, or maliciously enter upon the lands of another and disturb or excavate a prehistoric or historic site for the purpose of discovering, uncovering, moving, removing or attempting to remove an archaeological resource.

The property owner’s expert testified that he believed the structures were historic abutments from the 1700s or early 1800s and likely to be the “Compty bridge abutment.” He explained that additional excavation and review of other properties across the river would have been the appropriate “next step”.

The property owners submitted an application in 2008 to the National Register of Historic Places, but the Department responded that a great deal more research and archeological investigation was needed before a determination of eligibility could be made.

The record contains a screenshot from the website “ArchSite. The property owner’s expert testified that ArchSite is a multi-agency website that allows access to the archaeological resources database. He explained that when ArchSite receives information about historic sites, it verifies the information and posts it to the website. The image in the record shows a rendering of part of the Broad River and Castle Road, and it includes the notation “Historic Areas: Broad River Ferry and Bridge Site.”

The trial court found no governing preservation or conservation authority had recognized the structures as either archaeological resources or historical structures. In granting the City’s motion for summary judgment, the court found that the City was not liable under the statute.

The Court of Appeals agreed, holding that no evidence exists that the City cleared the land “for the purpose of” discovering, uncovering, moving, removing or attempting to remove an archaeological resource. Clearly, the City was attempting to clear the easement area to access the sewer lines. In addition, the owners provided no evidence that the City had any knowledge of the historic nature of the site.

The owner who shouted at the contractors could not testify that the contractors heard him and did not know whether this incident took place before or after the destruction of the stones. In addition, the Court held that the owners failed to show the City was obligated to consult ArchSite. The Court also questioned whether the entry on ArchSite contained sufficient information to conclude the property is historic because the entry indicates the site is “not eligible or requires evaluation.”

Finally, the Court held that regardless of whether any preservation or conservation authorities designed the structures as archaeological resources, the property owners failed to demonstrate the City had either actual or constructive knowledge of the existence of such resources.

*Brinkman v. Weston & Sampson Engineers, Inc., South Carolina Court of Appeals Opinion No. 5870, November 10, 2021

Borrower sues mortgage lender for violation of attorney preference statute

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Court of Appeals holds lender’s foreclosure action is not a compulsory counterclaim

South Carolina’s Court of Appeals ruled on a noteworthy foreclosure case* in August.

The facts are interesting. In 1998, the borrowers signed a fixed-rate note in the amount of $60,400 at a 9.99% interest rate secured by a mortgage on property in Gaston. The note contained a balloon provision requiring payment in full on July 1, 2013.

On June 27, 2013, days before the note matured, the borrowers brought an action against the lender alleging a violation of South Carolina Code §37-10-102, the Attorney Preference Statute. The complaint alleged that no attorney supervised the closing, that the loan was unconscionable, and that the borrowers were entitled to damages, attorney’s fees and penalties as provided in the Consumer Protection Code. In addition, the complaint asserted a claim under the Unfair Trade Practices Act. All the allegations were premised on the same alleged violation of the Attorney Preference Statute.

The borrowers immediately defaulted on the note, and the lender filed an answer asserting no counterclaims. At trial, the jury found for the lender. About a year later, the borrowers sent a letter by certified mail to the lender requesting that it satisfy the mortgage. The letter included a $40 check to pay the recording fee for the mortgage satisfaction. The lender refused to satisfy the mortgage and returned the check.

The lender brought the present action for foreclosure in October of 2016. The borrowers asserted defenses of res judicata, laches, unclean hands, waiver, and setoff, but admitted no payments had been made on the loan after July 1, 2013. The borrowers then sought a declaratory judgment that the lender held no mortgage on the property, or, alternatively, that the mortgage was unenforceable. They alleged that the lender was liable for failing to satisfy the mortgage and for noncompliance with the Attorney Preference Statute. The lender denied the allegations and argued that the claims under the Attorney Preference Statute were time-barred.

Both parties sought partial summary judgments before the master-in-equity. The master granter the borrower’s motion and denied the lender’s motion. He ruled that the mortgage was satisfied and instructed the lender to file a satisfaction.

On appeal, the lender argued the master erred by finding its foreclosure action was a compulsory counterclaim in the 2013 action. The Court of Appeals agreed, holding that the two claims arose out of separate transactions. The Attorney Preference claim arose from the closing, while the foreclosure arose from the borrower’s default, according to the Court. The Court reversed the master’s award of partial summary judgment to the borrower and remanded the case for further proceedings. Because of its decision on this issue, the Court determined that it did not need to address the remaining issues.

*Deutsche Bank National Trust Company v. Estate of Houck, South Carolina Court of Appeals Opinion 5844, August 11, 2021.

Thoughts of a traveling dirt lawyer in the days of COVID

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I am a planner. In November of 2019 I told my boss I planned to retire in February of 2021, giving us plenty of time to name and train my replacement. Thank goodness, Jennifer Rubin stepped up to learn more than I ever knew about my job. My husband, Frank, had already retired, and we had plans to travel.

But none of us planned for COVID!

Jennifer, the rest of our office and I all worked from home beginning March of 2020. We did manage to put everything in place for my retirement, and Jennifer has taken over like a champ…seamlessly.

After two COVID vaccines, Frank and I decided to put our toes timidly into the travel waters. Six adults flew with masks to Denver and toured Colorado for ten days. We drove over 1,700 miles and saw six National Parks, the Air Force Academy, and many other beautiful sites. (We crossed over to Utah on a whim to visit beautiful Arches National Park.)

 Except for the challenges of breathing at heights up to 14,000 feet above sea level, Colorado is a delightful state! Having grown up in Georgetown, South Carolina, and Panama City, Florida, my lungs are accustomed to breathing at sea level. And compared to Columbia, the temperatures in September were wonderfully cool!

A dirt lawyer can’t travel without having lots of real estate thoughts and raising lots of real estate questions.

Here are just a few from Colorado:  How was all that land accumulated for those National Parks? Were condemnations required? Who was displaced? What kinds of contracts are in place for care and maintenance of the parks?  How does the Federal Government share and manage the Academy’s real estate with the City of Colorado Springs and the State of Colorado? Is the Academy’s real estate treated like the real estate of our Fort Jackson? (I once handled the legal work for the creation of a subdivision from surplus Fort Jackson land, so I learned a good bit about the technicalities.) Where do those people who live in the middle of nowhere buy groceries and deliver babies?  How is that mountainous property surveyed?

I can do the research, but maybe some lawyers who are much smarter than I am will point me in a direction.

Of the six vaccinated, mask wearing adults, three came home and tested positive for COVID! Thankfully, the cases were minor, and everyone is fine by now.

After booster shots, Frank and I decided to travel again. This time, we struck out on our own and drove about 1,400 miles from Columbia to Asheville, Nashville, Memphis, Selma and back to Columbia. What a great trip!

We spent one night at an upscale, relatively new hotel in Asheville, and I was struck with how cramped it seemed, surrounded by busy Asheville streets. I, of course, thought about the developer’s thought process in accumulating the real estate and placing the hotel in that location.

Don’t judge, but it was Halloween week, so we took the “Spooky Asheville Walking Tour”. We didn’t see any ghosts, but I was struck with the stories of covering up cemeteries to create streets. I’m not sure I bought that story from a real estate standpoint. I’ve been involved in many claims involving missed cemeteries!

In fact, I couldn’t decide whether the tour guide was completely making up the stories or whether some of them were based in historical fact. Apparently, a lieutenant of Al Capone was pushed out of Asheville’s Flat Iron Building, and a United Methodist Church is haunted by a nun who predicts futures. I may need to check some of this out. Call me skeptical.

At Graceland, we saw Elvis’ Trust Deed with the notation, “A Title Policy is a Vital Policy.” I couldn’t agree more, and I’m attaching a picture for your enjoyment.

At the Peabody Hotel in Memphis, we watched the ducks leave their fountain in the hotel lobby to return to their “penthouse apartment” for the evening. We watched this show twice and dubbed it the best show in town. (The “rubber ducky” drinks I was imbibing may have added to the attraction.)

At the historic Edmund Pettus Bridge in Selma, we saw a “Witness Post” advising that we shouldn’t remove a survey market. What dirt lawyer could resist taking a picture of that? It is also attached for your enjoyment.

Thanks for indulging my real estate meandering thoughts and questions. Our next trip will be with children and grandchildren to Disney World for Thanksgiving week. Be prepared!