The preacher started his sermon on Sunday by saying: “I love a good story.”  I love a good story, too, and even though this one is about a South Carolina tax sale, not a twin’s stolen blessing from Genesis, it makes for a pretty good tale.

I’ve often said that our courts of appeal will overturn a tax sale on the flimsiest of technicalities. The technicalities in this case are not flimsy, and a claim of slander of title gives us a different slant on the typical tax sale case.

The opinion in Gleason v. Orangeburg County* starts, “This story began with a flawed tax sale, but there were several mistakes for years after.”  It’s not a John Grisham-worthy beginning, but it’s not bad for a South Carolina Court of Appeals case.

Bank of America began foreclosure proceedings in 1998 on property owned by Debra Foxworth. When the foreclosure was finalized, the bank sold the property to Wilton Gleaton. The opinion refers to Wilton Gleaton as “Wilton” because his wife will become a later player in the story. When Wilton bought the property, the 1998 taxes had not been paid.

In a classic tale of the left hand not knowing what the right hand is doing, Orangeburg County began proceedings in March of 1999 to collect the delinquent taxes. The County sent Foxworth notices for failing to pay taxes in March and May, shortly before the foreclosure sale to the bank, but long after the bank began foreclosure proceedings. The County sold the property at a delinquent tax sale to James Fields in February 2000.

The County sent three required “Dear Property Owner” letters to give notice of the redemption period. Two of the letters were addressed to Foxworth and the third was addressed to Wilton but mailed to Foxworth’s address.

In an interesting twist, Wilton’s wife, Sara, visited Orangeburg County in January 2001—before the redemption period expired—and went there precisely because she had not received a tax notice in the mail. She paid the 2000 property taxes. That tax bill listed a Charleston address at which neither Sara nor Wilton had ever lived. Sara gave the County her correct address and asked if any other taxes were owed. The County initially told her that no other taxes were due but later informed her the 1999 taxes had not been paid. She paid those taxes the next month, February 2001. In an “asleep at the wheel” move, the County employee did not inform her of the 2000 tax sale to Fields or of the right to redeem the property.

The redemption period expired in February 2001, not long after Sara paid the 2000 property taxes, but before she paid the 1999 taxes. In May 2001, The County issued a tax deed to Fields. The tax deed listed Foxworth as the defaulting taxpayer and “record owner against whom warrant was issued.” The tax deed made no reference to the Gleatons.

The Gleatons paid subsequent taxes as they came due.

In 2006, the County discovered Wilton—the record owner at the time of the 2000 tax sale—had not been noticed. In another interesting twist, the tax collector had Fields convey the property back to Foxworth via quitclaim deed in an effort to “reverse” the tax sale. The Gleatons were not notified about any of this.

In 2007, the Gleatons listed the property for sale. (Dirt lawyers, this is where the facts get “real” for us.) In October 2009, Donnie and Connie Hall contracted to buy the property for $33,000. It’s shocking, I know, but the Halls discovered a title problem! The County’s attorney offered to bring a declaratory judgment on the Hall’s behalf seeking rulings that the tax sale and quitclaim deed were void.

Wilton filed this suit against the County after the Halls backed out of the sale. In December 2014, the master issued an order finding the tax sale was flawed and invalid and the tax deed to Fields was improper. But the master left open the issues of liability and damages and ordered the Gleatons to attempt to sell the property within four months. Wilton died shortly after this order and Sara was substituted as a party. The property did not sell, and the master issued a final order in 2019. He found that the County’s actions were not malicious and “made no publication” that was intended to harm the Gleatons and made no statement that was knowingly false or in reckless disregard of its truth or falsity.

The master found that the only statement slandering Wilton’s title was the quitclaim deed from Fields to Foxworth, and that this deed was done for the purpose of returning the property to the defaulting taxpayer, not for the purpose of damaging Wilton’s title. The master also found that a proper title search would have revealed the 1998 taxes were due and owing at the time of the Gleatons’ purchase.

On appeal, Sara argued:

1. The tax deed and subsequent deed to Foxworth disparaged the title.
2. The County knew Wilton owned the property because the deed and mortgage were recorded before the tax deed.
3. The master erred in failing to find malice because malice, in a slander of title action, includes publications made without legal justification.
4. The Halls plainly refused to purchase the property because of the cloud on the title.

Citing an earlier case, the Cout of Appeals set out the elements of slander of title as:

1. The publication
2. with malice
3. of a false statement
4. that is derogatory to plaintiff’s title and
5. causes special damages
6. as a result of diminished value of the property in the eyes of third parties.

The Court held the master’s findings that the County’s actions did not result in any publication and did not contain any statement that was knowingly false or made in reckless disregard of the truth were not supported by the evidence. The Court also disagreed with the master’s finding that malice requires an intent to injure. The County’s numerous missteps were at least reckless, according to the Court, stating that the situation should have been resolved in a logical and reasonable manner when the mistakes were discovered.

The case was remanded for the master to consider each element in a slander of title action and the proper standard for malice.

Please note that more than 20 years have passed since this tale of woe began. The County should have discovered and fixed its mistakes when Sara visited in 2001 with the express purpose of paying taxes. And there is no excuse for the County’s continued failure to correct its errors in 2006 when the tax collector discovered Wilton’s ownership of the property.

*South Carolina Court of Appeals Opinion 6003 (July 26, 2023)