Three strikes, you’re out?

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South Carolina Supreme Court protects Captain Sam’s Spit for the third time

This blog has discussed “Captain Sam’s Spit” in Kiawah Island twice before. Googling that picturesque name will reveal a treasure trove of news, opinion and case law involving the proposed development of a beautiful and extremely precarious tract of pristine beach property on South Carolina’s coast.

In the latest case*, South Carolina’s Supreme Court refers to the property as one of our state’s only three remaining pristine sandy beaches readily accessible to the general public. The other two are Hunting Island State Park and Huntington Beach State Park. I enjoy the blessing of walking the pristine beach of Huntington Beach State Park on a regular basis, so despite having a career on the periphery of real estate development, I am in favor of maintaining these three state treasures.

The South Carolina Bar’s Real Estate Intensive seminar in 2016 and 2018 included field trips to Captain Sam’s Spit, from a distance at least. Professor Josh Eagle of the University of South Carolina School of Law was an excellent tour guide, and how many opportunities do we, as dirt lawyers, have for field trips? The South Carolina Environmental Law Project, located in Pawleys Island, fights these cases. Amy Armstrong, an attorney with that entity, joined our group to explain the environmental and legal issues.

Here are greatly simplified facts. Captain Sam’s Spit encompasses approximately 170 acres of land above the mean high-water mark along the southwestern tip of Kiawah Island and is surrounded by water on three sides. The Spit is over a mile long and 1,600 feet at its widest point, but the focal point of the latest appeal is the land along the narrowest point (the “neck”), which is the isthmus of land connecting it to the remainder of Kiawah Island. The neck occurs at a deep bend in the Kiawah River where it changes direction before eventually emptying into the Atlantic Ocean via Captain Sam’s Inlet.

The neck has been migrating eastward because of the erosive forces of the Kiawah River. The “access corridor”—the buildable land between the critical area and the ocean-side setback line—has narrowed significantly in the past decade to less than thirty feet. Googling this issue will lead to active maps which show the change over time. The width of the neck is significant because the developer needs enough space to build a road. At the base of the neck is Beachwalker Park, operated by the Charleston County Parks and Recreation Commission. Our fieldtrips were conducted on that Park.

Twice before, the administrative law court (ALC), over the initial objection of DHEC, has granted permits for the construction of an extremely large erosion control device in the critical area. In both cases (citations omitted), the Supreme Court found the ALC erred. The current appeal stems from the ALC’s third approval of another structure termed “gargantuan” by the Supreme Court—a 2,380-foot steel sheet pile wall designed to combat the erosive forces carving into the sandy river shoreline in order to allow the developer to construct the road to support the development of fifty houses. The Court again reversed and, in effect, shut down the proposed development, at least temporarily. The economic interests of an increased tax base and employment opportunities do not justify eliminating the public’s use of protected tidelands, according to the Court.

The Charleston Post and Courier has reported that a lawyer for the developer will ask for a rehearing of the latest case. I wouldn’t be surprised to see the litigation continue for another decade, despite rising sea levels and increasing hurricane threats affecting the precarious property. Stay tuned for future news.

*South Carolina Coastal Conservative League v. South Carolina Department of Health and Environmental Control, South Carolina Supreme Court Opinion 28031 (June 2, 2021)

SC Supreme Court warns Clerks of Court to avoid rejecting filings

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ROD offices should pay attention!

This post may be the first and last time this blog deals with a criminal case*, but the warning from South Carolina’s Supreme Court to Clerks of Court presents a worthy discussion for dirt lawyers.

The case involved a post conviction relief (PCR) application following a murder and attempted armed robbery conviction. The application was fraught with problems including a prison lockdown and incorrect forms. The Court said that the Clerk of Court’s ministerial duties required to Clerk to simply accept the application for filing, give it the appropriate docket number, and distribute it as required by law. Instead, the Clerk returned the application based on the statute of limitations. After chastising the Clerk, the Court granted the petition and instructed the petitioner to file his successive application within thirty days of the decision.

Omitting the citations and a significant footnote to be discussed later, here is the warning:

“We take this opportunity to remind the clerks of courts of their ministerial duty to docket filings irrespective of potential procedural flaws that may exist. It is not within the Clerk of Court’s authority to refuse to perform her duty based on her opinion that a filing lacks legal merit or is untimely. This duty is not discretionary. Unless specifically authorized by statute or a court rule, a clerk of court may not exercise any judicial power reserved for a judge. The clerk cannot, without express constitutional or statutory authority, exercise any judicial functions. This includes the prohibition of performing any action contingent on deciding a question of law. It follows that a clerk of court cannot ordinarily determine questions of law. Accordingly, a clerk of court does not have the authority to reject a filing based on ostensible or perceived failures, including whether the document is contained on the proper form. Because the clerk’s role is ministerial in this respect, the clerk shall not be concerned with the merit of the papers or with their effect and interpretation. Stated differently, a clerk of court may not reject a pleading for lack of conformity with requirements of form; only a judge may do that. In the absence of an order from a judge, clerks may not refuse to accept a notice of appeal, even if they believe that no appeal is untimely or otherwise defective. Instead, the clerk shall accept the filing, thereby permitting the court to decide any issues the parties may have with it.”

If you ever have an ROD office reject your deed, mortgage or other real estate documents, you may need to cite this case!

I had a situation early in my practice where properties had been accumulated across county lines for the development of a mall. To comply with seller and lender requirements, I had to record all the documents in a single day. Prior to cutting the recording checks, I had to apportion the documentary stamps between the two counties, which I did carefully and with much tax advice. The first county readily accepted all the documents. I was halfway home. The other county, however, rejected all the documents by jumping to a legal and tax decision about the sufficiency of the doc stamps for that county. I was in a proverbial pickle! I couldn’t un-record documents in the first county to take the time to sort out the situation. I had to convince the second county to accept the documents. Luckily, I had a good friend who was on the legal staff of the Department of Revenue. After several hours of running that friend down and explaining the situation to him in great detail, he agreed on my behalf to convince the second ROD to record the documents to allow the DOR to sort out the tax issue later. Whew! (And, by the way, my calculations turned out to be correct because I got great advice in advance.)

My position about this topic has always been that the ROD did not have the authority to decide a legal question about my documents! After this case, I believe the Supreme Court would agree.

Dirt lawyers love to tell stories about the treatment of documents in different counties. The stories go something like this…. County A will record a leaf that floats in from an open window, but County B will refuse to record a document on the flimsiest of legal technicalities.

I hope this case will help even the playing field.

One significant footnote in the case relates to real estate transactions. Referring to the rule that indicates a clerk cannot exercise judicial power unless authorized by statute, footnote 2 reads: “For example, in the context of real or personal property, section 30-9-30 authorizes a clerk of court to remove a sham document from the public records upon proper notice if the clerk reasonably believes the document to be fraudulent.”

This statute and this power could be important in cases of forged signatures and other fraud, but I still believe the ministerial official would at least need sound legal advice.

Pull this case out the next time one of your documents is rejected!

*Barnes v. The State of South Carolina, South Carolina Appellate Case No. 2020-001360 (June 3, 2021).

SC Supreme Court’s footnote impacts easement law

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In a March 17 case*, the South Carolina Supreme Court made a thought-provoking comment on easement law through a footnote.

As with most real estate cases involving neighbors, the facts in this case are interesting. (I should probably admit the facts may only be interesting to dirt lawyers.) Paul and Susan McLaughlin bought Lot 22 in Seabrook Island and spent the next six years meeting and negotiating to build on the lot because of the existence of a pipe and an easement they were told had been abandoned.

The backstory involves a draining pipe and easement running through the backyards of seven lots. The easement and pipe were originally owned by Seabrook Island Property Owners Association (SIPOA). Over the years, the pipe degraded and became porous such that, aside from carrying away stormwater from the road, as intended, it also drained standing water from the lots. Nearly 20 years later, SIPOA installed a new draining system for the road, rendering the old one obsolete. At a property owner’s request, SIPOA abandoned the easement, but left the porous pipe in place.

After six excruciating years, the McLaughlins received home design and location approval from SIPOA, including the right to build on a former “no-build area” occupied by the abandoned easement. They removed the pipe and built their new home.

Neighbors Richard and Eugenia Ralph owned Lot 23 and sued claiming their backyard flooding became even worse as a result of the pipe removal. The jury awarded the Ralphs $1,000 in “nominal” damages. The Court of Appeals reversed and remanded for a new trial on damages alone, and the Supreme Court reversed the Court of Appeals and reinstated the jury’s verdict.

I won’t dwell on the remainder of the opinion, which deals mostly with litigation issues, but I wanted to point dirt lawyers specifically to footnote 5.

The Ralphs claimed some sort of ownership right in the abandoned easement, which the Supreme Court did not feel the need to address. But the Supreme Court did express concern over the Court of Appeals discussion of a seminal easement case in South Carolina, Blue Ridge Realty Co. v. Williamson**.

Blue Ridge is the case we rely upon for the right of property owners who buy lots with reference to a plat to use the roads shown on that plat. Without that case, many properties would have access issues.

The Supreme Court voiced concern over the alteration of a quote from the Blue Ridge case by the Court of Appeals. The Court of Appeals quoted the case: “It is generally held that when the owner of land has it subdivided and platted into lots and (easements,) and sells and conveys the lots with referenced to the plat, he hereby dedicates said (easements) to the use of such lot owners (and) their successors in title…”

Blue Ridge actually said, “It is generally held that when the owner of land has it subdivided and platted into lots and streets and sells and conveys the lots with reference to the plat, he thereby dedicates said streets to the use of such lot owners, their successors in title, and the public. (Emphasis added by the Supreme Court in the current case.)

The Supreme Court said the scenarios presented by the current case and the Blue Ridge case were fundamentally different. Blue Ridge involved the claim of a property owner to use a public street shown on a recorded plat. In the current case, lot owners whose property contains an easement intended for the benefit of the HOA claims an ownership interest because the easement inadvertently benefits the property owner as well.

In Blue Ridge, the property owner and its successors in title were the intended beneficiaries.  Here, the opposite is true. The owners of Lots 22 – 28 were never intended to benefit directly from the easement. The fact that they did so, according to the Supreme Court, was a pure accident, caused by the unexpected degradation of the pipe. In short, Blue Ridge does not stand for the proposition for which it was cited by the Court of Appeals, according to the Supreme Court.

This distinction might be significant in many of the title scenarios real estate practitioners face routinely.

Interesting indeed! I also find it interesting that the Supreme Court refers to the Blue Ridge case, as we dirt lawyers refer to it, as the Williamson case, but that’s a blog for another day.

*Ralph v. McLaughlin, South Carolina Supreme Court Opinion 28015, March 17, 2021.

**247 S.C. 112, 145 S.E.2d 922 (1965).

Court of Appeals decides Hilton Head easement case

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Real estate cases involving property in Hilton Head Island are almost always interesting, and this one* is no exception. I’m sure my friend, Dick Unger, will be discussing it fully in his upcoming revised treatise on easements for the South Carolina Bar. In the meantime, here’s enough of a description to get this case on your radar.

The case involves a welcome center, a gas station and a shopping complex on Palmetto Bay Road near Sea Pines Circle. Enmark owns the gas station which is adjacent to the welcome center. The shopping complex is located behind the gas station and adjacent to the welcome center. The roadway in question covers a portion of the welcome center property and connects the station to the parking lot on the shopping center property.

The roadway initially forked around a small vegetative island located on the shopping center property and had two connections to the parking lot. The shopping center removed the island and placed a trash dumpster in its place. (That doesn’t sound like something that would have been well received in Hilton Head!) The station’s customers use the roadway as an alternative entrance and exit for the station, and the general public uses it to bypass Sea Pines Circle and access the shopping center.

The case outlines the chains of title for the welcome center and gas station properties. When a dispute about the roadway arose, the property owners entered into a tolling agreement in mid-2013, in which they agreed the owner of the welcome center would file a complaint seeking a declaratory judgment to determine each party’s rights as to the roadway.

The welcome center owner then involved the Town of Hilton Head, which wrote a letter stating the roadway violated Hilton Head’s Land Management Ordinances. The town ordered the road to be removed and replaced with a vegetative buffer.  The gas station owner informed the Hilton Head official about the existence of the tolling agreement and of the importance of the roadway to its business and the public. The town stated that its letter was premature and subsequently decided the roadway was grandfathered into the Land Management Ordinances.

The welcome center owner filed a complaint in August of 2013 seeking an order that the gas station owner had neither an express nor a prescriptive easement. The Master-In-Equity found the existence of a prescriptive easement, and this appeal followed.

The Court of Appeals first eliminated the involvement of the town as a determinative factor in its decision, holding that the 2013 letter was not a final decision.

The Court next outlined the elements of a prescriptive easement: (1) continued and uninterrupted use or enjoyment of the right for a period of twenty years; (2) the identity of the thing enjoyed; and (3) the use or enjoyment which is either adverse or under claim of right.

Citing an earlier case, the Court of Appeals said our Supreme Court had clarified the third element, holding “adverse” and “claim of right” are in effect the same thing. The Supreme Court had simplified the elements stating the claimant must identify the thing enjoyed and show his use has been open, notorious, continuous, uninterrupted, and contrary to the burdened property owner’s rights for a period of twenty years.

The welcome center owner argued that the identity of the thing enjoyed was not established because the roadway is an “easement to nowhere”, not terminating on a public road. The Court held that termination on a public road was not required.

Continuous use was established through tacking the periods of use by prior owners in the gas station’s chain of title. The welcome center argued the use was interrupted by three threatening letters (dated 1994, 2008 and 2012, respectively), plus the placement by the shopping center of the garbage bin. The Court held that the letters were too late to interrupt the required twenty-year period, and the placement of the garbage bin was irrelevant because it was not placed by the owner of the burdened estate.

The owner of the welcome center raised multiple arguments as to the lack of adverse use, but it conceded in its post-trial brief that the existence of the easement would not be presumed “only if the use of the (roadway) during the entire prescriptive period was uninterrupted”, an issue upon which the Court had previously ruled.

I give you this case as an interesting discussion of prescriptive easement law in South Carolina and wait with you to hear Dick Unger’s words of wisdom!

 

*Carolina Center Building Corp. v. Enmark Stations, Inc., South Carolina Court of Appeals Opinion 5804 (February 10, 2021).

Rock Hill residential real estate lawyer gets five years in jail

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Thankfully, it has been ten years or more since we’ve heard word “defalcation” used in connection with a South Carolina real estate lawyer. Sadly, we have to use that word in 2020 because a Rock Hill lawyer was arrested in 2019 after funds allegedly went missing from a residential closing.

That lawyer, Thomas Givens, was suspended by the South Carolina Supreme Court on September 25, 2019. Earlier this month, the 67-year old pled guilty for breach of trust and was sentenced to five years in prison, five years’ probation, and restitution. 

The closing took place on July 15, 2019 but the $166,000 mortgage payoff was never made. Two months later, Givens was arrested and charged with breach of trust over $10,000. The arrest warrant reads that Givens failed to make the mortgage payoff and does not have the funds.

We usually do not experience defalcations when the economy is good. With the economic downturn that began in 2007, we learned the difficult lesson that attorneys who are prone to dip into their trust accounts often manage to keep the balls in the air as long as closings continue to occur. They typically steal from one closing to fund another. They rob Peter to pay Paul.

Like a game of musical chairs, when the music (and closings) stop, bad actor attorneys no longer have closings to provide funds for prior transgressions, and the thefts come to light.

This time, the economy was good. There are simply no excuses. It is a very sad commentary, and one I hoped not to see again.

Lawyers: Help Get the Vote Out

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South Carolina licensed lawyers have been nudged by our Supreme Court to provide assistance with our greatest responsibility as citizens: voting!  See the attached Order of the Court granting CLE credit to lawyers who work the polls on November 3. 

There are, of course, guidelines. You must work the entire day, for example, and you can’t get paid. Pay attention to the details if you seek the credit.

What a great way for lawyers to demonstrate we are leaders in our communities! And in this problematic political environment, the more clear-headed, logical, calm lawyers who can be present, the better!

In other election news, the United States Supreme Court held on Monday that South Carolina mail-in ballots must be witnessed. Help get that word out to your family, friends and clients.

Thank you to all lawyers who stand and lead!

SC Supreme Court disbars two lawyers

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red card - suit

On June 24, the South Carolina Supreme Court issued two disciplinary opinions that both resulted in disbarment. Both involved interesting fact patterns, and I invite you to read  them as cautionary tales.

In the Matter of Brooks* involved a lawyer who was sworn in on February 19, 2019. Her application had been based on the Uniform Bar Exam score from Wyoming. One day after her admission, the Office of Bar Admissions learned that the lawyer had knowingly provided false or misleading information in her application.

She failed to disclose information about 2005 and 2014 arrests for driving under the influence (DUI), a resulting license suspension, use of cocaine and marijuana during her release as well as issues with Character and Fitness Boards in bar applications in other jurisdictions.

Bottom line: do not lie or omit facts on bar applications if you seek to practice in other jurisdictions. And advise potential South Carolina lawyers in your life to tell the truth and the whole truth on their applications.

The other case** is interesting only because of an underlying criminal conviction. The lawyer stole about $440,000 from trust accounts and was sentenced to probation. Never having worked in the criminal law arena, this sentence sounds unreasonably lenient to me. The disbarment makes complete sense though.

Bottom line: do not ever touch client funds for your own use!  Don’t borrow client funds, planning to replace them. Remove from your thought processes the idea that client funds are available to you for any reason other than to protect them for your clients.

 

*South Carolina Supreme Court Opinion 27983 (June 24, 2020).

**In The Matter of Collins, South Carolina Supreme Court Opinion 27984 (June 24, 2020).

The Episcopal Church property saga continues

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We have a new circuit court order

This is my third blog about the controversy surrounding the properties of various Episcopal churches in South Carolina. I previously said I am thankful to be a real estate lawyer as I attempt to decipher these issues.

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St. Philip’s and St. Michael’s Episcopal Churches, Downtown Charleston, SC 

In August of 2017, the South Carolina Supreme Court issued a 77-page opinion in this litigation. We now have a new circuit court order, and I am confident we will hear more at a later date.

I don’t have to solve the mystery of the rights of gays in churches. I don’t have to ascertain whether the “liberal mainline” members or the “ultra-conservative breakaway” members make up the real Episcopal Church.  I don’t have to delve into the depths of neutral principles of law vs. ecclesiastical law. I don’t have to figure out who will own the name “Episcopal Diocese of South Carolina.”

The real estate issues are sufficiently thorny to occupy our collective real estate lawyer brains. The South Carolina Supreme Court seemed to indicate that the 29 breakaway churches had to return their properties to the national church under the “Dennis Canon”. But the Supreme Court left open the possibility that the lower court might clarify the position, and clarify Circuit Court Judge Edgar Dickson did.

He wrote that state law, not church law, requires the transfer of real property by deed. He said that no parish expressly acceded to the Dennis Canon. He said, “This is a property case. A decision on property ownership is usually governed by the title to real estate—the deed. In this case, all the plaintiff parishes hold title to their property in fee simple absolute.”

News articles refer to the properties as being valued at hundreds of millions of dollars. The historic value of the properties, including St. Michael’s and St. Philip’s of Charleston, is also quite significant. Future appeals are almost guaranteed. Nothing is settled at this point. Let’s not try to insure these titles anytime soon.

The controversy began more than five years ago when local parishes in eastern South Carolina left the Episcopal Church over, among other issues, the rights of gays in church. Since then, the two sides have been involved in a battle over the church’s name, leadership and real estate.

Interestingly, the national church had offered a settlement to the breakaway parishes that would have allowed them to retain their properties if they gave up the name and leadership issues. That settlement offer was apparently summarily rejected.

The South Carolina Supreme Court’s ruling upheld the Episcopal Church’s position that it is a hierarchal church rather than a congregational church in which the vote of church membership can determine the fate of real property. The new circuit court order begs to differ.

I continue to be thankful that I am a real estate lawyer!

*The Protestant Episcopal Church in the Diocese of South Carolina v. The Episcopal Church, South Carolina Supreme Court Opinion 27731, August 2, 2017.