Alterna Tax Asset Group, LLC v. York County
5836
| S.C. Ct. App. | Jul 7, 2021Background
- In 2014 York County held a tax sale for a parcel; Alterna Tax Asset Group, LLC alleged it purchased the property at that sale and later filed suit claiming the sale was defective for lack of proper notice.
- Alterna sued York County and others seeking declaratory and injunctive relief, quiet title, and unjust enrichment relief to void the sale and cancel its ownership under S.C. Code § 12-61-10.
- On defendants' Rule 12(b)(6) motions, the Master consulted county real property records and judicially noticed Alterna was neither the purchaser at the tax sale nor the deeded owner; the Master found Alterna lacked standing as a real party in interest.
- The Master alternatively held § 12-61-10 is meant to clear tax titles, not to allow a purchaser to rescind a tax sale, and dismissed Alterna's complaint with prejudice.
- The Court of Appeals affirmed: (1) § 12-61-10 does not permit a purchaser to seek to defeat its tax title; (2) quiet title fails because no adverse claim exists; (3) unjust enrichment is barred by the presumption that a tax deed is prima facie good title; and (4) Alterna's requested relief presented a non-justiciable, speculative controversy and amendment would be futile.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Scope of § 12-61-10 — may a purchaser use it to void its tax title? | § 12-61-10 permits a person who acquired title at tax sale to bring an action to bar other claims and thus to void a defective sale. | § 12-61-10 is intended to clear or confirm tax titles, not to let a purchaser defeat or rescind its own title. | Court: § 12-61-10 does not provide a cause of action to defeat a purchaser’s title; dismissal affirmed. |
| Use of quiet title to nullify a purchaser’s tax title | Quiet title can be liberally construed to resolve disputes about title, so Alterna may use it to challenge the sale. | Quiet title requires an existing adverse claim; here no one is asserting a superior claim to Alterna’s title. | Court: No adverse claim exists; quiet title fails because the challenge is speculative and seeks to end, not quiet, title. |
| Unjust enrichment claim against county for keeping sale proceeds while delivering defective title | County was enriched by the sale proceeds despite allegedly defective notice and clouded title; Alterna seeks restitution. | Tax deed is prima facie evidence of good title; purchasers had public-record notice; claim blocked by statutory presumption. | Court: Claim barred by presumption that tax deed conveys good title; unjust enrichment fails. |
| Justiciability of declaratory/injunctive relief | Declaratory relief appropriate to resolve doubts about the validity of Alterna’s title before actual challenge. | Relief is speculative; no concrete, ripe controversy exists—request would be advisory. | Court: Controversy non-justiciable and speculative; declaratory relief denied; dismissal with prejudice was proper because amendment would be futile. |
Key Cases Cited
- Evans v. State, 344 S.C. 60 (2001) (novel legal questions may be decided on motion to dismiss when pure questions of law)
- Benson v. United Guar. Residential Ins. of Iowa, 315 S.C. 504 (Ct. App. 1994) (quiet title statute construed liberally but requires a real adverse claim)
- Wilson v. Moseley, 327 S.C. 144 (1997) (tax deed treated as prima facie evidence of good title)
- Shell v. Duncan, 31 S.C. 547 (1889) (historical support for presumption that tax deeds establish title)
- Byrd v. Irmo High Sch., 321 S.C. 426 (1996) (courts may not decide abstract or speculative controversies)
- Sunset Cay, LLC v. City of Folly Beach, 357 S.C. 414 (2004) (declaratory judgment requires at least ripening seeds of controversy)
- Skydive Myrtle Beach, Inc. v. Horry County, 426 S.C. 175 (2019) (trial courts should not dismiss with prejudice at 12(b) stage unless amendment would be futile)