CFRE, LLC v. Greenville County Assessor
395 S.C. 67
S.C.2011Background
- Sherry Ray purchased and domiciled in Greenville County residential property in 1991, taxed at the four percent legal residence ratio.
- In 2004 Ray formed CFRE, a single-member LLC, for estate planning and asset protection, with Ray as sole member and Ray deeded title of the home to CFRE in 2006.
- A reassessment for 2007 occurred, placing the property on the default six percent ratio until CFRE proved entitlement to the four percent ratio under §12-43-220.
- CFRE sought the four percent ratio but the Assessor denied eligibility; CFRE requested an interview, met with Adkins, and CFRE appealed to the Greenville County Board of Assessment Appeals which affirmed the decision.
- CFRE pursued a contested case hearing before the ALC; discovery requests were not answered by the Assessor, though the Assessor later submitted documents and supplements.
- The ALC ultimately held CFRE was not entitled to the four percent ratio, relying on the notion that only a natural person could qualify and on the absence of enacted amendments to §12-43-220(c). CFRE appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is a single-member LLC eligible for the four percent ratio under §12-43-220(c) in light of §12-2-25(B)(1)? | CFRE argues §12-2-25(B)(1) applies to all taxes and disregards the entity for tax purposes, enabling the member's eligibility to flow to CFRE. | Assessor argues only natural persons can qualify and §12-2-25(B)(1) does not broadly extend to non-income taxes or to SMLLCs for the four percent ratio. | CFRE entitled; §12-2-25(B)(1) applies broadly to all taxes and disregards the entity, enabling the member's eligibility to CFRE; remand for refund calculation. |
| Did the ALC abuse discretion in not sanctioning the Assessor for failure to respond to discovery? | CFRE asserts prejudice from unresolved discovery and seeks sanctions. | Assessor contends no prejudice and had provided available information; discovery rules were not violated to a prejudicial extent. | No sanction affirmed; CFRE waived the issue; absence of prejudice supports no sanction. |
| Is CFRE entitled to costs and attorney's fees under SCRPA? | CFRE seeks costs and fees incurred; argues entitlement under SCRPA. | SCRPA limits costs/attorney's fees; costs may be awarded to CFRE only for permissible items; attorneys' fees are not awarded. | CFRE may be entitled to costs on remand; attorney's fees denied; further motion on remand allowed to specify recoverable costs. |
Key Cases Cited
- Sloan v. Hardee, 371 S.C. 495 (2007) (statutory interpretation and statutory meaning)
- City of Rock Hill v. Harris, 391 S.C. 149 (2011) (APA review and statutory construction principles)
- Cent. Bank of Denver, N.A. v. First Interstate Bank of Denver, N.A., 511 U.S. 164 (1994) (legislative inaction not persuasive for statutory interpretation)
- Stardancer Casino, Inc. v. Stewart, 347 S.C. 377 (2001) (unenacted amendments and statutory interpretation)
- Downey v. Dixon, 294 S.C. 42 (1987) (prejudice in discovery, prejudice must be shown)