Walker v. Brooks, 414 S.C. 343, 778 S.E.2d 477 (2015) is a published October 2015 South Carolina Supreme Court opinion. It affirms in part the Court of Appeals decision in Walker v. Brooks, 403 SC 212, 742 SE 2d 869 (Ct. App. 2013), and remands the matter back to the special referee for determination on Walker’s specific performance claim.

Walker stems from a dispute between a son and his aunt over title to property that was initially owned by Walker’s father, who was also Brooks’ brother. In 1996 and 2002 Walker’s father (the decedent) transferred title to property to Brooks. Decedent and Walker continued to exercise dominion over the property. In 2004, at Decedent’s request, Brooks handwrote a note stating the following:

[Decedent] would like for all the money from Larry Herndon to be paid to [Brooks] until she is paid sixty thousand dollars, at that time she is to release to [Decedent] all the property off Cooks Hill Road at Walterboro, S.C. Any money [Decedent] pays [Brooks] will be toward the sixty thousand dollars.

The parties also generated a ledger documenting payments purportedly made from Decedent to Brooks. The ledger begins at $60,000 and the last entry shows $27,400 remaining to be paid. Brooks’ initials appear next to many of the entries.

Before Decedent’s death, his attorney sent a letter to Brooks citing the above agreement, and requesting her to tender the deed in exchange for $2,893.87. Brooks refused. After Decedent’s death, Walker offered to pay Brooks $27,400 in exchange for her returning title to the farm. After Brooks denied his offer, this lawsuit arose.

At trial Walker argued that an equitable mortgage existed and further sought specific performance on the agreement referenced in the handwritten note and ledger. The special referee found an equitable mortgage existed and did not address Walker’s specific performance claim. Brooks appealed to the Court of Appeals and Walker hired me to defend the appeal. At the Court of Appeals level Walker argued the specific performance claim as an additional sustaining ground. The Court of Appeals reversed the special referee on the equitable mortgage issue but refused to address the specific performance issue. We sought, and the Supreme Court granted, certiorari.

The Supreme Court, in a 4-1 decision, found that Walker had failed meet his clear and convincing burden of proof to demonstrate an equitable mortgage because there was insufficient evidence of decedent’s intent at the time of the transfers. There was no dispute that the ledger and handwritten note were created after the transfers and the majority held they did not demonstrate intent at the time of the transfers:

Most importantly, there is no contemporaneous writing indicating the property was to serve as security for any debt Decedent owed to Brooks. Additionally, while the Court in [F.] Gregorie [& Son v. Hamlin, 273 S.C. 412, 257 S.E.2d 699 (1979)] found it significant that discussions between the parties prior to the conveyance never indicated that an outright sale was contemplated, this was so because the parties were involved in business together and Hamlin had loaned money to F. Gregorie & Son before. Here, the same consideration is less significant where the parties had a close familial relationship. Moreover, the Court found that where Oakland Plantation was valued at nearly twenty times more than the purported consideration, it tended to establish the Gregorie family could not have intended to sell the land for that amount. Here, the deeds conveyed to Brooks recited the collective consideration of $13,255 and the special referee found the property was valued at approximately $120,000 at the time of conveyance. Not only is this disparity much less than in Gregorie, but the close familial relationship between Decedent and Brooks also ameliorates its possible significance because it is more likely a family member would sell property at a grave discount to another family member than would a business partner or past creditor.

Justice Kittredge dissented, holding:

I do not view the absence of a contemporaneous writing as controlling. I concur with the special referee that notwithstanding the absence of a contemporaneous writing, the evidence overwhelmingly supports the imposition of an equitable mortgage. Following the transfer, Kenneth Walker continued to act in every respect as the owner of the property. Similarly, before Walker died, Catherine Brooks never claimed ownership or took any action consistent with ownership. The acknowledgement written and signed by Brooks, albeit not contemporaneously with the conveyance, leaves no doubt that the parties intended a debtor-creditor relationship, with Brooks to convey the property back to Walker once the debt was paid in full. I would find the totality of the circumstances supports by clear and convincing evidence a finding of an equitable mortgage.

It’s always disappointing to lose an appeal, especially after being granted certiorari. It’s even more disappointing to lose an appeal where the decision isn’t unanimous. However all five justices noted facts that support Walker’s specific performance claim. Unlike the Court of Appeals opinion, the Supreme Court opinion remands the matter back to the special referee. Walker still hopes to win on remand what he did not win, at least initially, in the appellate courts.

Put Mr. Forman’s experience, knowledge, and dedication to your service for any of your South Carolina family law needs.

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