Cromey v. SCDOR ( 2021 )

THE STATE OF SOUTH CAROLINA
In The Court of Appeals
Mary Cromey, Appellant,
v.
South Carolina Department of Revenue, Respondent.
Appellate Case No. 2018-001739
Appeal From The Administrative Law Court
Ralph King Anderson, III, Administrative Law Judge
Opinion No. 5842
Heard June 8, 2021 – Filed August 4, 2021
AFFIRMED
Joshua Madison Tyler Felder and Richard L. Few, Jr.,
both of Parker Poe Adams & Bernstein, LLP, of
Greenville, for Appellant.
Nicole Martin Wooten, of Columbia, for Respondent.
GEATHERS, J.: Appellant Mary Cromey (Taxpayer) challenges an order of the
Administrative Law Court (ALC) upholding a determination by Respondent South
Carolina Department of Revenue (the Department) that Taxpayer does not qualify
as a surviving spouse of a disabled veteran for purposes of the property tax
exemption set forth in section 12-37-220(B)(1) of the South Carolina Code (2014).1
We affirm.
FACTS/PROCEDURAL HISTORY
1
Section 12-37-220(B)(1) allows disabled military veterans or their surviving
spouses to claim a property tax exemption for:
(a) the house owned by an eligible owner in fee or
jointly with a spouse;
(b) the house owned by a qualified surviving spouse
acquired from the deceased spouse and a house
subsequently acquired by an eligible surviving spouse.
The qualified surviving spouse shall inform the
Department of Revenue of the address of a subsequent
house;
...
(e) As used in this item:
(i) "eligible owner" means:
(A) a veteran of the armed forces of the United
States who is permanently and totally disabled as
a result of a service-connected disability and who
files with the Department of Revenue a certificate
signed by the county service officer certifying this
disability;
...
(iii) "qualified surviving spouse" means the surviving
spouse of an individual described in subsubitem
(i) while remaining unmarried, who resides in the
house, and who owns the house in fee or for life.
....
(emphasis added).
The parties agree that the facts in this case are undisputed. Therefore, we
adopt the following recitation of facts from the order on appeal:
[Taxpayer] is the surviving spouse of Lloyd D.
Cromey (Mr. Cromey). In February 2004, the United
States Veterans Administration (VA) deemed Mr. Cromey
to be permanently and totally disabled. [Taxpayer] and
Mr. Cromey lived in a jointly owned home in Owing
Mills, Maryland, until his death in 2005. Mr. Cromey has
never been a resident of South Carolina or owned real
property in South Carolina.
In 2010, several years after Mr. Cromey's death,
[Taxpayer] moved to South Carolina and purchased real
property located at 1551 Ben Sawyer Blvd., Unit 6B,
Mount Pleasant, South Carolina. [Taxpayer] submitted an
application to the Department for the disabled veteran
property tax exemption as a surviving spouse on this
property beginning with tax year 2011. The Department
granted [Taxpayer]'s application.[2]
In 2016, [Taxpayer] sold the property located at
1551 Ben Sawyer Blvd., Unit 6B, Mount Pleasant, South
Carolina, and purchased a new property located at 1885
Carolina Towne Court (Towne Court), Mount Pleasant,
South Carolina. [Taxpayer] was, and is, the sole owner of
Towne Court. Thereafter, on February 17, 2017,
[Taxpayer] applied for the disabled veteran property tax
exemption as a surviving [spouse] for Towne Court. The
Department denied [Taxpayer's] application. [Taxpayer]
has never remarried.
(emphasis added). Taxpayer protested the Department's denial of the exemption,
and the Department ultimately issued a final agency determination upholding the
denial. Taxpayer then sought a contested case hearing before the ALC. The
Department and Taxpayer filed cross-motions for summary judgment, and the ALC
granted summary judgment to the Department. This appeal followed.
2
The Department now asserts that it made a mistake in granting this application.
ISSUE ON APPEAL
Did the ALC err by concluding that Taxpayer did not qualify as a surviving
spouse of a disabled veteran for purposes of section 12-37-220(B)(1)?
STANDARD OF REVIEW
The Administrative Procedures Act governs the standard of review on appeal
from a decision of the ALC, allowing this court to
reverse or modify the decision if substantial rights of the
appellant have been prejudiced because the administrative
findings, inferences, conclusions, or decisions are: (a) in
violation of constitutional or statutory provisions; (b) in
excess of the statutory authority of the agency; (c) made
upon unlawful procedure; (d) affected by other error of
law; (e) clearly erroneous in view of the reliable,
probative, and substantial evidence on the whole record;
or (f) arbitrary or capricious or characterized by abuse of
discretion or clearly unwarranted exercise of discretion.
S.C. Code Ann. § 1-23-380(5) (Supp. 2020).
Further, when a trial court grants summary judgment on a question of law,
such as statutory interpretation, the appellate court must review the ruling de novo.
Wright v. PRG Real Estate Mgmt., Inc., 426 S.C. 202, 212, 826 S.E.2d 285, 290
(2019); see Lightner v. Hampton Hall Club, Inc., 419 S.C. 357, 363, 798 S.E.2d 555,
558 (2017) ("An issue regarding statutory interpretation is a question of law."
(quoting Univ. of S. Cal. v. Moran, 365 S.C. 270, 274, 617 S.E.2d 135, 137 (Ct. App.
2005))).
LAW/ANALYSIS
Taxpayer argues that she qualifies as a surviving spouse of a disabled veteran
for purposes of the property tax exemption set forth in section 12-37-220(B)(1)
because the statute's plain language does not condition eligibility on first acquiring
an exempt house from the deceased veteran. We disagree.
"What a legislature says in the text of a statute is considered the best evidence
of the legislative intent or will." S.C. Dep't of Soc. Servs. v. Boulware, 422 S.C. 1,
8, 809 S.E.2d 223, 226 (2018) (quoting Hodges v. Rainey, 341 S.C. 79, 85, 533
S.E.2d 578, 581 (2000)). "Therefore, the courts are bound to give effect to the
expressed intent of the legislature." Id. (quoting Hodges, 341 S.C. at 85, 533 S.E.2d
at 581). "Under the plain meaning rule, it is not the court's place to change the
meaning of a clear and unambiguous statute." Hodges, 341 S.C. at 85, 533 S.E.2d
at 581. "Where the statute's language is plain and unambiguous[] and conveys a
clear and definite meaning, the rules of statutory interpretation are not needed and
the court has no right to impose another meaning." Id.; see also State v. Johnson,
396 S.C. 182, 188, 720 S.E.2d 516, 520 (Ct. App. 2011) ("In interpreting a statute,
the court will give words their plain and ordinary meaning[] and will not resort to
forced construction that would limit or expand the statute.").
"Th[e appellate c]ourt looks beyond a statute's plain language only when
applying the words literally would lead to a result so patently absurd that the General
Assembly could not have intended it." Boulware, 422 S.C. at 8, 809 S.E.2d at 226.
Although our supreme court has expressed a policy of strictly construing tax
exemption statutes against the taxpayer, "[t]his rule of strict construction simply
means that constitutional and statutory language will not be strained or liberally
construed in the taxpayer's favor." CFRE, LLC v. Greenville Cty. Assessor, 395 S.C.
67, 74, 716 S.E.2d 877, 881 (2011) (quoting Se. Kusan, Inc. v. S.C. Tax Comm'n,
276 S.C. 487, 489, 280 S.E.2d 57, 58 (1981)). "It does not mean that [the appellate
court] will search for an interpretation in [the Department]'s favor where the plain
and unambiguous language leaves no room for construction." Id. at 74–75, 716
S.E.2d at 881.
Section 12-37-220(B)(1) allows disabled military veterans or their surviving
spouses to claim a property tax exemption for:
(a) the house owned by an eligible owner in fee or
jointly with a spouse;
(b) the house owned by a qualified surviving spouse
acquired from the deceased spouse and a house
subsequently acquired by an eligible surviving spouse.
The qualified surviving spouse shall inform the
Department of Revenue of the address of a subsequent
house;
...
(e) As used in this item:
(i) "eligible owner" means:
(A) a veteran of the armed forces of the United
States who is permanently and totally disabled as a
result of a service-connected disability and who
files with the Department of Revenue a certificate
signed by the county service officer certifying this
disability;
....
(iii) "qualified surviving spouse" means the surviving
spouse of an individual described in subsubitem (i) while
remaining unmarried, who resides in the house, and who
owns the house in fee or for life. . . .
(iv) "house" means a dwelling and the lot on which it is
situated classified in the hands of the current owner for
property tax purposes pursuant to Section 12-43-220(c)[.3]
(emphases added). Therefore, a surviving spouse's eligibility for this exemption is
derivative of the disabled veteran having been eligible for the exemption. Pursuant
to the statute's clear terms, a disabled veteran's eligibility for the exemption requires
his ownership of the house in question "in fee or jointly with a spouse" and his having
filed with the Department "a certificate signed by the county service officer
certifying [a service-connected] disability." § 12-37-220(B)(1)(e)(i). It is
undisputed that Taxpayer's husband neither owned property in South Carolina nor
filed the required certificate with the Department as he and Taxpayer resided in
Maryland at the time of his death. Curiously, Taxpayer asserts the certification
requirement does not apply to her because she is an "eligible surviving spouse" as
set forth in item (1), subitem (b), and "there is no textual link . . . between an eligible
surviving spouse and the certification requirement."
3
This property is classified as an owner-occupied legal residence and is taxed at a
rate of four percent of its fair market value. S.C. Code Ann. § 12-43-220(c)(1)
(Supp. 2020).
Subitem (b) identifies the property for which a surviving spouse may claim
the exemption in the following manner: "the house owned by a qualified surviving
spouse acquired from the deceased spouse and a house subsequently acquired by an
eligible surviving spouse." § 12-37-220(B)(1)(b) (emphasis added). The
legislature's inclusion of the conjunction "and" rather than "or" indicates there was
no intent to allow an alternative exemption for a surviving spouse who does not first
acquire an exempt house from the disabled veteran. Likewise, the inclusion of the
term "subsequently" indicates a relationship to the term "acquired" within the
preceding phrase: "the house owned by a qualified surviving spouse acquired from
the deceased spouse and a house subsequently acquired by an eligible surviving
spouse." § 12-37-220(B)(1)(b) (emphases added). In other words, "subsequently
acquired" means subsequent to the qualified surviving spouse's acquisition of an
exempt house from the deceased veteran. Otherwise, the legislature would not have
included the term "subsequently." See CFRE, 395 S.C. at 74, 716 S.E.2d at 881("[W]e must read the statute so 'that no word, clause, sentence, provision or part shall
be rendered surplusage, or superfluous,' for '[t]he General Assembly obviously
intended [the statute] to have some efficacy, or the legislature would not have
enacted it into law.'" (citation omitted) (second and third alterations in original)
(quoting State v. Sweat, 379 S.C. 367, 377, 382, 665 S.E.2d 645, 651, 654 (Ct. App.
2008))). It logically follows that the entire phrase "and a house subsequently
acquired by an eligible surviving spouse" relates back to the preceding phrase,
conditioning eligibility for the exemption on first acquiring an exempt house from
the deceased veteran.
Despite the absence of a logically separate and symmetrical subitem
expressing a third class of persons eligible for the exemption, Taxpayer essentially
seeks to carve out a third class from subitem (b). Taxpayer asserts that the legislature
intended "eligible surviving spouse" to mean merely a surviving spouse who remains
unmarried. Taxpayer attempts to support this assertion with the argument that the
term "subsequently" relates back to the veteran's death (meaning subsequent to the
veteran's death) rather than the surviving spouse's acquisition of the veteran's exempt
house and, thus, a surviving spouse who does not first acquire an exempt house from
the deceased veteran is eligible for the exemption when she acquires a residence
from another source. Taxpayer states: "Any house acquired by a surviving spouse
after the death of the [veteran] would thus be a 'subsequently acquired' house
qualifying for the [e]xemption under the third category." This is a strained
interpretation of item (1) that takes its terms out of their critical context to reach a
result the legislature did not intend. See Singletary v. S.C. Dep't of Educ., 316 S.C.
153, 162, 447 S.E.2d 231, 236 (Ct. App. 1994) ("The intention of the legislature
must be gleaned from the entire section and not simply clauses taken out of
context."). The term "subsequently" is an adverb that modifies the past tense of the
verb "acquire." Further, although the surviving spouse's acquisition of the deceased
veteran's exempt house presumably occurs on the same date as the date of the
veteran's death, the noun "death" does not appear as the event of reference for
"subsequently" in subitem (b).
Therefore, the legislature's use of the words "eligible surviving spouse" does
not indicate a third class of persons who may claim the exemption. If the legislature
had intended to create such a class, it would have added a separate subitem within
item (1) setting forth the third class and a separate definition for "eligible surviving
spouse" as it did for "qualified surviving spouse" and "eligible owner." Rather, the
context in which the word "eligible" is used in subitem (b) indicates the word is to
be understood in its plain sense, which is synonymous with "qualified"4 and simply
means eligible for the exemption. Accordingly, "eligible surviving spouse" is
simply a reference to the qualified surviving spouse who has become eligible for the
exemption on a subsequently acquired house after first acquiring the deceased
veteran's exempt house. The connection between "the qualified surviving spouse"
and "subsequent house" in the last sentence of subitem (b) confirms this plain
reading of the statute: "The qualified surviving spouse shall inform the Department
of Revenue of the address of a subsequent house[.]" § 12-37-220(B)(1)(b)
(emphasis added); see Singletary, 316 S.C. at 162, 447 S.E.2d at 236 ("The intention
of the legislature must be gleaned from the entire section and not simply clauses
taken out of context."). Under Taxpayer's interpretation of subitem (b), the qualified
surviving spouse would be required to inform the Department of the address of a
subsequently acquired house but an "eligible surviving spouse" who does not meet
the definition of qualified surviving spouse would not have to inform the
Department. The legislature could not have intended this incongruous result.
We view section 12-37-220(B)(1)(b) as unambiguous because the only
reasonable interpretation of the statute is that of the ALC and the Department. Cf.
S.C. Dep't of Nat. Res. v. Town of McClellanville, 345 S.C. 617, 623, 550 S.E.2d
299, 302 (2001) ("A contract is ambiguous when the terms of the contract are
reasonably susceptible of more than one interpretation." (emphasis added)).
Nonetheless, even if the statute could be considered ambiguous, the interpretation of
the ALC and the Department better harmonizes with the legislature's expressed
4
See Merriam-Webster Online Dictionary, Eligible, https://www.merriam-
webster.com/dictionary/eligible (June 24, 2021) ("1a: qualified to participate or be
chosen").
intent to require proof of a disability before allowing a tax exemption for it. See
CFRE, 395 S.C. at 74, 716 S.E.2d at 881 ("We . . . should not concentrate on isolated
phrases within the statute. Instead, we read the statute as a whole and in a manner
consonant and in harmony with its purpose." (citation omitted)); see also S.C.
Energy Users Comm. v. S.C. Pub. Serv. Comm'n, 388 S.C. 486, 491, 697 S.E.2d 587,
590 (2010) ("The cardinal rule of statutory construction is to ascertain and effectuate
the intent of the legislature." (quoting Hardee v. McDowell, 381 S.C. 445, 453, 673
S.E.2d 813, 817 (2009))); Boulware, 422 S.C. at 8, 809 S.E.2d at 226 ("What a
legislature says in the text of a statute is considered the best evidence of the
legislative intent or will." (quoting Hodges, 341 S.C. at 85, 533 S.E.2d at 581)).
Taxpayer's interpretation allows an "eligible surviving spouse" to obtain the
exemption even if the corresponding deceased veteran never provided the
Department with proof of his disability during his lifetime. Yet, this same
interpretation requires a living disabled veteran to submit such proof before he may
obtain the exemption for himself under subitem (a). The legislature could not have
intended this incongruous result, especially given the derivative nature of the
exemption for surviving spouses.
Further, we note the Department's representation that it has consistently
interpreted and applied section 12-37-220(B)(1)(b) in the same way it has applied
the statute to Taxpayer for her residence at 1885 Carolina Towne Court.5 Therefore,
this court may defer to this interpretation. See Kiawah Dev. Partners, II v. S.C. Dep't
of Health & Envtl. Control, 411 S.C. 16, 32–33, 766 S.E.2d 707, 717 (2014)
("Interpreting and applying statutes and regulations administered by an agency is a
two-step process. First, a court must determine whether the language of a statute or
regulation directly speaks to the issue. If so, the court must utilize the clear meaning
of the statute or regulation. If the statute or regulation 'is silent or ambiguous with
respect to the specific issue,' the court then must give deference to the agency's
interpretation of the statute or regulation, assuming the interpretation is worthy of
deference." (citations omitted) (quoting Chevron, U.S.A., Inc. v. Nat. Res. Def.
Council, Inc., 467 U.S. 837, 843 (1984))); id. at 34, 766 S.E.2d at 718 ("[W]e give
deference to agencies both because they have been entrusted with administering their
statutes and regulations and because they have unique skill and expertise in
administering those statutes and regulations."); Brown v. S.C. Dep't of Health &
Envtl. Control, 348 S.C. 507, 515, 560 S.E.2d 410, 414 (2002) ("[T]he construction
of a statute by the agency charged with its administration will be accorded the most
respectful consideration and will not be overruled absent compelling reasons."
5
The Department asserts that it made a mistake in granting the exemption for the
property located at 1551 Ben Sawyer Blvd.
(quoting Dunton v. S.C. Bd. of Exam'rs in Optometry, 291 S.C. 221, 223, 353 S.E.2d
132, 133 (1987))).
Finally, Taxpayer asserts that the legislative history of section 12-37-
220(B)(1) supports her position. We disagree. Prior to 2004, item (1) identified the
property for which a disabled military veteran could claim the exemption in the
following manner:
The dwelling house in which he resides and a lot not
to exceed one acre of land owned in fee or for life, or
jointly with a spouse, by a veteran who is one hundred
percent permanently and totally disabled from a service-
connected disability, if the veteran or qualifying surviving
spouse files a certificate, signed by the county service
officer, of the total and permanent disability with the
Department of Revenue. The exemption is allowed the
surviving spouse of the veteran and also is allowed to the
surviving spouse of a serviceman or law enforcement
officer as defined in Section 23-6-400(D)(1) killed in
action in the line of duty who owned the lot and dwelling
house in fee or for life, or jointly with his spouse, so long
as the spouse does not remarry, resides in the dwelling,
and obtains the fee or a life estate in the dwelling. A
surviving spouse who disposes of the exempt dwelling and
acquires another residence in this State for use as a
dwelling house . . . may apply for and receive the
exemption on the newly acquired dwelling, but a
subsequent dwelling of a surviving spouse is not eligible
for exemption pursuant to this item. The spouse shall
inform the Department of Revenue of the change in
address of the dwelling. To qualify for the exemption, the
dwelling house must be the domicile of the person who
qualifies for the exemption.
Act No. 399, 2000 S.C Acts 3463 (emphasis added). The legislature amended item
(1) in 2004 to read as it does today. See Act No. 224, 2004 S.C. Acts 2022.
The plain meaning of the language in the 2000 Act (Act No. 399) simply
allowed a qualified surviving spouse who chose to move to a new residence to claim
an exemption for the newly acquired house after relinquishing ownership of the
exempt house acquired from the deceased spouse. The language also expressly
limited the exemption to the house acquired from the deceased spouse and one
subsequently acquired house. If the qualified surviving spouse relinquished
ownership of the second house and acquired a third house to live in, she could not
claim an exemption for the third house or any other future residences.
The plain language of the current version of the statute indicates that the
legislature extended the exemption to all subsequently acquired residences by (1)
substituting the phrase "a house subsequently acquired by an eligible surviving
spouse" for the statement "A surviving spouse who disposes of the exempt dwelling
and acquires another residence in this State for use as a dwelling house . . . may
apply for and receive the exemption on the newly acquired dwelling" and (2)
deleting the language limiting the exemption to the house acquired from the
deceased spouse and one subsequently acquired house.
We disagree with Taxpayer's intimation that the 2004 amendment created a
third class of persons eligible for the exemption, i.e., "an eligible surviving spouse."
The 2004 amendment simply retained the term "eligible" from the version enacted
in 2000, which states, in pertinent part:
A surviving spouse who disposes of the exempt dwelling
and acquires another residence in this State for use as a
dwelling house . . . may apply for and receive the
exemption on the newly acquired dwelling, but a
subsequent dwelling of a surviving spouse is not eligible
for exemption pursuant to this item.
Act No. 399, 2000 S.C Acts 3463 (emphasis added). When the legislature expanded
the exemption in 2004 to all subsequent dwellings, it connected their acquisition to
a surviving spouse who had become eligible for that exemption after she first
acquired the deceased veteran's exempt house, resulting in the current language
found in section 12-37-220(B)(1)(b): "the house owned by a qualified surviving
spouse acquired from the deceased spouse and a house subsequently acquired by an
eligible surviving spouse." (emphases added). Therefore, this language did not
create a third class of persons who may claim the exemption.
Moreover, we note that the 2004 amendment deleted language allowing the
surviving spouse to file the certificate verifying the veteran's service-connected
disability with the Department so that the exemption is not allowed if the veteran
himself did not file the certificate. This indicates the legislature's intent to ensure
that the surviving spouse's ability to obtain the exemption is merely derivative. She
may not obtain the exemption on a house she purchases after the disabled veteran's
death unless she first acquired a previously exempt house from the deceased veteran.
We also disagree with Taxpayer's contention that her interpretation is
supported by the following language in the preamble to Act No. 224: "An Act . . . to
continue the exemption to subsequent homesteads of surviving spouses and provide
the requirements for this extended exemption . . . ." We view this language as
simply expressing the legislature's intent to extend the exemption to all houses
acquired by the qualified surviving spouse after she leaves the exempt house she
acquired from the deceased veteran. Prior to Act No. 224, the exemption extended
to only one subsequently acquired house.
Based on the foregoing, the ALC correctly ruled that the Department was
entitled to judgment as a matter of law. See Rule 56(c), SCRCP (providing that
summary judgment shall be granted when "the pleadings, depositions, answers to
interrogatories, and admissions on file, together with the affidavits, if any, show that
there is no genuine issue as to any material fact and that the moving party is entitled
to a judgment as a matter of law").
CONCLUSION
Accordingly, the ALC's order is
AFFIRMED.
KONDUROS and MCDONALD, JJ., concur.