Susquehanna Bank v. United States (In re: Restivo Auto Body, Inc.)

Order granting summary judgment


U.S. Bankruptcy Judge Robert Gordon entered an order granting summary judgment in favor of Susquehanna Bank, and against the IRS, declaring the bank has lien priority and thus may claim the fund created by the sale of the secured property.

Citing to findings made in open court, Judge Gordon declared from the bench that the IRS may not rely on it's internal regulations to negate a federal statute that incorporates state real property recording statutes. In particular, the IRS regulations could not be relied upon to gut Maryland's "relation back" rule that says a deed of trust has an "effective date" that is the date of acknowledgment, regardless of when it is recorded.

This is the second U.S. Bankruptcy judge to rule against the IRS on this issue. It is possible the issue will be appealed to a panel sitting for the U.S. District Court of Maryland, or the 4th Circuit.

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Reference Info:Decision | Federal, 4th Circuit, Maryland | United States

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