UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

In Re: WEI TU REASONOVER, a/k/a 

Wei Tu Grandon, a/k/a Wei Tu

Grandon Reasonover; In Re: ROBERT

P. REASONOVER,

Debtors.

COUNTRYWIDE HOME LOANS,

Successor in Interest to Federal

National Mortgage Association,

Defendant-Appellant,

v.  No. 99-2534 UNITED STATES OF AMERICA,

Defendant-Appellee,

and

DONALD F. KING, Successor in

interest to Robert G. Mayer, trustee,

Trustee-Appellee,

and

HARBOR FINANCIAL MORTGAGE

CORPORATION; NEW AMERICAN

FINANCIAL CORPORATION,

Plaintiffs. 
In Re: WEI TU REASONOVER, a/k/a 

Wei Tu Grandon, a/k/a Wei Tu

Grandon Reasonover; In Re: ROBERT

P. REASONOVER,

Debtors.

DONALD F. KING, Successor in

interest to Robert G. Mayer, trustee,

Trustee-Appellant,

v.  No. 99-2620

HARBOR FINANCIAL MORTGAGE

CORPORATION; NEW AMERICAN

FINANCIAL CORPORATION,

Plaintiffs-Appellees,

and

UNITED STATES OF AMERICA;

COUNTRYWIDE HOME LOANS,

Successor in Interest to Federal

National Mortgage Association,

Defendants-Appellees. 

Appeals from the United States District Court

for the Eastern District of Virginia, at Alexandria.

Leonie M. Brinkema, District Judge.

(CA-99-990-A, BK-97-14401-SSM, AP-98-1288, CA-99-989-A,

AP-97-1437, AP-97-1398, AP-97-1395, AP-97-1247, AP-97-1315)

Argued: November 1, 2000

Decided: December 22, 2000

Before LUTTIG and TRAXLER, Circuit Judges, and

Alexander WILLIAMS, United States District Judge

for the District of Maryland, sitting by designation.

2 IN RE: REASONOVER
Remanded by unpublished per curiam opinion. 

COUNSEL

ARGUED: John Turner Donelan, LAW OFFICES OF JOHN T.

DONELAN, Alexandria, Virginia, for Appellant. Tina Maria McMillan, MCMILLAN & LANG, P.C., Fairfax, Virginia, for Appellees. 

Unpublished opinions are not binding precedent in this circuit. See

Local Rule 36(c). 

OPINION

PER CURIAM: 

Wei Tu Reasonover, the debtor, believed she had conveyed certain

real property to Business Depot, Inc., prior to filing for bankruptcy.

By mistake, no deed was recorded for the conveyance, and Reasonover unknowingly retained legal title to the property. The trustee

of Reasonover’s bankruptcy estate filed this action to avoid the claim

to equitable title asserted by Countrywide Home Loans, Inc., the

successor-in-interest to the purchaser of the property from Business

Depot. The bankruptcy and district courts held that 11 U.S.C.

§ 544(a)(3) allows the trustee to avoid Countrywide’s claim to equitable title, subject to a $31,500 security interest in the property in favor

of Countrywide. 

This court heard oral argument in the case on November 1, 2000.

The case was briefed and argued primarily on the question of whether

11 U.S.C. § 544(a)(3) allows the trustee to avoid Countrywide’s equitable claim to property in which Reasonover holds legal title. Thereafter, the parties were requested to brief, in letter form, the question of

"whether 11 U.S.C. § 550(b) has any implications for the resolution

of this case, and if so, the precise nature of its implications." 

IN RE: REASONOVER 3
Under certain circumstances, section 550(b) limits the trustee’s

right to recover property or its value from subsequent transferees of

the initial transferee of the debtor.* The effect of section 550(b) on

this case was apparently not briefed or considered in the courts below.

Because this section may bar the trustee from recovering from Countrywide — even if section 544(a)(3) allows the trustee to avoid Countrywide’s equitable claim to the property — we remand to the district

court for full consideration of section 550(b) and its effect, if any, on

this case.

REMANDED

*Section 550 provides in relevant part that: 

(a) Except as otherwise provided in this section, to the extent that

a transfer is avoided under section 544 . . . of this title, the trustee

may recover, for the benefit of the estate, the property transferred, or, if the court so orders, the value of such property, from

— 

(1) the initial transferee of such transfer or the entity for

whose benefit such transfer was made; or 

(2) any immediate or mediate transferee of such initial transferee. 

(b) The trustee may not recover under section (a)(2) of this section from— 

(1) a transferee that takes for value, including satisfaction or

securing of a present or antecedent debt, in good faith, and

without knowledge of the voidability of the transfer avoided;

or 

(2) any immediate or mediate good faith transferee of such

transferee. 

11 U.S.C. § 550. 

4 IN RE: REASONOVER