Court Opinion

ID: 2747390
Source: CourtListenerOpinion
Date Created: 2014-10-31 19:00:49.169168+00
Date Added: 2024-06-11T11:25:22.657133
License: Public Domain

PUBLISHED

                    UNITED STATES COURT OF APPEALS
                        FOR THE FOURTH CIRCUIT

                               No. 13-2249

In Re: RESTIVO AUTO BODY, INC., d/b/a Restivo Auto Body &
Towing, Inc.,

                Debtor.

------------------------

SUSQUEHANNA BANK,

                Plaintiff - Appellee,

           v.

UNITED STATES OF AMERICA/INTERNAL REVENUE SERVICE,

                Defendant - Appellant.

Appeal from the United States District Court for the District of
Maryland, at Baltimore.    Ellen L. Hollander, District Judge.
(1:12-cv-03597-ELH; 11-18718; 11-00734)

Argued:   September 16, 2014                Decided:   October 31, 2014

Before NIEMEYER, WYNN, and FLOYD, Circuit Judges.

Affirmed by published opinion.        Judge Niemeyer wrote the
opinion, in which Judge Floyd joined.        Judge Wynn wrote a
separate opinion concurring in part and dissenting in part.

ARGUED: Bethany B. Hauser, UNITED STATES DEPARTMENT OF JUSTICE,
Washington, D.C., for Appellant.   Ian Thomas Valkenet, YOUNG &
VALKENET, Baltimore, Maryland, for Appellee.  ON BRIEF: Kathryn
Keneally, Assistant Attorney General, Bridget M. Rowan, Tax
Division, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C.;
Rod J. Rosenstein, United States Attorney, OFFICE OF THE UNITED
STATES ATTORNEY, Baltimore, Maryland, for Appellant.    Thomas C.
Valkenet, YOUNG & VALKENET, Baltimore, Maryland, for Appellee.

                                2
NIEMEYER, Circuit Judge:

        In this appeal, we determine priority as between a tax lien

filed    by     the   Internal    Revenue    Service   (“IRS”)    and    a   bank’s

security interest created by a deed of trust that was executed

before the IRS filed its lien but recorded thereafter.

        On January 4, 2005, Restivo Auto Body, Inc., of Eldersburg,

Maryland, borrowed $1 million from Susquehanna Bank and secured

repayment of the loan by executing and delivering to the Bank a

deed of trust with respect to two parcels of real property.                       Six

days later, on January 10, 2005, the IRS filed notice of a

federal tax lien against Restivo Auto Body for unpaid employment

taxes.        On February 11, 2005, Susquehanna Bank recorded the deed

of trust it had received on January 4, 2005.

        Susquehanna     Bank     commenced    this   adversary    proceeding      in

Restivo       Auto    Body’s   Chapter   11    bankruptcy     case,     seeking     a

judgment declaring that the security interest it acquired on

January 4, 2005, had priority over the IRS’s tax lien filed on

January 10, 2005, regardless of the fact that it did not record

its security interest until after the IRS had filed notice of

its tax lien.

        The    district    court    granted     Susquehanna      Bank    priority,

ruling (1) that Md. Code Ann., Real Prop. § 3-201, related back

Susquehanna Bank’s subsequent recordation of its deed of trust

to the date the deed of trust was executed and delivered, thus

                                         3
giving Susquehanna Bank a security interest effective before the

IRS recorded its tax lien; and alternatively (2) that Maryland

common law, under the doctrine of equitable conversion, gave

Susquehanna      Bank    a    protected      equitable         security   interest   in

Restivo Auto Body’s property, regardless of recordation, when

Restivo Auto Body executed the deed of trust in exchange for the

$1 million loan on January 4, before the IRS recorded its tax

lien.

     We reject the district court’s holding that Md. Code Ann.,

Real Prop. § 3-201 gives Susquehanna Bank retroactive priority

over the IRS, concluding that 26 U.S.C. § 6323(h)(1)(A)’s use of

the present perfect tense precludes giving effect to Real Prop.

§ 3-201’s relation-back provision.                      We nonetheless affirm the

judgment of the district court on the ground that under Maryland

common   law,    Susquehanna         Bank    acquired      an    equitable    security

interest    in   the    two    parcels      of    real    property     on   January 4,

regardless       of     recordation,         because       its     interest    became

“protected . . . against a subsequent lien arising out of an

unsecured    obligation”        on    that       date    and    that   therefore     its

security interest had priority over the IRS’s tax lien under

26 U.S.C. § 6323(a) and § 6323(h)(1).

                                             4
                                            I

       Restivo Auto Body failed to pay employment taxes for the

fourth quarter of 2002, the first quarter of 2003, and the first

and second quarters of 2004.                The IRS issued notice and demand

for payment of these deficiencies on or before September 20,

2004, giving rise to a tax lien on all property owned by Restivo

Auto Body.       On January 10, 2005, the IRS filed notice of its

federal tax lien for the relevant quarters in the land records

in the Circuit Court for Carroll County, Maryland.

       On January 4, 2005, six days before the IRS filed notice of

its federal tax lien, Restivo Auto Body borrowed $1 million from

Susquehanna Bank, giving the Bank a note and a deed of trust on

two adjacent parcels of real property on Enterprise Street in

Eldersburg, Maryland -- Lots 17 and 39 -- to secure repayment of

the loan.      The deed of trust, however, was not recorded until

February 11, 2005, more than a month after the IRS filed notice

of its tax lien.

       When   Restivo    Auto   Body       filed       for    Chapter       11    bankruptcy

protection     in    April    2011,       the    IRS    filed      a    proof     of    claim,

stating   that      Restivo   Auto    Body       owed    it    $62,438.99          in   taxes,

interest, and penalties for the relevant quarters.                               Susquehanna

Bank   thereupon      commenced      an    adversary         proceeding          against   the

IRS,    seeking      a   declaratory            judgment      as       to   the     relative

priorities of the parties’ secured interests, and the parties

                                            5
filed cross-motions for summary judgment.                  In claiming priority

for the deed of trust that it received before the IRS filed its

tax lien but recorded thereafter, Susquehanna Bank relied on Md.

Code Ann., Real Prop. § 3-201, which relates back a deed of

trust’s effective date upon recordation to the date when the

deed of trust was executed.                The Bank also claimed a prior

“equitable lien.”

      The    bankruptcy    court   relied       on   WC   Homes,    LLC    v.   United

States, Civil Action No. DKC 2009-1239, 2010 WL 3221845 (D. Md.

Aug. 13, 2010), to hold that Md. Code Ann., Real Prop. § 3-201

relates back the effective date of Susquehanna Bank’s deed of

trust to January 4, 2005, six days before the IRS recorded its

tax lien.     The court explained:

      Why [Susquehanna Bank] would wait so long to record
      the lien, who knows?   But that doesn’t really matter
      for purposes of the analysis. [The] effective date is
      the most important thing, and the deed was recorded in
      such a way as . . . give it priority pursuant to [Md.
      Code Ann., Real Prop. § 3-201] over the government’s
      claim.

      The district court affirmed, again relying on WC Homes.

The   court    stated     that,    under       Maryland    law,    which    is     made

applicable by 26 U.S.C. § 6323(h)(1)(A), “a recorded deed of

trust   is    effective    against    any       creditor    of     the    person    who

granted the deed of trust as of the date the deed of trust was

delivered (not the date it was recorded) regardless of whether

the creditor did or did not have notice of the deed of trust at

                                           6
any time.”         United States v. Susquehanna Bank (In re Restivo

Auto Body, Inc.), Civil Action No. ELH-12-3597, 2013 WL 4067624,

at *7 (D. Md. Aug. 12, 2013) (quoting Chi. Title Ins. Co. v.

Mary    B.,     988 A.2d 1044,     1050    (Md.     Ct.    Spec.     App.    2010))

(internal quotation marks omitted).                        It concluded accordingly

that “as      of    when     the    IRS’s    lien    was    recorded,       Susquehanna’s

[deed    of   trust]       was     already    a    ‘security       interest’      that   was

entitled      to   priority        under    Maryland       law    and,    hence,    federal

law.”    Id. at *6.

       As an alternative basis for affirming the bankruptcy court,

the     district         court     held    that     Susquehanna          Bank’s    security

interest would have taken priority under Maryland law even if

the deed of trust had never been recorded.                         The court reasoned

that Maryland’s doctrine of equitable conversion entitles the

holder of a deed of trust to the same protections as a bona fide

purchaser     for     value,       who    takes    title    free    and    clear    of    all

subsequent liens regardless of recordation.                              Since 26 U.S.C.

§ 6323(h)(1)(A) gives an IRS tax lien only those protections

that    local      law    would     afford    to    “a    subsequent       judgment      lien

arising out of an unsecured obligation,” the court concluded

that Susquehanna Bank’s deed of trust took priority over the

IRS’s lien.

       The IRS filed this appeal.

                                              7
                                             II

       The priority of a federal tax lien is governed by federal

law.        See   Aquilino      v.   United       States,     363 U.S. 509,    513-14

(1960).      Under federal law, a lien in favor of the IRS attaches

to all property owned by a person who “neglects or refuses” to

pay taxes for which he is liable after the IRS demands payment.

26    U.S.C.      § 6321.       The    lien       arises      at    the        time    the    tax

assessment is made, id. § 6322, and generally takes priority

over    a    lien     created     after      that      date       under    the        common-law

principle that “the first in time is the first in right,” United

States v. City of New Britain, 347 U.S. 81, 85 (1954), even if

the    tax     lien    is   unrecorded,          see    United       States       v.    Snyder,

149 U.S. 210, 214 (1893).                   But a tax lien is not “valid as

against      any . . .      holder     of    a    security         interest . . .            until

notice thereof . . . has been filed by the Secretary [of the

Treasury].”           26 U.S.C.      § 6323(a).         As    used        in    § 6323(a),       a

“security interest” is defined to mean “any interest in property

acquired by         contract    for    the    purpose        of    securing       payment      or

performance of an obligation or indemnifying against loss or

liability,” id. § 6323(h)(1), and its existence at any given

time depends on whether, inter alia, “the interest has become

protected under local law against a subsequent judgment lien

arising out of an unsecured obligation,” id. § 6323(h)(1)(A).

                                              8
       The issue, in this context, is whether Maryland law gave

Susquehanna         Bank     a     security          interest,          as     defined      by

§ 6323(h)(1), when the Bank received a deed of trust to secure

the repayment of its loan on January 4, even though it did not

record the deed of trust until February 11.                            As the issue is a

question of law, we review the judgment of the district court de

novo.

       The    IRS     contends          that       the       district        court     misread

§ 6323(h)(1) in applying Md. Code Ann., Real Prop. § 3-201 to

give    Susquehanna        Bank    the    retroactive           benefit       of     its   late

recordation.          In     particular,           it    argues        that    § 6323(h)(1)

requires     the    court    to    determine         whether      a    security      interest

existed as of January 10 when the IRS filed its tax lien.                                   And

it   notes    that    under       § 6323(h)(1),          a    security        interest     only

“exists”     at    such    time    as    “the      interest      has    become       protected

under local law.”            Emphasizing the text’s use of the present

perfect tense, it argues that Susquehanna Bank did not obtain an

effective security interest as of January 10, but only as of

February 11,        when    it    recorded         the   deed    of     trust.        Because

Susquehanna Bank was not a holder of a security interest on

January 10, according to the IRS, the federal tax lien became

valid against the Bank by September 20, 2004, the last date on

which the IRS assessed the tax deficiencies, and therefore the

                                               9
federal tax lien takes priority under the common-law rule of

first in time, first in right.

        Susquehanna        Bank    argues    that      Maryland’s     relation-back

statute     is      part     of    the      “local     law”    and    must,       under

§ 6323(h)(l)(A), be given effect.

      Our analysis begins with the determination of when, under

Maryland     law,     a     deed    of     trust     becomes   effective      against

subsequent judgment liens.               See 26 U.S.C. § 6323(h)(1)(A).           As a

general proposition, Maryland specifies that a deed of trust is

not effective unless it is “executed and recorded.”                         Md. Code

Ann., Real Prop. § 3-101(a).                  When the date of execution is

earlier than the date of recordation, recordation relates back

the     deed’s      effective       date     to     the   date      the    deed    was

executed -- that is,“[e]very deed, when recorded, takes effect

from its effective date,” presumptively defined as the later of

the date of the last acknowledgment or the date stated on the

deed.     Id. § 3-201.        This means, according to Maryland case law,

that a “recorded deed of trust is effective against any creditor

of the person who granted the deed of trust” -- including a

holder of a judgment lien -- “as of the date the deed of trust

was delivered.”       Chi. Title Ins., 988 A.2d at 1050.                  Thus, where

a deed of trust was executed on July 15, 2005, but remained

unrecorded for over two years, the effective date of the deed of

trust was nonetheless July 15, 2005, giving the deed of trust

                                            10
priority over a lien arising from a judgment rendered after the

execution date but before the recordation date.                   Id. at 1047-50;

see also, e.g., Angelos v. Md. Cas. Co., 380 A.2d 646, 648 (Md.

Ct. Spec. App. 1977) (holding that a mortgage took priority over

a judgment lien under Real Prop. § 3-201, where the mortgage had

been executed before, but recorded after, the institution of a

lawsuit to obtain the judgment lien).

      Thus, under Maryland law, when Susquehanna Bank recorded

its deed of trust on February 11, 2005, the effective date of

the deed of trust related back to January 4, 2005, when it was

executed and delivered.

      That conclusion, however, does not dispose of the question

presented in this case, because the question here is not what

interest Susquehanna Bank had on February 11, but rather, under

26 U.S.C. § 6323(a), whether Susquehanna Bank had a “security

interest”     at    the   time      the   IRS   recorded    its     tax     lien     on

January 10.          Section 6323(h)(1)’s        definition        of    that      term

focuses    the     priority   determination      on   the   date    when    the     IRS

filed notice of its tax lien, providing that a security interest

must exist at the time of the IRS’s recordation.                        In statutory

language, Susquehanna Bank would have priority only “if, at such

time [as the filing of the IRS’s lien, January 10], the property

is   in   existence    and    the   interest    has   become   protected        under

local law against a subsequent judgment lien arising out of an

                                          11
unsecured      obligation.”              26       U.S.C.     § 6323(h)(1)(A).          On

January 10, however, Susquehanna Bank had not yet triggered the

relation-back       statute     because          recordation     was   an      essential

element that had not then been satisfied.                        See Md. Code Ann.,

Real Prop. § 3-201 (“Every deed, when recorded, takes effect

from its effective date” (emphasis added)); Chi. Title Ins., 988
A.2d    at   1050    (“[Real        Prop.     § 3-201]     plainly     means    that    a

recorded deed of trust is effective against any creditor of the

person who granted the deed of trust as of the date the deed of

trust    was   delivered”       (emphasis         added)).        While     Susquehanna

Bank’s subsequent recordation on February 11 gave its deed of

trust an earlier effective date by operation of Real Prop. § 3-

201, that statute had not yet been triggered as of the date on

which the IRS filed notice of its tax lien.                      Thus, that statute

had     no   bearing    in     determining         whether       Susquehanna     Bank’s

security interest “had become protected” as of January 10.

       The   district       court’s    analysis       removed      § 6323(h)(1)(A)’s

temporal distinction from the statute and rendered the words “at

such    time   .    .   .    [as]     the    interest      has    become     protected”

superfluous,       notwithstanding          the   Supreme    Court’s       guidance    to

take account of Congress’ use of verb tenses.                      See, e.g., United

States v. Wilson, 503 U.S. 329, 333 (1992) (“Congress’ use of a

verb tense is significant in construing statutes”).                         Tenses are

particularly telling where Congress uses multiple tenses within

                                            12
the same section.                See Dickerson v. New Banner Inst., Inc.,

460 U.S. 103, 116 (1983) (deriving meaning from Congress’ use of

the present and present perfect tenses within 18 U.S.C. § 922);

Barrett v. United States, 423 U.S. 212, 217 (1976) (“[Congress]

used    the     present          perfect        tense        elsewhere          in     the     same

section . . . ,        in    contrast       to       its    use    of     the    present      tense

[here].        The statute’s pattern is consistent and no intended

misuse of language or of tense is apparent”).

       Thus,    we    give       effect    to     Congress’          use    of       the    present

perfect tense in § 6323(h)(1)(A), especially since Congress used

the present tense within the same sentence.                                See § 6323(h)(1)

(“A security interest exists at any time (A) if, at such time,

the    property       is    in    existence          and    the     interest         has     become

protected under local law” (emphasis added)).                              As a consequence,

§ 6323(h)(1) must be read to mean that at the time that the IRS

filed its lien, a security interest must have been in existence

and    must    have    become      protected         under        local    law    in       order   to

obtain priority.           Here, that means that as of January 10, 2005,

Susquehanna Bank’s security interest must have become protected

by local law against subsequent judgment liens to deny the IRS

priority.       Yet, under Maryland law, as of January 10, Md. Code

Ann., Real       Prop.      § 3-201       did    not       give    Susquehanna         Bank    such

protection.          That statute did not operate to give Susquehanna

                                                13
Bank    a     security     interest     until      February 11,       2005,     when    it

recorded its deed of trust.

       The     Sixth     Circuit’s     opinion      in    Citizens    State     Bank    v.

United      States,      932 F.2d 490   (6th    Cir.     1991)      (per   curiam),

provides       substantial       support     for     this    conclusion.          There,

Citizens State Bank recorded a mortgage involving two tracts of

land.         Id.   at   491.      Thereafter,       intending       to   release      the

mortgage on one of the tracts, the Bank inadvertently recorded a

total release as to both tracts.                     Id.     The IRS subsequently

recorded a federal tax lien pursuant to 26 U.S.C. § 6321.                              Id.

The Bank sought priority for its accidentally-released mortgage,

arguing that since it, at some point, had a security interest

that    had    become     protected     under     local     law,   its    mortgage     had

priority under § 6323(a).              Id. at 493.          Relying on the phrase

“has become” in § 6323(h)(1)(A), the court rejected the Bank’s

interpretation of the statute:

       Congress intended the protection to cover present
       security interests which have been perfected at some
       point prior to the imposition of the federal tax lien.
       Thus, the language would exclude security interests
       which have not yet become perfected under local law,
       as   well   as   those  interests   which  have   been
       released. . . . [T]he language “has become” suggests
       that Congress intended to cover only those security
       interests which exist presently, and have become valid
       prior to the federal tax lien.

Id. (emphasis added).

                                             14
       In     short,      although        Maryland’s       relation-back           law

retroactively validated Susquehanna Bank’s security interest, it

had    not    so    operated   as   of   January 10,      2005,      when    the   IRS

recorded its tax lien.

       This interpretation is precisely the one adopted in Treas.

Reg. § 301.6323(h)-1(a)(2).           That regulation provides:

            For purposes of this paragraph,                    a security
       interest   is  deemed   to  be protected                 against a
       subsequent judgment lien on --

              (A) The date on which all actions required under
                  local law to establish the priority of a
                  security interest against a judgment lien have
                  been taken, or

              (B) If later, the date on which all required
                  actions are deemed effective, under local law,
                  to establish the priority of the security
                  interest against a judgment lien.

       For purposes of this subdivision, the dates described
       in (A) and (B) of this subdivision . . . shall be
       determined without regard to any rule or principle of
       local law which permits the relation back of any
       requisite action to a date earlier than the date on
       which the action is actually performed.

Treas. Reg. § 301.6323(h)-1(a)(2) (emphasis added).

       Susquehanna     Bank    argues    that    we   should   not    rely    on   the

regulation because the statute that the regulation interprets

unambiguously gives effect to local law -- here, Md. Code Ann.,

Real   Prop. § 3-201 -- which,           it   maintains,    “protects        recorded

security interests from the date of delivery, irrespective of

the    date    of     recordation.”           This    interpretation,        however,

                                         15
overlooks      the       language    of    § 6323(h)(1),        which,    as     we    have

already pointed out, requires that the evaluation of Susquehanna

Bank’s security interest be made as of the date that notice of

the federal tax lien was filed.                   Because Susquehanna Bank had

not, as of that date, recorded its deed of trust, the relation-

back provision in Real Prop. § 3-201, which applies only to a

deed “when recorded,” did not yet apply.

       Even    if     Susquehanna     Bank’s      argument      were     recognized     to

demonstrate a statutory ambiguity, the Treasury Regulation would

nonetheless be enforceable if it were a permissible construction

of the statute.            “[A] court need not conclude that the agency

construction was the only one it permissibly could have adopted

to uphold the construction, or even the reading the court would

have    reached       if    the    question      initially      had    arisen    in    the

judicial proceeding.”               Chevron, U.S.A., Inc. v. Natural Res.

Def. Council, Inc., 467 U.S. 837, 843 n.11 (1984).                               Instead,

“any    ensuing       regulation      is    binding        in   the     courts    unless

procedurally defective, arbitrary or capricious in substance, or

manifestly      contrary      to    the   statute.”        United      States    v.    Mead

Corp., 533 U.S. 218, 227 (2001).

       We conclude that the regulation is indeed a permissible

construction        of     § 6323(h)(1)(A).          For    the   reasons        we    have

already       given      above,     the    present    perfect         tense     used    in

§ 6323(h)(1)(A) precludes the subsequent retroactive creation of

                                            16
a security interest.         In addition, the legislative history of

the   Federal      Tax   Lien    Act     of    1966,      Pub.    L.       No. 89-719,

80 Stat. 1125      (codified     in    scattered     sections        of    26 U.S.C.),

demonstrates     that    Congress     wanted    to   bypass      state         laws   that

relate back a deed’s date of priority to an earlier date.                             The

Senate    Report    states      specifically       that      “[f]or       Federal      tax

purposes,    a   security    interest     is   not     considered         as    existing

until the condition set forth here” -- namely, the requirements

listed in § 6323(h)(1) -- “are met even though local law may

relate a security interest back to an earlier date . . . .”

S. Rep.     No. 89-1708,     at 13     (1966).         And     the     House      Report

expresses the same view:

           For purposes of [§ 6323(h)(1)(A)], a security
      interest   becomes  protected  against   a  subsequent
      judgment lien on the date on which all actions
      required under local law to establish the priority of
      the security interest against such a judgment lien
      have been taken, or, if later, the date on which all
      such actions are deemed effective, under local law, to
      establish such priority.       Therefore, a security
      interest comes into existence only at the time
      prescribed in the preceding sentence notwithstanding
      any rule or principle of local law which permits the
      relation back of any requisite action to a date
      earlier than the date on which it is actually
      performed.

H.R. Rep. No. 89-1884, at 49 (1966) (emphasis added).

      Our conclusion that the Treasury Regulation is a reasonable

construction of 26 U.S.C. § 6323(h)(1)(A) is bolstered by the

fact that federal courts have, with one exception, uniformly

                                         17
applied it to bar state laws that would otherwise permit later

actions to relate back in time, without any suggestion that it

might be an impermissible construction of the statute.                        See Haas

v.   IRS   (In    re    Haas),    31 F.3d 1081,    1091      (11th   Cir.     1994)

(holding that, although Alabama state law would give a mortgagee

who erroneously recorded a release of a mortgage an equitable

right      to     have     the      mortgage         retroactively         reinstated,

reinstatement          would    have      resulted      in     relating      back     the

perfection of the mortgage to the original recording date, in

violation of Treas. Reg. § 301.6323(h)–1(a)(2)); Flagstar Bank,

FSB v. Eerkes, No. C12-1951RSL, 2014 WL 4384063, at *1-2 (W.D.

Wash. Sept. 4, 2014) (granting reformation of a deed of trust

describing       the    wrong    parcel    of   land,        but   holding   that     the

reformed deed was inferior to a federal tax lien under Treas.

Reg. § 301.6323(h)–1(a)(2)’s prohibition against relation-back

rules); Regions Bank v. United States, No. 3:12-cv-21, 2013 WL
635615, at *3 (E.D. Tenn. Feb. 20, 2013) (reaching same result

as Haas under similar facts); Bank of N.Y. Mellon Trust Co.,

Nat’l Ass’n v. Phipps, Civil No. L-10-1271, 2011 WL 1322393,

at *2-3 (D. Md. Apr. 1, 2011) (assuming that a deed of trust

could be amended to include a mistakenly omitted purchaser or

that an equitable lien could be imposed under state law, but

holding    that    those       remedies    could     only     have   forward-looking

effects pursuant to Treas. Reg. § 301.6323(h)–1(a)(2)).                        But see

                                           18
WC Homes, LLC v. United States, Civil Action No. DKC 2009-1239,

2010 WL 3221845, at *3-4 (D. Md. Aug. 13, 2010) (concluding that

Treas. Reg. § 301.6323(h)–1(a)(2) was not entitled to deference

because the statute was unambiguous).

       In short, while we read § 6323(h)(1)(A) unambiguously to

preclude the application of Md. Code Ann., Real Prop. § 3-201,

we also conclude that the Treasury Department’s construction of

§ 6323(h)(1)(A) in explicitly precluding the application of a

relation-back rule is a permissible one.                Thus, we find that the

district     court    misinterpreted      § 6323(h)(1)(A)         in    ruling    that

Real    Prop. § 3-201      gave      Susquehanna      Bank   a    prior     security

interest.

                                        III

       Apart from its application of Md. Code Ann., Real Prop.

§ 3-201, the district court also concluded that Susquehanna Bank

had a prior security interest under § 6323(h)(1)(A), based on

the    Maryland      doctrine   of    equitable      conversion.          The    court

explained that under Maryland law, “the holder of an equitable

title   or   interest     in    property,     by    virtue   of    an     unrecorded

contract of sale, has a claim superior to that of a creditor

obtaining     a    judgment     subsequent     to     the    execution      of    the

contract.”        Susquehanna Bank, 2013 WL 4067624, at *7 (quoting

Stebbins-Anderson Co. v. Bolton, 117 A.2d 908, 910 (Md. 1955))

(internal quotation marks omitted).                And it pointed out that the

                                         19
doctrine     applies      to     lenders    whose         interests       are    secured     by

mortgages or deeds of trust.                    Construing § 6323(h)(1)(A), the

court concluded that “an IRS tax lien is entitled only to the

protection due under state law to ‘a subsequent judgment lien

arising     out      of     an     unsecured          obligation’”            id.    (quoting

§ 6323(h)(1)(A)),         and      that,       under       Maryland       law,      as     made

applicable by § 6323(h)(1)(A), judgment liens are “subject to

prior, undisclosed equities,” id. (quoting Wash. Mut. Bank v.

Homan, 974 A.2d 376, 389 (Md. Ct. Spec. App. 2009)) (internal

quotation marks omitted).

      We    agree    with       the   district        court       that    § 6323(h)(1)(A)

incorporates        Maryland      law     insofar         as    it    protects      equitable

security interests against subsequent judgment-creditor liens.

      The    Maryland     doctrine        of    equitable            conversion     “emanates

from the maxim that ‘equity treats that as being done which

should be done.’”           Noor v. Centreville Bank, 996 A.2d 928, 932

(Md. Ct. Spec. App. 2010) (quoting Himmighoefer v. Medallion

Indus., Inc., 487 A.2d 282, 286 (Md. 1985)).                             Pursuant to that

doctrine, upon contracting to buy land, “in equity the vendee

becomes     the   owner     of    the     land,      the       vendor    of   the    purchase

money.”     Id. (quoting Himmighoefer, 487 A.2d at 286).                             Although

the seller retains legal title during the executory period, he

has   “no   beneficial         interest    in       the    property”      apart     from   his

“right to the balance of the purchase money.”                           Watson v. Watson,

                                               20
497 A.2d 794, 800 (Md. 1985).              Rather, he holds his legal title

“in trust for the purchaser.”             Wolf Org., Inc. v. Oles, 705 A.2d
40, 45 (Md. Ct. Spec. App. 1998).                    By contrast, a holder of

equitable     title       “retains   a      significant         interest     in    the

enforcement      of   a    land   sales    contract.”           Wash.   Mut.      Bank,
974 A.2d at 388.           Consistent with these principles, Maryland

courts have repeatedly held that a land purchaser’s equitable

title is superior to any judgment lien subsequently obtained

against the seller.          See, e.g., Watson, 497 A.2d at 800; Wolf

Org., 705 A.2d    at    46–47.        As    Maryland’s      Court   of   Appeals

explained in Himmighoefer:

      It is a general rule that the holder of an equitable
      title or interest in property, by virtue of an
      unrecorded contract of sale, has a claim superior to
      that of a creditor obtaining judgment subsequent to
      the execution of the contract. . . . The right of the
      vendee to have the title conveyed upon full compliance
      with the contract of purchase is not impaired by the
      fact that the vendor, subsequently to the execution of
      the contract, incurred a debt upon which judgment was
      recovered. A judgment creditor stands in the place of
      his debtor, and he can only take the property of his
      debtor subject to the equitable charges to which it is
      liable in the hands of the debtor at the time of the
      rendition of the judgment.
487 A.2d at 287 (quoting Stebbins-Anderson Co., 117 A.2d at 910)

(internal quotation marks and citations omitted).                       A judgment

creditor’s lien cannot attach to a seller’s bare legal title in

the   property    after     the   seller       has   conveyed    equitable     title,

because the seller’s legal title is a mere “technicality.”                        Wolf

                                          21
Org., 705 A.2d at 46.                 Nor can the judgment creditor’s lien

attach    to    the     seller’s      equitable      interest     in   the    property,

because that interest has already become “vested in another.”

Id.

      Moreover,       the     Maryland       doctrine   of    equitable      conversion

protects the security interest of a purchaser regardless of the

purchaser’s      compliance          with    the    recordation    statutes.        The

recordation statutes protect only bona fide purchasers.                             See

Lewis v. Rippons, 383 A.2d 676, 680 (Md. 1978) (holding that

because a party was not a bona fide purchaser, “the recording

statute avail[ed] him not”); see also Greenpoint Mortg. Funding,

Inc. v. Schlossberg, 888 A.2d 297, 308 (Md. 2005); In re Careful

Laundry, 104 A.2d 813, 818 (Md. 1954).                        And Maryland law is

clear that “a judgment creditor is not in the position of a bona

fide purchaser.”          Kolker v. Gorn, 67 A.2d 258, 261 (Md. 1949);

see also, e.g., Himmighoefer, 487 A.2d at 287; Stebbins-Anderson

Co., 117 A.2d at 910; Chi. Title Ins., 988 A.2d at 1050; Wash.

Mut. Bank, 974 A.2d at 389; Chambers v. Cardinal, 935 A.2d 502,

511 (Md. Ct. Spec. App. 2007).                      Thus, a judgment creditor’s

claim    “is    subject       to   prior,     undisclosed     equities”      and   “must

stand or fall by the real, and not the apparent rights of the

defendant in the judgment.”                   Kolker, 67 A.2d at 261 (quoting

Ahern    v.    White,    39 Md. 409,    421   (1874))    (internal      quotation

marks omitted).

                                              22
      This traditional scheme of real property law and equity

does not render Md. Code Ann., Real Prop. § 3-201’s recordation

requirement a nullity, as the district court recognized.                                Bona

fide purchasers remain incentivized to record their interests to

achieve priority against other bona fide purchasers.                              See Md.

Code Ann., Real Prop. § 3-203.

      While Susquehanna Bank did not sign a contract to purchase

Restivo Auto Body’s real property, it did receive a conditional

deed to secure repayment of its loan.                       And Maryland principles

in   equity    “treat         lenders    who    secure      their     interests    with   a

mortgage      or    deed       of    trust   as      entitled    to     the   protections

available to bona fide purchasers for value,” so long as those

lenders act in good faith.                   Wash. Mut. Bank, 974 A.2d at 396;

see also Silver v. Benson, 177 A.2d 898, 902 (Md. 1962) (“It is

well settled that in circumstances where a deed is set aside for

fraud, a mortgagee not a party to the fraud is entitled to the

protection afforded a bona fide purchaser by a court of equity,

to   the   extent        of    his   interest”).           Consequently,      a   lender’s

equitable      interest         in    secured       property    is    superior     to    the

interest of subsequent judgment lienholders.                          Taylor Elec. Co.,

Inc. v. First Mariner Bank, 992 A.2d 490, 502 (Md. Ct. Spec.

App. 2010) (“The overwhelming weight of authority is that once a

bona fide purchaser or lender for value acquires title by way of

execution      of    a        contract   for        sale   or   valid    mortgage,      the

                                               23
purchaser       or   mortgagee      takes     title     free    and      clear    of    any

subsequent lien” (emphasis added and omitted)).

       These principles are not unique to Maryland, which applies

traditional      equitable       principles       to   traditional       real    property

law.    See Hellmann v. Circle C Props. I, Ltd., No. 04-03-00217-

CV, 2003 WL 22897220, at *2-3 (Tex. Ct. App. Dec. 10, 2003)

(holding that a lender who held a deed of trust had priority

over   a   debtor’s       subsequent    judgment       creditor);        Suffolk       Cnty.

Fed. Sav. & Loan Ass’n v. Geiger, 57 Misc. 2d 184, 186 (N.Y.

Sup. Ct. 1968) (holding that a mortgagee had priority over a

subsequent judgment lienholder).

       Applying these principles in this case, Susquehanna Bank

took equitable title to Lots 17 and 39 when Restivo Auto Body

executed    a    deed     of    trust   and      delivered     it   to    the    Bank    on

January 4, 2005.           That equitable title gave Susquehanna Bank

priority over all of Restivo Auto Body’s subsequent judgment-

creditor lienholders.            And because federal tax law subordinates

a federal tax lien to a deed of trust that has become protected

“against a subsequent judgment lien arising out of an unsecured

obligation,”         26   U.S.C.     § 6323(h)(1)(A),          Susquehanna         Bank’s

equitable       security       interest,    which      had   become       protected      on

                                            24
January 4,      2005,     had   priority    over   the   IRS’s    lien    under

§ 6323(a). ∗

     The IRS’s arguments to the contrary are unavailing.                 First,

noting that Maryland’s equitable conversion cases all involve

belatedly      recorded   deeds,   rather   than   deeds   that   were   never

recorded at all, the IRS argues that those cases “involved the

application of the relation-back principle” of Md. Code Ann.,

Real Prop. § 3-201 and are therefore subject to that statute’s

     ∗
       Dissenting from this part of the opinion, Judge Wynn
argues that the IRS’s tax lien “was not a subsequent lien”
because the IRS’s lien arose “at the time the assessment [was]
made” on September 20, 2004.     But that is wholly beside the
point.   Equitable conversion protected Susquehanna Bank from
subsequent judgment liens as of January 4, 2005. Because, under
the Tax Code, a security interest “exists” when it “has become
protected under local law against a subsequent judgment lien,”
§ 6323(h)(1)(A) (emphasis added), Susquehanna Bank became the
holder of a security interest as of that date. While the IRS’s
lien became effective against Restivo Auto Body, the delinquent
taxpayer, on September 20, 2004, id. § 6322, it was not valid
against Susquehanna Bank, the holder of a security interest,
until the IRS filed notice of the lien on January 11, 2005, id.
§ 6323(a).    This opinion does not overturn United States v.
Bond, 279 F.2d 837 (4th Cir. 1960), which recognized that, in
1913, Congress “partially abrogate[d] the effect of the secret,
unrecorded lien” in § 6323(a) “by requiring recordation of the
federal tax lien to render it valid as against mortgagees,
pledgees, purchasers and judgment creditors.”       Id. at 841.
Congress subsequently amended § 6323(a) to make unrecorded tax
liens ineffective against holders of security interests as well.

In short, our argument is not, as Judge Wynn claims, that the
IRS’s tax lien is equivalent to a judgment lien.    Rather, the
Tax   Code  subordinates   unrecorded tax   liens  to  security
interests, and it defines security interests according to their
protection under state law against subsequent judgment liens.
See 26 U.S.C. § 6323(h)(1)(A).

                                      25
recordation requirement.              This argument, however, overlooks the

fact that Maryland courts have applied the doctrine of equitable

conversion       to    grant    priority     to    equitable         titleholders     since

well before the enactment of Real Prop. § 3-201 in 1974.                               See,

e.g., Stebbins-Anderson Co., 117 A.2d at 910.                         And cases decided

after     1974    have        likewise     applied     equitable         conversion     to

subordinate       judgment         liens    to    subsequently          recorded      deeds

without    invoking         Real   Prop.    § 3-201,      demonstrating        that    Real

Prop. § 3-201           and        equitable       conversion           are    logically

independent.          See Himmighoefer, 487 A.2d at 287–88; Grant v.

Kahn, 18 A.3d 91, 96-97 (Md. Ct. Spec. App. 2011).                                 Indeed,

several cases applying equitable conversion make no mention of

the     deed’s        recordation,         indicating      that        recordation       is

irrelevant to the doctrine’s application.                        See Noor, 996 A.2d

at 938; Wolf Org., 705 A.2d at 45–50.                     In short, we must accept

the Maryland Court of Appeals at its word when it said that

equitable conversion “does not depend upon actual notice to the

creditor.”       Stebbins-Anderson Co., 117 A.2d at 910.

      Second,         the    IRS    contends      somewhat      obliquely      that     the

district     court’s         analysis      improperly      combined       an   equitable

doctrine    with       the     technical    elements       of    a    detailed     federal

statutory scheme.             A straightforward consideration of the text,

however,    puts       this    argument     to    rest.         Section 6323(h)(1)(A)

defines a “security interest” as an interest that is enforceable

                                             26
against     subsequent            judgment     creditors          under     local        law.

Maryland’s doctrine of equitable conversion is local law, and it

makes    Susquehanna         Bank’s    deed       of    trust     enforceable      against

subsequent      judgment         creditors.        Nowhere       does    § 6323(h)(1)(A)

limit    local     law      to   exclude     established         principles       of   state

common     law.         Moreover,     federal          courts    have     often    invoked

equitable principles of state law when applying § 6323(h)(1)(A).

See     Haas, 31 F.3d     at   1091    (holding          that    state     equitable

principles would retroactively reinstate an erroneously released

mortgage but that those principles were nonetheless barred by

Treas. Reg. § 301.6323(h)-1(a)(2)’s prohibition against relation

back); Regions Bank, 2013 WL 635615, at *2-3 (same); Bank of

N.Y. Mellon Trust, 2011 WL 1322393, at *2–3 (assuming arguendo

that state equitable principles would retroactively impose an

equitable mortgage where a deed of trust accidentally omitted

the name of a purchaser, but holding that those principles were

barred by Treas. Reg. § 301.6323(h)-1(a)(2)).

      Pointing         to   Angelos    v.    Maryland      Casualty       Co.,     the   IRS

responds that Maryland’s own courts do not combine the doctrine

of    equitable         conversion      with       the     technical       elements       of

§ 6323(h)(1)(A) when determining priority of a lien relative to

a competing federal tax lien.                In Angelos, the IRS intervened in

a dispute over lien priority between a judgment creditor and

Angelos, the holder of a third mortgage, asserting that its tax

                                             27
liens    deserved            priority      over       the    judgment       creditor’s          lien.
380 A.2d at 647.               While the factual record was insufficient to

decide conclusively the IRS’s priority, the court endeavored to

guide the lower court on remand.                        Id. at 649–50.             It noted that

the    IRS   had        conceded       that     its    tax    lien     was    subordinate           to

Angelos’ lien because the tax lien “came not only after Angelos’

mortgage was executed, but after it was recorded as well.”                                          Id.

at    650.        Far    from       rejecting     application          of    the    doctrine        of

equitable conversion in determining tax lien priority, the court

in Angelos had no need to consider the doctrine in light of the

IRS’s admission that Angelos’ lien was entitled to priority.

Even if the IRS had not conceded its inferior lien position, Md.

Code    Ann.,      Real        Prop.    § 3-201        would     have       afforded          Angelos

priority because Angelos’ mortgage was recorded before the IRS

filed    notice         of    its    tax    lien,      making    reliance          on       equitable

conversion unnecessary and, in the circumstances, irrelevant.

       Third, the IRS maintains that Susquehanna Bank does not

qualify      as    a    statutory       purchaser           entitled    to    priority          under

26 U.S.C. § 6323(a).                 Section 6323(h)(6) defines “purchaser” as

“a person who, for adequate and full consideration in money or

money’s      worth,          acquires      an   interest       (other       than        a    lien   or

security interest) in property which is valid under local law

against      subsequent         purchasers        without       actual       notice.”           Under

Maryland law, until recordation, a purchaser’s property interest

                                                  28
“is subject to destruction by a conveyance of the legal title to

a    bona   fide    purchaser            without      notice.”            Bourke          v.    Krick,

304 F.2d 501, 504 (4th Cir. 1962).                          Since Susquehanna Bank had

not yet recorded its property interest when the IRS filed notice

of    its   federal      tax     lien,     the       IRS    contends          that       Susquehanna

Bank’s property interest was not “valid under local law against

subsequent purchasers without actual notice.”                                 Although the IRS

may    be   correct       that      Susquehanna            Bank     was       not    a    statutory

purchaser, that point is wholly beside the point.                                        Maryland’s

doctrine of equitable conversion does not transform lenders into

purchasers.        Rather, it “entitle[s] [lenders] to the protection

afforded”     by    Maryland        law    to    bona       fide    purchasers.                Silver,
177 A.2d at        902.        As    a    lender      secured       by    a    deed       of    trust,

Susquehanna Bank acquired equitable title on January 4, 2005,

when Restivo Auto Body executed the deed of trust, giving the

Bank    priority      over       any      subsequent            judgment       liens           obtained

against Restivo Auto Body.                  As such, on January 4, Susquehanna

Bank had a security interest, as defined in § 6323(h)(1), giving

it priority over the IRS’s later-recorded tax lien, pursuant to

§ 6323(a).

       Fourth,     the    IRS       contends     that       a     party   cannot          convey    an

interest in property that it does not have.                               It notes that its

tax lien attached to Restivo Auto Body’s property on or before

September 20,       2004,       when      the   tax     deficiencies            were       assessed.

                                                29
See 26 U.S.C. § 6322.                 Therefore, it maintains that Restivo Auto

Body’s property was already encumbered when it executed a deed

of    trust    to     Susquehanna          Bank      on       January 4,       2005,     precluding

Restivo Auto Body from conveying an unencumbered interest in

Lots 17 and 39.           This argument is a red herring.                          It is all too

common    that      a    property       holder           fraudulently          conveys    the    same

interest in his property to various parties.                                    Even though the

property      holder      does    not       hold         an    unencumbered       interest       when

conveying      that      interest          to   a    second         purchaser     or     mortgagee,

property law often places title in fee simple in the second

purchaser or mortgagee as long as it obtained its interest in

good faith.         For example, under Maryland’s race-notice statute,

a    second    bona      fide    purchaser          who        beats    the     first    bona    fide

purchaser      in       the    race     to      record          takes    good     title     to    the

property.       Md. Code Ann., Real Prop. § 3-203.                               Section 6323(a)

is no different.              Where a delinquent taxpayer executes a deed of

trust to a lender after a federal tax lien has attached to the

same    property        but     before       the     IRS       has     filed    notice     thereof,

priority vests in the holder of the security interest created by

the deed of trust.

       Finally,         the     IRS    insists           that        applying     the     equitable

principles       of     Maryland       law      would         ignore     the    Supreme     Court’s

effort to interpret federal tax laws in such a manner as not to

place    the     collection           of    taxes,            and    thereby     “the    potential

                                                    30
existence of the government of the United States[,] . . . at the

mercy of state legislation.”                  Snyder, 149 U.S. at 214.                But

federal tax laws, namely 26 U.S.C. § 6323(h)(1)(A), mandate that

result        with    respect     to    tax       lien    priority    by       expressly

incorporating          local    law    into       the    definition   of       “security

interest.”           As we stated in Collier v. United States (In re

Charco,       Inc.),    432 F.3d 300        (4th   Cir.   2005),     “[a]lthough

Congress could have retained absolute priority under the common

law ‘first in time, first in right’ rule, it was satisfied [in

§ 6323] to have the IRS be treated no better and no worse than

other     third-party      lienors      under       state    law.”       Id.    at    306

(emphasis added and omitted).                 Congress remains free to amend

§ 6323 to make federal tax collection less susceptible to state

law doctrines if it fears that the incorporation of local law

may imperil the federal fisc.                But we must take § 6323 as it now

reads.

        For    the    reasons    given,      we    affirm   the   judgment       of   the

district court.

                                                                                AFFIRMED

                                             31
WYNN, Circuit Judge, concurring in part and dissenting in part:

        I join in Parts I and II of the majority opinion.                  However,

I cannot join in Part III, which holds that Susquehanna Bank’s

interest in Restivo Auto Body’s land is protected by equitable

conversion.          I would reverse the district court and hold that

Susquehanna Bank has no interest sufficient to defeat the IRS’s

tax lien on the land.              Accordingly, I respectfully dissent.

                                           I.

     As the majority recognizes, the priority of federal tax

liens is governed by federal law.                  Supra at 8 (citing Aquilino

v. United States, 363 U.S. 509, 513-14 (1960)).                       Federal law

makes     it       clear    that    Restivo     Auto   Body   did    not   have    an

unencumbered title to which it could give Susquehanna Bank an

interest.

     Specifically, under the Internal Revenue Code, the type of

tax lien at issue here “shall arise at the time the assessment

is made and shall continue until the liability for the amount so

assessed       .    .   .   is     satisfied[.]”       26   U.S.C.   Section      6322

(emphasis added).            This Court has held that for such a lien to

become “valid and effective . . . notice, filing or recording

are not required.”               United States v. Bond, 279 F.2d 837, 841

(4th Cir. 1960).

                                           32
      Here,    no     one    disputes     that     the    IRS    assessed     the   tax

deficiencies on September 20, 2004.                      From that date forward,

then, the property was encumbered by the IRS tax lien.                          And it

would be over three months before Susquehanna Bank even entered

the picture.         Despite what the majority argues in its footnote

at supra at 25, this is precisely the point.                              The majority

applies state law to determine the priority of the IRS's tax

lien to the property.               It does so by blurring the line between

the IRS and a judgment creditor and between a tax lien and a

judgment lien without citing any precedent that allows it to do

so.   See supra at 20 (“We agree with the district court that

Section 6323(h)(1)(A) incorporates Maryland law insofar as it

protects      equitable        security         interests       against     subsequent

judgment-creditor liens” (this begs the question as to what the

“subsequent judgment-creditor lien” is if not the tax lien));

supra at 22 (“The recordation statutes protect only bona fide

purchasers. . . . And Maryland law is clear that ‘a judgment

creditor is not in the position of a bona fide purchaser.’”

(again, who is the “judgment creditor” if not the IRS?)).

      Based     on    this     blurred     understanding,         it   then    applies

Maryland equitable principles to declare that Susquehanna Bank's

interest is superior to a subsequent judgment lien.                          While the

majority      may    be     right    in   its    interpretation        of   Maryland’s

equitable principles, it is wrong in applying them to this case.

                                           33
There is no judgment lien here.                There is a tax lien.              And its

priority in this scheme is determined solely by federal law.

       This Court has made it clear that filing is not necessary

for a tax lien to become effective, Bond, 279 F.2d at 841, and

the   majority    does   not     claim    to     be    overturning        this   binding

precedent.        Therefore      the     IRS’s    tax        lien   was    “valid    and

effective” as of September 20, 2004, well before Susquehanna

Bank had any security interest.                In fact, in Ruggerio v. United

States,   153    Fed.    Appx.    242     (4th        Cir.    2005)   (unpublished),

another   panel     of   this     Court        analyzed       Maryland’s     equitable

conversion principle as it related to granting priority to a

mortgage holder over a federal tax lien.                       In that case, this

Court stated that:

      We have noted that “the Maryland law is that legal
      title to land does not pass until a deed is properly
      executed and recorded, and . . . until this is done a
      vendee's equity in property is subject to destruction
      by a conveyance of the legal title to a bona fide
      purchaser without notice.” Hence, under Maryland law,
      Ruggerio's [the mortgage holder] interest in the
      Property   would    be   invalid  against   subsequent
      purchasers   without   notice.     Because  Ruggerio's
      interest in the Property was subject to destruction
      under Maryland law by subsequent purchasers without
      actual notice, he did not qualify as a “purchaser”
      under Section 6323(b) of the IRC before April 7, 2003
      [the date IRS gave notice of its tax lien]. Thus, the
      federal tax liens on the Property remain valid against
      Ruggerio.

                                          34
Id.    at    244-45    (citations    omitted).        Further,   the    Court   in

Ruggerio added in a footnote, “To the extent that Ruggerio may

have       achieved    ‘purchaser’   status    after    April    7,    2003,    the

federal tax liens on the Property remain valid against him based

on the antecedent filing of tax notices.”               Id. at 245 fn (citing

26 U.S.C. Section 6323(a)).             It thus held that the mortgage

holder did not have priority over the federal tax lien, even

though notice was given after the mortgage was conveyed.

       As     the     majority   opinion     notes,     Maryland’s      equitable

conversion       doctrine    protects   “a    land     purchaser’s      equitable

title” as “superior to any judgment lien subsequently obtained

against the seller.”         Supra at 21 (citing Watson v. Watson, 497
A.2d 794, 800 (Md. 1985)) (emphasis added). *                    But the IRS’s

interest here predates that of Susquehanna Bank.                 The IRS filed

notice of its lien subsequent to Susquehanna Bank’s loan—but the

interest itself arose and became protected at an earlier date.

It therefore was not a subsequent lien.                And because the IRS’s

interest is not a subsequent lien, the principles the majority

       *
       The Appellee’s brief before this Court barely addresses
this alternative holding of the district court. In fact, their
brief only discusses the concept of “equitable conversion” by
quoting from Stebbins-Anderson Co. v. Bolton, 208 Md. 183, 187-
88 (1955), to support their argument for application of
Maryland’s relation back principle, which this Court rejects in
Part II of the majority’s opinion.

                                        35
cites   about    protecting    purchasers      or   other   interest     holders

against “subsequent judgment liens” are beside the point.

                                     II.

      This case should be governed by the priority principle of

“first in time is first in right.”          United States v. City of New

Britain, 347 U.S. 81, 85 (1954).            Here, the IRS’s interest in

the   property     attached   on   September    20,   2004.       The   earliest

possible date, even under equitable theories, that Susquehanna

Bank’s interest could have attached is January 4, 2005.                 The IRS

therefore had an interest in the land a full 106 days prior to

Susquehanna      Bank’s   earliest   potential      date    of   possessing   an

interest.     It thus has the first right to the land to fulfill

Restivo     Auto     Body’s    tax    obligations.            Accordingly,     I

respectfully dissent as to Part III and the final judgment.

                                      36