Diediker

This case derives from the actions of a title insurance company which issued a policy insuring title to a property without excepting an Internal Revenue Service lien despite its knowledge of the lien’s existence. The insurance company now seeks to recover the amount eventually paid to the IRS on behalf of its policyholder from the trustee who, lacking knowledge of the existence of the lien, conducted a foreclosure sale years earlier without notifying the IRS. The policyholder joins in the suit against the trustee. The central issue raised is whether the trustee is “required” to notify the IRS under the terms of a federal statute. The trial court concluded there was no such requirement, and granted summary judgment to the trustee. We affirm.

Factual and Procedural Background

The essential facts leading up to this dispute are uncontested. In 1984, real property located at 777 North Workman Street, San Fernando, California, was encumbered by a deed of trust in favor of Beneficial Mortgage Company of California. Defendant and respondent Peelle Financial Corporation (Peelle) was the trustee. In 1991, the IRS recorded a notice of federal tax lien against the property to…