Fidelity National Title Insurance Company Philip Ruiz v. United States of America Department of the Treasury Internal Revenue Service

Fidelity National Title Insurance Company and Phillip Ruiz (collectively referred to as “Ruiz”) appeal the district court’s grant of summary judgment in favor of the United States Internal Revenue Service (“IRS”). The district court ruled that the IRS had a legitimate tax lien on Ruiz’ property. The court further held that Ruiz could not establish any priority over the IRS’ lien under a theory of equitable subro-gation. We affirm.

BACKGROUND FACTS

The property at issue in this case is located in West Covina, California. In 1979, the property was owned by Patrick and Lorraine Reyes. When the Reyes’ purchased the property, they executed a deed of trust on the property in favor of Homestead Savings & Loan Association (“Homestead”). Subsequently, three other liens were recorded on the property. The first lienholder was Environmental Engineering Company (“Environmental”), the second lienholder was the State of California and the final lienholder was the IRS. During 1986, the Reyes failed to make some loan payments to Homestead. In response, Homestead exercised its power of sale under the deed of trust. The trustee held a nonjudicial foreclosure sale on the property and neither it nor…