In Re L. Darrell Bevan Patricia F. Bevan, Debtors. L. Darrell Bevan Patricia F. Bevan v. Socal Communications Sites, LLC

L. Darrell Bevan and Patricia F. Be-van appeal the district court’s decision, which affirmed an order of the bankruptcy court allowing a $61,694.50 creditor’s claim purportedly held by Socal Communications Sites, LLC. The district court held that Socal became equitably subrogated to the IRS’s claim when it eliminated the Internal Revenue Service’s right of redemption in certain property that once belonged to the Bevans, but had been foreclosed upon by Socal. We disagree and reverse.

BACKGROUND

' In November of 1998, the Bevans filed a voluntary petition for bankruptcy pursuant to Chapter 13, Title 11 of the United States Code. Before they filed that petition, the Bevans had become indebted to Socal’s predecessor in interest on a deed of trust secured by real property located in Malibu, California (“Malibu property”).

In. December of 1998, the IRS timely filed its proof of claim in the amount of $60,162.34. The IRS also had a lien on .the Malibu property for that amount, but So-cáis deed of trust was senior to the IRS’s lien. During the pendency of the Chapter 13 case, Socal obtained an order for relief from the automatic stay and foreclosed on the Malibu property. At the…