783 F. Supp. 2d 243
D.N.H.2011Background
- Green Tree seeks equitable reinstatement of a mistakenly discharged mortgage to outrank federal tax liens against the Rickers’ NH property.
- Conceco (predecessor to Green Tree) filed a mortgage and later discharged it; a discharge was recorded before federal tax liens were recorded.
- The government contends federal law or NH law bars or limits reinstatement; Green Tree argues NH law permits it and Progressive controls.
- Tax liens were first recorded in 2004; Green Tree asserts its mortgage had priority as first in time before the discharge, which was erroneous.
- Discharge of the mortgage is alleged to have been a mistake; the record includes disputed evidence about why the discharge was filed and what was intended.
- The court denied Green Tree’s summary judgment request and reserved whether NH law supports equitable reinstatement in this context.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether federal law bars equitable reinstatement of a mistakenly discharged mortgage | Green Tree relies on Progressive to permit state-law equity | Government argues federal law bars reinstatement | No, not as a matter of federal law according to controlling circuit precedent. |
| Whether New Hampshire law allows equitable reinstatement of a mistakenly discharged mortgage | NH law permits reinstatement to its original priority | NH law should be interpreted to resist circumvention of priority priority | NH law permits, but entitlement depends on further factual showing. |
| Whether the discharge was recorded by mistake and thus eligible for reinstatement | Discharge was a mistake to be nullified | Discharge reasons are disputed and not conclusively shown as a mistake | Genuine issue of material fact on whether the discharge was made by mistake. |
| Whether Conseco/Green Tree’s and government’s negligence affect entitlement to equitable relief | Negligence should not bar relief | Negligence may bar relief under NH standards | Issue reserved for trial; not dispositive on summary judgment. |
Key Cases Cited
- Progressive Consumers Fed. Credit Union v. United States, 79 F.3d 1228 (1st Cir. 1996) (prescribes presuming applicability of state common-law doctrines to state-created liens; allows equitable reinstatement over federal tax liens.)
- Haas v. IRS (In re Haas), 31 F.3d 1081 (11th Cir. 1994) (hypothetical judgment lien creditor test; regulation-based barrier to reinstatement; rejected by Progressive.)
- Caron, Anatole Caron, Inc. v. Manchester Fed. Sav. & Loan Ass'n, 90 N.H. 560, 10 A.2d 668 (1940) (equitable restoration of mistakenly discharged mortgage under NH law.)
- Int'l Trust Co. v. Davis & Farnum Mfg. Co., 70 N.H. 118, 46 A. 1054 (1900) (equitable correction of mistaken acts when third-party rights not affected.)
- Hilco, Inc. v. Lenentine, 142 N.H. 265, 698 A.2d 1254 (1997) (trepidation about claims circumventing priority; relief depends on equity, not public notice.)
- In re Chase, 388 B.R. 462 (2008) (bankruptcy context; equitable reinstatement discussed in NH-related decisions.)
- United States ex rel. IRS v. McDermott, 507 U.S. 447, 113 S. Ct. 1526, 123 L. Ed. 2d 128 (1993) (general principle that federal tax liens are not automatically prioritized over all other liens.)