MEMORANDUM — DECISION and ORDER
I. INTRODUCTION
Appellant Clinton County Treasurer (“the County”) appeals the order of Hon. Robert E. Littlefield, Jr., Chief United States Bankruptcy Judge, denying its motion to dismiss the adversary complaint and granting, in part, appellee Douglas J. Wolinsky, Chapter 7 Trustee’s (“the Trustee”) motion for summary judgment.
Debtor John W. Martin, II (“debtor” or “Martin”) owned a parcel of real property in Champlain, New York, which is located in Clinton County. After he failed to pay $2406.45 in property taxes in 2008 and 2009,
At the time of the foreclosure, the property was assessed at $42,000. In June 2011 the County sold the property at public auction to a bona fide purchaser (“BFP”) for $25,500. A quitclaim deed transferring the property to the BFP was recorded in the Clinton County Clerk’s Office on June 28, 2011.
On December 20, 2011, Martin voluntarily filed a Chapter 7 bankruptcy petition in the Northern District of New York. The Trustee commenced this adversary proceeding on June 28, 2012, seeking a judgment against the County declaring the tax foreclosure transfer to be fraudulent and avoiding that transfer for the benefit of the estate pursuant to 11 U.S.C. § 548(a)(1) and ordering a monetary award against the County in the amount of the assessed value of the property ($42,000) plus interest, costs, and fees pursuant to § 550(a).
Upon completion of discovery, the County moved for summary judgment and dismissal of the adversary complaint, arguing that the tax foreclosure proceeding was not fraudulent within the intended meaning of Bankruptcy Code § 548(a)(1). The Trustee filed a cross-motion for summary judgment. Oral argument was heard on June 12, 2013, and Chief Judge Littlefield filed a written order on August 13, 2013, denying the County’s motion in its entirety and granting, in part, the Trustee’s cross-motion. Specifically, Chief Judge Little-field found for the Trustee on the issue of liability, holding that the tax foreclosure proceeding is avoided pursuant to § 548(a)(1)(B) and permitting the Trustee to recover the value of the propеrty from the County pursuant to § 550. However, he found that the Trustee could recover damages equal only to the amount realized by the County for the property at auction ($25,500), less the outstanding property taxes and expenses incurred ($4240.45), for a total award of $21,259.55.
The County appealed Chief Judge Lit-tlefield’s order on September 13, 2013. It argues thаt a valid pre-petition tax foreclosure proceeding and subsequent transfer of property to a BFP is not the type of fraudulent conveyance contemplated by Bankruptcy Code § 548. The Trustee opposes and has filed a cross-appeal regarding the amount of recovery permitted pursuant to Bankruptcy Code § 550.
III. STANDARD OF REVIEW
Federal Rule of Bankruptcy Procedure 8013 provides that a reviewing court may “affirm, modify, or reverse a bankruptcy judge’s judgment, order, or decree, or it may remand with instructions for
A factual finding is clearly erroneous where, “although there is evidence to support it, the reviewing court on the entire record is left with the definite and firm conviction that a mistake has been committed.” H & C Dev. Gyp., Inc. v. Miner (In re Miner),
IY. DISCUSSION
A. The County’s Appeal — Section 548 The County seeks to reverse the bankruptcy court’s determination that the tax foreclosure proceeding is avoided pursuant to 11 U.S.C. § 548(a)(1)(B). It maintains that a valid pre-petition state tax foreclosure proceeding and subsequent transfer of property to a BFP is not an avoidable fraudulent conveyance within the meaning of § 548. It further notes that there was no intent to defraud in this case and as-serfs that allowing the Trustee to avoid this type of transfer impinges upon a municipality’s right to collect unpаid real property taxes through foreclosure actions. The County unsuccessfully made these identical arguments in a recent analogous case. See Cnty. of Clinton v. Warehouse at Van Buren St., Inc.,
Section 548 of the Bankruptcy Code provides, in pertinent part:
(a)(1) The trustee may avoid any transfer ... of an interest of the debtor in property, or any obligation ... incurred by the debtor, that was made or incurred on or within 2 years before the date of the filing of the petition, if the debtor voluntarily or involuntarily—
(A) made such transfer or incurred such obligation with actual intent to hinder, delay, or defraud any entity to which the debtor was or became, on or after the date that suсh transfer was made or such obligation was incurred, indebted; or
(B)(i) received less than a reasonably equivalent value in exchange for such transfer or obligation; and
(ii)(I) was insolvent on the date that such transfer was made or such obligation was incurred, or became insolvent as a result of such transfer or obligation!.]
To establish a fraudulent conveyance under § 548(a)(1)(B), as applicable to this case, the following four elements must be present: “(1) the debtor had an interest in the property; (2) a transfer of that interest occurred within [two] year[s] of the filing of the bankruptcy petition; (3) the debtor was insolvent at the time of the transfer or became insolvent as a result thereof; and (4) the debtor received less than a reasonably equivalent value in exchange for such transfer.” Herkimer Forest Prоds. Corp. v. Cnty. of Clinton (In re Herkimer Forest Prods. Corp.), No. 04-90148,
The County correctly notes the Supreme Court of the United States has held that, as a matter оf law, “mortgage foreclosure sales” result in “reasonably equivalent value” where the state’s foreclosure laws are followed and, therefore, cannot be avoided pursuant to § 548. BFP,
The unambiguous language of § 548 allows the Trustee to avoid “any transfer” that occurred within two years prior to the filing of the bankruptcy petition and involved actual or constructive fraud. There is simply no indication that Congress intended to carve out an exception for valid in rem state tax foreclosure proceedings. The County tacitly conceded this at oral arguments.
Moreover, permitting avoidance of such tax foreclosures comports with the Bankruptcy Code’s general policy favoring equal treatment of creditors. See Van Buren,
Finally, the assumption that debtor Martin did not act with fraudulent intent is irrelevant to the § 548(a)(1)(B) analysis. Unlike the actual fraud provision outlined in § 548(a)(1)(A), fraudulent intent is not one of the elements that the Trustee must establish to show constructive fraud under § 548(a)(1)(B). See Van Buren,
In sum, Chief Judge Littlefield correctly concluded that the state tax foreclosure proceeding is a “transfer” within the meaning of Bankruptcy Cоde § 548 and the Trustee is entitled to avoid same as a constructively fraudulent transfer pursuant to § 548(a)(1)(B).
B. The Trustee’s Cross-Appeal — Section 550
The Trustee seeks to reverse Chief Judge Littlefield’s determination that it may recover only the amount realized by the County for the property at auction ($25,500), less the outstanding property taxes and expenses incurred. The Trustee argues that hе is entitled to recover the assessed value of the property at the time of the fraudulent transfer ($42,000), less the tax debt owed. He maintains that the amount realized at auction is not an accurate measure of the property’s value because the auction took place over two months after the tax foreclosure proceeding.
Section 550 neither defines “value” nor prescribes the time at which value should be measured. However, courts generally look to a property’s market value at the time оf the transfer — less any consideration given — when determining the proper measure of recovery pursuant to § 550. Hirsch v. Steinberg (In re Colonial Realty Co.),
Chief Judge Littlefield’s determination that the $25,500 realized at public auction is a more appropriate measure of the value of the property than the $42,000 assessment is a factual finding subject to a clear error standard of review. See First Brandon Nat’l Bank v. Kerwin (In re Kerwin),
The Trustee cannot seriously contend that the $42,000 assessment is an accurate estimation of the property’s value in light of the fact that the property sold for just $25,500 at public auction only two months later. There is no suggestion that the auction was fraudulent or a sham. The parties stipulated that the property was sold to a BFP “[f]ollowing open and comрetitive bidding.” Stipulated Set of Facts, ECF No. 2-11, ¶ 8. The two-month interval between the tax foreclosure and public auction is not a significant amount of time to substantially alter the property’s market value. Thus, the value realized at the public auction is a reliable measure of the property’s actual market value at the time of the tаx foreclosure.
Moreover, Chief Judge Littlefield justifiably discounted the $42,000 assessment. See Hr’g Tr. 11:6-8 (“The number simply ... is not a credible indicia of the value of the property at any given moment.”). Indeed, no expert testimony was produced to support that figure. Nor does the record provide any indication of when the assessment was completed, thе qualifications, if any, of the person who completed it, or the procedures he or she utilized to arrive at the $42,000 figure. In support of this appeal, the Trustee merely cites the New York Department of Taxation and Finance’s website, which reports: “A property’s assessment is based on its market value.” N.Y. Dep’t of Taxation & Fin., Assessments (Feb. 22, 2012), http://www. tax.ny.gov/pit/property/learn/аsmts.htm. However, this general assertion provides no context to the specific assessment in this matter.
Finally, the County correctly notes that awarding damages in excess of what it realized at the public auction sale, less the debtor’s outstanding tax debt, would inequitably penalize the County for exercising its right to collect unpaid real property taxes through foreclosure actions.
V. CONCLUSION
The plain language of Bankruptcy Code § 548 permits the Trustee to avoid “any transfer” — including a valid state tax foreclosure proceeding — that occurred within two years prior to the filing of the bankruptcy petition and involved actual or constructive fraud. Therefore, the bankruptcy court correctly allowed the Trustee to avoid the tax foreclosure at issue. Further, the bankruptcy court’s determination that $25,500 was a rehable estimate of the property’s market value at the time of the tax foreclosure is not clearly erroneous.
Therefore, it is
ORDERED that
The August 13, 2013, Order of the Bankruptcy Court is AFFIRMED.
IT IS SO ORDERED.
Notes
. Chief Judge Littlefield's written decision, dated August 13, 2013, incorporated his oral ruling of June 12, 2013, and the parties’ amended stipulation dated August 5, 2013.
. Martin also reportedly failed to pay his property taxes in 2010 and 2011.
. It is undisputed that Martin received proper nоtice of the tax foreclosure proceeding, which was properly conducted in accordance with state law.
. The County’s attempt to distinguish Van Bu-rén because that case did not involve a subsequent sale to a BFP is unpersuasive. As Chief Judge Littlefield correctly noted during oral argument, the subsequent sale to the BFP at public auction is irrelevant to the initial transfer at issue; to wit, the tax foreclosure proceeding that transferred title to the property from the debtor to the County. Indeed, there is no indication that the BFP’s interest in the title to the property has been disturbed in any manner as a result of this bankruptcy action. See Hr’g Tr., ECF No. 2-5, 5-6 (explaining that the Trustee is attempting to recover the value of the property from the County, not the property itself from the BFP).
. The County does not put forth any arguments with regard to the four elements listed above. Its sole argument is that the transfer involved here is not, or should not be, an avoidable fraudulent conveyance within the meaning of § 548.
. “THE COURT: But I assume you would agree that there’s no specific exemption or сarve out for municipalities within 548 or 550?
[Counsel for the County]: I can’t disagree with that.” Hr’g Tr. 7:14-17.
. Indeed, the County ultimately recovered the full amount of unpaid property taxes, and the property was restored to the tax rolls.
. In its opposition to the cross-appeal, the County briefly notes that on September 13, 2013, the Bankruptcy Clerk issued a “Certification of Non-Compliance” with regard to the Trustee’s cross-appeal. See ECF No. 1-10. This certification appears to stem from the Trustee’s failure to timely file a statement of the issues to be presented on cross-appeal as required by Federal Rule of Bankruptcy Procedure 8006. The Trustee filed said statement in this court on September 16, 2013. ECF No. 4. The County does no more than briefly highlight this procedural error. The Trustee does not address it at all. As the error is minor, does not evidence bad faith or a pattern of negligence, did not prejudice the County, and the parties have not afforded it significant attention, a harsh sanction such as dismissal of the cross-appeаl is unwarranted. Such a determination is well within the discretion of a reviewing district court. See In re Harris,