United States v. Phillips

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF NEW YORK

United States of America,

Plaintiff,

-v-

Linda B. Phillips, Robert S. Phillips, County of Suffolk, 2:22-cv-2564

New York, J.S. Funding Corporation, Commissioner of the (NJC) (JMW)

New York Department of Taxation and Finance,

SW Anderson Sales Co., Clerk of the Suffolk County

Traffic and Parking Violations Agency, Town of Smithtown

Receiver of Taxes, and Cavalry SPV I, LLC as assignee of

Citibank, N.A.,

Defendants.

OPINION AND ORDER

NUSRAT J. CHOUDHURY, United States District Judge:

The United States of America (“Plaintiff”) brings this action under 28 U.S.C. §§ 7401

and 7403 and 28 U.S.C. § 3201 to enforce federal liens against real property located at 434

Meadow Road, Kings Park, New York 11754 (the “Property”). (Compl. at 1, 13, ECF No. 1; id.

¶¶ 11, 44.) Although the initial Complaint named numerous defendants, including Linda B.

Phillips and Robert S. Phillips (the “Phillipses”), the only remaining Defendants are the County

of Suffolk, New York (the “County”) and the Clerk of the Suffolk County Traffic and Parking

Violations Agency (the “Clerk,” and together, “Defendants”).1 I refer to Plaintiff and Defendants

as the “Parties.”

1 The claims against the other defendants were disposed as follows. Default judgment was

entered against the Commissioner of the New York Department of Taxation and Finance on

March 25, 2025. (ECF No. 73.) The remaining individuals and entities named as defendants in

Before me are the Parties’ cross-motions for summary judgment under Rule 56 of the

Federal Rules of Civil Procedure (“Fed. R. Civ. P.”) (“the Parties’ Cross-Motions” or “the Cross-

Motions”). (Pl.’s Mot., ECF No. 61; Defs.’ Mot., ECF No. 65.) Plaintiff seeks summary

judgment and an order that the Property be sold, with the net proceeds applied first to satisfy the

Plaintiff’s judgment liens. (Pl.’s Mem. at 6, 19.) Defendants seek summary judgment dismissing

the Complaint, “or in the alternative, an order . . . that the County’s ad valorem tax liens are

superior to those of [Plaintiff] and that the County . . . is entitled to satisfy its superior tax liens

out of the proceeds of any foreclosure sale directed by this Court.” (Defs.’ Mem. at 1; see also

Defs.’ Reply at 7.) Defendants also request an order “directing that [the] [P]roperty be sold” but

have not brought any counterclaims seeking such relief or requested such relief in their Answer.

(See Defs.’ Reply at 7; Defs.’ Answer, ECF No. 21.)

For the reasons set forth below, I grant Plaintiff’s Cross-Motion for Summary Judgment

(“Plaintiff’s Cross-Motion”) in its entirety, order a judicial sale of the Property, and order that

the proceeds from such a sale will first be used to satisfy Plaintiff’s judgment liens before being

applied to any County tax liens. I deny the Defendants’ Cross-Motion for Summary Judgment

(“Defendants’ Cross-Motion”) as to the request for a judgment finding that the County’s tax liens

have priority over Plaintiff’s judgment liens and federal tax liens and dismiss as moot

Defendants request for an order directing a judicial sale of the Property.

the Complaint—the Phillipses, J.S. Funding Corporation, SW Anderson Sales Co., the Town of

Smithtown Receiver of Taxes, and Cavalry SPV I, LLC as assignee of Citibank, N.A.—have

acknowledged service of the Summons and Complaint and disclaimed any remaining interest or

claim in the Property. (ECF No. 12 (the Phillipses); ECF No. 11 (J.S. Funding Corporation);

ECF No. 7 (SW Anderson Sales Co.); ECF No. 26 (the Town of Smithtown Receiver of Taxes);

ECF No. 19 (Cavalry SPV I, LLC as assignee of Citibank, N.A).)

JURISDICTION

This Court has subject matter jurisdiction over this action pursuant to 28 U.S.C. §§ 1331,

1340, and 1345, because it is brought by the United States under federal laws, specifically 28

U.S.C. §§ 7401 and 7403, which concern civil actions to collect unpaid taxes and to enforce the

United States’ liens arising from unpaid taxes, and because Plaintiff seeks declaratory relief

regarding the scope of provisions of the Federal Debt Collection Procedures Act (“FDCPA”), 28

U.S.C. § 3001, et seq.—specifically, 28 U.S.C. § 3201 (“Section 3201”)—and the Federal Tax

Lien Act (“FTLA”)—specifically, Internal Revenue Code Section 6323(b)(6) (“Section 6323”),

26 U.S.C. § 6323.

BACKGROUD

The following facts are not in dispute, unless otherwise noted.

Title in the Property was conveyed to the Phillipses by a deed that was executed on

September 21, 1982, and recorded on November 8, 1982. (Defs.’ Counterstatement ¶ 43; Pl.’s

Counterstatement ¶ 4.) Between February 5, 2001 and June 16, 2003, a delegate of the Secretary

of the Treasury made five assessments of tax fund recovery penalties against Linda Phillips for

her failure to pay federal income taxes, Federal Insurance Contributions Act (“FICA”), and

Medicare taxes withheld from wages of the employees of Frost Sheet Metal Co. Inc., which she

was responsible to collect. (Defs.’ Counterstatement ¶ 1.) Between January 9, 2006 and August

10, 2008, a delegate of the Secretary of the Treasury, likewise, made thirteen assessments of tax

fund recovery penalties against Robert Phillips for his failure to pay federal income taxes, FICA,

and Medicare taxes withheld from wages of the employees of Jersey Sheet Metal Work, Inc.,

which he was responsible to collect. (Defs.’ Counterstatement ¶ 4.) On October 19, 2009, a

delegate of the Secretary of the Treasury made an assessment jointly against the Phillipses for

unpaid federal income taxes, penalties, and interest for the 2007 federal income tax year. (Defs.’

Counterstatement ¶ 7.) At the time each assessment was made, a delegate of the Secretary of the

Treasury gave the Phillipses proper notice of the assessment. (Defs.’ Counterstatement ¶¶ 2, 5,

8.) Despite receiving such notice, the Phillipses did not pay the full amount of any of the tax fund

recovery penalty assessments. (Defs.’ Counterstatement ¶¶ 3, 6, 9.)

As a result of non-payment, following notice of each tax fund recovery penalty

assessment, federal tax assessment liens arose on the Property pursuant to 26 U.S.C. §§ 6321 and

6322 on the dates of each assessment. (Defs.’ Counterstatement ¶ 10.) Notices of Federal Tax

Liens were recorded with the Suffolk County Clerk’s Office regarding assessments against Linda

Phillips on October 25, 2005, against Robert Phillips on June 24, 2008 and October 14, 2009,

and against the Phillipses jointly on December 11, 2009. (Id. ¶ 11.) These four Notices of Federal

Tax Liens remain “valid and subsisting liens against the” Property. (Id. ¶ 12; see also id. ¶¶ 13–

14.)

On February 3, 2011, Plaintiff filed an action in this Court against the Phillipses seeking

judgments against them in the amount of the tax fund recovery penalty assessments. Complaint,

United States v. Linda B. and Robert S. Phillips, No. 2:11-cv-545 (E.D.N.Y. Feb. 3, 2011), ECF

No. 1; see also Defs.’ Counterstatement ¶ 15. On July 7, 2011, another judge of this Court

entered judgment in favor of Plaintiff against the Phillipses for the tax fund recovery penalty

assessments. (Defs.’ Counterstatement ¶ 16.) On April 23, 2012, Plaintiff recorded certified

copies of the abstracts of the judgment with the Suffolk County Clerk’s Records Office, creating

the following judgment liens on the Property: a judgment lien for Plaintiff against the Phillipses

in the amount of $4,197.86 with interest; a judgment lien for Plaintiff against Linda Phillips in

the amount of $970,922.49 with interest; and a judgment lien for Plaintiff against Robert Phillips

in the amount of $1,355,968.39 with interest. (Pl.’s Counterstatement ¶¶ 16–18; see also Defs.’

Counterstatement ¶ 17.)

Several years later, the Phillipses failed to pay the County real estate taxes owed on the

Property for tax year 2014/2015. (Pl.’s Counterstatement ¶ 25.) Defendants assert that the

Phillipses continued to fail to “pay every year since”; however, Plaintiff denies this assertion on

the grounds that the Phillipses “were no longer responsible for the property taxes after the

County took title to the [P]roperty in 2020. (Id.) Defendants also assert that “[t]he unpaid real

estate taxes [owed to the County for tax year 2014/2015] became a lien on the [P]roperty in

January 2015.” (Pl.’s Counterstatement ¶ 26.) Plaintiff contends that it lacks knowledge to

dispute or concede this assertion and that the assertion calls for a legal conclusion. (Id.)

In 2015, the County did not provide notice to the Internal Revenue Service (“IRS”) or the

United States Department of Justice (“USDOJ”) that it would be conducting a tax lien sale of the

Property, even though Plaintiff had recorded judgement liens on the Property with the Suffolk

County Clerk’s Records Office. (Defs.’ Counterstatement ¶ 20.) On December 4, 2015, the

Suffolk County Comptroller conducted a tax lien sale of the Property, and the County “was

deemed the preferred bidder and became the owner of the [County] tax lien.” (Pl.’s

Counterstatement ¶¶ 27, 29.)

In 2018 and 2019, the County did not provide the IRS or USDOJ notice of a right to

redeem the Property. (Defs.’ Counterstatement ¶ 23.) On December 30, 2019, Robert Phillips

informed the County that there had been a fire at the Property, and that the Phillipses did not

have insurance, did not want to keep the Property and, instead, wanted the County to take it.

(Defs.’ Counterstatement ¶ 25.) In January 2019, the County confirmed with Robert Phillips that

the Phillipses did not want to keep the Property. (Id. ¶ 26.)

On April 14, 2020, the County sent notice to J.S. Funding Corp., the holder of the

mortgage on the Property, informing it that if the 2014/2015 tax year property taxes owed to the

County were not paid within fifteen days, then “the County would take a tax deed to the Property

free and clear of any interest that J.S. Funding Corp. may have in it, severing J.S. Funding

Corp.’s rights as a mortgagee.” (Id. ¶ 27.) The County did not mail any notices of redemption

rights to any other creditors with liens or judgments recorded against the Property, including

Plaintiff. (Id. ¶ 29.)

On October 7, 2020, the County Comptroller executed an indenture conveying the

Property’s title to the County by tax deed. (Id. ¶ 31.) The tax deed was recorded on October 15,

2020. (Id. ¶ 33.) On November 5, 2021, Plaintiff’s counsel contacted the County regarding the

County’s acquisition of title to the Property. (Id. ¶ 35.) Specifically, Plaintiff’s counsel spoke

with Redemption Supervisor Peter Belyea of the Suffolk County Department of Economic

Development and Planning, who informed Plaintiff’s counsel “that the County had not provided

direct notice of redemption rights to the federal government.” (Id. ¶¶ 35–36.)

Plaintiff’s counsel sent an email to Belyea that same day, instructing Belyea that his

office “must serve the IRS consistent with the provisions of 26 U.S.C. 7425.” (Id. ¶ 36.) On

November 10, 2021, a letter signed by Balyea was sent to the IRS, with a copy sent to the United

States Department of Treasury. (Id. ¶¶ 38, 40–41.) The letter stated:

This letter shall serve as Official Notice to you that, in the event of your failure to

redeem the property within six months of the filing of this notice with the County

Comptroller, the County Shall auction the property at a public sale, at the next

available date, free and clear of any interests or rights of the assessed owner or

you.

(Id. ¶ 39.) On January 18, 2022, Belyea emailed Plaintiff’s counsel, “stating, among other things,

that, if the United States wanted to redeem the Property, it must submit a redemption application

no later than May 16, 2022.” (Id. ¶ 42.)

PROCEDURAL HISTORY

On May 5, 2022, Plaintiff filed the Complaint in this action. (Compl.) Defendants filed

their Answer on July 13, 2022. (Defs.’ Answer, ECF No. 21.)

On April 18, 2023, Plaintiff filed a motion for a pre-motion conference concerning its

anticipated motion for summary judgment. (ECF No. 35.) On April 19, 2023, Judge Gary R.

Brown, to whom this case was previously assigned, granted the motion and scheduled a pre-

motion conference for June 20, 2023. (Elec. Order, Apr. 19, 2023.) On May 17, 2023,

Defendants also filed a letter motion for a pre-motion conference concerning their anticipated

summary judgment motion. (ECF No. 45.) On May 18, 2023, Judge Brown granted that letter

motion as well. (Elec. Order, May 18, 2023.) On May 30, 2023, Plaintiff filed a response to

Defendants’ letter motion for a pre-motion conference. (ECF No. 46.)

On June 20, 2023, Judge Brown held a pre-motion conference regarding the Parties’

anticipated cross-motions for partial summary judgment. (Min. Entry, June 20, 2023.) During the

conference, Judge Brown instructed the Parties to file a joint status report within three weeks

stating whether the Parties would like to appear for a settlement conference before Magistrate

Judge James M. Wicks, and if not, proposing a briefing schedule for the anticipated cross-

motions. (ECF No. 48.)

On July 11, 2023, Plaintiff and Defendants notified the Court that they did not request a

settlement conference and, instead, proposed a briefing schedule, which Judge Brown so ordered.

(ECF No. 49; Elec. Order, July 12, 2023.) The Parties subsequently filed requests to extend the

briefing schedule, which were granted by Judge Brown. (ECF Nos. 49, 50; Elec. Order, Aug. 30,

2023; Elec. Order, Oct. 3, 2023.)

On October 19, 2023, this action was reassigned to my docket. On November 11, 2023,

Plaintiff and Defendants filed a joint motion to stay briefing on their cross-motions for summary

judgment for 90 days because the Parties had reached an agreement in principle to resolve the

case, which was granted. (ECF No. 52; Elec. Order, Nov. 8, 2023.) However, on January 30,

2024, the Parties filed a joint status report informing the Court that they failed to reach a

settlement and requesting an additional extension of time to file cross-motions for summary

judgment. (ECF No. 53.) I granted that request. (Elec. Order. Jan. 31, 2024.)

On May 23, 2024, the Parties’ filed their fully-briefed Cross-Motions for Summary

Judgment in accordance with this Court’s recommended bundling practices. (Pl.’s Mot.; Defs’

Opp’n, ECF No. 62; Pl.’s Reply, ECF No. 63; Defs.’ Mot.; Pl.’s Opp’n, ECF No. 66, Defs.’

Reply, ECF No. 67.) On May 24, 2024, Plaintiff filed a consent motion to correct Defendants’

opposition to Plaintiff’s Cross-Motion because Plaintiff had incorrectly filed the appendix to

Defendants’ opposition (ECF No. 62-1), which was granted. (ECF Nos. 68, 68-1; Elec. Order,

May 28, 2024.)

LEGAL STANDARDS

Summary judgment is appropriate where “there is no genuine dispute as to any material

fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a); see also

Kemp v. Regeneron Pharms, Inc., 117 F.4th 63, 68 (2d Cir. 2024). The moving party bears the

burden of demonstrating the absence of a material question of fact. McKinney v. City of

Middletown, 49 F.4th 730, 738 (2d Cir. 2022). “A fact is material if it might affect the outcome

of the suit under the governing law.” Cunningham v. Cornell Univ., 86 F.4th 961, 980 (2d Cir.

2023), rev’d on other grounds, 145 S. Ct. 1020 (2025) (citing Anderson v. Liberty Lobby, Inc.,

477 U.S. 242, 248 (1986)).2 A dispute of “material fact is genuine if the evidence is such that a

reasonable jury could return a verdict for the nonmoving party.” Id. (citing Anderson, 477 U.S. at

248). “In considering whether such a fact issue exists, the court is not to make credibility

determinations or weigh the evidence.” Rupp v. Duffalo, 91 F. 4th 623, 634 (2d Cir. 2024).

“Credibility determinations, the weighing of the evidence, and the drawing of legitimate

inferences from the facts are jury functions, not those of a judge.” Id. (quoting Reeves v.

Sanderson Plumbing Products, Inc., 530 U.S. 133, 150 (2000)).

In order to defeat summary judgment, the non-moving party must set forth sufficient facts

showing that there is a genuine dispute for trial. See Fed. R. Civ. P. 56(c). The non-moving party

“may not rely on mere speculation or conjecture as to the true nature of the facts to overcome a

motion for summary judgment.” Hicks v. Banes, 593 F.3d 159, 166 (2d Cir. 2010); see also Daly

v. Westchester Cnty. Bd. of Legislators, No. 23-1220-CV, 2024 WL 3264125, at *2 (2d Cir. July

2, 2024) (summary order). “Mere conclusory allegations or denials cannot by themselves create a

genuine issue of material fact where none would otherwise exist.” Hicks, 593 F.3d at 166. A

court considering whether summary judgment is appropriate “must construe the facts in the light

most favorable to the non-moving party and must resolve all ambiguities and draw all reasonable

inferences against the movant.” Cunningham, 86 F.4th at 980; see also Woods v. Centro of

Oneida, Inc., 103 F.4th 933, 939 (2d Cir. 2024) (“We may find for the movant defendant only if

we conclude that on the record presented, considered in the light most favorable to the non-

movant plaintiff, no reasonable jury could find in the plaintiff’s favor.”). If “the party opposing

2 Unless otherwise indicated, case quotations omit all internal quotation marks, alterations,

brackets, and citations.

summary judgment propounds a reasonable conflicting interpretation of a material disputed

fact,” summary judgment must be denied. Schering Corp. v. Home Ins. Co., 712 F.2d 4, 9 (2d

Cir. 1983).

Where more than one party moves for summary judgment, “[e]ach party’s motion must

be examined on its own merits, and in each case all reasonable inferences must be drawn against

the party whose motion is under consideration.” Schuyler v. Sun Life Assurance Co. of Canada,

No. 23-498, ___ F.4th ___, 2025 WL 2349010, at *4 (2d Cir. Aug. 14, 2025) (quoting Morales v.

Quintel Entm’t, Inc., 249 F.3d 115, 121 (2d Cir. 2001)). Therefore, when evaluating Plaintiff’s

Cross-Motion, I draw all reasonable inferences against Plaintiff; when considering Defendants’

Cross-Motion, I draw all reasonable inferences against Defendants.

DISCUSSION

The primary dispute raised in the Parties’ Cross-Motions is whether Plaintiff’s judgment

liens have priority over the County’s tax lien on the Property. The Parties dispute whether this

question is governed by a provision of the FTLA—specifically, Section 6323—or by the

FDCPA—specifically, Section 3201.

Plaintiff seeks enforcement of its federal tax liens pursuant to 26 U.S.C. § 7403

(“Section 7403”) and its judgment liens pursuant to 28 U.S.C. § 3202(e), through an order of

judicial sale of the Property. (Pl.’s Mem. at 6, 10–12.) In support of its Cross-Motion, Plaintiff

argues that its judgment liens are governed by the FDCPA and have priority over the County’s

tax liens because Plaintiff’s judgment liens “were perfected earlier in time.” (Pl.’s Mem. at 7; see

also id. 13–19; Pl.’s Reply at 6–20.) Plaintiff further argues in support of its Cross-Motion and in

opposition to Defendants’ Cross-Motion that its federal tax liens remain attached to the Property

and that Plaintiff is therefore also entitled to an order of sale to enforce its tax liens. (Pl.’s Opp’n

at 17–20; see also Pl.’s Mem. at 11 n.14.)3 In opposition to Defendants’ Cross-Motion, Plaintiff

also argues that Defendants cannot enforce the County’s tax lien on the Property because that

lien was extinguished when the County took “fee simple ownership” of the Property. (Pl.’s

Opp’n at 17–20.)

In support of its own Cross-Motion and in opposition to Plaintiff’s Cross-Motion,

Defendants assert that the FDCPA is inapplicable to Plaintiff’s judgment liens. According to

Defendants, the FTLA governs the priority of Plaintiff’s tax liens and judgment liens in relation

to the County’s tax liens because the FDCPA does not apply when the FTLA specifies

procedures for recovering on a judgment or debt, as it does here. (Defs.’ Mem. at 8–10; see also

Defs.’ Opp’n at 2–6.) Defendants argue that the County’s tax lien has priority over Plaintiff’s tax

and judgment liens because the FTLA provides “superpriority” to local real property tax liens

and Plaintiff’s tax and judgment liens “both stem from the tax liabilities pursuant to . . . the

Internal Revenue Code.” (Defs. Mem. at 5–8 (citing 26 U.S.C. § 6323(b)(6)); Defs.’ Opp’n at 2–

6.) And, in support of its own Cross-Motion, Defendants further argue that the County’s tax liens

remain attached to the Property even though the County took title to the Property through a tax

deed conveyance in 2020. (Defs. Mem. at 11.)

For the reasons set forth below, according to the plain text of the FDCPA and the FTLA,

the priority of Plaintiff’s judgment liens in relation to the County’s tax liens is governed by the

3 In its brief in support of its Cross-Motion for Summary Judgment, Plaintiff states that while it

had “argued in its pre-motion filings that [its] [f]ederal [t]ax [l]iens also have priority over the

County’s claims,” it “has decided not to make this separate argument in its summary judgment

motion because the priority of the [j]udgment [l]iens should be dispositive of the case.” (Pl.’s.

Mem at 19 n.19 (citing ECF No. 35 at 2; ECF No. 46 at 2).) Plaintiff also states that it “reserves

the right to argue that the [f]ederal [t]ax [l]iens have priority at a later stage of this litigation,” if a

ruling on the Parties’ Cross-Motions do not resolve this action. (Id.)

FDCPA, and under that statute, Plaintiff’s judgment liens have priority over the County’s later-

in-time tax liens. Furthermore, Plaintiff is entitled to an order of judicial sale because the

FDCPA permits Plaintiff to rely on Section 7403’s procedures for securing a judicial sale and

Plaintiff has complied with the statutory requirements to invoke such procedures. By contrast,

Defendants fail to establish that, as a matter of law, the County’s tax liens remain attached to the

Property after the County obtained title to the Property through a tax deed conveyance.

Accordingly, the Court grants Plaintiff’s Cross-Motion for Summary Judgment in its

entirety, orders a judicial sale of the Property, and orders that the proceeds from such a sale will

first be used to satisfy Plaintiff’s judgment liens before being applied to any County tax liens.

The Court denies Defendants’ Cross-Motion as to the request for a judgment finding that the

County’s tax liens have priority over Plaintiff’s judgment liens and federal tax liens, and

dismisses as moot Defendants request for an order directing a judicial sale of the Property.

I. The Status and Priority of the Parties’ Liens

A. Plaintiff’s Tax Liens

The Parties agree that Plaintiff’s federal tax liens remain attached to the Property and that

the priority of these liens in relation to local real property tax and special assessment liens is

governed by Section 6323(b)’s superpriorities. (Pl.’s Mem. at 17; Defs.’ Mem. at 1–2.)

Plaintiff’s federal tax liens attached to the Property when Plaintiff filed with the Suffolk County

Clerk’s Office the Notices of Federal Tax Liens against: Linda Phillips on October 25, 2005;

Robert Phillips on June 24, 2008 and October 14, 2009; and the Phillipses, jointly, on December

11, 2009. (See Defs.’ Counterstatement ¶ 11–14.) These federal tax liens remain “valid and

subsisting liens against the” Property. (Defs.’ Counterstatement ¶ 12.)

B. Plaintiff’s Judgment Liens

The Parties agree that Plaintiff’s judgment liens were created pursuant to Section 3201(a)

of the FDCPA. (Defs.’ Counterstatement ¶ 17.) The Parties also agree that these judgment liens

attached to all of the Phillipses’ real property in the County, including the Property, on April 23,

2012, when Plaintiff “recorded certified copies of abstracts of the judgment . . . in the Suffolk

County Clerk Records Office in the manner in which a notice of tax lien would be filed under 26

U.S.C. 6323(f).” (Defs.’ Counterstatement ¶ 17.) Defendants do not dispute the fact that

Plaintiff’s judgment liens remain attached to the Property. (Pl.’s Mem. at 6–7; Defs.’ Opp’n at 1–

2; Defs.’ Reply at 4.)

C. The County’s Tax Liens

The undisputed record shows that a tax lien in favor of the County was created on

January 1, 2015. The Phillipses “failed to pay the real estate taxes assessed on the . . . Property

for tax year 2014/2015 . . . .” (Pl.’s Counterstatement ¶ 25.) A letter from the Suffolk County

Comptroller dated August 9, 2018, informed the Phillipses that they had failed to pay the real

property tax on the Property for the 2014/2015 tax year. (Rogers Decl. Ex. I, ECF No. 65-12.)

The Suffolk County Comptroller’s Computation of Monies, dated January 12, 2023, shows that

the Phillips have not paid county real estate taxes on the Property for the 2014, 2015, 2016,

2017, 2018, or 2019 tax years. (Rogers Decl. Ex. G, ECF No. 65-10). Under New York law,

unpaid local real property taxes “become a lien” on the real property “as of the first day of

January of the fiscal year for which levied and shall remain a lien until paid.” N.Y. Real Prop.

Tax Law § 902. Accordingly, the undisputed record shows that unpaid real property taxes for the

2015/2015 tax year became a lien on the Property as of January 1, 2015, the first day of the

January in the 2014/2015 fiscal year. (See Pl.’s Counterstatement ¶ 25.)

D. Prioritization of Plaintiff’s Judgment Liens in Relation to the County’s Tax Liens

The Parties’ dispute whether the priority given to Plaintiff’s judgment liens in relation to

the County’s tax liens are governed by the FTLA or the FDCPA. Plaintiff argues that the

FDCPA controls and that the FTLA is inapplicable. According to Plaintiff, the plain text of

Section 6323(b)(6) establishes superpriorities applicable only to federal tax liens—not a

procedure for the recovery of judgment liens that is inconsistent with the FDCPA. (Pl.’s Mem. at

16–17; Pl’s Opp’n at 6–7.) Specifically, Plaintiff emphasizes that its judgment liens were created

pursuant to FDCPA Section 3201 and that the text of Section 6323(b)(6) expressly stating that

the provision is applicable to “lien[s] imposed by section 6321” of the Internal Revenue Code

does not provide that Section 6323 applies to judgment liens created pursuant to Section 3201.

(Pl.’s Mem. at 16–17 (quoting 26 U.S.C. § 6322(b)(6)).) According to Plaintiff, its judgment

liens have priority over the County’s tax liens under Section 3201(b) because the judgment liens

were “perfected earlier in time.” (Pl.’s Mem. at 7 (citing 28 U.S.C. § 3201(b)); Pl.’s Opp’n at 7–

8 (same).)

Defendants argue that Plaintiff’s tax liens and judgment liens are both governed by the

FTLA because both sets of liens “stem from the tax liabilities pursuant to § 6672 of the Internal

Revenue Code.” (Defs.’ Opp’n at 2.) According to Defendants, the FTLA is a federal law that

provides “compressive procedures for recovering a tax debt” and conflicts with the FDCPA’s

procedures, and accordingly, the FDCPA’s limitation provision, 28 U.S.C. 3001(b), applies. (Id.)

Defendants rely on portions of the legislative histories of the FTLA and FDCPA to argue that

Congress intended to provide local tax liens priority over federal tax liens. (Defs.’ Opp’n at 3–4.)

They further argue that Plaintiff’s position is arbitrary as it is inconsistent with stipulations into

which Plaintiff entered in two other actions, where Plaintiff agreed that county property tax liens

would be satisfied before Plaintiff’s federal tax liens: United States v. Morrison, No. 2:23-cv-

3399 (E.D.N.Y.); and United States v. Sygitowicz, No. 15-cv-405 (W.D. Wash.). (Defs.’ Mem. at

10.)

i. Legal Standards

A statute generally “should be enforced according to its plain and unambiguous

meaning.” Greathouse v. JHS, Sec. Inc., 784 F.3d 105, 111 (2015). “The plainness or ambiguity

of statutory language is determined by reference to the language itself, the specific context in

which that language is used, and the broader context of the statute as a whole.” Id. (quotation

marks omitted). “If the meaning is plain, the inquiry ends there.” United States v. Rowland, 826

F.3d 100, 108 (2d Cir. 2016); see also Williams v. MTA Bus Co., 44 F.4th 115, 127 (2d Cir.

2022) (same). When the plain text of a statute is ambiguous, a court must apply “canons of

statutory construction for assistance in interpreting the statute.” Rowland, 826 F.3d at 108. The

court may “resort to legislative history only if, after consulting canons of statutory

[construction], the meaning remains ambiguous.” Id. (citing Daniel v. Am. Bd. of Emergency

Med., 428 F.3d 408, 423 (2d Cir. 2005)); see also United States v. Peterson, 394 F.3d 98, 105

(2d Cir. 2005) (“[E]ven if the statute were ambiguous, we would look to traditional canons of

statutory construction to resolve the ambiguity, before looking to legislative history and

interpretive regulations.”). If the canons of statutory interpretation and legislative history do not

resolve the ambiguity, the court will “afford[] some degree of weight to the interpretations of the

agencies charged with enforcing [the statute].” Greathouse, 784 F.3d at 113.

ii. Analysis

Resolving the Parties’ dispute first requires a close review of the text of the relevant

FDCPA and FTLA provisions. The plain text of these statutes supports the conclusion that the

FDCPA governs the priority of Plaintiff’s judgment liens, which were created pursuant to

Section 3201, in relation to the County’s tax liens. Further the specific context in which

Section 3201 and Section 6323 are used and the broader context of each statute also support this

conclusion. Applying the FDCPA’s first-in-time rule, Plaintiff’s judgment liens created under

Section 3201 have priority over the County’s tax liens.

The FDCPA “provides the exclusive civil procedures for the United States . . . to recover

a judgment on a debt.” 28 U.S.C. § 3001(a) (emphasis added). Despite this broad language, the

applicability of the FDCPA is circumscribed by its limitations provision, which provides: “To

the extent that another Federal law specifies procedures for recovering on a claim or a judgment

for a debt arising under such law, those procedures shall apply to such claim or judgment to the

extent those procedures are inconsistent with” the FDCPA. 28 U.S.C. § 3001(b) (emphasis

added). The FDCPA also provides, however, that it “shall not be construed to curtail or limit the

right of the United States . . . to collect taxes or to collect any other amount collectible in the

same manner as a tax.” 28 U.S.C. § 3003.

Section 3201 of the FDCPA governs the creation of liens from “[a] judgment in a civil

action” and provides that a civil judgment “shall create a lien on all real property of a judgment

debtor on filing a certified copy of the abstract of the judgment in the manner in which a notice

of tax lien would be filed under” Section 6323(f)(1) and (2). 28 U.S.C. § 3201(a). Section 3201

provides that such a judgment lien “shall have priority over any other lien or encumbrance which

is perfected later in time.” 28 U.S.C. § 3201(b). The text of the FDCPA does not contain any

exception for judgment liens created from judgments obtained by the federal government in a tax

case.

Section 6323 of the FTLA, on the other hand, does not reference judgment liens created

pursuant to Section 3201, but identifies eight types of property interests that receive

“[p]rotection,” meaning priority, over “liens imposed by section 6321” of the Internal Revenue

Code, “even though notice” of the Section 6321 lien “has been filed.” 26 U.S.C. § 6323(b)

(emphasis added). Section 6321, in turn, provides that “[i]f any person liable to pay any tax

neglects or refuses to pay the same after demand, the amount . . . shall be a lien in favor of the

United States upon all property and rights to property, whether real or personal, belonging to

such person.” 26 U.S.C. § 6321.

The eight enumerated categories of property interests listed in the FTLA receive what is

called “superpriority” over Section 6321 liens. (ECF No. 68-1 at 11 (S. Rep. No. 80-1708, at 5).)

One category of property interests afforded superpriority are “[r]eal property tax and special

assessment liens,” 26 U.S.C. § 6323(b)(6), which are given priority “wherever state law would

grant the local property tax lien a priority over a prior competing interest held by any other

person,” United States v. Gen. Douglas MacArthur Senior Vill., Inc., 470 F.2d 675, 678 (2d Cir.

1972). The text of neither Section 6321 nor Section 6323 refers to judgment liens created

pursuant to Section 3201, whether or not such judgment liens originate from an a judgment in a

civil action to collect federal taxes.

Neither Section 6321 nor Section 6323 expressly state that, under the FTLA, local real

property taxes and special assessments are afforded superpriority over judgment liens created

pursuant to Section 3201. As noted, the FTLA does not mention judgment liens of any kind.

Although Section 6323 provides that liens arising from local real property taxes and assessments

have priority over federal tax liens, both Section 6321 and Section 6323 are silent on whether

these property interests are afforded priority over judgment liens created under Section 3201.

Moreover, as noted, Section 3201 itself makes clear that any judgment liens created under that

provision “shall have priority over any other lien or encumbrance which is perfected later in

time,” and does not create any exception to this rule. 28 U.S.C. § 3201(b). Additionally, the

FDCPA emphasizes that it “shall not be construed to curtail or limit the right of the United

States . . . to collect taxes or to collect any other amount collectible in the same manner as a tax.”

28 U.S.C. § 3003.

Defendants fail to show that the FTLA falls within the FDCPA limitations provision,

which applies when a different federal law “specifies procedures for recovering on a claim or a

judgment for a debt arising under such law” that are “inconsistent with” the FDCPA. 28 U.S.C.

§ 3001(b) (emphasis added). In such a situation, the other federal law, and not the FDCPA,

would establish the procedures for recovering on a claim or judgment.

Here, the plain and unambiguous text of the FDCPA and FTLA establishes that the

priority of Plaintiff’s judgment liens is governed by the FDCPA and not the FTLA because the

latter does not set forth any specific procedure for recovering on a judgment lien established

under Section 3201. Accordingly, the statutory interpretation inquiry should end there. See

Rowland, 826 F.3d at 108 (“If the meaning is plain, the inquiry ends there.”). Defendants,

however, point to select portions of the FTLA’s legislative history, a portion of the Internal

Revenue Service Manual (“IRS Manual”), caselaw, and stipulations by Plaintiff in other cases to

support their position that the FTLA governs the relative priority of Plaintiff’s judgment liens

and the County’s tax liens. However, none of these authorities support Defendants’ position.

The legislative history upon which Defendants rely concerns federal tax liens, not federal

judgment liens. Defendants rely on the Report of the Senate Committee on Finance on the FTLA

(“Senate Report”) to argue that Congress deemed the “FTLA . . . necessary ‘as a practical

matter’ to streamline the transfer of real property where a federal lien exists because ‘a purchaser

cannot take the property free of these local liens,’ namely, real estate taxes and special

assessments.” (Defs.’ Opp’n at 4 (citing ECF No. 68-1 at 11 (S. Rep. No. 80-1708, at 5

(1966))).) Defendants selectively omit text in the Senate Report, in an attempt to convey that

Congress intended for FTLA to apply to a wide array of federal liens in addition to federal tax

liens created under Section 6231. (Compare Defs.’ Opp’n at 4, with ECF No. 68-1 at 11 (S. Rep.

No. 80-1708, at 5) (1966)).) The paragraph of the Senate Report from which Defendants

selectively quote states, in full:

(b) Real property taxes and special assessments.—A fourth new category of

superpriority is provided for real property taxes and special assessments. As a

practical matter, real property taxes and special assessments imposed by local

governmental authorities presently limit the value of the security real property

affords to Federal tax liens. This occurs because a purchaser cannot take the

property free of these local liens. Consequently, any tax sale purchaser could be

expected to take into account in his bid any outstanding local property taxes and

special assessments. This situation is recognized in the bill and priority is given to

these taxes and assessments even as against a filed Federal tax lien. However, the

priority is provided only where local law gives similar priority to real property

taxes and assessments as against holders of security interests. “Assessment” is

used her in the general sense of local law (not in the more limited sense usually

employed in the tax lien provisions of the Internal Revenue Code).

(ECF No. 68-1 at 11 (S. Rep. No. 80-1708, at 5 (1966)) (emphasis added).) The Senate Report

refers to federal tax liens. (Id.) Accordingly, the Senate Report does not contradict the plain text

reading of the FDCPA and the FTLA set forth above and provides no support for Defendants’

position that Congress enacted the FTLA to provide local real property taxes and special

assessments with superpriority status over federal judgment liens created under Section 3201.

The legislative history of the FDCPA, on the other hand, supports Plaintiff’s position that

Congress intended the FDCPA, not the FTLA, to govern the priority of federal judgment liens in

relation to local real property tax liens. Congress considered and rejected an earlier draft of the

FDCPA bill proposed in the House of Representatives, which included proposed text in

Section 3201 that, if enacted, would have established that any lien created as a result of “[a]

judgment obtained by the United States in a tax case” would be “a lien as provided in section

6321 of the Internal Revenue Code,” rather than a judgment lien created pursuant

Section 3201(a). H.R. Rep. 101-736, 1990 WL 200442 (quoting full draft text of H.R. 5640).

Likewise, an earlier Senate version of the FDCPA bill included proposed text in Section 3201

under which “[a] judgment obtained by the United States in a tax case” would constitute “a lien

co-extensive with any lien created prior to judgment under section 6321 of the Internal Revenue

Code.” 135 Cong. Rec. S14684-01, 1989 WL 187966 (quoting full draft text of S. 84). In its

1990 enactment of the FDCPA, Congress rejected both proposals—either of which, if enacted,

would have ensured that judgment liens obtained by the federal government in tax cases were

equivalent to federal tax liens created pursuant to Section 6321 for the purposes of determining

priority in relation to liens seeking to collect local real estate taxes. Congress did so with the

knowledge that the failure to incorporate these proposals made the FTLA’s superpriorities,

which had been enacted twenty-four years earlier in 1966, inapplicable to civil judgment liens

obtained by the federal government in tax cases.

Defendants also rely, without success, on a portion of the IRS Manual to support their

position that the FTLA controls the priority of Plaintiff’s judgment liens in relation to the

County’s tax liens. Defendants cite the portion of the IRS Manual entitled “Section 2. Federal

Tax Liens,” which simply states that the Internal Revenue Code, and specifically the FTLA,

grants “certain specified state and local tax liens against real property . . . priority

over . . . federal tax lien[s]” when the FTLA’s conditions are met. (Rodgers Decl. Ex. Q. at 1,

ECF No. 65-18 (emphasis added); Defs.’ Mem. at 6 (quoting Rodgers Decl. Ex. Q at 40).)

Although Plaintiff is correct that the IRS Manual “confers no legal rights and is not enforceable”

(Pl.’s Opp’n at 10 n.5), it may still provide persuasive authority. See United States v. N.Y. Tele.

Co., 644 F.2d 953, 959 n.10 (2d Cir. 1981) (“An IRS manual . . . does not have the effect of law,

especially where . . . the issue concerns the applicability of federal law,” but it may be

“informative.”). Nevertheless, as with the portions of the FTLA legislative history on which

Defendants rely, the portion of the IRS Manual identified by Defendants refers only to federal

tax liens—not federal judgment liens that arise from civil lawsuits to collect federal taxes. Thus,

the section of the IRS Manual on which Defendants rely does not alter this Court’s interpretation

of the plain text of the relevant FDCPA and FTLA provisions.

Finally, Defendants rely on numerous decisions of courts within and outside of the

Second Circuit, none of which address the question of whether the FTLA applies to federal

judgment liens. All of these cases are distinguishable or otherwise inapposite.

First, United States v. George does not address the issues in this action. 144 F. Supp. 2d

161 (E.D.N.Y. 2001); see also Defs.’ Mem. at 9, Defs.’ Reply at 2–3; Defs.’ Opp’n at 4. In

George, the court held that “the provisions of the FDCPA [were] not controlling” on the United

States’ request for an order permitting garnishment of the defendant’s disposable wages, because

the Higher Education Act of 1965 governed the amount of garnishment the United States could

seek specifically “to collect a defaulted student loan.” George, 144 F. Supp. 2d at 163. The court

did not discuss the FDCPA’s limitation provision, 28 U.S.C. § 3001(b), but instead found that

since the Health Education Act provided “the more specific limitation” on “the proper amount of

garnishment for repayment of student loans,” that statute, rather than the FDCPA’s more general

garnishment provisions, applied. Id. at 164. Here, the FTLA’s text does not set forth a “more

specific limitation” on what Plaintiff may seek with respect to recovery on its judgment liens,

and, as discussed, does not even mention judgment liens created pursuant to Section 3201, let

alone establish specific procedures for recovering on those judgment liens.

Second, Defendants rely on numerous cases that concern the priority of federal tax

liens—not judgment liens—and are therefore inapposite. (See Defs’ Mem. at 9; Defs.’ Opp’n at

3–4.) In Estate of Friedman v. Cadle Company, the court concluded that the FTLA controlled the

priority of a federal tax lien over the expenses of the plaintiff’s estate, which were incurred after

the federal tax lien was recorded. No. 08-cv-488, 2009 WL 7271206, at *3–4 (D. Conn. Sept. 8,

2009), report and recommendation adopted, 2009 WL 7271208 (D. Conn. Sept. 29, 2009). In

Western National Bank v. United States, the Fifth Circuit held that a federal tax lien had priority

over a later recorded state fuel tax lien, because Congress, through the FTLA, did not grant state

fuel taxes superpriority over federal tax liens like it did for state real property tax and special

assessment liens. 8 F.3d 253, 255–56 (5th Cir. 1993) (holding that “the first-in-time rule

determines the priority of conflicting state and federal claims for taxes when a section 6323

provision does not apply”) As noted, neither of these cases concerned federal judgment liens

created under Section 3201, which are at issue here.

Third, while Defendants correctly assert that courts in the Second Circuit have held that

the FDCPA does not provide the statute of limitations applicable to certain actions brought by

the federal government to collect taxes (Defs. Opp’n at 3), Defendants rely on decisions that do

not address whether the FDCPA applies to actions by the United States to enforce its judgment

liens. In United States v. Carney, another judge of this Court found that the FDCPA’s statute of

limitations did not apply to the federal government’s state law claim to, among other things,

“foreclose on federal tax liens on two parcels of real property,” because “Congress expressly

indicated” in the FDCPA “that the government’s remedies [to collect taxes] were not to be

curtailed.” 796 F. Supp. 700, 701, 703 (E.D.N.Y. 1992) (emphasis added). In United States v.

Letscher, the court found that the FDCPA’s statute of limitations did not apply to the federal

government action “to reduce to judgment an assessment of federal tax liabilities,” because the

FDCPA explicitly states it “shall not be construed to curtail or limit the right of the United

States . . . to collect taxes.” 83 F. Supp. 2d 367, 368, 378 (S.D.N.Y. 1999) (quoting 28 U.S.C.

§ 3003(b)(1)). Neither of these decisions concerned an action by the United States to enforce

judgment liens already procured through prior civil litigation. Nor do they address the question

before this Court: whether the FDCPA or FTLA govern the priority given to federal judgment

liens created under Section 3201 in relation to local real property tax liens.

Fourth, Defendants rely on decisions of courts from outside the Second Circuit that also

do not address the applicability of the FDCPA to litigation by the federal government to enforce

its judgment liens.4 None of these cases demonstrate that the FTLA, rather than the FDCPA,

establishes the priority given to federal judgment liens in relation to County real property tax and

assessment liens or that the County’s liens have priority over the federal judgment liens in this

action.

In McLain v. McLain, the court held that the FDCPA’s statute of limitations did not apply

to the federal government’s fraudulent conveyance claim based on the FDCPA provision stating

that the statute, “[b]y its own terms, . . . does not apply to Government actions to collect taxes.”

4 In addition to the cases discussed in the subsequent paragraph, Defendants rely on the sixth

page of United States v. Bigley, No. 14-cv-0729, 2019 WL 3944614 (D. Ariz. Aug. 21, 2019).

(Defs.’ Reply at 3.) Defendants’ reliance on this case is unpersuasive, however, both because

Bigley did not concern federal judgment liens and because the decision in Bigley is only five-

pages long. Rather, Bigley concerned a motion to strike the federal government’s notice of levy

following judgment on “outstanding federal tax liabilities assessed against the . . . defendants”

and foreclosure on “federal tax liens on real property.” Bigley, 2019 WL 3944614 at *1

(emphasis added).

No. 16–cv–36, 2017 WL 713548, at *5 (D. Mont. Feb. 23, 2017). In United States v. Brown, the

Tenth Circuit held that the statute of limitations provided in the Internal Revenue Code—rather

than the shorter statute of limitations set forth in the FDCPA—applied to the federal

government’s suit against the defendants for unpaid income taxes. 23 Fed. App’x. 955, 956 (10th

Cir. 2001). In United States v. Dawes, the Tenth Circuit rejected the argument that the federal

government “must bring” suit to “reduce to judgment federal tax assessments” and “foreclose

federal tax liens” under the FDCPA on the basis of the FDCPA’s limitation provision and

because FDCPA “expressly provides that it does not limit the United States’ right to collect taxes

under federal law.” 161 Fed. App’x. 742, 744, 746 (10th Cir. Dec. 5, 2005). None of these

decisions addressed how to prioritize federal judgment liens created under Section 3201 in

relation to local real property tax liens on the same property.

McKean v. United States is similarly inapposite, addressing only the question of what

statute governs recovery of federal tax liabilities through a levy—not through enforcement of

federal judgment liens. 563 F. Supp. 2d 182, 187 (D.D.C. 2008).5 United States v. Cam, is

similarly inapposite. No. 22-cv-20885, 2022 WL 18023419 (S.D. Fla. Nov. 7, 2022). The court

in Cam held only that the Internal Revenue Code’s procedures govern the judicial sale of a

property encumbered by a federal judgment lien created pursuant to Section 3201 and a federal

5 The plaintiff in McKean challenged the federal government’s placement of a levy on his bank

account and social security benefits due of unpaid tax liabilities on several grounds, including

that the levy was governed by the FDCPA, not the Internal Revenue Code. Id. at 183, 187. The

court held that since the Internal Revenue Code “provides exclusive procedures to govern the

government’s collection of unpaid tax liabilities,” the FDCPA’s limitation provision applied, and

the Internal Revenue Code governed the federal government’s levy. Id. at 187 (emphasis added).

The court did not address, much less conclude, that the Internal Revenue Code, or more

specifically, the FTLA, provides “exclusive” or, as Defendants assert, “specific” procedures for

the recovery of federal judgment liens and thereby displaces the FDCPA’s provisions governing

prioritization of liens. McKean, 563 F.Supp.2d at 187; Defs.’ Mem. at 4.

tax lien created pursuant to Section 6321, relying on the FDCPA provision indicating that the

statute does not “curtail or limit the right of the United States . . . to collect taxes.” Id. at *5

(quoting 28 U.S.C. § 3003(b)(1)). Cam did not address the question of the prioritization given to

the federal judgment lien in relation to any local real estate property tax liens.

United States v. Cromar is distinguishable because it did not concern the enforcement of

federal judgment liens at all. 807 F. App’x 821, 822–823 (10th Cir. 2020). In Cromar, the Tenth

Circuit affirmed a district court’s issuance of an order of foreclosure and for judicial sale in an

action brought by the federal government “to reduce to judgment assessments . . . for unpaid

income taxes and to foreclose tax liens through a sale of [defendant’s] real property.” Id. It

rejected defendants’ argument that the FDCPA required a pre-sale hearing because the FDCPA

did “not apply to a proceeding to collect income taxes brought under 26 U.S.C. §§ 7402 and

7403.” Id. By contrast, Plaintiff brought this action to enforce both judgment liens pursuant to

Section 3201 and federal tax liens pursuant to 26 U.S.C. §§ 7402 and 7403. (Compl. ¶¶ 43–44

(“The United States is entitled to enforce the federal tax liens . . . against the Real Property

pursuant to 26 U.S.C. §§ 7402(a) and 7403, and 28 U.S.C. § 3202(e). . . . Alternatively, the

United States is entitled to enforce the Judgment Lien[s] . . . against the Real Property pursuant

to 28 U.S.C. 3201.”); see also Pl.’s Reply at 1–2.)

Finally, Defendants’ reliance on stipulations into which Plaintiff entered in Morrison and

Sygitowicz is unpersuasive. Defendants provide no authority to support their position that

Plaintiff’s entry into stipulations to further the resolution of other actions not before this Court

conveys the United States’ position on the statutory interpretation question before this Court:

whether the FDCPA or the FTLA governs the prioritization of Plaintiff’s judgment liens in

relation to the County’s real estate tax liens. In furthering the resolution of litigation by

stipulation, parties may make strategic decisions not to pursue all rights to which they believe

they are entitled. See, e.g., Nemaizer v. Baker, 793 F.2d 58, 63 (2d Cir. 1986) (“A decision to

stipulate to a dismissal of the entire cause of action at that point could well have been based on a

conscientious and informed estimate by counsel of plaintiff’s legal chances of success, balancing

the benefits of continued litigation against its prospective costs.”). Moreover, as discussed in

detail below, Plaintiff’s positions in Morrison and Sygitowicz do not resolve the statutory

interpretation question before this Court.

In Morrison, Plaintiff brought suit to “reduce to judgment unpaid federal tax liabilities

owed by” the defendant taxpayer and to “enforce federal tax liens against 10 parcels of real

property.” (Rodgers Decl. Ex. R at 1, ECF No. 65-20.) Plaintiff entered into a stipulation

regarding the priority of its liens versus liens held by the County and the Town of Brookhaven.

(Id. at 15–18.) Plaintiff agreed that the sale proceeds would first satisfy “any real property taxes

and/or special assessments due” to the County and Town of Brookhaven “with regard to the

Property that are entitled to priority over the federal tax liens pursuant to 26 U.S.C.

§ 6323(b)(6),” then to the County to satisfy any of its judgment liens, and finally to Plaintiff to

satisfy its “federal tax liens.” (Id. at 16–17.) While the Morrison complaint alleges that Plaintiff

had a recorded judgment lien against the defendant taxpayer, it did not bring a claim to enforce

that judgment lien. (Id. at 12–13.) In fact, as Defendants concede in their brief in support of their

Cross-Motion, in Morrison, some of the County’s tax liens predated the recording of Plaintiff’s

judgment lien. (See Defs.’ Mem. at 10 (stating that Plaintiff’s judgment lien in Morrison was

recorded in 2021, but that the County’s earliest tax liens were created in 2020).) In Morrison, the

stipulation did not address the priority of Plaintiff’s judgment lien in relation to the county and

municipal property tax and special assessment liens at issue. Accordingly, the stipulation in

Morrison has no bearing on this Court’s resolution of the question of how to prioritize Plaintiff’s

judgment liens and the County’s real property tax liens in this action.

Furthermore, the stipulation in Sygitowicz does not assist Defendants in this action both

because it involved a nominee issue absent here and because the stipulation did not address the

prioritization of judgment liens created under Section 3201 in relation to local real estate tax

liens. There, Plaintiff brought suit to, among other things, foreclose on real property that it

asserted was subject to federal tax and judgment liens after the defendant taxpayers allegedly,

fraudulently conveyed the property to two nominees named as codefendants. (Rodgers Ex. R at

1–2, ECF No. 65-19.) Plaintiff and the defendant county treasurer, a potential holder of a lien

against the real property, entered into a stipulation in which Plaintiff “recognize[d],” “[p]ursuant

to 26 U.S.C. § 6323(b)(6),” that the county’s tax liens were a “superior interest” (id. at 17–19),

and committed to “include in any proposed order of sale a provision that the net proceeds of

sale . . . shall be applied to satisfy the” county’s tax liens before “the United States’ interest

secured by federal tax liens,” (id. at 18 (emphasis added).) The stipulation did not determine

whether Plaintiff’s tax and judgment liens remained attached to the property at issue after the

alleged fraudulent conveyance—that issue was resolved by a bench trial. See id. at 17–19;

Minute Entry, United States v. Sygitowicz, No. 15-cv-405 (W.D. Wash. June 1, 2016). Further,

the stipulation did not determine whether Plaintiff’s judgment liens were subordinate to the

county treasurer’s tax liens, but only dealt with the priority of the county’s tax liens over

Plaintiff’s tax liens. (Id. at 18.)

Neither Morrison nor Sygitowicz concerned Plaintiff’s assertion that any judgment liens

created under Section 3201 have priority over local real estate tax and special assessment liens.

The fact that the government stipulated that certain local taxes and assessments were to be

prioritized over the satisfaction of Plaintiff’s federal tax liens in those cases simply does not

convey a concession that the text of the relevant FDCPA and FTLA provisions requires local

real estate tax liens to be prioritized above judgment liens created under Section 3201. By

contrast, there are numerous reasons why Plaintiff may have chosen not to assert the priority of

its judgment liens in both cases without making any such concessions.6

Therefore, as a matter of law, the priority given to Plaintiff’s judgment liens created

under Section 3201 in relation to the County’s real property tax liens is governed by the FDCPA,

not Section 6323.

Applying the FDCPA to the undisputed facts, Plaintiff’s judgment liens have priority

over the County’s tax liens. There is no dispute that Plaintiff’s judgment liens were created and

attached to the Property on April 23, 2012, and that the County’s tax liens were perfected on

January 1, 2015. (Defs.’ Counterstatement ¶ 17.) Since the County’s tax liens were “perfected

later in time” than Plaintiff’s judgment liens, pursuant to the FDCPA, Plaintiff’s judgment liens

have priority over the County’s liens. 28 U.S.C. 3201(b).

For all of these reasons, I grant Plaintiff’s Cross-Motion and deny Defendants’ Cross-

Motion on the issue of the prioritization of Plaintiff’s judgment liens in relation to the County’s

tax liens.

II. Order of Sale

In support of its Cross-Motion, Plaintiff contends that it may enforce it judgment liens

6 For example, in Sygitowicz, by entering into the stipulation, Plaintiff also secured the voluntary

dismissal with prejudice of all claims against the county treasurer. (Rodgers Decl. Ex. S at 19.)

In Morrison, as discussed, Plaintiff chose not to bring a claim to enforce its judgment lien, and

the record does not provide a reason for this decision. (See generally Rodgers Decl. Ex. S, ECF

No. 65-20.)

through Section 7403(c) even though the judgment liens arise under Section 3201, which has its

own procedures for enforcement of a judgment lien.7 Plaintiff relies on the FDCPA provision

stating that the statute “shall not be construed to curtail or limit the right of the United States

under any other Federal law . . . to collect taxes or to collect any other amount collectible in the

same manner as a tax.” (Pl.’s Mem. at 12 (quoting 28 U.S.C. § 3003(b)).) Plaintiff also argues

that the FDCPA “preserve[s]” its “right ‘to appoint or seek the appointment of a receiver,” that it

“has the right to sell the Property through a receiver under [28 U.S.C.] § 7403(d),” and that

Plaintiff “may exercise this right regardless of whether the Property is sold pursuant to the

Federal Tax Liens or the Judgment Liens.” (Id. at 12 n.15 (quoting 28 U.S.C. 3003(b)(3)).)

In opposition to Plaintiff’s Cross-Motion, Defendants argue that Plaintiff, as a lienholder,

“does not have any legal right to sell the Property,” even with the consent of the Phillipses,

because the County, not Plaintiff or the Phillipses is the “titleholder” of the Property. (Defs.

Opp’n at 1.) Defendants also assert that Plaintiff “failed to provide the Phillipses and the County

with the required notice that the Property was being taken under the FDCPA.” (Id. (citing 28

U.S.C. § 3202(b)–(c)).)

On reply in support of its Cross-Motion, Plaintiff argues that Section 7403 “allows the

United States to sue to ‘subject any property’ of a delinquent taxpayer, or against which a federal

tax lien has attached regardless of current ownership, ‘to the payment of such tax or liability’

underlying the lien.” (Pl.’s Reply at 2–3 (quoting 26 U.S.C. § 7403(a).) Plaintiff asserts that

because it has followed all of the statue’s requirements, including by joining as defendants all

7 Section 3201 provides that “[o]n proper application to a court, the court may order the United

States to sell, in accordance with” 28 U.S.C. §§ 2001 and 2002, “any real property subject to a”

judgment lien. 28 U.S.C. § 3201(f)(1).

entities with liens or interests in the Property, this Court may decree a sale of the Property. (Id.)

Plaintiff also argues that it has established its right to sell the Property under Section 3201,

despite Defendants’ assertions to the contrary, because 28 U.S.C. 3202(b)’s notice requirement is

not applicable to an action “where, as here, the United States has also requested a judicial sale

under 26 U.S.C. §[ ]7403.” (Pl.’s Reply at 3.)

The text of the FDCPA and the Internal Revenue Code establishes that Plaintiff retains

the right to seek an order of judicial sale pursuant to Section 7403 to enforce its judgment liens

when it seeks to enforce federal tax liens in the same action. The FDCPA provides that it “shall

not be construed to curtail or limit the right of the United States under any other Federal

law . . . (1) to collect taxes or to collect any other amount collectible in the same manner as a

tax” or “to appoint or seek the appointment of a receiver.” 28 U.S.C. § 3003(b)(3) (emphasis

added). Section 7403(a) gives Plaintiff the right to file a civil action in a federal district court to

enforce a federal tax lien. 26 U.S.C. § 7403(a). In such an action, under Section 7403(c):

The court shall, after the parties have been duly notified of the action, proceed to

adjudicate all matters involved therein and finally determine the merits of all

claims to and liens upon the property, and, in all cases where a claim or interest of

the United States therein is established, may decree a sale of such property, by the

proper officer of the court, and a distribution of the proceeds of such sale

according to the findings of the court in respect to the interests of the parties and

of the United States.

Id. § 7403(c) (emphasis added).

Here, the FDCPA permits Plaintiff to rely on Section 7403’s procedures for securing a

judicial sale in order to collect “any other amount collectible in the same manner as a tax,” 28

U.S.C. § 3003(b), and each requirement set forth in Section 7403 is met. Plaintiff filed this action

to enforce its federal tax liens pursuant to Section 7403 and its judgment liens pursuant to

Section 3201. (Compl. at 13–14.) Plaintiff included as Defendants in this action, and duly

notified, “[a]ll persons having liens upon or claiming any interest in the property” through

service of the Summons and Complaint. 26 U.S.C. § 7403(b); see also 26 U.S.C. § 7403(c);

Compl. at 1; supra note 1. As discussed above, the Parties do not dispute that Plaintiff has “a

claim or interest” in the Property through its federal tax liens and judgment liens. See supra

Discussion § I.A–B.

Accordingly, having determined the priority of the Plaintiff’s judgment liens in relation

to the County’s tax liens upon the Property, I order the judicial sale of the Property pursuant to

Section 7403, with the net proceeds of such sale going first to satisfy Plaintiff’s judgment liens

on the Property before satisfaction of the County’s tax liens.

III. Defendants’ Cross-Motion

In their Cross-Motion for summary judgment, Defendants seek a judgment finding (1)

that the County’s tax liens have priority over Plaintiff’s judgment liens and (2) that the County’s

tax liens have priority over Plaintiffs’ federal tax liens. (Defs.’ Mem. at 1, 8.) They also request a

judicial order “directing that [the] [P]roperty be sold.” (Defs.’ Reply at 7.)

Defendants’ first request is contradicted by the plain text of the FDCPA and FTLA,

which read together demonstrate that the FDCPA governs the prioritization of Plaintiff’s

judgment liens created under Section 3201 in relation to the County’s tax liens. Moreover,

applying this law to the undisputed facts, Plaintiff’s judgment liens have priority over the

County’s tax liens because the Plaintiff’s judgment liens were perfected earlier in time. See

Discussion § II. Therefore, Defendants’ Cross-Motion for summary judgment seeking a ruling

that the County’s tax liens have priority over Plaintiff’s judgment liens is denied.

With respect to the second issue raised in Defendants’ Cross-Motion, Plaintiff has not

moved for summary judgment on the issue of whether its federal tax liens have priority over the

County’s tax liens. See supra note 3 (citing Defs. Mem at 19 n.19). Instead, Plaintiff opposes

Defendants’ Cross-Motion on this point, arguing that the County’s tax liens were extinguished

after the County took fee simple ownership of the Property in 2020. (Pl.’s Opp’n at 17–20.)

It is undisputed that on January 1, 2015, the County’s tax liens for unpaid real estate taxes

for the 2014/2015 tax year attached to the Property. See N.Y. Real Prop. Tax Law § 902; see also

supra Discussion § I.C. It is also undisputed that the Phillipses did not pay County real estate

taxes for the property at any time after 2015. (See Pl.’s Counterstatement ¶ 25; Defs.’

Counterstatement ¶ 26.) Nevertheless, Defendants have not provided sufficient legal authority to

support a finding that, as a matter of law and based on undisputed facts, the County tax liens

remain attached to the Property even after the County obtained title to the Property via a tax deed

executed through an indenture on October 7, 2020—a condition precedent to any finding that the

County’s tax liens have priority over Plaintiff’s federal tax liens.

The only legal authority provided by Defendants is the 1954 New York Supreme Court

decision in Riverhead Estates Civic Association v. Gobron, 206 Misc. 405 (N.Y. Supp. Ct.

1954).8 Riverhead is not an appellate decision, much less a decision of New York’s highest court

(the New York Court of Appeals) and therefore does not provide a binding interpretation of the

relevant New York law. Torres v. City of New York, 590 F. Supp. 3d 610, 624 (S.D.N.Y. 2022)

(noting that “a decision in an individual case of the New York State Supreme Court, as New

York’s trial court, is not binding on future cases”). Furthermore, Riverhead does not support

8 Plaintiff only provides a 1947 decision of the New York Supreme Court to support its contrary

position that the County’s tax liens were extinguished when the County took title to the Property.

That case, Tolfree v. Connolly, does not appear to address the issue of whether the County’s tax

liens survive following the County’s act of taking title to the Property. 188 Misc. 689, 692 (N.Y.

Sup. 1946), aff’d 271 A.D. 1033 (N.Y. App. Div. 1947).

Defendants’ position here. In Riverhead, the County was not a party to the litigation and the

status of its tax liens was not at issue. See id. Instead, the defendant state officer had recorded a

judgment lien against the real property at issue. Id. The County subsequently acquired title

through a sale for unpaid taxes and then sold the property to the plaintiff. Id. The court held that

the state officer’s judgment liens were not “extinguished” because “[s]overeign liens” are “not

cut off by a tax sale” and the County’s tax claim, from which plaintiff’s title stemmed, was not

“superior to that of the State.” Id. at 406 (emphasis added). Riverhead does not address the

second issue presented in Defendants’ Cross-Motion: whether a local government’s tax liens

against a property have priority over federal tax liens when the local government took title to the

property through a tax deed conveyance. Moreover, Defendants have not identified legal

authority for the propositions that: (1) the state officer’s judgment liens in Riverhead are

equivalent to the County tax liens at issue in this action, and (2) that the tax sale considered in

Riverhead is equivalent to the tax deed conveyance under which the County obtained title to the

Property at issue here.

Accordingly, Defendants have failed to establish that, as a matter of law, the County’s tax

liens remain attached to the Property even though Defendants now hold title to it. For all of these

reasons, Defendants’ Cross-Motion is denied as to the request that the Court issue judgment

finding that the County’s tax liens have priority over Plaintiff’s federal tax liens.

Finally, Defendants have not brought any counterclaims or otherwise requested relief in

their Answer that would support their summary judgment request for an order “directing that

[the] [P]roperty be sold.” (Defs.’ Reply at 7; see Defs.’ Answer.) As discussed above, in

opposition to Plaintiff’s Cross-Motion, Defendants raised a meritless argument that Plaintiff

cannot seek a judicial order of sale as a lienholder. See supra Discussion § II. Because I have

granted Plaintiff’s request for a judicial sale under Section 7403, Defendants’ Cross-Motion is

dismissed as moot with respect to Defendants’ request for an order directing a judicial sale of the

Property.

CONCLUSION

For the reasons set forth above, Plaintiff’s Cross-Motion (ECF No. 61) is granted.

Defendants’ Cross-Motion (ECF No. 65) is denied with respect to Defendants’ request for a

judgment finding that the County’s tax liens have priority over Plaintiff’s judgment liens and that

the County’s tax liens have priority over Plaintiffs’ federal tax liens; and it is dismissed as moot

with respect to Defendants’ request for an order directing a judicial sale of the Property.

In a forthcoming order, the Court will schedule a status conference during which the

Parties will provide their positions on the next steps to resolve the sole remaining issues in this

litigation: whether the County’s tax liens remain attached to the Property following the County’s

acquisition of title to the Property in 2020 and whether the County’s tax liens have priority over

Plaintiff’s federal tax liens.9

Dated: Central Islip, New York

September 19, 2025

/s/ Nusrat J. Choudhury

NUSRAT J. CHOUDHURY

United States District Judge

9 In their briefs, the Parties suggest that if I grant Plaintiff summary judgment on the basis that its

judgment liens have priority over the County’s tax liens, then the issue of whether the County’s

tax liens have priority over Plaintiff’s federal tax liens is moot. (See Pl.’s Mem. at 19 n.9 (stating

that Plaintiff chose not to move for summary judgment on this issue “because the priority of [its]

[j]udgment [l]iens should be dispositive of the case”); Defs.’ Reply at 5 (stating “Permitting

Plaintiff to subvert the proper procedure,” the Internal Revenue Code, “would result in a

complete loss to the County.” (emphasis added)).) However, there are insufficient facts in the

record to support such a conclusion at this time.