Fed. Nat. Mortg. Ass'n v. Sundquist
311 P.3d 1004
Utah2013Background
- FNMA filed unlawful detainer to recover Sundquist’s Utah home; ReconTrust conducted nonjudicial foreclosure as trustee under Sundquist’s deed of trust.
- Sundquist challenged ReconTrust’s authority, arguing Utah trustee-qualification statutes (57-1-21, 57-1-23) limit power of sale to Utah Bar members or title companies with Utah office.
- District court ruled ReconTrust lacked Utah-qualification and restitution order required Sundquist to vacate during pendency.
- FNMA argued NBA §92a preempts Utah law; claimed ReconTrust could foreclose under federal law.
- Court reverses, holds Utah law controls for foreclosures in Utah; remands for further proceedings; decision limited to preemption issue.
- Justice Lee concurs in part and judgment; other issues regarding validity of foreclosure and restitution left for remand.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does NBA §92a preempt Utah’s trustee-qualification statutes? | FNMA argues federal law preempts Utah §§57-1-21, -23. | Sundquist argues Utah law remains controlling; preemption not established. | Not preempted; Utah law governs foreclosures in Utah. |
| Where is the national bank located for §92a purposes in Utah foreclosures? | FNMA contends Texas location governs; Texas law applies. | Sundquist contends Utah location governs; Utah law applies. | Utah law governs where foreclosure occurs; bank located in Utah for these purposes. |
| Is the Comptroller’s interpretation of §92a and 12 C.F.R. § 9.7(d) entitled to Chevron deference? | Defendant argues regulation preempts Utah law. | Court should defer to agency interpretation under Chevron. | Regulation not entitled to deference; its interpretation is unreasonable. |
| Does Congress’s clear-statement or major-questions doctrine affect §92a preemption here? | Congress intended to prevent state-law disadvantage to national banks. | Preemption requires clear Congressional intent for state-sovereignty intrusion. | Clear-statement/major-questions analysis supports Utah-law application. |
| Are other issues (validity of foreclosure, trustee’s deed, restitution) ripe on interlocutory appeal? | Arguments raised. | Not fully litigated below. | Declined; remand allows new challenges on remand. |
Key Cases Cited
- Bell v. Countrywide Bank, N.A., 860 F. Supp. 2d 1290 (D. Utah 2012) (interpretation of §92a and location for institutions performing fiduciary acts in Utah)
- BFP v. Resolution Trust Corp., 511 U.S. 531 (U.S. 1994) (real property security and state sovereignty considerations)
- Brown & Williamson Tobacco Corp. v. FDA, 529 U.S. 120 (U.S. 2000) (clear-statement/major-questions doctrine accompanying agency interpretation)
- MCI Telecommunications Corp. v. American Telephone & Telegraph Co., 512 U.S. 218 (U.S. 1994) (major-questions/agency delegation concerns)
- Santa Fe Indus. v. Green, 430 U.S. 462 (U.S. 1977) (state law governs fiduciary obligations; traditional sovereignty)
- Wachovia Bank v. Schmidt, 546 U.S. 303 (U.S. 2006) (the meaning of ‘located’ varies by context in the NBA)