Federal National Mortgage Ass'n v. Sundquist
311 P.3d 1004
Utah2013Background
- Sundquist appeals an interlocutory order requiring her to vacate during an unlawful detainer action brought by FNMA on Sundquist's Utah home.
- ReconTrust, a trustee, foreclosed nonjudicially and deeded the property to FNMA; ReconTrust is a national bank, not a Utah-licensed trustee under Utah Code §§57-1-21, -23.
- Utah law limits the power of sale to active Utah State Bar members or title insurance companies with Utah offices; Sundquist argued ReconTrust lacked authority to foreclose under these provisions.
- The district court ruled for FNMA, finding no preemption by the National Banking Act (NBA) and ordering restitution; Sundquist sought interlocutory review.
- The Utah trial court’s notice of trustee sale and subsequent deed are under scrutiny for whether Utah law applies to a national bank foreclosing property in Utah, despite ReconTrust’s federal status.
- The court ultimately holds that Utah law governs the foreclosure process and that Utah code provisions are not preempted by the NBA, remanding for further proceedings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does the NBA preempt Utah trustee-qualification provisions? | Sundquist argues NBA §922 preempts Utah §§57-1-21, -23. | FNMA contends ReconTrust, as a national bank, is subject to federal law overriding Utah requirements. | Utah law is not preempted; national banks must comply with Utah trustee-qualification rules. |
| Where is ReconTrust located for purposes of §92a in determining applicable law? | Sundquist contends Texas laws apply because ReconTrust is located in Texas. | FNMA maintains federal interpretation locates the bank in Texas, privileging Texas law. | Utah law governs since Foreclosure acts occur in Utah; bank is located in Utah for these fiduciary acts. |
Key Cases Cited
- Bell v. Countrywide Bank, N.A., 860 F. Supp. 2d 1290 (D. Utah 2012) (national bank subject to Utah law for foreclosures in Utah)
- First Nat'l Bank of Bay City v. Fellows ex rel. Union Trust Co., 244 U.S. 416 ((1917)) (state law governs fiduciary and property-related powers)
- BFP v. Resolution Trust Corp., 511 U.S. 531 ((1994)) (real property security; state sovereignty considerations)
- Chevron U.S.A., Inc. v. Natural Resources Def. Council, Inc., 467 U.S. 837 ((1984)) (agency deference framework for interpreting statutes)
- Vt. Agency of Natural Resources v. United States ex rel. Stevens, 529 U.S. 765 ((2000)) (clear statement and major questions considerations)