This opinion is subject to revision before final

publication in the Pacific Reporter

2013 UT 45

IN THE

SUPREME COURT OF THE STATE OF UTAH

FEDERAL NATIONAL MORTGAGE ASSOCIATION,

Plaintiff and Appellee,

v.

LORAINE SUNDQUIST,

Defendant and Appellant.

No. 20110575

Filed July 23, 2013

Third District, West Jordan

Honorable Bruce C. Lubeck

No. 110408730

Attorneys:

Maria-Nicholle Beringer, Robert H. Scott, Chandler P. Thompson,

Salt Lake City, for appellee

J. Kent Holland, Daniel J. Morse, Sandy, Douglas R. Short,

Midvale, for appellant

Jerrold S. Jensen, Wade Farraway, Salt Lake City, amicus curiae

for State of Utah

JUSTICE PARRISH authored the opinion of the Court,

in which CHIEF JUSTICE DURRANT, JUSTICE DURHAM,

 and JUSTICE NEHRING joined.

JUSTICE LEE filed a concurring opinion. 

JUSTICE PARRISH, opinion of the Court:

INTRODUCTION

¶1 Appellant Loraine Sundquist appeals from an interlocutory

order requiring her to vacate her home during the pendency of an

unlawful detainer action. Appellee Federal National Mortgage

Association (FNMA) initiated the unlawful detainer action, claiming

ownership of Sundquist’s home. FNMA claimed ownership

pursuant to a trustee’s deed that it obtained from ReconTrust.

ReconTrust is a national bank that conducted a nonjudicial

foreclosure sale in its capacity as trustee of the trust deed that

Sundquist had executed to secure her mortgage.
FED. NAT. MORTG. ASS’N v. SUNDQUIST

Opinion of the Court

1

 FNMA has raised at least some additional arguments for the

first time on appeal. However, because the district court agreed

with FNMA on the preemption issue, FNMA did not need to raise

these arguments in the district court and the district court did not

rule on them. We decline to address them for the first time on

appeal.

2

¶2 The interlocutory order at issue was entered at the

conclusion of an immediate occupancy hearing held just two weeks

after FNMA initiated the unlawful detainer action. At that hearing,

Sundquist argued that ReconTrust lacked authority to conduct the

foreclosure sale and convey her home to FNMA. Specifically, she

argued that sections 57-1-21 and 57-1-23 of the Utah Code limit the

power of sale to trustees who are either members of the Utah State

Bar or title insurance companies with an office in Utah. In response,

FNMA argued that ReconTrust, as a national bank, was authorized

to conduct the sale under federal law and that federal law

preempted the Utah statute. The district court agreed with FNMA

and entered an order of restitution, requiring that Sundquist vacate

her home.

¶3 We reverse. Utah Code sections 57-1-21 and 57-1-23 are

not preempted by federal law. A national bank seeking to foreclose

real property in Utah must comply with Utah law. We therefore

vacate the district court’s order of restitution and remand for

additional proceedings.

¶4 Because our ruling in this matter is limited to the

preemption issue, the parties may, on remand, raise any additional

issues they may see fit with respect to FNMA’s claim for immediate

occupancy.1

 Similarly, the parties remain free to raise any additional

arguments they may have regarding the validity of the trustee’s

deed in connection with the final resolution of the unlawful detainer

action.

FACTUAL & PROCEDURAL BACKGROUND

¶5 In 2006, Sundquist executed a deed of trust as security for

the loan on her Utah home (Property). In 2009, Sundquist defaulted

on the loan. The beneficiary under the deed of trust appointed

ReconTrust, a wholly-owned subsidiary of Bank of America, as the

successor trustee. In January 2011, ReconTrust placed a notice of

trustee’s sale on Sundquist’s door. In May 2011, ReconTrust

conducted a nonjudicial foreclosure of Sundquist’s home and

thereafter deeded it to FNMA.
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Opinion of the Court

3

¶6 In June 2011, FNMA filed an unlawful detainer action.

Pursuant to Utah Code section 78B-6-810, the district court

conducted an evidentiary hearing to determine which party would

have possession of the Property during the pendency of the

litigation. At the hearing, Sundquist argued that Utah law regarding

the qualification of trustees did not authorize ReconTrust to conduct

a nonjudicial foreclosure. In response, FNMA asserted that Utah law

was preempted by federal law, which authorized ReconTrust to

conduct the foreclosure sale. The district court sided with FNMA

and awarded it possession of the Property during the pendency of

the litigation.

¶7 Sundquist filed a petition for interlocutory appeal, which

was granted. The order of restitution was stayed pending appeal.

We have jurisdiction under Utah Code section 78A-3-102(3).

¶8 Sundquist argues that ReconTrust lacked authority to

conduct a nonjudicial foreclosure of her home because such

authority is granted only to members of the Utah State Bar or title

insurance companies with an office in Utah. UTAH CODE §§ 57-1-21;

57-1-23. She asserts that it necessarily follows that ReconTrust’s

deed is “null and void,” that FNMA lacks title to the Property, and

that FNMA is without standing to bring an unlawful detainer action.

She concludes that the district court lacked subject matter

jurisdiction to entertain the eviction action brought by FNMA.

¶9 FNMA counters that ReconTrust is a national bank

exercising fiduciary powers subject to section 92a of the National

Banking Act (NBA), which preempts Utah law regarding

qualification of trustees. UTAH CODE §§ 57-1-21, 57-1-23; 12 U.S.C.

§ 92a. Specifically, FNMA claims that ReconTrust is subject to the

laws of Texas because that is where ReconTrust is “located” and

where it conducts its fiduciary business, and that ReconTrust is

authorized to conduct nonjudicial foreclosures under Texas law.

FNMA also argues that the order of restitution was proper because

Sundquist suffered no prejudice by virtue of ReconTrust’s role as a

trustee inasmuch as she was unable to demonstrate an ability to

make up her missed mortgage payments or post a bond. FNMA

further argues that the other issues raised by Sundquist are not ripe

for appeal inasmuch as the district court has yet to determine

whether Sundquist’s challenge to ReconTrust’s authority has any

effect on the validity of the trust deed.

STANDARD OF REVIEW

¶10 We generally will not disturb a district court’s order of
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Opinion of the Court

2

 It is unclear from the record if either party actually requested

this hearing. Under the statute, however, it is clear that such a

hearing should be scheduled only “upon request of either party.”

UTAH CODE § 78B-6-810(2)(a). We therefore note that district courts

should not schedule such hearings unless requested to do so by one

of the parties. 

4

restitution unless it abuses its discretion. State v. Snyder, 747 P.2d

417, 422 (Utah 1987). However, when the validity of an order of

restitution turns on interpretation of a statue, it presents issues of

law. State v. Garcia, 866 P.2d 5, 6 (Utah Ct. App. 1993). “We accord

a lower court’s statutory interpretations no particular deference but

assess them for correctness, as we do any other conclusion of law.”

State v. Rio Vista Oil, Ltd., 786 P.2d 1343, 1347 (Utah 1990).

ANALYSIS

I. SECTION 92a OF THE NATIONAL BANKING ACT

 DOES NOT PREEMPT SECTIONS 57-1-21 AND 57-1-23

 OF THE UTAH CODE AND A NATIONAL BANK SEEKING

 TO FORECLOSE REAL PROPERTY IN UTAH MUST

 THEREFORE COMPLY WITH UTAH LAW

¶11 Sundquist appeals the order of restitution directing her to

vacate the Property during the pendency of the unlawful detainer

action. In an unlawful detainer action, a court may hold an

evidentiary hearing under section 78B-6-810(2)(b)(i) of the Utah

Code to “determine who has the right of occupancy during the

litigation’s pendency.” The district court held such a hearing in this

case.2

 At this hearing, Sundquist argued that ReconTrust was not

qualified to conduct the foreclosure because Utah law establishing

the qualifications of trustees is not preempted by the NBA. The

district court rejected this argument and ordered Sundquist to vacate

the Property.

¶12 Under section 57-1-23 of the Utah Code, a qualified trustee

“is given the power of sale by which the trustee may . . . cause the

trust property to be sold.” Section 57-1-21(1)(a) defines qualified

trustee as:

(i) any active member of the Utah State Bar who

maintains a place within the state where the trustor or

other interested parties may meet with the trustee [or]

. . .

(iv) any title insurance company or agency that:
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Opinion of the Court

3

 This statute survived constitutional challenge in Kleinsmith v.

Shurtleff, 571 F.3d 1033 (10th Cir. 2009).

5

(A) holds a certificate of authority or license . . . to

conduct insurance business in the state;

(B) is actually doing business in the state; and

(C) maintains a bona fide office in the state.3

¶13 ReconTrust is neither a member of the Utah State Bar nor

a title insurance company or agency with an office in the State of

Utah. ReconTrust was therefore not a qualified trustee with the

power of sale under Utah Code sections 57-1-21 and 57-1-23.

However, FNMA argues that Utah law does not apply to ReconTrust

because, as a national bank, ReconTrust is subject to the laws of

Texas, not Utah. Under Texas law, ReconTrust is arguably

authorized to conduct a nonjudicial foreclosure sale. See Tex. Fin.

Code §§ 32.001, 182.001.

¶14 Whether ReconTrust is subject to the laws of Utah or Texas

depends on where it is “located.” As a national bank, ReconTrust

operates under the National Banking Act, 12 U.S.C. § 1 et seq., and is

regulated by the Office of the Comptroller of Currency

(Comptroller). The NBA gives the Comptroller authority “to

grant . . . to national banks . . . the right to act as trustee . . . under the

laws of the State in which the national bank is located.” 12 U.S.C. § 92a(a)

(emphasis added). And section 92a(b) of the NBA provides that

“exercise of such powers by national banks shall not be deemed to

be in contravention of State or local law.”

¶15 The Comptroller’s current interpretation of section 92a is

contained in the Code of Federal Regulations. 12 C.F.R. § 9.7. The

applicable regulation provides that a national bank is “located” in

“the state in which the bank acts in a fiduciary capacity.” 12 C.F.R.

§ 9.7 (d). And the regulations define the state in which the bank acts

in a fiduciary capacity as “the state in which it accepts the fiduciary

appointment, executes the documents that create the fiduciary

relationship, and makes discretionary decisions regarding the

investment or distribution of fiduciary assets.” 12 C.F.R. § 9.7(d).

¶16 Despite the fact that the Property at issue is located in

Utah, FNMA argues that ReconTrust acted in a fiduciary capacity in

Texas because the substitution of trustee, notice of default, and

trustee’s deed all were executed and notarized in Texas. It therefore
FED. NAT. MORTG. ASS’N v. SUNDQUIST

Opinion of the Court

6

concludes that the laws of Texas apply and that, under Texas law,

ReconTrust has the authority to conduct a nonjudicial foreclosure of

property located in Utah.

¶17 The issue of whether the NBA preempts Utah law

governing the qualification of trustees has been addressed by the

Utah federal district courts, with differing results. In three cases, the

federal district courts have found that federal law preempts Utah

law and have therefore concluded that the laws of Texas apply.

Garrett v. ReconTrust Co., N.A., 2011 WL 7657381, at *2 (D. Utah 2011)

(holding that because ReconTrust is located in Texas, it acts as a

trustee in Texas, and therefore “the state laws that apply to

ReconTrust by virtue of section 92a are those of Texas, rather than

Utah.”); Dutcher v. Matheson, 2012 WL 423379, at *7 (D. Utah 2012)

(holding that Texas law governs ReconTrust, and even if it did not,

that section 92a of the NBA preempts Utah law because Utah title

insurance companies compete with ReconTrust); Baker v. BAC Home

Loans Servicing LP, 2012 WL 464024, at *4 (D. Utah 2012) (following

Dutcher).

¶18 In four cases, however, the federal district courts have

reached the contrary result and held that Utah law is not preempted.

Cox v. ReconTrust Co., N.A., 2011 WL 835893, at *6 (D. Utah 2011)

(stating that “[u]nder a straight forward reading of [section] 92a(b),

this court must look to Utah law in its analysis of whether

ReconTrust’s activities in Utah exceed ReconTrust’s trustee

powers”); Coleman v. ReconTrust Co., N.A., U.S. Dist. LEXIS 138519

(D. Utah 2011) (agreeing with the reasoning applied in Cox); Loomis

v. Meridias Capital, Inc., 2011 WL 5844304 (D. Utah 2011) (same); Bell

v. Countrywide Bank, N.A., 860 F. Supp. 2d 1290 (D. Utah 2012)

(same). We find Judge Jenkins’ analysis in Bell to be particularly

persuasive, and follow much of this same analysis here. Like Judge

Jenkins, we conclude that ReconTrust is subject to the laws of Utah

when exercising the power to sell property located in Utah.

¶19 In arguing that ReconTrust is subject to Texas law, FNMA

relies heavily on the regulations interpreting section 92a, which

provide that a national bank is located in the state where it accepts

its fiduciary appointment, executes the documents creating the

fiduciary relationship, and makes discretionary decisions regarding

the asset. 12 C.F.R. § 9.7(d). The first question confronting us,

therefore, is the level of deference that we owe to the regulation.

When a court reviews an agency’s construction of the

statute which it administers, it is confronted with two
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Opinion of the Court

7

questions. First, always, is the question whether

Congress has directly spoken to the precise question at

issue. If the intent of Congress is clear, that is the end

of the matter; for the court, as well as the agency, must

give effect to the unambiguously expressed intent of

Congress. If, however, the court determines Congress

has not directly addressed the precise question at

issue, the court does not simply impose its own

construction on the statute, as would be necessary in

the absence of an administrative interpretation.

Rather, if the statute is silent or ambiguous with

respect to the specific issue, the question for the court

is whether the agency’s answer is based on a

permissible construction of the statute.

Chevron, U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837,

842–43 (1984) (footnotes omitted).

¶20 With this standard in mind, our task is clear. We must first

examine the language of section 92a of the NBA to see if it

unambiguously addresses the question of where a national bank is

located. If so, that is the end of the matter. On the other hand, if the

statute is ambiguous, we then look to the federal regulations to

determine whether the interpretation they adopt is based on a

permissible construction of the NBA.

A. Under the Plain Language of Section 92a, a National Bank

Performing Trustee’s Duties Must Comply with the Law of the

State in Which the Duties Are Performed

¶21 We now turn to the relevant statutory language to

determine if Congress has directly spoken to the issue of where a

national bank is “located.” See Robinson v. Shell Oil Co., 519 U.S. 337,

341 (1997) (“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.”); Marion Energy, Inc. v. KFJ Ranch P’ship, 2011 UT 50,

¶ 14, 267 P.3d 873 (“The best evidence of the [L]egislature’s intent is

the plain language of the statute itself.” (internal quotation marks

omitted)).

¶22 Under section 92a of the NBA, the Comptroller has

authority to authorize national banks to act as a trustee or in a

fiduciary capacity “when not in contravention of [the] State [law] . . .

in which the national bank is located,” whenever State banks are

permitted to act as a trustee under that State’s laws. 12 U.S.C.
FED. NAT. MORTG. ASS’N v. SUNDQUIST

Opinion of the Court

8

§ 92a(a). Utah banks are not permitted to act as a trustee of a trust

deed under Utah’s laws. And there is nothing in the text of the NBA

to suggest that a national bank may appoint a Texas trustee to

foreclose on Utah property when a Utah bank could not do so. 

¶23 The key inquiry under the statute is determining where a

national bank is “located.” Locate is a commonly used term.

Webster’s dictionary defines “locate” as “to determine or indicate

the place, site, or limits of” something. “Locate,” Merriam-Webster

Online Dictionary, 2013, http://www.merriam-webster.com (last

visited July 8, 2013). This suggests that a national bank is located in

the place or places where it acts or conducts business. As Judge

Jenkins correctly reasoned, “[t]he statute’s plain meaning indicates

that the national bank is ‘located’ in each state in which it carries on

activities as trustee.” Bell, 860 F. Supp. 2d at 1300.

When acting as a trustee of a trust deed, one

necessarily acts in the capacity as trustee in the State

where the real property is located, where notice of

default is filed, and where the sale is conducted. In

this case, ReconTrust is acting as trustee of a trust deed

for real property in the State of Utah. ReconTrust, as

trustee, filed notice of default and election to foreclose

on real property within the State of Utah.

The notice is filed in Utah. The sale is conducted in

Utah, often on the steps of the local county courthouse.

Those acts do not occur in Texas. Those acts may not

be performed by Utah-chartered banks. 

Id. at 1300–01.

¶24 Judge Waddoups’ reasoning in Cox was similar. He stated

that he was

unconvinced by ReconTrust's argument that [section]

92a(b) dictates that the court look to some state law

other than Utah state law to evaluate ReconTrust’s

foreclosure activities in Utah. . . . Here, . . . ReconTrust

is conducting foreclosure activities on behalf of Bank

of America in several states, including Utah. . . .

Under a straight forward reading of [section]

92a(b), this court must look to Utah law in its analysis

of whether ReconTrust’s activities in Utah exceed

ReconTrust’s trustee powers. The powers granted to

ReconTrust under federal law in this case are limited
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Opinion of the Court

9

by the powers granted by Utah state law to

ReconTrust’s competitors. Accordingly, the extent of

ReconTrust’s federal powers must be determined by

reference to the laws of Utah, not by reference to the

laws of some other state. Under Utah law, the power

to conduct a nonjudicial foreclosure is limited to

attorneys and title companies. The scope of the

powers granted by federal law is limited to the same

power Utah statute confers on ReconTrust’s Utah

competitors.

Cox v. ReconTrust Co., N.A., 2011 WL 835893, at *6 (D. Utah 2011).

¶25 In short, the plain meaning of the statute is clear. A

national bank is located in those places where it acts or conducts

business. And it certainly acts as a trustee in the state in which it

liquidates trust assets.

¶26 Our conclusion is bolstered by the legislative history of the

NBA, specifically the history of section 92a, which limits the

Comptroller’s authority to grant trustee powers to national banks

only when “not in contravention of State or local law.” 12 U.S.C.

§ 92a(a). We again summarize Judge Jenkins’ analysis. 

¶27 “The phrase, ‘when not in contravention of State or local

law’ originated with [section] 11(k) of the Federal Reserve Act of

1913.” Bell, 860 F. Supp. 2d at 1301. Section 11(k) of the Federal

Reserve Act of 1913 allowed conversion of state banks to national

banks “[p]rovided . . . [t]hat said conversion shall not be in

contravention of the State law.” Federal Reserve Act of 1913, Dec.

23, 1913, ch. 6 § 11(k), 38 Stat. 262. This language was also included

in section 8 of the same Act, but was expanded to include local law

as well. Discussions in the Senate as to this language stated that it

was “put . . . in to show that there was no purpose on the part of

Congress to disregard the local State law, but merely to give its

assent provided the State law permitted it to be done.” 51 Cong.

Rec. S879 (December 15, 1913) (statement of Sen. Owen).

¶28 As Judge Jenkins reasoned, taken together, the language of

sections 11(k) and 8 is nearly identical to language later included in

section 92a(a) of the NBA, which similarly limits the Comptroller’s

authority to grant trustee powers to national banks only “when not

in contravention of State or local law.” 12 U.S.C. § 92a(a). Thus,

“[i]n light of the near-identical nature of the phrases in [sections] 8

and 11(k), it seems clear that Congress intended to preclude any

inference that a national bank may disregard local State law in
FED. NAT. MORTG. ASS’N v. SUNDQUIST

Opinion of the Court

4

 See also First Nat’l Bank of Bay City v. Fellows ex rel. Union Trust

Co, 244 U.S. 416, 426 (1917) (holding that under section 11(k) of the

Federal Reserve Act of 1913, a state must allow a national bank to

conduct the same business as it allows a state bank to conduct).

5 See Vermont Agency of Natural Res. v. United States ex rel. Stevens,

529 U.S. 765, 787 (2000) (relying in part on the clear statement rule to

decide that a qui tam relator may not bring an action in federal court

against a state under the False Claims Act); New York State Conference

of Blue Cross & Blue Shield Plans v. Travelers Ins. Co., 514 U.S. 645, 655

(continued...)

10

performing its duties as trustee.”4

 Bell, 860 F. Supp. 2d at 1302.

¶29 The plain meaning of the statutory language is therefore

consistent with the legislative history. And through the plain

language of section 92a, Congress has directly spoken to the question

at issue. “[T]he law that shall apply to a national bank acting as

trustee under a trust deed is the local State law, which in this

instance is Utah law.” Bell, 860 F. Supp. 2d at 1304.

B. Because Real Property is Traditionally an Area of State Concern,

Utah Law Governs When a National Bank Seeks to Foreclose Property

Located in Utah 

¶30 The concurring opinion suggests that section 92a is not

clear on its face. However, even if the plain meaning of the statute

were not clear, two substantive canons of statutory construction

dictate the same result.

¶31 The first is the clear statement canon, which applies where

Congress is thought to have legislated in a manner that would “alter

the usual constitutional balance between the States and the Federal

Government,” Will v. Michigan Dep’t of State Police, 491 U.S. 58, 65

(1989) (internal quotation marks omitted), or “intrude” on a field of

traditional state sovereignty, Gregory v. Ashcroft, 501 U.S. 452, 470

(1991). In such fields, courts do not lightly “attribute to Congress an

intent to intrude,” but instead require that Congress “make its

intention to do so unmistakably clear in the language of the statute.”

Id. at 460, 470 (internal quotation marks omitted).

¶32 When Congress “intends to pre-empt the historic powers

of the States or when it legislates in traditionally sensitive areas,”

Raygor v. Regents of the Univ. of Minn., 534 U.S. 533, 543 (2002)

(internal quotation marks omitted), a clear statement of intention to

do so is required.5

 This clear statement canon “assures that the
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Opinion of the Court

5

(...continued)

(1995) (“[W]here federal law is said to bar state action in fields of

traditional state regulation . . . we have worked on the assumption

that the historic police powers of the States were not to be superseded by the Federal Act unless that was the clear and manifest

purpose of Congress.” (internal quotation marks omitted)); Cipollone

v. Liggett Group, Inc., 505 U.S. 504, 516 (1992) (“[T]he historic police

powers of the States [are] not to be superseded by . . . Federal Act

unless that [is] the clear and manifest purpose of Congress.” (all but

first alteration in original)); Will v. Michigan Dep’t of State Police, 491

U.S. 58, 65 (1989) (relying on a clear statement rule to decide that

states are not “persons” within the meaning of a section 1983 claim);

United States v. Bass, 404 U.S. 336, 349 (1971) (“[W]e will not be quick

to assume that Congress has meant to effect a significant change in

the sensitive relation between federal and state criminal jurisdiction.”).

11

[L]egislature has in fact faced, and intended to bring into issue, the

critical matters involved in the judicial decision.” United States v.

Bass, 404 U.S. 336, 349 (1971). It thus reflects “an acknowledgment

that the States retain substantial sovereign powers under our

constitutional scheme, powers with which Congress does not readily

interfere.” Gregory, 501 U.S. at 461.

¶33 A second clear-statement canon is also implicated. It holds

that the Chevron analysis as to whether Congress has already spoken

to the precise question at issue and clearly expressed its intent is

informed by a threshold inquiry into whether “a statute’s ambiguity

constitutes an implicit delegation from Congress to the agency to fill

in the statutory gaps.” Food & Drug Admin. v. Brown & Williamson

Tobacco Corp., 529 U.S. 120, 159 (2000). And it recognizes that not all

ambiguities can reasonably be seen as a legislative delegation of

discretion to an agency. Thus, in Brown & Williamson, the Court

drew a distinction between “major questions” of policy and mere

“interstitial matters” of “daily administration.” Id. (internal

quotation marks omitted). It deemed it highly unlikely that

Congress would leave the determination of major policy questions

to agency discretion, and thus required a clear statement of

congressional intent to do so. Id. at 159–60.

¶34 In Brown & Williamson, the lack of a clear statement

persuaded the Court that Congress had not intended to delegate to

the FDA the discretion to decide whether to regulate tobacco. Id.
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Opinion of the Court

6 See Santa Fe Indus. v. Green, 430 U.S. 462, 479 (1977) (stating that

“state law will govern” fiduciary obligations). Though only real

property law is implicated in this case, the power to act in a

fiduciary capacity impacts contract and probate law as well, which

are also traditional areas of state concern. See Fidelity Fed. Sav. &

Loan Ass’n v. de la Cuesta, 458 U.S. 141, 174 (1982) (Rehnquist, C.J.,

dissenting) (“Contract and real property law are traditionally the

domain of state law.”); Zschernig v. Miller, 389 U.S. 429, 440 (1968)

(“The several States, of course, have traditionally regulated the

descent and distribution of estates.”). Accordingly, if we interpreted

section 92a as abrogating state law, it would nullify a large swath of

Utah law on matters related to national banks acting in a fiduciary

(continued...)

12

Because such authority was so politically and economically

significant, the Court was “confident that Congress could not have

intended to delegate” such a decision “to an agency” in a

less-than-clear, “cryptic ... fashion.” Id. at 160. A parallel conclusion

was adopted in MCI Telecommunications Corp. v. American Telephone

& Telegraph Co., 512 U.S. 218 (1994). There the Court held that the

statutory delegation of agency authority to “modify” common

carrier tariff requirements did not encompass the authority to make

fundamental changes in the nature of waiving the tariff requirement

altogether. Id. at 225. It rooted its holding in a parallel

clear-statement canon, deeming it “highly unlikely that Congress

would leave the determination of whether an industry will be . . .

rate-regulated to agency discretion—and even more unlikely that it

would achieve that through such a subtle device as permission to

‘modify’ rate-filing requirements.” Id. at 231.

¶35 The lack of a clear statement on matters of fundamental

significance persuaded the Court in Brown & Williamson and MCI to

repudiate any inference of delegation of agency authority: Absent a

clear, non-cryptic indication of congressional intent to leave these

questions up to agency discretion, the Court construed the

governing statutes to foreclose it.

¶36 These clear-statement rules would inform our construction

of section 92a of the NBA were we to find it ambiguous. Under

ReconTrust’s view, this provision delegates to the Comptroller the

discretion to authorize one state to regulate the terms and conditions

of a foreclosure sale in another state. But such delegation would

intrude on core matters of traditional state sovereignty.6

 “It is
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6

(...continued)

capacity, not just the law of real property.

13

beyond question that . . . the general welfare of society is involved

in the security of the titles to real estate and the power to ensure that

security inheres in the very nature of [state] government.” BFP v.

Resolution Trust Corp., 511 U.S. 531, 544 (1994) (third alteration in

original) (internal quotation marks omitted).

¶37 A delegation of authority to intrude on matters of such

intensely local concern may not simply be inferred. Rather, a clear

statement of an intent to permit the laws of a foreign state to regulate

the manner and mode of a foreclosure sale in another state should

be required.

¶38 Brown & Williamson and MCI dictate a similar conclusion.

The matter of authorizing one state to regulate non-judicial sales for

the foreclosure of real property in another state would be

monumental—hardly the sort of interstitial administrative detail that

Congress would likely leave for an agency. Any inference of an

intent to leave that to the Comptroller would accordingly require a

clear statement of such intent.

C. The Comptroller’s Interpretation of Section 92a is

Unreasonable and Not Entitled to Deference

¶39 Although consideration of the regulation interpreting

section 92a is unnecessary because the statutory language is not

ambiguous and because Congress did not intend to delegate to the

Comptroller the power to preempt the historic power of the states to

regulate the foreclosure of real property, we think it worth noting

that we find the Comptroller’s current interpretation of the statute,

which is found in the Code of Federal Regulations, to be

unreasonable. Again, we quote from Judge Jenkins. “[E]ven if the

statute is not clear and demands interpretation,” the “interpretation

in 12 C.F.R. [section] 9.7(d) modifies the statute and is

unreasonable—if not irrational—and therefore does not deserve

deference.” Bell, 860 F. Supp. 2d at 1298.

¶40 Under Chevron, we give deference to an agency’s

interpretation of a statute only so long as such an interpretation is

neither contrary to Congressional intent, nor unreasonable. 467 U.S.

837, 842–43 (1984); see also LPI Serv. v. McGee, 2009 UT 41, ¶ 7, 215

P.3d 135 (stating that “where the [L]egislature has granted discretion

to an agency to interpret the statutory provision at issue, we will
FED. NAT. MORTG. ASS’N v. SUNDQUIST

Opinion of the Court

14

affirm the agency’s interpretation if it is reasonable.”).

¶41 As Judge Jenkins astutely reasoned, “[i]f [section] 92a is to

mean what it says (i.e., the plain meaning), the reference to ‘State or

local law’ at a minimum should be construed to mean the State in

which the trust activity occurs.” Bell, 860 F. Supp. 2d at 1304. And

as discussed above, the State in which the trust activity occurred in

this case is Utah.

¶42 Despite the straight forward statutory language, the federal

regulation setting forth the Comptroller’s interpretation of the

statute inexplicably defines a bank’s “location” as the place where it

engages in three specific activities: where it “accepts the fiduciary

appointment, executes the documents that create the fiduciary

relationship, and makes discretionary decisions regarding the

investment or distribution of fiduciary assets.” 12 C.F.R. § 9.7(d).

But there is nothing in the statute itself that ascribes any particular

significance of these three particular acts, while rendering other acts

undertaken to the bank irrelevant. Moreover, the three activities

identified in the regulation could theoretically be performed in any

location without regard to the location of the trust property, thereby

allowing national banks to dictate the applicable law. Notably

missing from this list is where the bank engages “in an act which

liquidates the trust assets, e.g., engaging in a nonjudicial foreclosure

of real property where the trust asset is located.” Bell, 860

F. Supp. 2d at 1300. We therefore conclude that the regulation is not

a reasonable construction of the statute.

¶43 While the current regulation is not reasonable, the

Comptroller’s former interpretation of the statute, found in

Interpretive Letter Number 695, 1996 WL 187825 (December 8, 1995),

is reasonable. This interpretation states that

the effect of section 92a is that in any specific state, the

availability of fiduciary powers is the same for out-ofstate national banks or for in-state national banks and

is dependent upon what the state permits for its own

state institutions. A state may limit national banks

from exercising any or all fiduciary powers in that

state, but only if it also bars its own institutions from

exercising the same powers. Therefore, a national

bank with its main office in one state . . . may conduct

fiduciary business in that state and other states,

depending upon—with respect to each state—whether

each state allows its own institutions to engage in
Cite as: 2013 UT 45

Opinion of the Court

15

fiduciary business.

Id. at **4.

¶44 While this interpretation is consistent with the statutory

text, the two interpretive letters that subsequently followed reversed

Interpretive Letter Number 695 and actually contradict the plain

meaning and legislative history of section 92a’s contravention clause.

Like the current federal regulation, Interpretive Letter Number 866,

1999 WL 983923 (October 8, 1999), and Interpretive Letter 872, 1999

WL 1251391 (October 28, 1999), state that a bank’s location is to be

determined by where the bank acts in a fiduciary capacity. See e.g.

1999 WL 983923 at Part II.B. And like the current regulation, the

letters state that a bank acts in a fiduciary capacity only where it

reviews proposed trust appointments, executes trust agreements,

and makes discretionary decisions about the investment or

distribution of trust assets. See id. at Part II.C.

¶45 Like Judge Jenkins, we conclude that Congressional intent

is clear from the statutory text. Congress intended “that a national

bank based in Texas which performs fiduciary functions in Utah

cannot have a competitive advantage over a Utah-based national

bank that performs its fiduciary functions in Utah.” Bell, 860

F. Supp. 2d at 1305. “[T]he national statutes which created a dual

banking system operate to deny out-of-state national banks any

competitive advantage over local, state-chartered banks or in-state

national banks.” Id. at 1308. However, the interpretation in section

9.7(d) would not just level the playing field as Congress intended.

Rather, it would mean that “a national bank based in Texas . . .

[would] have a competitive advantage over a national bank based in

Utah as well as Utah-chartered banks.” Id. at 1305.

¶46 In short, the regulation’s interpretation is not entitled to

deference because it 

modifies the statute and gives out-of-state national

banks a sizeable competitive advantage over their

state-chartered counterparts and in-state national

banks in states—such as Utah—where state-chartered

banks and in-state national banks are not allowed to

perform certain fiduciary functions, namely exercising

the power of sale in nonjudicial trust deed

foreclosures.

Id. at 1308.

D. Utah Law is Not Preempted by the NBA Because a
FED. NAT. MORTG. ASS’N v. SUNDQUIST

Opinion of the Court

16

National Bank Does Not Compete With Any Utah

Institution Authorized to Foreclose Under Utah Law

¶47 We now turn to FNMA’s alternative argument. FNMA

asserts that even if ReconTrust exercised its fiduciary duties in Utah,

Utah law is nevertheless preempted by section 92a(b)’s “competition

clause.” The Competition Clause provides that 

whenever the laws of [a] State authorize or permit the

exercise of [trustee] powers by State banks, trust

companies, or other corporations which compete with

national banks, the granting to and the exercise of such

powers by national banks shall not be deemed to be in

contravention of State or local law.

12 U.S.C. § 92a(b).

¶48 FNMA asserts that ReconTrust competes with Utah title

insurance companies and reasons that Utah law is therefore

preempted. We are unpersuaded. As a national bank, ReconTrust

competes with Utah banks. It is not subject to competition from

either members of the Utah State bar or Utah title insurance

companies. And under sections 57-1-21 and 57-1-23 of the Utah

Code, even State banks “must procure the services of either an active

member of the State bar or title insurance company in order to

comply with the Utah law.” Bell, 860 F. Supp. 2d at 1309. 

¶49 As a national bank operating in Utah under the NBA,

ReconTrust is precluded from exercising the power of a trustee

under Utah statute for purposes of conducting a nonjudicial

foreclosure. It would be irrational to interpret section 92a(b) or

section 9.7 as giving a national bank such as ReconTrust authority to

exercise a power that Utah law specifically prohibits even Utah

banks from exercising. We therefore hold that sections 57-1-21 and

57-1-23 of the Utah Code are not preempted by the NBA. A national

bank seeking to foreclose on real property in Utah must comply with

Utah law. 

II. WE DECLINE TO REACH THE OTHER ISSUES

RAISED BY THE PARTIES

¶50 Our opinion in this matter is limited to the narrow issue of

whether Utah law regarding the qualification of trustees is

preempted by the NBA. In briefing and oral argument, the parties

have attempted to raise a variety of other issues relating to the

validity of the nonjudicial foreclosure sale, the validity of the

trustee’s deed, and the propriety of the order of restitution. Because
Cite as: 2013 UT 45

JUSTICE LEE, concurring in part

17

these issues were not fully litigated below, we decline to reach them

on interlocutory appeal. On remand, the parties are free to raise any

arguments they may have regarding the validity of the foreclosure

sale and trustee’s deed and the appropriateness of the order of

restitution.

CONCLUSION

¶51 The district court erred in concluding that Utah Code

sections 57-1-21 and 57-1-23 are preempted by the NBA. A national

bank operating in Utah is authorized to act only to the extent Utah

law allows Utah banks to do so. As Judge Jenkins stated in Bell v.

Countrywide Bank, N.A., “[a] state bank which seeks to foreclose on

real property in Utah must comply with Utah law. A federally

chartered ‘bank’ which seeks to foreclose on such property must

comply with Utah law as well.” 860 F. Supp. 2d 1290, 1297 (D. Utah

2012). We remand this matter to the district court for consideration

of other arguments or defenses the parties may properly raise.

JUSTICE LEE, concurring in part and concurring in the judgment:

¶ 52 I am on board with the majority’s disposition of this case

and with its conclusion that section 92a of the National Bank Act

forecloses application of the Comptroller’s regulation in 12 C.F.R.

§ 9.7. Specifically, I agree that a national bank physically located in

one state (Texas) but performing a nonjudicial foreclosure sale in

another (Utah) is governed by the law of the latter state, not the

former. And I agree that that conclusion flows from a construction

of section 92a under Chevron step one—in that the “laws of the State

in which the national bank is located,” 12 U.S.C. § 92a(a), must have

reference to the state in which the foreclosure sale is performed, and

not the state in which the bank is physically located.

¶ 53 I would base that conclusion on only one of the two

grounds articulated by the court, however. In my view, the statutory

reference to the “laws of the State in which the national bank is

located” is not at all clear or unambiguous on its face. So I cannot

concur in part I.A of the court’s opinion, which rests on that

conclusion.

¶ 54 Section 92a allows the Comptroller of the Currency to grant

a national bank, “when not in contravention of State or local law, the

right to act . . . in any . . . fiduciary capacity in which” entities “which

come into competition with national banks are permitted to act

under the laws of the State in which the national bank is located.” 12

U.S.C. § 92a(a). If entities competing with national banks are
FED. NAT. MORTG. ASS’N v. SUNDQUIST

JUSTICE LEE, concurring in part

18

permitted to perform fiduciary acts “under the laws of the State in

which the national bank is located,” then national banks may

likewise be authorized to perform such acts.

¶ 55 This case turns on the meaning of the term “located.” If

ReconTrust is located in Texas by virtue of the physical situs of its

offices there, then Texas law dictates the terms and conditions of its

authority to act as a fiduciary in conducting a nonjudicial sale for the

foreclosure of real property in Utah. On the other hand, if

ReconTrust is located in Utah based on the situs of the real property

subject to foreclosure, then it is Utah law that governs its authority

in this regard.

¶ 56 I see no clear or unambiguous answer to this question on

the face of the National Bank Act. As the United States Supreme

Court has indicated, the term “located” “as it appears in the National

Bank Act, has no fixed, plain meaning. See Wachovia Bank v. Schmidt,

546 U.S. 304 (2006). “In some provisions, the word unquestionably

refers to a single place: the site of the banking association’s

designated main office. In other provisions, ‘located’ apparently

refers to or includes branch offices.” Id. at 313 (citations omitted).

¶ 57 Loraine Sundquist proffers another possible meaning of the

term—one divorced from physical location. She suggests that a bank

performing a fiduciary act is “located” in the state in which the bank

performs the act at issue. That seems grammatically tenable. In

circumstances where a bank is physically officed in one or more

states and conducting business in another, any or all of those states

are plausibly the place where it is “located.” The dictionary

definitions of the intransitive form of the verb “locate,” after all,

have reference to the place where one “establish[es] one’s business

or residence in a place,” or where one “settle[s].” RANDOM HOUSE

DICTIONARY OF THE ENGLISH LANGUAGE, 1129 (2d ed. 1987). Such

definitions beg the key question, which is what sorts of actions are

sufficient to rise to the level of establishing a “business,” or of

“settling.” Without more, I would say that either a physical office or

the performance of a fiduciary act on behalf of another could suffice.

And thus I cannot say, as the majority does, that the statutory

language, standing alone, is clear. 

¶ 58 The court bases its contrary conclusion on an alternative

definition of “locate”—“‘to determine or indicate the place, site or

limits of’ something.” Supra ¶ 23 (quoting Merriam-Webster Online

Dictionary). Even assuming a definition of the transitive form of

“locate” to be relevant, this one is similarly question-begging. It
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JUSTICE LEE, concurring in part

19

could certainly be said “that a national bank is located in the place

or places where it acts or conducts business,” supra ¶ 23, but that

does not at all eliminate the alternative conclusion that a bank could

also be located in the place or site where its physical offices are

situated. The key question under the majority’s definition, in other

words, is what “determines” or “indicates” the place of a person or

entity’s location. And that question is not at all answered—certainly

not clearly or unambiguously—by the statutory text.

¶ 59 Nor is the question resolved in the legislative history cited

by the majority. It may be that the addition of “local” to the phrase

“not in contravention of State or local law” in an unrelated section

of the NBA was meant ”to preclude any inference that a national

bank may disregard local State law.” See supra ¶ 28 (internal

quotation marks omitted). But given that “located” takes on different

meanings throughout the NBA, see Wachovia, 546 U.S. at 313–14, it is

by no means clear that legislative history concerning the use of the

term in one section has any relevance to its use in another. And

again, the cited legislative history does not answer the key question:

Local to what? To the bank’s physical location, or to the fiduciary

acts it performs? 

¶ 60 Thus, I see no basis for the conclusion that section 92a

clearly mandates any particular notion of “located” among the range

of definitions that seem linguistically possible under the statute. I

would instead acknowledge that the statute, on its face, is

susceptible to a range of constructions—encompassing both physical

locations and the state(s) where a bank conducts its fiduciary acts. 

¶ 61 That ambiguity, however, cuts in favor of the construction

rendered by the court. It does so under the clear statement rules

identified by the majority. I accordingly concur in part I.B of the

court’s opinion, and would rest the construction of section 92a on the

clear statement principle articulated there—that on a matter of

traditional state sovereignty over the disposition of title to property

of an inherently local nature, we cannot lightly deem Congress to

have intruded on the local state’s sovereignty.