Opinion ID: 2633539
Heading Depth: 2
Heading Rank: 2

Heading: if a creditor elects to foreclose a trust deed, utah code section 57-1-32 provides the only post-foreclosure remedy

Text: ¶ 22 As discussed in Part I, a creditor may proceed directly against a guarantor of payment without first foreclosing the trust deed. If a creditor elects to seek foreclosure of the trust deed, however, it must do so in accordance with the procedure set forth in the UTDA, Utah Code Ann. §§ 57-1-19 to -44 (2000 & Supp.2005). Following foreclosure, if the creditor wishes to seek additional recovery, Utah Code section 57-1-32 provides the exclusive procedure for obtaining such recovery. Cox v. Green, 696 P.2d 1207, 1208 (Utah 1985). In Surety Life v. Smith , we concluded that section 57-1-32 also provides the exclusive procedure to recover from a guarantor the balance due on a trust deed note following foreclosure. 892 P.2d 1, 3 (Utah 1995). Section 57-1-32 requires a creditor to bring a deficiency action within three months of a trustee's sale and limits recovery to the amount of indebtedness and costs, offset by the fair market value of the property sold. [1] Thus, upon conclusion of a trustee's sale, a creditor may not recover any balance from either the guarantor or the debtor unless it satisfactorily complies with section 57-1-32. In other words, completion of a trustee's sale activates the requirements of section 57-1-32 as to both guarantors and creditors. ¶ 23 In this case, Machock initially chose to seek recovery by suing Fink based on their guaranty agreement. But Machock subsequently opted to liquidate the collateral by seeking foreclosure of the Harmer Trust Deed. Therefore, after the trustee's sale in February 2000, Machock could recover the balance due only by satisfying the provisions of section 57-1-32. Having determined that Machock's decision to foreclose the trust deed to Harmer's property activated the provisions of section 57-1-32, we next turn to the question of whether his breach-of-guaranty complaint satisfied that section's requirements.