Court Opinion

ID: 1036394
Source: CourtListenerOpinion
Date Created: 2013-08-02 20:36:49.196713+00
Date Added: 2024-06-11T15:27:59.436780
License: Public Domain

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 JUDGE ORME joined.
   Having recused himself, ASSOCIATE CHIEF JUSTICE NEHRING
                 does not participate herein;
        COURT OF APPEALS JUDGE GREGORY K. ORME sat.
             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.
              FED. NAT. MORTG. ASS’N v. SUNDQUIST
                       Opinion of the Court

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.
    ¶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

   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.

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                       Opinion of the Court

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.
     ¶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

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              FED. NAT. MORTG. ASS’N v. SUNDQUIST
                       Opinion of the Court

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
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:

   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.

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                           Opinion of the Court

        (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:
            (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).

   3
    This statute survived constitutional challenge in Kleinsmith v.
Shurtleff, 571 F.3d 1033 (10th Cir. 2009).

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               FED. NAT. MORTG. ASS’N v. SUNDQUIST
                        Opinion of the Court

    ¶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
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,

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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
       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

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                  FED. NAT. MORTG. ASS’N v. SUNDQUIST
                         Opinion of the Court

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.
§ 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

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       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
       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,

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               FED. NAT. MORTG. ASS’N v. SUNDQUIST
                         Opinion of the Court

“[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
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

   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
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[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.

   5
     (...continued)
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
(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 super-
seded 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 jurisdic-
tion.”).

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               FED. NAT. MORTG. ASS’N v. SUNDQUIST
                         Opinion of the Court

    ¶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.
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

   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
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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.

   6
    (...continued)
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
capacity, not just the law of real property.

                                   13
               FED. NAT. MORTG. ASS’N v. SUNDQUIST
                         Opinion of the Court

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
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-of-
       state 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

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                         Cite as: 2013 UT 45
                        Opinion of the Court

        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
        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.

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               FED. NAT. MORTG. ASS’N v. SUNDQUIST
                        Opinion of the Court

Id. at 1308.
         D. Utah Law is Not Preempted by the NBA Because a
          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

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                          Cite as: 2013 UT 45
                    JUSTICE LEE, concurring in part

validity of the nonjudicial foreclosure sale, the validity of the
trustee’s deed, and the propriety of the order of restitution. Because
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

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               FED. NAT. MORTG. ASS’N v. SUNDQUIST
                   JUSTICE LEE, concurring in part

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
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

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                         Cite as: 2013 UT 45
                   JUSTICE LEE, concurring in part

Dictionary). Even assuming a definition of the transitive form of
“locate” to be relevant, this one is similarly question-begging. It
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.

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