Reply Brief of Appellant

8/7/2019 Reply Brief of Appellant

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Case No. 10-4117

IN THE UNITED STATES COURT OF APPEALS FOR THE TENTH CIRCUIT__________________________________________________________________

PENI COX,

Plaintiff-Appellant

vs.

RECONTRUST COMPANY, N.A.; BANK OF AMERICA HOME LOANSSERVICING, LP; BANK OF AMERICA, FSB; NEW LINE MORTGAGE,

DIVISION OF REPULIC MORTGAGE HOME LOANS, LLC; MORTGAGE

ELECTRONIC REGISTRATION SYSTEMS, INC., AND DOES 1-5,

Defendants-Appellee__________________________________________________________________

Interlocutory Appeal from an Order of the United States District Court For TheDistrict of Utah, Central Division No. 2:10-CV-00492-SA Hon. Clark Waddoups

_____________________

REPLY BRIEF OF APPELLANT_____________________

JOHN CHRISTIAN BARLOWCAMERON SORAN (Law Student)Attorney for Plaintiff/Appellant40 North 300 East, Suite 101St. George, UT 84770Telephone: (435)634-1200

E.CRAIG SMAYAttorney for Plaintiff/Appellant174 E. South TempleSalt Lake City, UT 84111-1102Telephone: 801-539-8515

ORAL ARGUMENT REQUESTED

Appellate Case: 10-4117 Document: 01018526530 Date Filed: 11/03/2010 Page: 1

Courtesy of www.4closureFraud.o


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TABLE OF CONTENTS

TABLE OF CONTENTS ........................................................................................ i

TABLE OF AUTHORITIES ................................................................................... iii

INTRODUCTION ..................................................................................................... 1

RESPONSE TO COUNTERSTATEMENT OF THE ISSUES PRESENTED ON

APPEAL ..................................................................................................................... 3

RESPONSE TO STANDARD OF REVIEW ............................................................ 6

SUMMARY OF ARGUMENT ................................................................................. 6

ARGUMENT ............................................................................................................. 9

I. THE DISTRICT COURT SHOULD ONLY HAVE EXERCISED

JURISDICTION IN THIS CASE IF THE NATIONAL BANK ACT

COMPLETELY PREEMPTED THE RELEVANT UTAH STATUTES ...........10

II. THE NATIONAL BANK ACT DOES NOT PREEMPT EITHER UTAH

STATUTE .............................................................................................................12

A. The Presumption Against Preemption Applies in this Case .......................12

B. As Stated Previously, the NBA does not Preempt either Utah Statute .......14

C. Defendants Analysis of 12 U.S.C. 92a and Associated Regulations isIncorrect .............................................................................................................14

D. Defendants Reliance on the OCC Interpretive Letters is Unavailing .........17

E. Defendants Other Arguments are Unavailing............................................19

F. The National Bank Act does not Completely Preempt both Utah Statutes

20

III. THE PREMISE OF RECONTRUSTS ARGUMENT IS THAT STATE

LAWS DO NOT APPLY TO NATIONAL BANKS ...........................................21

A. The Historical Overview of the Subjection of National Banks to State

Laws According to the Supreme Court .............................................................21

B. The Correct Interpretation of How Utah State Laws Apply to National

Banks .................................................................................................................23




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CONCLUSION ........................................................................................................26

STATEMENT REGARDING ORAL ARGUMENT .............................................26

ATTACHMENTS

1. Defendants Memorandum in Opposition to Plaintiff Peni Coxs Motion forPartial Summary Judgment

2. Declaration of Richard F. Ensor Requesting Judicial Notice in Connectionwith Reply Brief in Support of Motion to Dismiss

3. Peni Cox Deed of Trust




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TABLE OF AUTHORITIES

Cases

770 PPR, LLC v. TJCV Land Trust, 30 So.3d 613 (Fla. App. 2010) ......................19

American Bush v. City of South Salt Lake, 42 Fed.Appx. 308 (2002) ....................11

Anderson Nat. Bank v. Luckett, 321 U.S. 233 (1944) ..............................................22

Attorney General of Oklahoma v. Tyson Foods, Inc., 565 F.3d 769 (2009) ............. 6

Bank of Am. v. City & County of San Francisco, 309 F.3d 551 (9th Cir. 2002) .....24

Barnett Bank of Marion County v. Nelson, 517 U.S. 25(1996) ........................ 12, 22

Bauchman ex rel. Bauchman v. West High Sch., 132 F.3d 542 (10th Cir.1997) ....10

Beneficial Natl Bank v. Anderson, 539 U.S. 1 (2003) ..................... 9, 10, 11, 20, 21

Carnegie-Mellon Univ. v. Cohill, 484 U.S. 343 (1988) ......................................7, 10

Caterpillar Inc. v. Williams, 482 U.S. 386, (1999) ..................................................21

Christensen v. Harris County, 529 U.S. 576 (2000) ...............................................18

City of Burbankv.Lockheed Air Terminal, Inc., 411 U.S. 624 (1973) ...................13

Cuomo v. Clearing House Ass'n, L.L.C., 129 S. Ct. 2710, 2720-21 (2009).... passim

Enterprise Intern., Inc. v. Corporation Estatal Petrolera Ecuatoriana, 762 F.2d

464 (5th Cir. 1985) .................................................................................................. 4

First Nat'l Bank v. Dickinson, 396 U.S. 122 (1969) ................................................23

First National Bank in St. Louis v. Missouri, 263 U.S. 640, (1924) .......................23

Florida Lime & Avocado Growers, Inc. v. Paul, 373 U.S. 132 (1963) ..................13




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Franchise Tax Bd. of Cal. v. Construction Laborers Vacation Trust for Southern

Cal.,463 U.S. 1 (1983) ..........................................................................................21

Indiana National Bank v. Roberts, 326 So.2d 802 (Miss. 1976) .............................19

Jones v.Rath Packing Co., 430 U.S. 519 (1977) ............................................. 12, 13

National Bank v. Commonwealth, 9 Wall. 353 (1870) ............................... 13, 22, 23

Nat'l State Bank v. Long, 630 F.2d 981 (3d Cir.1980) ............................................24

Perdue v. Crocker Nat'l Bank, 38 Cal.3d 913 (1985) ..............................................24

Pullman Co. v. Jenkins, 305 U.S. 534 (1939) ..........................................................10

Rice v. Santa Fe Elevator Corp., 331 U.S. 218 (1947) .................................... 12, 13

United States v.Bass, 404 U.S. 336 (1971) .............................................................12

United States v. Mead Corp., 533 U.S. 218 (2001) .................................................18

Waite v. Dowley, 94 U.S. 527, (1876)......................................................................22

Watters v. Wachovia Bank, N.A., 550 U.S. 1 (2007) .................................. 12, 14, 23

Wells Fargo Bank N.A. v. Boutris, 419 F.3d 949 (9th Cir. 2005) ...........................19

Statutes

12 U.S.C. 43 ..........................................................................................................18

12 U.S.C. 92a ................................................................................................... passim

28 U.S.C. 1292...4

28 U.S.C. 1367......................................................................................................11

28 U.S.C. 1441 ........................................................................................... 2, 10, 11




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Utah Code 7-1-704 ................................................................................................25

Utah Code 16-10a-1501........................................................................... 14, 19, 25

Utah Code 16-10a-1502.......................................................................................... 4

Utah Code 16-10a-1505....................................................................................5, 14

Utah Code 57-1-21......................................................................................... 14, 25

Rules

Fed. R. App. P. Rule 28(c) ......................................................................................... 1

Regulations

12 C.F.R. 9.7......15, 16, 23, 24

12 C.F.R. 5.34...19

12 C.F.R. 55715

Other AuthoritiesActivities Permissible for a National Bank ..............................................................16

Comptrollers Licensing Manual, Fiduciary Powers ...............................................16

OCC Interp. Letter No. 1103 ...................................................................................18




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This is an appeal of an Interlocutory Decision by the District Court that

lifted an injunction issued by the State Court.

This Court has jurisdiction under 28 U.S.C. 1441(b).

Except as provided in subsections (c) and (d) of this section, thecourts of appeals shall have jurisdiction of appeals from: (1)Interlocutory orders of the district courts of the United States, ofthe judges thereof, granting, continuing, modifying, refusing ordissolving injunctions, or refusing to dissolve or modify injunctions,except where a direct review may be had in the Supreme Court[.]

This section, under which Cox appeals, allows this court to review an interlocutory

order of a district court that dissolved an injunction. The District Court entered an

Interlocutory order in which it ruled it had jurisdiction to lift the State Court

injunction based upon the fact the preemption exists which allows ReconTrust to

operate in the State of Utah without being subject to state laws because ReconTrust

is a National Bank. This court need not review the merits of the injunction itself

because that is not the basis of this appeal, but this court must review the District

Courts decision upon which the District Court determined the State Court

Injunction invalid.

Cox submits to this Court that there are three possible scenarios presented by

this appeal:

(1) The District Court lacks jurisdiction. This being so, the case should

be remanded to the State Court, Injunction intact.




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(2) The District Court has jurisdiction but made an error in its interpretation

of the National Bank Act and the ability of a National Bank to preempt State

statutes. The result would be that the District court retains jurisdiction, but, based

on Utah law, the injunction must be reinstated or a new injunction issued.

(3) The District Court has jurisdiction and did not error in its interpretation

of the National Bank Act. This is the position of ReconTrust which Cox wholly

disputes.

Cox declines to argue the merits of the injunction because the injunction

itself is not the basis of the appeal, but a more substantial issue of preemption1 that

was addressed in the Interlocutory order is what Cox submits to this court as the

basis of appeal.

RESPONSE TO COUNTERSTATEMENT OF THE ISSUES PRESENTED ON

APPEAL

The Defendants suggest that Plaintiff Cox filed the appeal to decide whether

the district court abused its discretion when it dissolved the state court injunction.

See Respondents Brief p. 3. This is incorrect. The threshold question here is

whether the [district] court has subject matter jurisdiction over this action. District

Court Memo. Dec. at 2. Plaintiff filed an interlocutory appeal pursuant to 28

1The question becomes whether the National Banking Act completely preempts these Utahcauses of action allowing for removal in this case. Appellant Brief Attachment 1, Memo. Dec.p. 8.




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U.S.C. 1292(a) for this court to review an interlocutory order of a district court that

dissolved an injunction.

The threshold question for modification of an injunction is whether the

district court has jurisdiction, not whether the district court abused its discretion in

dissolving the injunction. See Enterprise Intern., Inc. v. Corporation Estatal

Petrolera Ecuatoriana, 762 F.2d 464, 470-71 (5th Cir. 1985) (a district court must

have valid jurisdiction before entering an order respecting interlocutory injunctive

relief); Respondents Brief p. 13 (agreeing with this point). The district court ruled

that it held jurisdiction on the sole grounds of complete preemption of both Utah

statutes. District Court Memorandum Opinion p. 2

Defendants contend that the injunction as a result of their failure to register

as a foreign corporation is procedurally invalid. The State Court correctly issued

the injunction. The Defendants reach their conclusion as a result of their flawed

reading of the statute.

The Utah registration statute is stated thusly:

16-10a-1502. Consequences of transacting business withoutauthority.(5) Upon a finding by the court that a foreign corporation or any of its

officers or agents have transacted business in this state in violation ofthis part, the court shall issue, in addition to or instead of a civilpenalty, an injunction restraining the further transaction of thebusiness of the foreign corporation and the further exercise of anycorporate rights and privileges in this state. Upon issuance of theinjunction, the foreign corporation shall be enjoined from transactingbusiness in this state until all civil penalties have been paid, plus any




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interest and court costs assessed by the court, and until the foreigncorporation has otherwise complied with the provisions of this part.

The State Court received evidence that ReconTrust, Bank of America, and

MERS are not registered to do business in the State of Utah. The State Court then

issued an injunction as it is directed to do so under the statute.

ReconTrust reads the statute thusly:

If a foreign corporation is found to be in violation of these provisions,section 1502(5) permits a court issue an injunction restraining thefurther transaction of the business of the foreign corporation and the

further transaction of the business of the foreign corporation and thefurther exercise of any corporate rights and privileges in this state.Respondents Brief Foot note 6 page 32.

ReconTrust believes that the injunction was permissive, and ReconTrust

wants this court to think that the State Court was outside its boundaries when it

issued the injunction. According to the plain language of the statute, an injunction

was mandatory. If ReconTrust has issue with the fact that the statute requires an

injunction they need to challenge the statute in court, not simply try to convince

this Court that the statute says something other than what it actually does.

Thus, the question of whether the District Court properly exercised

jurisdiction is the only question on appeal which this Court must answer. This

Court need not determine the validity of the injunction issued by the State Court.




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RESPONSE TO STANDARD OF REVIEW

Defendants argue that the standard of review in this case is abuse of

discretion. See Respondents Brief p. 13. Defendants are incorrect. The standard

of review for this case is de novo. See Appellants Brief p. 2. Even assuming

Defendants view ofthe issues on appeal is correct, the standard of review is still

de novo.Attorney General of Oklahoma v. Tyson Foods, Inc., 565 F.3d 769, 776

(10 Cir. 2009).

SUMMARY OF ARGUMENT

The District Court did not have the power to dissolve the Injunction issued

by the State Court. The District Court claimed that complete preemption existed

making Plaintiffs claims federal, and that it had jurisdiction over the issues

enabling it to enter a ruling dissolving the injunction. District Court Memo. Dec.

at 17. The District Court held that there are only two possible grounds for

concluding that the court could retain jurisdiction and dissolve the injunction.

District Court Memo. Dec. at 3. First, if supplemental jurisdiction existed, then the

District Court could have exercised jurisdiction.Id. Second, if the National Bank

Act (NBA) completely preempted both Utah statutes, then the District Court could

have exercised jurisdiction.Id. Neither supplemental jurisdiction nor complete

preemption however, is present in this case.




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First, there was no supplemental jurisdiction at the time of removal, since

Plaintiffs state law claims were not so related to her RESPA claim that they

formed part of the same case or controversy. District Court Memo. Dec. at 3.

Even if they did, a District Court should not exercise supplemental jurisdiction

when the federal law claims are no longer present. Carnegie-Mellon Univ. v.

Cohill, 484 U.S. 343, 350 (1988).

Second, the NBA does not completely preempt both Utah statutes.

Plaintiff has already thoroughly demonstrated this point in the original brief, and

all of Defendants arguments in their response are unavailing.

(1)Despite the Defendants assertions to the contrary, the presumptionagainst preemption does apply here. Cuomo v. Clearing House Assn,

L.L.C., 129 S. Ct. 2710, 2720-21 (2009).

(2)Moreover, 12 U.S.C. 92a and associated regulations do not preempt bothUtah statutes, since neither statue is an exercise of visitorial powers nor

specifically preempted by 12 U.S.C. 92a and associated regulations.

Indeed, the only interpretation that would allow for 12 U.S.C. 92a and

associated regulations to preempt both Utah statutes would make national

banks completely immune to all State laws, a clearly absurd result.




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(3)Nor is the Defendants reliance on the OCC interpretation lettersparticularly persuasive, since they are neither binding, nor do they

specifically address the question at issue.

(4)Defendants other arguments are neither persuasive nor on point.(5)Defendant now serially shifts positions to disguise the fact that no similar

institution, state or federally chartered, is given power of sale as trustee

of a trust deed by Utah law. First defendant claimed to be a depository

institution2

in obtaining reversal of the state court injunction. Next,

Defendants claimed to be a Trust (Non-Deposit) and a non-depository

institution.3 It appearing that trust companies also lack power of sale

under Utah law, defendant now claims that federally chartered trust

companies have power of sale by implication from their trust powers,

though state trust companies do not.

(6)Lastly Defendants position is undermined by the very instrument theywish to enforce, the Deed of Trust. Under paragraph 16 of the Deed of

2Utah Code 57-1-21 provides a list of persons eligible to act as trustees in Utah. Theseinclude members of the Utah state bar, depository institutions, and title insurance companies.Utah Code 57-1-21. ReconTrust is not permitted to serve as a trustee under this Utahregulation. This restriction on ReconTrusts ability to act as a trustee clearly conflicts with 12

U.S.C. 92a(b) because Utah Code 57-1-21 allows a depository institution, which isunquestionably a competitor of a national bank, to act as a trustee. (Memo. Dec. [Doc. # 45] at

14.) Preemption principles thus bar the application of 57-1-21 to ReconTrust, and Plaintiffsrequest for summary judgment on her claim based on that statute must be denied. DefendantsMemo. in Opp., [Doc. #58] at 6, Attach. 1.3The Court can take judicial notice of the fact that ReconTrust Company, N.A. is a non-depository institution as that fact is set forth in the public records. Dec. Richard Ensor [Doc. #66] at 2, par. 2, Attach. 2.




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Trust states This Security Instrument shall be governed by federal law

and the law of the jurisdiction in which the property is located. Attach.3.

Even if the NBA did preempt either Utah statute, the NBA does not

completely preempt them. Federal preemption requires that the State statute

conflicts with the federal statute, but complete preemption requires that the NBA

provide the exclusive cause of action for the claim asserted and also set forth

procedures and remedies governing that cause of action.Beneficial Natl Bank v.

Anderson, 539 U.S. 1, 8 (2003) (emphasis added). This standard, as articulated by

the Supreme Court, is simply not present in this case.

Thus, the District Court incorrectly exercised jurisdiction in this case, and

this Court should remand this case to the State trial court, or in the alternative issue

an order to the District Court to correct its ruling.

ARGUMENT

Plaintiff will not restate all of the same arguments already presented within

Plaintiffs opening brief. Rather, Plaintiff will only focus on responding to

arguments that Respondent raises that the Plaintiff has not already covered in the

opening brief.




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I. THE DISTRICT COURT SHOULD ONLY HAVE EXERCISED

JURISDICTION IN THIS CASE IF THE NATIONAL BANK ACT

COMPLETELY PREEMPTED THE RELEVANT UTAH STATUTES

A defendant may remove a civil action filed in state court to federal court if

a claim arises under federal law. 28 U.S.C. 1441(b) (2010). In determining if a

claim arises under federal law, courts examine the well pleaded allegations of the

complaint and ignore potential defenses.Beneficial Natl Bankv. Anderson, 539

U.S. 1, 6 (2003) and 28 U.S.C. 1441 (2010). The action here was removed solely

on the basis of an original claim under RESPA. Since Cox amended her complaint

to voluntarily dismiss the RESPA claim and include only state claims, there are

only two possible grounds for the District Court to retain jurisdiction. Removal is

not available to re-institute the RESPA claim for decision.

(1)The court may exercise supplemental jurisdiction if it concludes that the

state law claims are so related to her RESPA claim that they form part of the

same case or controversy.28 U.S.C. 1367(a) (2010). It is not necessary that the

plaintiff alleges no federal claim now, since the court must determine the right to

remove at the time of the petition for removal. Pullman Co. v. Jenkins, 305 U.S.

534, 537 (1939). However, the District Court should refuse supplemental

jurisdiction if the federal claims are no longer present. Carnegie-Mellon Univ. v.

Cohill, 484 U.S. 343, 350 (1988);Bauchman ex rel. Bauchman v. West High

Sch., 132 F.3d 542, 549 (10th Cir.1997);American Bush v. City of South Salt Lake,




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42 Fed.Appx. 308, 310 (2002). The cases cited by defendant (e.g.Boelens, 759

F.2d 504 (5 Cir. 1985); Westmoreland, 605 F.2d 119 (3 Cir. 1979)) nowhere

suggest that voluntary dismissal of a federal claim after removal leaves the federal

court with jurisdiction to review and reverse prior state law decisions of the state

court. Such decisions would be protected by at least comity and the law of the

case.

Bank of Americas alleged RESPA and TILA violations, that were dropped

from Coxs amended complaint, are not related to ReconTrusts power to sell Ms.

Coxs home, let alone so related that they form part of the same case or

controversy. 28 U.S.C. 1367(a) (2010). Indeed, the District Court concluded

that it would be incorrect to exercise supplemental jurisdiction in this case. District

Court Memorandum opinion at 3.

(2) The defendant may remove to federal court when a federal statute wholly

displaces a State law cause of action through complete preemption.4Beneficial

Natl Bankv. Anderson, 539 U.S. 1, 8 (2003) and 28 U.S.C. 1441 (2010).

Complete preemption only occurs when the federal statutes at issue provide the

exclusive cause of action for the claim asserted and also set forth procedures and

remedies governing that cause of action.Beneficial Natl Bank v. Anderson, 539

4 Diversity of citizenship was not asserted as a ground for removal. Further, diversity may not beresorted to for removal of a matter in which the state court has ruled on a state law issue, toobtain review of that decision by the federal court.




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U.S. 1, 8 (2003) (emphasis added). In other words, the cause of action, even if

pleaded in terms of state law, is in reality based on federal law.Id.

Thus, in order for complete preemption to occur here, the NBA must not

simply interfere with the state law claims, but the NBA must completely control

this specific cause of action by the Plaintiff. In this case it does not. See for

example Cuomo at 2720-21, Stateshave always enforced their general laws

against national banks--and have enforced their banking-related laws against

national banks;Watters, at 12; andBarnett Bank of Marion County v. Nelson, 517

U.S. 25, 31 stating the NBA preempts state law whenever a state law directly

conflicts with a specific federal statute, or the state law would significantly

impair a specific federal statute.

II. THE NATIONAL BANK ACT DOES NOT PREEMPT EITHER

UTAH STATUTE

A. The Presumption Against Preemption Applies in this Case

The presumption against preemption applies when the area of law is

historically under the States police powers.Rice v. Santa Fe Elevator Corp., 331

U.S. 218, 230 (1947). This assumption provides assurance that "the federal-state

balance," United States v.Bass, 404 U.S. 336, 349 (1971), will not be disturbed

unintentionally by Congress or unnecessarily by the courts.Jones v.Rath Packing

Co., 430 U.S. 519, 525 (1977).




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This presumption against preemption however, does not apply when

Congress has unmistakably ordained,Florida Lime & Avocado Growers,

Inc. v. Paul, 373 U.S. 132, 142 (1963), that its enactments alone are to regulate a

part of commerce, state laws regulating that aspect of commerce must fall. This

result is compelled whether Congress' command is explicitly stated in the statute's

language or implicitly contained in its structure and purpose. City of

Burbankv.Lockheed Air Terminal, Inc., 411 U.S. 624, 633 (1973);Rice at 230;

Jones at 525. However, States, on the other hand, have always enforced their

general laws against national banks--and have enforced their banking-related laws

against national banks. Cuomo at 2720-21. As both Utah statutes are general laws,

applying to national banks and non-national banks alike, they merit presumption

against preemption under the Courts analysis.

Furthermore, [N]ational Banks acquisition and transfer of property [are]

based on state law. Watters at 6, quotingNational Bank v. Commonwealth, 9

Wall. 353, 362 (1870). Therefore, since both Utah statutes concern the acquisition

and transfer of property within their borders, they fall within the traditional police

powers of the States. Thus, these statutes merit presumption against preemption

under the Courts analysis.




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B. As Stated Previously, the NBA does not Preempt either Utah Statute

As originally stated in the Appellants Brief, the NBA only preempts a State

statute in two instances. First, when the state exercises visitorial powers. Cuomo at

2721, and Watters at 6. The Supreme Court has defined visitorial powers as a

sovereigns supervisory powers over corporations, including any form of

administrative oversight that allows a sovereign to inspect books and records on

demand. Cuomo, at 2721. But since neither Utah Code 16-10a-15015 nor 57-1-

21(3) are an exercise of visitorial powers, the NBA cannot preempt them.

Second, the NBA preempts state law whenever a state law directly conflicts

with a specific federal statute, or the state law would significantly impair a

specific federal statute. Watters, at 12 andBarnettat 31. However, there is no

specific federal statute that would preempt either State statute.

Consequently, the NBA does not preempt either Utah statute.

C. Defendants Analysis of 12 U.S.C. 92a and Associated Regulationsis Incorrect

Section 92a addresses the applicability of state laws to a national bank's trust

powers:

(a) Authority of Comptroller of the Currency. The Comptroller of theCurrency shall be authorized and empowered to grant by specialpermit to national banks applying therefor, when not in contravention

5 16-10a-1505(3) This chapter does not authorize this state to regulate the organization orinternal affairs of a foreign corporation authorized to transact business in this state.




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of State or local law, the right to act astrustee, executor,administrator, registrar of stocks and bonds, guardian of estates,assignee, receiver, committee of estates of lunatics, or in any otherfiduciary capacity in which State banks, trust companies, or othercorporations which come into competition with national banks arepermitted to act under the laws of the State in which the national

bank is located. (emphasis added). 12 U.S.C. 92a(a).

Therefore, a national bank may receive the legal status as a trustee from the

Comptroller when not in contravention of State or local law within the State in

which it is located.

The Definition ofLocated.

Looking at the plain language of the statute we can determine the definition

of the word located.

(a) Authority of Comptroller of the Currency. The Comptroller of theCurrency shall be authorized and empowered to grant by specialpermit to national banks applying therefor, when not in contraventionof State or local law, the right to act astrustee,or in any otherfiduciary capacity in which State banks, trust companies, or othercorporations which come into competition with national banks are

permitted to act under the laws of the State in which the nationalbank is located. (emphasis added). 12 U.S.C. 92a(a).

Located refers to any State where the national bank is in competition with State

banks.

The OCC interprets locate not as defining situs in one state, but in any

State in which the national bank is in competition with State banks. To clarify

locate the Comptroller promulgated 12 C.F.R. 9.7. The state laws that apply

to a national bank's fiduciary activities by virtue of 12 U.S.C. 92a are the laws of




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the State in which the bank acts in a fiduciary capacity. 12 C.F.R. 9.7 (e). A

national bank acts in fiduciary capacity in 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).

Under the title Fiduciary Activities in Activities Permissible for a National

Bank, published in April of 2010, the OCC says:

Fiduciary Activities, In Gerneral. National banks with fiduciarypowers (which may be granted at the time of the chartering orsubsequently on application to the OCC) are subject to federal rulesthat define fiduciary standards and authorize national banks to operatein the same capacities as fiduciaries are permitted to operate6in theStates

7where the bank conducts its trust activities(emphasis

added). 12 USC 92a and 12 CFR 9. (P.42)

In the Comptrollers Licensing Manual, Fiduciary Powers, published in June 2002,

the OCC says:

Fiduciary powers mean the authority the OCC permits a bank toexercise pursuant to 12 USC 92a. The extent of fiduciary powers isthe same for out-of-state national banks as for instate national banksand that extent depends upon what powers the state grants to thefiduciaries in the state with which the national banks compete. (p.2).

A bank with existing fiduciary powers may offer services inmultiple states through branches, trust offices, or trust representative

offices in such states. Such a bank may exercise any of the fiduciarypowers granted in 12 USC 92a(a) in any state, unless that state

6In Watters the Supreme Court used the word operate interchangeably with locate when

discussing an analogous situation involving the location of a subsidiary bank.7Note that States is plural, meaning that the bank can operate and conduct its activities in morethan one State.




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prohibits both national banks and competing institutions in its ownstate from exercising that fiduciary power. (p.3).

Where is ReconTrust Located?

ReconTrust, as a national bank comes into competition with which State

banks? Utah State banks. ReconTrust is not competing with California State

banks in Utah. ReconTrust is not competing with Texas State banks in Utah.

ReconTrust is not competing with Utah State banks in Texas or California.

ReconTrust is competing with Utah State banks and/or trust companies.

ReconTrust is located in Utah.

ReconTrust is Located in Utah, California, Texas, Arizona, Alaska, Arkansas,

Idaho, Mississippi, Montana, Nebraska, Nevada, Oregon, Tennessee, Virginia,

and Washington.

According to the ReconTrust website, ReconTrust is located in 15 States.

ReconTrust claims it is headquartered in California and its trust operations for

Utah foreclosures take place in Texas. Appellee Brief pg. 41. ReconTrust at least

admitsto being located in at least two places, California and Texas.

D. Defendants Reliance on the OCC Interpretive Letters is Unavailing

Defendants incorrectly rely on the OCC interpretive letters. See

Respondents Brief at p. 34-35.

First, the OCC Interpretive Letters are not binding. The 1994 amendments

on the NBA recognized that the OCC had been issuing interpretive letters on




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federal preemption. See 12 U.S.C. 43. However, by its own language, 43 does

not confer any authority on the OCC to make binding determinations concerning

statutory preemption.Id. Rather, 43(a) requires the OCC to follow notice-and-

comment procedures before issuing any opinion letter or interpretive rule that

concludes that Federal law preempts the application to a national bank of any State

law regarding community reinvestment, consumer protection, fair lending, or the

establishment of intrastate branches. The crucial phrase here, opinion letter or

interpretive rule, makes it clear that these types of administrative actions do not

have any force of law and generally are not eligible for Chevron deference.

See United States v. Mead Corp., 533 U.S. 218 (2001); Christensen v. Harris

County, 529 U.S. 576 (2000).

Second, Defendants appear to over-read these OCC interpretive letters. In

each instance, the OCC appears to adhere to the analysis that the Plaintiff set out in

the original brief. See Petitioners Brief at p. 14-15. The NBA preempts State law

when it attempts to exercise visitorial powers, or when there is a specific federal

law on point. See OCC Interp. Letter No. 1103 (North Carolina law specifically

conflicting with 12 U.S.C. 92a). As stated previously, neither situation is present

here. See Petitioners Brief.




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E. Defendants Other Arguments are Unavailing

First, Defendants argue that Utah Code 16-10a-1501 is an exercise of

visitorial powers. However, for the reasons stated in the Petitioners original brief,

this argument is unpersuasive.

Second, Defendants urge reliance on three more non-binding cases that they

believe to be persuasive in this case: Wells Fargo Bank N.A. v. Boutris, 419 F.3d

949 (9th Cir. 2005); 770 PPR, LLC v. TJCV Land Trust, 30 So.3d 613 (Fla. App.

2010);Indiana National Bank v. Roberts, 326 So.2d 802 (Miss. 1976). Not only

are these cases non-binding, they are not particularly persuasive.

Boutris held that the OCCs extensive regulation concerning operating

subsidiaries of a national bank (12 C.F.R. 5.34) preempted a blatant exercise of

visitorial powers over a subsidiary of a national bank.Boutris, 419 F.3d at 949-70.

Both TJCVandRoberts held that a State cannot prohibit a national bank from

filing suit or being sued due to a specific federal law stating to the contrary. It is

not clear how these cases are particularly analogous, let alone persuasive, to the

current dispute.




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Third, Defendant argues that Plaintiff Cox uses this appeal as a challenge to

remand ruling. This is incorrect. Plaintiff filed this appeal to challenge the district

courts ruling that the NBA completely preempted both Utah statutes. Such a

decision implies that State regulations concerning commercial and real property

law cannot apply to national banks, a completely absurd result and one that

conflicts with the long history of federal law concerning State regulation of

national banks.

F. The National Bank Act does not Completely Preempt both UtahStatutes

As stated above, the NBA does not preempt either Utah statute. However,

the standard here is not that the National Bank Act must preempt these statutes, but

that they must completely preempt them. Complete preemption only occurs

when the federal statutes at issue provide the exclusive cause of action for the

claim asserted and also set forth procedures and remedies governing that cause of

action.Beneficial Natl Bank v. Anderson, 539 U.S. 1, 8 (2003) (emphasis added).

In other words, the cause of action, even if pleaded in terms ofState law, is in

reality based on federal law.Id.

Under the well-pleaded-complaint rule, a federal court does not have

original jurisdiction over a case in which the complaint presents a State-law cause

of action, but also asserts that federal law deprives the defendant of a defense he




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21

may raise, ... or that a federal defense the defendant may raise is not sufficient to

defeat the claim.Franchise Tax Bd. of Cal. v. Construction Laborers Vacation

Trust for Southern Cal., 463 U.S. 1, 10 (1983). [A] case maynotbe removed to

federal court on the basis of ... the defense of pre-emption ....Caterpillar Inc. v.

Williams, 482 U.S. 386, 393, 107 S.Ct. 2425 (1999). To be sure, preemption

requires a State court to dismiss a particular claim filed under State law, but it does

not, as a general matter, provide grounds for removal.

Even assuming arguendo that Defendant ReconTrust is correct in asserting

that the National Bank Act preempts both Utah statutes, the National Bank Act

does not provide for the exclusive cause of action for the claim asserted and also

set forth procedures and remedies governing that cause of action in all State

agency registration andtrustee power of sale cases based on State law. (Emphasis

added).Beneficial at 8.

Therefore, the District Court incorrectly ruled that the National Bank Act

completely preempts both Utah statutes.

III. THE PREMISE OF RECONTRUSTS ARGUMENT IS THAT STATE

LAWS DO NOT APPLY TO NATIONAL BANKS

A. The Historical Overview of the Subjection of National Banks to StateLaws According to the Supreme Court

So of the banks. They are subject to the laws of the State, and are

governed in their daily course of business far more by the laws of theState than of the Nation. *** It is only when the State law




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22

incapacitates the banks from discharging their duties to thegovernment that it becomes unconstitutional. National Bank v.

Commonwealth, 76 U.S. 353, 362 (1869).

We have more than once held in this court that the national banksorganized under the acts of Congress are subject to State Legislation,except were such legislation is in conflict with some act of Congress,or where it tends to impair or destroy the utility of such banks, asagents or instrumentalities of the United States, or interferes with thepurposes of their creation. Waite v. Dowley, 94 U.S. 527, 533(1876).

National banks are brought into existence under the federallegislation, are instrumentalities of the federal government and are

necessarily subject to the paramount authority of the United States.Nevertheless, national banks are subject to the laws of a state inrespect of their affairs, unless such laws interfere with the purposes oftheir creation, tend to impair or destroy their efficiency as federalagencies, or conflict with the paramount law of the United States.First National Bank in St. Louis v. Missouri, 263 U.S. 640, 656(1924).

This Court has often pointed out that national banks are subject tostate laws, unless those laws infringe the national banking laws orimpose an undue burden on the performance of the banks' functions.

Anderson Nat. Bank v. Luckett, 321 U.S. 233, 248 (1944).

In defining the pre-emptive scope of statutes and regulations grantinga power to national banks, these cases take the view that normallyCongress would not want States to forbid, or to impair significantly,the exercise of a power that Congress explicitly granted. To say this isnot to deprive States of the power to regulate national banks, where(unlike here) doing so does not prevent or significantly interfere with

the national bank's exercise of its powers.Barnett Bank of MarionCounty v. Nelson, 517 U.S. 25, 33 (1996).

Federally chartered banks are subject to state laws of generalapplication in their daily business to the extent such laws do notconflict with the letter or the general purposes of the NBA. States arepermitted to regulate the activities of national banks where doing so




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does not prevent or significantly interfere with the national bank's orthe national bank regulator's exercise of its powers.Watters v.Wachovia Bank, 550 U.S. 1, 11, 12 (2007).

No one denies that the National Bank Act leaves in place some statesubstantive laws affecting banks. This [national banking] systemechoes many other mixed state/federal regimes in which the FederalGovernment exercises general oversight while leaving statesubstantive law in place.Cuomo v. The Clearing House Association,

L.L. C. and Office of the Comptroller of the Currency, 129 S. Ct.2710, 2717-18 (2009).

B. The Correct Interpretation of How Utah State Laws Apply to National Banks

Trustee Status in Utah

Defendants suggest that State laws concerning the acquisition and transfer of

property do not apply to national banks. That would mean that Utah could regulate

how individuals and State banks acquire and transfer property, but that these laws

could not apply to national banks. Not only does this run afoul ofSupreme Court

case law ([N]ational Banks acquisition and transfer of property [are] based on

State law. Watters at 6, quotingNational Bank v. Commonwealth, 9 Wall. 353,

362 (1870)), but it also violates States police powers8 and allows national banks to

completely ignore State law. See 12 C.F.R. 9.7 (d).

8See, e.g., 12 C.F.R. 557.13(a) & 560.2(c) (state laws pertaining to contract and commerciallaw, tort law, criminal law, real property law, and homestead law are not preempted by OTSregulations); de la Cuesta, 458 U.S. at 172, 102 S.Ct. 3014 (Nothing in the language of ...HOLA ... suggests that Congress intended to permit the [OTS] to displace local laws, such as taxstatutes and zoning ordinances, not directly related to savings and loan practices.) (O'Connor, J.,

concurring); First Nat'l Bank v. Dickinson, 396 U.S. 122, 90 S.Ct. 337, 24 L.Ed.2d 312 (1969)(allowing application of a Florida branch bank statute to national banks in the state); FranklinNat. Bank v. New York, 347 U.S. 373, 378 n. 7, 74 S.Ct. 550, 98 L.Ed. 767 (1954) ( [N]ationalbanks may be subject to some state laws in the normal course of business if there is no conflict




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The Defendants also contend that 12 CFR 9.7(e) grants them the power of

sale. Both the plain and correct reading of this statute is thatfederal law limits the

assignment to national banks of authority to act only when not in contravention of

State or local law. A federally chartered trust company can have no power

conferred upon it by the comptroller which is not conferred by State law, such as

57-1-21, UCA (1953), upon similar State chartered institutions.

But the Defendants then take this regulation to justify that they may ignore

any State law that they believe limitsor establishes preconditions on their

ability to act as a trustee. The Defendants completely misunderstand 9.7(e). This

regulation was meant to ensure that national banks may have the legal authority to

act as a trustee (among the other fiduciary capacities) - not to ignore the laws of the

States in which they do business. IfReconTrusts reading was correct, then a

national bank could ignore all State laws since they would potentially limit or

establish preconditions on their ability to act in fiduciary capacity. Indeed, it is

difficult to imagine a single economic or property regulation that a State could

promulgate that would not in some way limit a national banks ability to act in

one of its eight fiduciary capacities.

with federal law.); see alsoNat'l State Bank v. Long, 630 F.2d 981, 985 (3d Cir.1980)([R]egulation of banking has been one of dual [federal-state] control since the passage of thefirst National Bank Act in 1863.); Perdue v. Crocker Nat'l Bank, 38 Cal.3d 913, 937, 216Cal.Rptr. 345, 702 P.2d 503 (1985) (Congress has declined to provide an entire system offederal law to govern every aspect of national bank operations.), appeal dismissed, 475 U.S.1001, 106 S.Ct. 1170, 89 L.Ed.2d 290 (1986) (noting lack of jurisdiction).Bank of Am. v. City & County of San Francisco, 309 F.3d 551, 566 (9th Cir. 2002)




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The correct reading is that a national bank may receive the legal status as a

trustee from the Comptroller when not in contravention of State or local law of

the State in which it acts with fiduciary capacity. However, a national bank must

still respect the method in which a State regulates the acquisition and transfer of

property.

Registration of Foreign Corporations in Utah

ReconTrust claims that the Utah registration statute inhibits the OCCs

ability to authorize a national bank to conduct the business of banking. Appellees

Brief p. 32-3. Once again, this is an overgeneralization.

Utah Code Section 16-10a-1501(1) requires foreign corporations to register

with the division [of corporations]. Utah Code Section 7-1-704 requires financial

institutions to register with the State Department of Financial Institutions. The

irony here is that Countrywide Home Loans, of which ReconTrust is a subsidiary,

or which is also a subsidiary of BAC, and doing business in the State of Utah, is

registered with both State agencies.

Registration with the State is not a licensing activity. No requirements are

made. Everyone can register any business entity they want. The cost is $70.00.

Articles of Incorporation must be filed and the Registered Agent must be

identified.




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The public policy under this statute is that registration makes it easier for

citizens to obtain service of process on out-of-state corporations doing business in

the State.

The OCC may give ReconTrust the necessary authority to carry on business

as a National Bank. However, the status of national bank is not license for

ReconTrust to operate in any fashion it wants. Necessary does not equate to

sufficient. As Plaintiff stated previously in Coxs opening brief, the Utah statute

requiring registration of a Foreign Corporation does not require any visitation, and

the policy behind the statute is that it makes it easier for citizens to obtain service

of process on out-of-state corporations doing business in Utah.

CONCLUSION

For the foregoing reasons, this Court must reverse the order of the District

Court in which it retains jurisdiction, and remand to the State trial Court. Or,

alternatively issue an order to the District Court to correct its ruling.

STATEMENT REGARDING ORAL ARGUMENT

Since this case presents certain key issues concerning the National Bank Act

and its relationship to State law within the Tenth Circuit, we believe that Oral

Argument is necessary.

DATED this _3___ day of November, 2010./s/ John Christian Barlow

John Christian BarlowAttorney for Plaintiff/Appellant




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CERTIFICATE OF COMPLIANCE WITH RULE 32(a)

1. This brief complies with the type-volume limitations of Fed. R. App. P.32(a)(7)(B) because it contains 6312 words, excluding the parts of the briefexempted by Fed R. App. P. 32(a)(7)(B)(iii), as counted by Microsoft Word 2007the word processing software used to prepare this brief.

2. This brief complies with the typeface requirements of the Fed. R. App. P.32(a)(5) & (6) because it has been prepared in 14 point Times New Romanaplain, Roman, proportionally spaced typefaceusing Microsoft Word 2007, theword processing software used to create prepare this brief.

DATED this __3__ day of November, 2010./s/ John Christian Barlow





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CERTIFICATE OF COMPLIANCE WITH THE GENERAL ORDER ON

ELECTRONIC FILING

This brief complies with this Courts March 18, 2009 general order

regarding electronic filing because:

(1) all required privacy redactions have been made;

(2) the ECF submission is an exact copy of the 7 hard copies of this briefand documents, which will be submitted within 2 business days of the ECFfiling;

(3) the ECF submission was scanned for viruses with the most recent versionof AVG, and according to the program is free of viruses.

DATED this __3__ day of November, 2010./s/ John Christian Barlow





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CERTIFICATE OF SERVICE

I do hereby certify that on this _3___ day of November, 2010, I caused to beelectronically served a true and correct copy of the foregoing REPLY BRIEF OFAPPELLANT to the following:

E. Craig Smay174 E. South TempleSalt Lake City, UT 84111(801) 539-8515Fax: (801) 539-8544

Cameron Soran (Law Student)40 N. 300 E. # 101

Saint George, Utah 84771Telephone: (253) 250-9449

Michael Huber8170 S. Highland Drive, Suite E5Sandy, Utah 84093

Richard F. Ensor (10877)VANTUS LAW GROUP, P.C.3165 East Millrock Drive, Suite 160Salt Lake City, Utah 84121Telephone: (801) 833-0500Facsimile: (801) 931-2500

Roy W. Arnold (Admitted pro hacvice)REED SMITH LLPReed Smith Centre225 Fifth Avenue

Pittsburgh, PA 15222Telephone: (412) 288-3916Facsimile: (412) 288-3063

Amir Shlesinger (Admitted pro hacvice)REED SMITH LLP355 South Grand Avenue, Suite 2900Los Angeles, CA 90071-1514Telephone: (213) 457-8000

Facsimile: (213) 457-8080

James MartinReed Smith LLP225 Fifth AvenuePittsburgh, [email protected]: (412) 288-3131

David BirdReed Smith LLP225 Fifth AvenuePittsburgh, [email protected]: (412) 288-3131

/s/ John Christian Barlow




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ATTACHMENT 1




37/55

Richard F. Ensor (10877)

VANTUS LAW GROUP, P.C.

3165 East Millrock Drive, Suite 160

Salt Lake City, Utah 84121Telephone: (801) 833-0500

Facsimile: (801) 931-2500

Roy W. Arnold (Admittedpro hac vice)

REEDSMITHLLP

Reed Smith Centre225 Fifth Avenue

Pittsburgh, PA 15222

Telephone: (412) 288-3916Facsimile: (412) 288-3063

Amir Shlesinger (Admittedpro hac vice)REED SMITH LLP355 South Grand Avenue, Suite 2900Los Angeles, CA 90071-1514Telephone: (213) 457-8000Facsimile: (213) 457-8080

Attorneys for Defendants ReconTrust Company, N.A., BAC Home Loans Servicing, LP(erroneously sued as Bank of America Home Loans Servicing, LP), Bank of America, N.A.

(erroneously sued as Bank of America, FSB), and Mortgage Electronic Registration Systems,

Inc.

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF UTAH -

CENTRAL DIVISION

PENI COX, an individual,

Plaintiff,

v.

RECONTRUST COMPANY, N.A., BANK

OF AMERICA HOME LOANS SERVICING,LP; BANK OF AMERICA, FSB, NEW LINEMORTGAGE, DIVISION OF REPUBLIC,

MORTGAGE ELECTRONIC

REGISTRATION SYSTEMS, INC.; ANDDOES 1-5,

Defendants.

DEFENDANTS MEMORANDUM IN

OPPOSITION TO PLAINTIFF PENI

COXS MOTION FOR PARTIAL

SUMMARY JUDGMENT

Case No. 10-cv-00492

Honorable Clark Waddoups

Magistrate Judge Alba

Case 2:10-cv-00492-CW-SA Document 58 Filed 07/08/10 Page 1 of 7Appellate Case: 10-4117 Document: 01018526530 Date Filed: 11/03/2010 Page: 37



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I. INTRODUCTIONOn June 7, 2010, only a month after serving her complaint on ReconTrust, N.A.

(ReconTrust), Plaintiff Peni Cox (Plaintiff) filed an emergency motion for partial

summary judgment seeking an adjudication of her first and second claims which allege that

ReconTrust violated registration and trustee qualification requirements set forth in Utah Code

57-1-21 and 16-10a-1501.

Plaintiffs motion raises the same issues previously addressed by this Court in connection

with the motion to dissolve the preliminary injunction filed by ReconTrust and other defendants.

After hearing oral argument, on June 11, 2010, the Court granted the motion to dissolve the

injunction finding that Utah Code 57-1-21 and 16-10a-1501 are preempted by federal law.

(6/11/10 Order [Doc. # 42]; Memo. Dec. [Doc. # 45].) The Courts order and its conclusion that

these statutory provisions are preempted by federal law are dispositive of Plaintiffs first and

second claims. Therefore, this Court should deny Plaintiffs motion for partial summary

judgment.1

II. RESPONSE TO PLAINTIFFS STATEMENT OF UNDISPUTED FACTSPlaintiffs motion is not supported by any competent affidavits, deposition testimony, or

any admissible evidence. Indeed, the motion fails to establish any material facts necessary to

state any claim against ReconTrust, let alone establish any entitlement to judgment against

ReconTrust. Plaintiff does not present evidence to establish even the basic elements of her

claim; namely, that ReconTrust foreclosed on her home in violation Utah Code 57-1-21 and

16-10a-1501. Plaintiffs alleged undisputed material facts are primarily comprised of

improper legal assumptions and conclusions. Paragraphs 4 through 11, for instance, include

1Subsequent to filing her motion for partial summary judgment, Plaintiff moved to dismiss her third, fourth and fifth

claims from the amended complaint, as well as New Line Mortgage as a defendant. (Motion to Amend [Doc. # 49].)

Accordingly, Plaintiffs first and second claims are the only remaining claims in this action, and ReconTrust and the

other remaining defendants filed a motion to dismiss those claims. (Motion to Dismiss [Doc. # 52]; Memo. In

Support [Doc # 53].)




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citations to Utah Code 57-1-21 and 16-10a-1501, as well as citation to inapposite case law

which does not support her motion. Because Plaintiffs motion is not supported by any

admissible evidence, it should be denied for this reason alone.2

In any event, for reasons set

forth below, Plaintiffs motion also should be denied because her claims are preempted by

federal law.

III. LEGAL ANALYSIS AND ARGUMENTA. Legal Standard Governing Rule 56 Motion For Summary Judgment.Federal Rules of Civil Procedure 56 provides that summary judgment can be granted only

if the pleadings, the discovery and disclosure materials on file, and any affidavits show that

there is no genuine issue as to any material fact and that the movant is entitled to a judgment as a

matter of law. Fed. R. Civ. P. 56(c) (emphasis added). When applying this standard, a court

should review the factual record in the light most favorable to the party opposing summary

judgment. Wilkerson v. Shinseki, 606 F.3d 1256, 1262 (10th Cir. 2010). For purposes of

summary judgment, the court should deny a motion for summary judgment if a reasonable jury

could return a verdict for the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242,

249 (1986). Summary judgment will not be granted, even if there is no genuine issue as to any

material fact, where a moving party is not entitled to judgment as a matter of law. See Applied

Genetics Intern., Inc. v. First Affiliated Securities, Inc., 912 F.2d 1238, 1242 (10th Cir. 1990)

2To the extent Plaintiffs statement of facts warrant a specific response under Local Rule 56(c), ReconTrust

responds as follows:

Plaintiff Fact No. 1: Disputed. ReconTrust is a national banking association and is a wholly ownedsubsidiary of Bank of America, N.A. (Aff. Of Jeffrey Aiken [Doc. # 20].) Furthermore, based on the Court's

previous ruling in this case and the arguments below, ReconTrust is authorized to conduct foreclosures in the state

of Utah. (6/11/10 Order [Doc. # 42]; Memo. Dec. [Doc. # 45].)

Plaintiff Fact No. 2-3: Undisputed. These facts are not material to Plaintiffs motion.

Plaintiff Fact Nos. 4-11: Disputed: Plaintiff's assertions are not facts, but rather legal conclusions which

are disputed as set forth below.




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(even if no genuine issue of material fact in dispute, district court must still correctly apply

substantive law);APC Operating Partnership v Mackey, 841 F.2d 1031, 1033 (10th Cir. 1988)

(same); see also Fed. R. Civ. P. 56(c). Where a plaintiff seeks summary judgment of state-law

claims which are preempted by federal law, summary judgment must be denied. See Dadoub v.

Gibbons, 42 F.3d 285, 290 (5th Cir. 1995) (affirming summary judgment for defendant where

plaintiff's state copyright claims preempted by Federal Copyright Act).

B. Plaintiffs First And Second Claims Against ReconTrust Are Preempted ByThe National Bank Act.

Despite this Courts preemption analysis, Plaintiff continues to argue that ReconTrusts

foreclosure of her home violates Utah Code 57-1-21 and 16-10a-1501. Plaintiffs motion as

to her first and second claims fails as a matter of law, however, because this Court already found

that her claims, based on Utah Code 57-1-21 and Utah Code 16-10a-1501, are preempted by

the National Bank Act. (Memo. Dec. [Doc. # 45] at 8-15.)

1. The National Bank Act Specifically Authorizes ReconTrust ToConduct Foreclosures In Utah.

This Court should deny Plaintiffs motion for summary judgment with respect to her first

claim under Utah Code 16-10a-1501 because this Court previously held that Congress intended

to completely preempt the area of requirements a national bank must meet before conducting

business nationwide. (Memo. Dec. [Doc. # 45] at 13.)

Utah Code 1501 and 1502 purport to regulate a national banks ability to transact

business in Utah. Specifically, section 1501 mandates that a foreign corporation may not

transact business in this state until its application for authority to transact business is filed by the

division. Utah Code 16-10a-1501. Where a foreign corporations application is not approved

and filed by the appropriate division, that corporation may not maintain a proceeding in any Utah

state court. Utah Code 16-10a-1502(1). Moreover, if a foreign corporation is found to be in




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violation of these provisions, section 1502(5) permits a court to issue an injunction restraining

the further transaction of the business of the foreign corporation and the further exercise of any

corporate rights and privileges in this state. Utah Code 16-10a-1502(5).

These statutes set out competing state requirements for a bank to transact business,

assign a competing authority to judge if the requirements are met, and provide for competing

remedies for a banks failure to meet the states requirements. (Memo. Dec. [Doc. # 45] at 10.)

However, sections 26, 27, and 42 of the National Bank Act leave no room for Utah Code Ann.

16-10a-1501 and 1502 to regulate national banks. Id. Thus, Plaintiffs claims based on Utah

Code 16-10a-1501 and 1502 are preempted because the Comptroller is intended to be the

exclusive authority on what a national bank must do to transact business in any state under 12

U.S.C. 26-27, 42. Id. at 11. Plaintiffs motion based on this statute accordingly should be

denied.

2. Section 92a Of The National Bank Act Authorizes ReconTrust ToConduct A Foreclosure In Utah As A Trustee.

This Court also should deny Plaintiffs motion for summary judgment with respect to her

second claim under Utah Code 57-1-21 because 12 U.S.C. 92a preempts section 57-1-21.

(Memo. Dec. [Doc. # 45] at 14.) Section 92a provides that a national banks position as a trustee

shall not be deemed to be in contravention of State or local law if a state allows a competitor

of a national bank to act as a trustee. Id.; 12 U.S.C. 92a(b). In other words, where a state law

regulation allows a national banks competitor to act as a trustee, a national bank may also act as

a trustee pursuant to section 92a. (Memo. Dec. [Doc. # 45] at 14.) Thus, where state regulation

allows a competitor to act as a trustee, but prohibits a national bank from doing so, section 92a

preempts the state law regulation and permits a national bank to act as a trustee. Id.; see also

Zabriskie v. ReconTrust, et al., Case No. 2:08-CV-00155-BSJ (Doc. No. 31, dated Nov. 12,

2008).




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Utah Code 57-1-21 provides a list of persons eligible to act as trustees in Utah. These

include members of the Utah state bar, depository institutions, and title insurance companies.

Utah Code 57-1-21. ReconTrust is notpermitted to serve as a trustee under this Utah

regulation. This restriction on ReconTrusts ability to act as a trustee clearly conflicts with 12

U.S.C. 92a(b) because Utah Code 57-1-21 allows a depository institution, which is

unquestionably a competitor of a national bank, to act as a trustee. (Memo. Dec. [Doc. # 45] at

14.) Preemption principles thus bar the application of 57-1-21 to ReconTrust, and Plaintiffs

request for summary judgment on her claim based on that statute must be denied.

IV. CONCLUSIONPlaintiffs motion for partial summary judgment fails. This Courts June 11, 2010

Memorandum Opinion clearly establishes that the National Bank Act preempts Plaintiffs claims

under Utah Code 57-1-21 and 16-10a-1501. Accordingly, Plaintiff fails to establish an

entitlement to judgment on those claims, and this Court should deny Plaintiffs Motion.

DATED: July 8, 2010 VANTUS LAW GROUP, P.C.

By /s/ Richard F. EnsorAttorneys for Defendants ReconTrust Company,N.A., BAC Home Loans Servicing, LP(erroneously sued as Bank of America HomeLoans Servicing, LP), Bank of America, N.A.(erroneously sued as Bank of America, FSB),and Mortgage Electronic Registration Systems,Inc.




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THE UNDERSIGNED CERTIFIES that on this 8

th

day of July 2010, a true and correct

copy of the foregoing was filed with the Clerk of Court via ECF and was therefore served by

electronic mail to the following:

John Christian Barlow

ENVISION LAW FIRM

40 North 300 East, Suite 101St. George, Utah 84770

Michael Huber

8170 S. Highland Drive, Suite E5Sandy, Utah 84093

/s/ Richard F. Ensor




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ATTACHMENT 2




45/55

Richard F. Ensor (10877)

VANTUS LAW GROUP, P.C.

3165 East Millrock Drive, Suite 160

Salt Lake City, Utah 84121Telephone: (801) 833-0500

Facsimile: (801) 931-2500

Roy W. Arnold (Admittedpro hac vice)

REED SMITH LLPReed Smith Centre

225 Fifth Avenue

Pittsburgh, PA 15222Telephone: (412) 288-3916

Facsimile: (412) 288-3063

Amir Shlesinger (Admittedpro hac vice)REED SMITH LLP355 South Grand Avenue, Suite 2900Los Angeles, CA 90071-1514Telephone: (213) 457-8000Facsimile: (213) 457-8080

Attorneys for Defendants ReconTrust Company, N.A., BAC Home Loans Servicing, LP

(erroneously sued as Bank of America Home Loans Servicing, LP), Bank of America, N.A.(erroneously sued as Bank of America, FSB), and Mortgage Electronic Registration Systems,

Inc.

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF UTAH,

CENTRAL DIVISION

PENI COX, an individual,

Plaintiff,

v.

RECONTRUST COMPANY, N.A., BANK

OF AMERICA HOME LOANS SERVICING,LP; BANK OF AMERICA, FSB, NEW LINE

MORTGAGE, DIVISION OF REPUBLIC,

MORTGAGE ELECTRONICREGISTRATION SYSTEMS, INC.; AND

DOES 1-5,

Defendants.

DECLARATION OF RICHARD F. ENSOR

REQUESTING JUDICIAL NOTICE IN

CONNECTION WITH REPLY BRIEF IN

SUPPORT OF MOTION TO DISMISS

Case No. 10-cv-00492

Honorable Clark Waddoups

Magistrate Judge Alba




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2

I, Richard F. Ensor, declare as follows:

1. I am an attorney duly licensed to practice before this Court. I am the attorney forDefendants ReconTrust Company, N.A., BAC Home Loans Servicing, LP (erroneously sued as

Bank of America Home Loans Servicing, LP), Bank of America, N.A. (erroneously sued as

Bank of America FSB), and Mortgage Electronic Registration Systems, Inc. in this action, and

am competent to testify regarding the matters set forth herein.

2. The Court can take judicial notice of the fact that ReconTrust Company, N.A. is anon-depository institution as that fact is set forth in the public records.

3. The fact that ReconTrust is a non-depository institution is capable of accurate andready determination by resorting to sources whose accuracy cannot reasonably be questioned,

such as the Office of Comptrollers Quarterly Journal or on Westlaw.

4. Specifically, the following attached documents establish that this fact cannot bedisputed:

a. Attached hereto as Exhibit A is a true and accurate print out of the Officeof the Comptroller of the Currencys Application for New, Limited-

Purpose National Bank Charters, Approved and Denied, by State, July 1 to

December 31, 2004. Exhibit A states, under type of bank, that

ReconTrust is Trust (Non-Deposit).

b. Attached hereto as Exhibit B is a true and accurate copy of the Office ofComptroller Report on New, Limited-Purpose National Bank Charters

issued January 1, 2005 to June 30, 2005. Exhibit B states that

ReconTrusts charter has been issued as Trust (non-deposit).




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c. Attached hereto as Exhibit C is a true and accurate copy of the Office ofComptroller of the Currencys Conditional Approval letter to Bank of

America, dated April 23, 2009. Page 7 of Exhibit C states, in pertinent

part, that Following the conversion of Country wide into BANA-

Colorado, and BANA-Colorados merger into BANA, BANA will retain

ReconTrust Company, National Association, an uninsured, nondepository

national bank with trust powers headquartered in Thousand Oaks,

California (Recon NA).

5. The citations listed on the upper left corner of the exhibits identify the specificcitation where these documents can be located in the public record.

6. I declare under penalty of perjury and under the laws of the State of Utah that theforegoing is true and correct.

EXECUTED this 26th

day of July 2010 in Salt Lake City, Utah.

Respectfully submitted,

By: /s/ Richard F. EnsorCounsel for Defendants




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THE UNDERSIGNED CERTIFIES that on this 26th day of July 2010, a true and correct

copy of the foregoing was filed with the Clerk of Court via ECF and was therefore served by

electronic mail to the following:

John Christian Barlow

ENVISION LAW FIRM

40 North 300 East, Suite 101

St. George, Utah 84770

Craig Smay

174 East South TempleSalt Lake City, Utah 84111

Michael Huber8170 S. Highland Drive, Suite E5

Sandy, Utah 84093

/s/ Richard F. Ensor




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ATTACHMENT 3




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Documents

Reply Brief of Appellant