Dutcher v. Matheson

Richard and Gwen Dutcher and their co-plaintiffs (collectively, “plaintiffs”) brought suit in Utah state court on behalf of a putative plaintiff class against ReconTrust, a national bank that served as the substitute trustee for class members’ deeds of trust over properties located in Utah. The suit alleged that ReconTrust illegally non-judicially foreclosed on the plaintiffs’ properties because depository institutions like ReconTrust did not have the power of sale over properties secured by trust deed. The plaintiffs also sued B.A.C. Home Loans Servicing (“BAC”) and Bank of America, N.A. (“BOA”), as the former trustees who transferred trusteeship to ReconTrust, as well as Stuart Matheson and his law firm, as the agents who conducted the foreclosure sale on behalf of ReconTrust. ReconTrust and the other defendants removed the case to federal court. They maintained that ReconTrust’s acts were lawful. The district court denied a motion by plaintiffs to remand the case to state court and agreed with ReconTrust on the merits, which led the court to grant the defendants’ pending motion to dismiss. On appeal to the Tenth Circuit Court of Appeals, plaintiffs sought reversal of the court’s order denying remand to Utah state court, and reversal of the order granting dismissal of the case. The Tenth Circuit concluded, however, that the district court properly decided that it had jurisdiction under the Class Action Fairness Act (“CAFA”); accordingly, it correctly denied the plaintiffs’ motion for remand. On the merits, the Court concluded that ReconTrust was authorized to conduct the challenged foreclosures under federal law, and the plaintiffs had relatedly failed to state a claim on which relief could be granted. The Court therefore affirmed the district court’s judgment as to both issues. View "Dutcher v. Matheson" on Justia Law