Surety Life Ins. Co. v. Smith

In Surety Life Ins. Co. v. Smith, 892 P.2d 1 (Utah 1995), the creditor foreclosed a trust deed, purchased the property for much less than market value, and brought an action against the guarantor more than three months after the trustee's sale. 892 P.2d at 2, 3 n.2. The creditor argued that the guaranty was independent of any security for the trust deed note and, thus, section 57-1-32 did not apply. Id. at 3. The Court concluded that the type of instrument on which the action was founded was irrelevant because, by its plain language, section 57-1-32 applies "to any action to recover the balance due on the obligation secured by a trust deed, following a nonjudicial foreclosure sale," regardless of whether the creditor is suing the debtor or the guarantor. Id. Thus, in Surety Life, the Court concluded only that section 57-1-32 applies to guarantors and did not address the applicability of other foreclosure rules to suits against guarantors.