The 10th Circuit panel said that it was relying on a legal opinion from the Office of the Controller of the Currency that construed federal banking law to uphold Sam's order. That opinion was filed in a brief in another case before a different appeal panel.
St. George attorney John Christian Barlow, who represented the Utah County homeowner, said the 10th Circuit panel "does not believe that the states have sovereign rights. The decision is severely flawed."
Barlow said Friday he intended to appeal the case to the U.S. Supreme Court.
But Abraham Bates, an attorney who represented homeowners in other foreclosure lawsuits, said the court was "clearly reserving judgment on the main issues" presented by the appeal because the decision was narrowly tailored and the panel specifically said it was not a guiding legal precedent that could be used in other cases.
"The decision can't be properly considered as a win on the merits for ReconTrust," Bates said in an email.
The appeals panel also referenced a recent Utah Supreme Court decision that said Utah law and not that of Texas governs foreclosures here. The three-judge panel noted that decision used a legal standard that was not before it and on which it could not rule.
The panel's decision likely means the dispute over which state law governs ReconTrust foreclosures will continue to be disputed in federal courts.
After the bursting of the real estate bubble in 2008, ReconTrust carried out thousands of foreclosures in this state using its offices in Texas. Dozens of lawsuits over foreclosures flooded Utah state courts and many were removed to federal court, where they were largely dismissed.
Still, several lawsuits over the issue of whether ReconTrust followed Utah law in carrying out foreclosures remain pending.