## Facts

- The Smidts bought real property subject to an existing first deed of trust and gave a second deed of trust to the sellers for the remaining purchase price; the same trustee served under both deeds of trust.
- The obligors on the first deed of trust defaulted, and the trustee initiated a nonjudicial foreclosure.
- The trustee mailed notice to the Smidts at an address listed years earlier in recorded documents; the Smidts had moved, and the certified mail was returned “unclaimed.”
- The Smidts’ current address was readily ascertainable through ordinary sources (tax records, DMV records, utilities, and telephone listings), but the trustee made no effort to locate it.
- The trustee published notice and conducted the sale; the Rosenbergs purchased the property, and the trustee’s deed recited compliance with legal notice requirements.
- The Smidts, unaware of the sale, continued making payments under the second deed of trust until they learned the property had been sold, then sued to set aside the sale and quiet title.
- The superior court, on stipulated facts, entered partial summary judgment divesting the Rosenbergs of title and revesting title in the Smidts, ruling the trustee had a duty to take reasonable steps to discover a current address before sale.

## Issues

1. Whether Alaska Stat. § 34.20.070(c) requires a deed-of-trust trustee to exercise reasonable diligence to determine the last known address of a record interest holder before mailing foreclosure notice.
2. Whether Alaska Stat. § 34.20.090(c) protects purchasers as bona fide purchasers when the trustee’s sale is invalid due to failure to comply with statutory notice requirements.

## Decision

- The Alaska Supreme Court affirmed the partial summary judgment.
- The court held that § 34.20.070(c) requires the trustee to use reasonable diligence to ascertain the last known address of affected record interest holders; mailing only to a stale recorded address is insufficient when a current address is reasonably discoverable.
- Because the trustee did not satisfy the statutory notice requirement, the nonjudicial foreclosure sale was invalid as against the Smidts.
- The court held that § 34.20.090(c) does not shield a purchaser where the sale is invalid for noncompliance with essential statutory notice requirements; the trustee’s deed recitals could not supply valid title.
- Title was properly divested from the Rosenbergs and revested in the Smidts.

## Legal Principles

- In nonjudicial foreclosure, statutory notice requirements are conditions to a valid exercise of the power of sale.
- Under Alaska Stat. § 34.20.070(c), “last known address” obligates the trustee to take reasonable, good-faith steps to identify a current address when it is readily obtainable from routine sources.
- Mailing notice to an outdated address, without reasonable inquiry despite readily available information, fails to satisfy the statute.
- Alaska Stat. § 34.20.090(c) bona fide purchaser protections and trustee’s deed recitals do not validate a trustee’s sale that is invalid due to failure to comply with essential notice requirements.

## Conclusion

The court upheld setting aside a nonjudicial foreclosure where the trustee failed to use reasonable diligence to locate and mail notice to the Smidts’ last known address, and it ruled that purchasers at an invalid trustee’s sale cannot rely on statutory bona fide purchaser protections or deed recitals to retain title.


Rosenberg v. Smidt, 727 P.2d 778 (Alaska 1986)