# Williams v. The Bank of Fayette County

> District Court, W.D. Tennessee · October 18, 2024

URL: https://www.frixlaw.com/law-library/cases/10670266

## Case

- **Court:** District Court, W.D. Tennessee
- **Decided:** October 18, 2024
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/10670266

## How later opinions describe it (automated extraction)

- explaining that the “purpose of Rule 12(b)(6) is to allow a defendant to test whether, as a matter of law, the plaintiff is entitled to legal relief even if everything alleged in the complaint is true.”

## Opinion text

IN THE UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF TENNESSEE
WESTERN DIVISION

)
TERRY WILLIAMS, )
)
Plaintiff, )
)
v. ) No. 2:24-cv-02216-SHM-cgc
)
THE BANK OF FAYETTE COUNTY, )
)
Defendant. )
)
)

ORDER GRANTING DEFENDANT’S MOTION TO DISMISS

Pro se Plaintiff Terry Williams sues Defendant Bank of
Fayette County (the “Bank”) based on a real property transaction
that originated on November 21, 2008. Before the Court is the
Bank’s Motion to Dismiss for Failure to State a Claim under Rule
12(b)(6), filed on May 10, 2024 (the “Motion”). See ECF No. 10.
This matter is fully briefed and ripe for adjudication. For the
reasons stated below, Defendant’s Motion to Dismiss is GRANTED.
I. Background
The following background information is taken from
Plaintiff’s pro se complaint, filed on April 4, 2024. See ECF
No. 1. For purposes of deciding the Motion, the Court construes
the allegations in the complaint as true. See Mertik v. Blalock,
983 F.2d 1353, 1356 (6th Cir. 1993); Miller v. Currie, 50 F.3d
373, 377 (6th Cir. 1995).
On November 21, 2008, the Bank made a loan to Plaintiff in
the principal amount of $191,250, with a fixed annual interest
rate of 7.25%. See Compl. at *6, ECF No.1; see also ECF No. 3,

Ex. 1. That loan was memorialized by a promissory note. See
Compl. at *7, ECF No.1. To secure the note, Plaintiff executed
a Deed of Trust encumbering his property at 4697 Winchester Road,
Memphis, Tennessee 38118, naming Defendant as the secured party.
See Compl. at *6, ECF No. 1; see also ECF No. 3, Ex. 2.
On January 23, 2024, Plaintiff discovered that his mortgage
loan had been transferred to a third-party trust known as
“Guaranteed REMIC Pass-Through Certificates Fannie Mae REMIC
Trust 2008-94” (the “Fannie Mae Trust”). See Compl. at *7, ECF
No. 1. According to Plaintiff, the Fannie Mae Trust is a “special
purpose vehicle […] created for the purpose of issuing mortgage-
backed securities.” Id. The Trust purchases mortgages from

banks, commingles them into trust assets, and sells the right to
collect loan proceeds to investors in the secondary markets—a
process known as securitization. See id. Based on this alleged
securitization transaction, Plaintiff asserts that the Fannie
Mae Trust had purchased the right from Defendant to collect
future mortgage payments from Plaintiff. See id. Plaintiff
ceased making mortgage payments to Defendant, which then
threatened to foreclose on Plaintiff’s property. See id. at *11.
II. Procedural History
On April 4, 2024, Plaintiff filed his pro se complaint
against Defendant, claiming the following:
1. Declaratory Judgment: Plaintiff seeks a declaratory

judgment that Defendant has no right to foreclose on
Plaintiff’s property, asserting that the securitization
of the mortgage renders the mortgage and promissory note
unenforceable. See id. at *19.
2. Fraudulent Concealment: Plaintiff claims that Defendant
committed fraudulent concealment by failing to disclose
its intent to transfer the mortgage to the Fannie Mae
Trust, which securitized the mortgage without Plaintiff’s
consent or knowledge. See id. at *16.
3. Truth in Lending Act Violation: Plaintiff argues that
Defendant violated the Truth in Lending Act (“TILA”), 15

U.S.C. § 1641(g), by failing to record the loan transfer
with the appropriate state recordation office and by
neglecting to notify Plaintiff within 30 days of the
transfer. See id. at *7-8.
4. Quiet Title: Plaintiff asks the Court to declare that the
securitization of the mortgage extinguished Defendant’s
right and security interest in the property, and that
title to the property is vested in Plaintiff alone. See
id. at *19.
Plaintiff seeks several forms of relief, including monetary
damages between $100,000 and $2,000,000, a refund of all loan
proceeds paid under the promissory note, and the return of all

loan documents evidencing rights to the property. See id. at
*23-24.
On May 10, 2024, Defendant moved to dismiss Plaintiff’s
complaint for failure to state a claim. See ECF No. 10. Plaintiff
opposed Defendant’s Motion on May 29, 2024. See ECF No. 11.
Defendant replied on June 7, 2024. See ECF No. 12. On July 11,
2024, Plaintiff filed a sur-reply addressing Defendant’s reply.
See ECF No. 13. Defendant moved to strike Plaintiff’s sur-reply
on July 12, 2024, see ECF No. 14, which the Court partially
granted on August 16, 2024. See ECF No. 18.
III. Jurisdiction
The Court has federal question jurisdiction under 28 U.S.C.

§ 1331, which grants district courts original jurisdiction over
all civil actions arising under the Constitution, laws, or
treaties of the United States, based on Plaintiff’s allegation
that Defendant violated the TILA. The Court has supplemental
jurisdiction over Plaintiff’s state law claims pursuant to 28
U.S.C. § 1367.
IV. Standard of Review
“In determining whether a complaint fails to state a claim,
the court must construe the complaint in the light most favorable
to the plaintiff[.]” Payne v. Secretary of Treasury, 73 Fed.Appx.
836, 837 (6th Cir. 2003). Under Federal Rule of Civil Procedure
8(a)(2), a complaint need only contain “a short and plain

statement of the claim showing that the pleader is entitled to
relief.” Fed. R. Civ. P. 8(a)(2). It need not contain “detailed
factual allegations,” Bell Atlantic Corp. v. Twombly, 550 U.S.
544, 555 (2007), but it must assert “more than an unadorned,
the-defendant-unlawfully-harmed-me accusation.” Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009). “Following Twombly and Iqbal,
it is well settled that a complaint must contain sufficient
factual matter, accepted as true, to state a claim to relief
that is plausible on its face[.]” Center for Bio-Ethical Reform,
Inc. v. Napolitano, 648 F.3d 365, 369 (6th Cir. 2011) (emphasis
added). A claim is plausible when the alleged fact “allows the
court to draw the reasonable inference that the defendant is

liable for the misconduct alleged.” Iqbal, 556 U.S. at 678.
Pro se complaints must also meet this plausibility standard.
They are “not exempt from the Federal Rules of Civil Procedure.”
Selmon-Austin v. Wells Fargo Bank, No. 2:21-cv-02724, 2022 WL
18141470, at *1 (W.D. Tenn. Sep. 7, 2022) (citing Wells v. Brown,
891 F.2d 591, 594 (6th Cir. 1989)). Although “pro se complaints
are held to less stringent standards” and “should be liberally
construed,” Williams v. Curtin, 631 F.3d 380, 383 (6th Cir.
2011), courts do not “abrogate [the] basic pleading essentials
in pro se suits.” Wells, 891 F.2d at 594. If essential elements
are missing, dismissal is warranted as a matter of law. See Mayer
v. Mylod, 988 F.2d 635, 638 (6th Cir. 1993) (explaining that the

“purpose of Rule 12(b)(6) is to allow a defendant to test
whether, as a matter of law, the plaintiff is entitled to legal
relief even if everything alleged in the complaint is true.”).
V. Analysis
Defendant moves to dismiss each of Plaintiff’s claims based
on a variety of legal arguments. See ECF No. 10.
A. Declaratory Judgment Claim
Plaintiff seeks a declaratory judgment that Defendant has
no right to foreclose on Plaintiff’s property, alleging that the
securitization of the mortgage “forever destroyed” the note and
mortgage. See Compl. at *19, ECF No.1. Plaintiff’s theory is
that the deed of trust, promissory note, and the underlying debt

obligation are inseparable components of the mortgage, and that
any separation would render the entire mortgage unenforceable.
See id. at *7. Based on this theory, Plaintiff contends that
the securitization effectively voided his debt obligation. See
id. Defendant denies that the mortgage was ever securitized,
assigned, or transferred. See ECF No. 10.
There is no legal authority supporting Plaintiff’s
proposition that a loan becomes unenforceable when securitized.
It is well-settled in the Sixth Circuit that the securitization
of a mortgage alone does not free a borrower from the borrower’s
obligation to repay. See Thompson v. Bank of America, N.A., 773
F.3d 741, 749 (6th Cir. 2014) (“securitization of a note does

not alter the borrower’s obligation to repay the loan.”); see
also Johnson v. Broker Solutions, Inc., No. 3:15-cv-00047, 2015
WL 4469276, at *3 (M.D. Tenn. Jul. 22, 2015).1
Securitization merely “creates a separate contract,
distinct from a plaintiff’s obligations under the [original
note].” Dauenhauer v. Bank of New York Mellon, 562 Fed.Appx.
473, 480 (6th Cir. 2014). Under Tennessee law, the mortgage
note is a negotiable instrument which “can be sold or assigned
to another party who then receives the right to enforce the
instrument.” Thompson, 773 F.3d at 749 (citing Tenn. Code Ann.
§§ 47-3-104, 201, 203, 301, 302). On assignment, the borrower’s
debt obligation remains intact. See id. (citing W.C. Early Co.

v. Williams, 186 S.W. 102, 103 (1916)). Therefore,
securitization will not “shield plaintiff’s property from
foreclosure.” Dauenhauer, 562 Fed.Appx. at 480.

1 In Thompson, the Sixth Circuit also noted the uptick in claims related to
securitization and addressed the extent to which securitization might affect
the borrower’s obligations to repay. See Thompson, 773 F.3d at 746. The
Sixth Circuit noted that, “the district courts in this circuit, particularly
in Tennessee, have entertained a spate of civil actions that advance legal
theories similar to [the plaintiff’s] ... [M]any of these civil actions are
scattershot affairs, tossing myriad (sometimes contradictory) legal theories
at the court to see what sticks.” Id. at 748.
Federal law allows the creation of mortgage-backed
securities through securitization. See Securities Act of 1933,
15 U.S.C. §§ 77a-77aa; Secondary Mortgage Market Enhancement Act

of 1984, Pub. L. 98-440, 98 Stat. 1689. Contrary to Plaintiff’s
assertions, “the pooling of mortgages into investment trusts is
not some sort of illicit scheme that taints the underlying debt.”
Thompson, 773 F.3d at 749.
Even if Plaintiff’s allegation that the mortgage was
securitized were accepted as true, Plaintiff cannot state a
plausible claim to relief. Plaintiff’s declaratory judgment
claim fails as a matter of law.
B. Fraudulent Concealment Claim
Plaintiff claims that Defendant committed fraudulent
concealment by failing to disclose (1) its intent to transfer
the mortgage when the parties signed the loan agreement, and (2)

the terms of the securitization agreement with the Fannie Mae
Trust. See Compl. at *17, ECF No. 1. Plaintiff asserts that,
had he “known […] the truth” that the mortgage would be
securitized, he “would not have pledged a security to
[Defendant].” Id. at *18. Plaintiff alleges that this
information was material, and that the concealment was
intentional. See id.
To establish a claim of fraudulent concealment under
Tennessee law, a plaintiff must show “(1) that the defendant
took affirmative action to conceal or remained silent and failed
to disclose material facts despite a duty to do so and, (2) the
plaintiff could not have discovered the cause of action despite

exercising reasonable care and diligence.” Shadrick v. Coker,
963 S.W.2d 726, 735 (Tenn. 1998) (citing Benton v. Snyder, 825
S.W.2d 409, 414 (Tenn. 1992)). A duty to disclose arises when
there is a “confidential or fiduciary relationship between the
parties.” Id. (citing Hall v. De Saussure, 297 S.W.2d 81, 85
(1956)).
When alleging fraud, a plaintiff must meet a heightened
pleading standard. Federal Rule of Civil Procedure 9(b) requires
fraud allegations to be stated with particularity as to the
circumstances, rather than mere plausibility. See Fed. R. Civ.
P. 9(b) (emphasis added). At a minimum, fraud allegations must
state “the time, space, and content of the alleged

misrepresentation […]; the fraudulent scheme; the fraudulent
intent of the defendants; and the injury resulting from the
fraud.” Coffey v. Foamex L.P., 2 F.3d 157, 161-62 (6th Cir.
1993). The test is whether the complaint places the defendant
on “sufficient notice of the misrepresentation,” allowing the
defendant to respond “in an informed way [to] plaintiff’s claim
of fraud.” Id. at 162 (citing Brewer v. Monsanto Corp., 644
F.Supp. 1267, 1273 (M.D. Tenn. 1986)).
Plaintiff has failed to plead with particularity the
essential elements of the fraudulent concealment claim.
Plaintiff does not allege any facts to support an inference that

Defendant owed a duty to disclose the terms of securitization to
Plaintiff. Securitization merely creates a separate contract
that does not alter Plaintiff’s rights or obligations under the
original note, and Plaintiff, as third party, has no right or
interest in the securitization agreement between Defendant and
the Fannie Mae Trust. See Dauenhauer, 562 Fed.Appx. at 480.
Defendant has no contractual or fiduciary obligation to disclose
the terms of securitization. Plaintiff’s fraudulent concealment
claim must be dismissed.
C. Truth in Lending Act Violation Claim
1. TILA’s Notice Requirement
Plaintiff claims that Defendant violated the TILA by failing

to comply with its notice obligations. Plaintiff asserts that
Defendant did not “record the transfer [of mortgage] in the
Official Records of the Shelby County Recorder’s Office within
30 days along with [a] notification” to Plaintiff of that
transfer. Compl. at *7, ECF No. 1. Although Plaintiff cites the
wrong section of the United States Code, the Court construes
this claim as arising under 15 U.S.C. § 1641(g).2

2 Plaintiff alleges that, “[u]nder 41 U.S.C. § 1641[,] any transfers of the
[…] Mortgage Loan to the Federal National Mortgage Association Trust would
be in violation of [the] Federal Statute.” Compl. at *7, ECF No. 1. The
Section 1641(g) of TILA requires that, when a mortgage loan
is assigned or otherwise transferred, the assignee must notify
the borrower in writing within 30 days. See 15 U.S.C. § 1641(g).

The written notice must state:
(A) the identity, address, telephone number of the new
creditor;
(B) the date of transfer;
(C) how to reach an agent or party having authority to act
on behalf of the new creditor;
(D) the location of the place where transfer of ownership
of the debt is recorded; and
(E) any other relevant information regarding the new
creditor.
See 15 U.S.C. § 1641(g)(1)(A)-(E). The notice requirement
applies specifically to a mortgage assignee, not the original

mortgagee. See id. Only “entities that acquire legal title to
the debt obligation” are subject to § 1641(g). Robertson v. U.S.
Bank, N.A., 831 F.3d 757, 762 (6th Cir. 2016). In Robertson,
the Sixth Circuit clarified that holders of the mortgage
instrument (such as a deed of trust) without rights to the
underlying debt are not subject to the notice requirement. See
id.

statutory provision on which Plaintiff relies does not exist in the United
States Code. It appears that Plaintiff is referring to 15 U.S.C. § 1641(g).
Accepting all facts in Plaintiff’s complaint as true, his
TILA claim fails because Defendant has no duty notify Plaintiff
under 15 U.S.C. § 1641(g). First, Defendant is not a mortgage

assignee. Only the Fannie Mae Trust, as the alleged assignee,
would owe a duty of notification to Plaintiff. Second,
Plaintiff’s complaint alleges that Defendant “gave up all rights
to the debt after the [securitization].” Compl. at *9, ECF No.
1. If that statement is accurate, Defendant would be relieved
of any notice obligations because § 1641(g) applies only to
entities that acquire legal title to the debt obligation.
Robertson, 831 F.3d at 762.
2. TILA’s One-Year Statute of Limitations
Even if Plaintiff could establish that Defendant had a duty
to notify him under § 1641(g), his TILA claim must be dismissed
as time-barred. Under 15 U.S.C. § 1640(e), “[a]ny action under
this section may be brought […] within one year from the date of

the occurrence of the violation.” 15 U.S.C. § 1640(e) (emphasis
added). “[T]he statute of limitations begins to run when the
plaintiff has a complete and present cause of action and thus
can file and obtain relief.” Wike v. Vertrue, Inc., 566 F.3d
590, 593 (6th Cir. 2009) (internal quotations omitted).
Plaintiff has not specified the exact date of the alleged
securitization, but the complaint suggests it occurred on or
shortly after November 11, 2008. Plaintiff alleges that the
“Original Lender, [t]he Bank, gave up all the rights to [the
debt] to Fannie Mae [Trust] shortly after the November 11, 2008
signing.” See Compl. at *9, ECF No. 1. That date cannot be

correct because the original mortgage transaction was executed
on November 21, 2008. A mortgage cannot be securitized before
it is created.
Even if the alleged securitization occurred on November 11,
2008, the TILA’s one-year statute of limitations would bar the
claim. Plaintiff did not file this lawsuit until April 4, 2024,
long after the one-year limitations period had run. Plaintiff’s
claim is time-barred. He has failed to state a plausible claim
of TILA violation.
D. Quiet Title Claim
Plaintiff brings a claim to quiet title. He argues that
the securitization of his mortgage clouded the title. He asks

the Court to declare that “the title to the subject property is
vested in plaintiff alone,” and that any of Defendant’s rights,
security interest, or title in the property be extinguished. See
Compl. at *21, ECF No. 1.
To succeed on a quiet title claim, a plaintiff must “show
that he himself has the title, or else he has no right to have
a cloud removed from that to which he has no title in himself.”
Dauenhauer, 562 Fed.Appx. at 481 (citing Hoyal v. Bryson, 53
Tenn. 139, 141 (Tenn. 1871)). “[A] party wishing to quiet title
must show that he has superior title against any other
claimants.” Starkey v. Bank of America, N.A., No. 3:17-0511,
2018 WL 3872193, at *6 (M.D. Tenn. Aug. 15, 2018) (citing Hoyal,

53 Tenn. at 141). Under Tennessee law, “the lender, the holder
of the note, has title to the property [and] … [u]ntil the note
is satisfied, the holder of the note has superior title to
property.” Thompson, 773 F.3d at 750-51 (citing Hoyal, 53 Tenn.
at 141).
Plaintiff has not established any plausible legal basis on
which he has title to the property, let alone superior title.
Nowhere in his 24-page complaint or subsequent filings does he
demonstrate that he had satisfied the obligations in his note to
acquire title. Plaintiff’s only relevant assertion is that the
securitization clouds the title. See Compl. at *21, ECF No. 1.
However, securitization does not alter Plaintiff’s debt

obligations under the note, does not affect the property’s title,
and does not affect the priority of title. See Thompson, 773
F.3d at 749. Plaintiff’s quiet title claim fails as a matter of
law.
VI. Conclusion
For the foregoing reasons, each of Plaintiff’s claims fails
as a matter of law. Defendant’s Motion to Dismiss under Rule
12(b)(6) is GRANTED. Plaintiff’s declaratory judgment claim,
fraudulent concealment claim, TILA violation claim, and quiet
title claim are DISMISSED WITH PREJUDICE.

SO ORDERED this 18th day of October, 2024.

/s/ Samuel H. Mays, Jr.
SAMUEL H. MAYS, JR.
UNITED STATES DISTRICT JUDGE

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10670266. Public record. Not legal advice.