Cox v. Bank of America

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF OHIO

EASTERN DIVISION

SABRINA L. COX, ) CASE NO. 1:23-cv-01977

)

Plaintiff, ) JUDGE DAVID A. RUIZ

)

v. )

)

BANK OF AMERICA, )

) MEMORANDUM OPINION AND ORDER

Defendant. )

Plaintiff Sabrina L. Cox, appearing pro se, alleges in her Complaint that Defendant Bank

of America violated the Truth in Lending Act (TILA), 15 U.S.C. § 1601 et seq., and the Uniform

Commercial Code (UCC), Ohio Rev. Code. § 1303.31 (UCC 3-301); id. § 1303.69 (UCC 3-604),

by “failing to perfect [its] security interest” in her automobile loan, selling “the loan note” and

converting it “into an asset-backed security,” and failing to disclose “the securitization process.”

(R. 1). She seeks damages, injunctive relief, and declaratory judgment. (See id. at PageID# 1–2).

Defendant has moved to dismiss the Complaint under Rule 12(b)(6) of the Federal Rules of Civil

Procedure. (R. 9, PageID# 51).1 Plaintiff filed an “answer in response to” the motion to dismiss,

but she did not address the merits of Defendant’s arguments. (R. 11). Defendant replied

1 Although the Court referred this action to the assigned magistrate judge for pretrial

management, that order indicates the “undersigned will rule directly on each dispositive motion

filed in this action.” (R. 7).

su pporting its motion to dismiss. (R. 12). Both Plaintiff and Defendant have submitted

supplemental authority. (R. 15; R. 16). For the following reasons, Defendant’s motion to dismiss

is GRANTED in its entirety.

I. Standard of Review

A Rule 12(b)(6) motion to dismiss challenges whether a complaint pleads a “short and

plain statement of the claim showing that the pleader is entitled to relief.” Ashcroft v. Iqbal, 556

U.S. 662, 677–78 (2009) (quoting Fed. R. Civ. P. 8(a)(2)). To get past the pleading stage, “a

complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is

plausible on its face.” Id. at 678 (quotation marks omitted). A claim is facially plausible “when

the plaintiff pleads factual content that allows the court to draw the reasonable inference that the

defendant is liable for the misconduct alleged.” Id. This “plausibility standard is not akin to a

‘probability requirement,’” but it demands “more than a sheer possibility that a defendant has

acted unlawfully.” Id. “Where a complaint pleads facts that are merely consistent with a

defendant's liability, it stops short of the line between possibility and plausibility of entitlement

to relief.” Id. (quotation marks omitted).

A court resolving a Rule 12(b)(6) motion “must consider the complaint in its entirety.”

Tellabs, Inc. v. Makor Issues & Rts., Ltd., 551 U.S. 308, 322 (2007). In doing so, a court must

accept as true all the factual allegations contained in the complaint and construe them in the light

most favorable to the plaintiff. See Erickson v. Pardus, 551 U.S. 89, 93–94 (2007) (per curiam);

accord Streater v. Cox, 336 F. App’x 470, 474 (6th Cir. 2009). A court need not accept as true

conclusions of law, “labels,” “a formulaic recitation of the elements of a cause of action,” and

naked assertions “devoid of further factual enhancement,” though these “can provide the

framework of a complaint.” Iqbal, 556 U.S. at 678–79. “When there are well-pleaded factual

al legations, a court should assume their veracity and then determine whether they plausibly give

rise to an entitlement to relief” under governing law. Id. at 679.

Because Plaintiff is a layperson representing herself, her Complaint “is ‘to be liberally

construed’” and “must be held to less stringent standards than formal pleadings drafted by

lawyers.” Erickson, 551 U.S. at 94 (quoting Estelle v. Gamble, 429 U.S. 97, 106 (1976)); see

also Williams v. Curtin, 631 F.3d 380, 383 (6th Cir. 2011). Nevertheless, Plaintiff must satisfy

basic procedural rules and pleading standards, see Grinter v. Knight, 532 F.3d 567, 577 (6th Cir.

2008); Erwin v. Edwards, 22 F. App’x 579, 580 (6th Cir. 2001); McGhee v. Light, 384 F. Supp.

3d 894, 896 (S.D. Ohio 2019) (citing Wells v. Brown, 891 F.2d 591, 594 (6th Cir. 1989)), and the

Court need not “conjure allegations” on her behalf, Erwin, 22 F. App’x at 580.

II. Background2

On October 16, 2021, “Plaintiff and Defendant entered into a retail installment contract,

which constituted an auto loan for … Plaintiff to purchase a vehicle.” (R. 1, PageID# 1).

However, “Defendant neglected to include the note, the evidence of debt, in the security

agreement and did not file a financing statement.” Id. Then, “Defendant initiated a securitization

process, which involved the sale of the loan note” and “effectively converted … Plaintiff’s loan

into an asset-backed security.” Id. Defendant did so “[w]ithout informing or gaining the consent

of … Plaintiff.” Id.

Plaintiff’s Complaint asserts claims under the TILA and the UCC. (Id. at PageID# 1–2).

On her first TILA claim, she alleges that “Defendant’s non-disclosure of the securitization

2 The facts set forth herein come from Plaintiff’s Complaint. (R. 1). All well-pleaded factual allegations and

reasonable inferences therefrom are presented as true and in the light most favorable to Plaintiff as the nonmovant.

See Erickson, 551 U.S. at 93–94.

pr ocess is a violation of the TILA.” Id. On the remaining TILA and UCC claims, she alleges that

Defendant failed “to include the note … in the security agreement and did not file a financing

statement, thus failing to perfect the security interest correctly.” (Id. at PageID# 1). After doing

so, Defendant sold the note, meaning that it “[wa]s not the holder of the note.” (Id. at PageID#

2). Plaintiff asserts Defendant “forfeited its right to enforce the note,” thereby “nullifying

[Plaintiff’s] obligation to pay the debt.” Id. Additionally, Plaintiff contends “by selling the note,

… Defendant voluntarily discharged [Plaintiff’s] debt …, absolving [her] of any liability under

the note.” Id. She requests relief in the form monetary damages, unspecified declaratory

judgment, and the Court ordering “Defendant to produce the original note and to demonstrate

that it was not securitized.” (Id. at PageID# 1–2).

Defendant moved to dismiss the Complaint. (R. 9). Defendant argues that Plaintiff fails to

state a TILA claim because she “does not identify which material disclosures were not

provided.” (Id. at PageID# 57). Defendant also argues that Plaintiff fails to state both her TILA

and UCC claims because securitization does not make a loan unenforceable. (Id. at PageID# 58).

Plaintiff filed an “answer in response to” Defendant’s motion to dismiss. (R. 12). This

filing, however, does not address Defendant’s arguments. See id. Instead, it restates the TILA

claim and requests new forms of declaratory and injunctive relief for the first time. See id. (she

“seeks a declaratory judgment … that Defendant has no legal right to enforce a security interest

in the [v]ehicle or to collect the alleged debt due to violations of TILA” as well as an injunction

“prohibit[ing] Defendant from attempting to collect the alleged debt or enforce any purported

security interest against the [v]ehicle”). It does not restate Plaintiff’s UCC claims. See id.

Defendant filed a reply supporting its motion to dismiss. (R. 12). Defendant reiterates the

arguments from its motion to dismiss and argues that Plaintiff’s failure to respond to the merits

of its “arguments regarding her theory of ‘securitization’” waives “any defense to th[ese]

arguments.” Id.

III. Analysis

A. Failure to Respond

A plaintiff’s failure to respond to a motion to dismiss “amounts to a forfeiture of” the

claims to which the motion is addressed. See Notredan, L.L.C. v. Old Republic Exch. Facilitator

Co., 531 F. App’x 567, 569 (6th Cir. 2013). “Likewise, opposition to a motion to dismiss is

waived, and dismissal appropriate, where the plaintiff fails to respond thereto.” March v.

Securitas Sec. Servs. USA, No. 1:23cv194, 2023 WL 5417778, at *3 (W.D. Mich. July 28, 2023)

(citing Humphrey v. U.S. Att’y Gen.’s Off., 279 F. App’x 328, 331 (6th Cir. 2008)), report &

recommendation adopted, 2023 WL 5379747 (W.D. Mich. Aug. 22, 2023).

Here, Plaintiff’s “answer in response to” the motion to dismiss fails to address

Defendant’s arguments’ merits, (See R. 12), which amounts to a failure to respond, see Cox v.

Bank of America, N.A., No. 1:23cv1976, 2024 WL 3091056, at *3 (N.D. Ohio June 21, 2024).

The Court could grant Defendant’s motion to dismiss on this ground alone. See March, 2023 WL

5417778, at *3. Nevertheless, the Court will address the substance of the Complaint and the

motion to dismiss.

B. TILA Disclosure Claim

The TILA “was enacted to promote the informed use of credit by consumers by

requiring meaningful disclosure of credit terms.” Begala v. PNC Bank, Ohio, Nat’l Ass’n,

163 F.3d 948, 950 (6th Cir. 1998) (citing Jones v. TransOhio Sav. Ass’n, 747 F.2d 1037,

1040 (6th Cir. 1984); 15 U.S.C. § 1601). The TILA lists the required disclosures, 15

U.S.C. § 1638(a), and dictates the “[f]orm and timing of” the required disclosures, id. §

16 38(b). “Failure to abide by disclosure requirements established in [the] TILA may

subject a creditor to civil liability.” Cox, 2024 WL 3091056, at *3 (citing 15 U.S.C. §

1640).

Here, Defendant argues that Plaintiff fails to state a plausible claim because she “does

not identify which material disclosures were not provided.” (R. 9, PageID# 57). Under the TILA,

“a creditor’s principal disclosure obligations arise before the credit transaction is consummated.”

Begala, 163 F.3d at 950 (citing Rudisell v. Fifth Third Bank, 622 F.2d 243, 246 (6th Cir. 1980);

12 C.F.R. § 226.17(b)); see also 12 C.F.R. § 226.17(b). “In close-ended transactions such as

[Plaintiff]’s car loan, the required disclosures … are to be made as of the time that credit is

extended, and it is as of that time that the adequacy and accuracy of the disclosures are

measured.” Begala, 163 F.3d at 950 (citations omitted) (citing 15 U.S.C. § 1638(b);

Bartholomew v. Northampton Nat’l Bank of Easton, 584 F.2d 1288, 1296 (3d Cir. 1978)).

Plaintiff does not mention, let alone contest, the adequacy of the material disclosures made when

credit was extended. (See R. 1). Instead, she alleges that when Defendant later sold the loan, it

did so “without informing” her, “gaining [her] consent,” or disclosing “the securitization

process.” (Id. at PageID# 1–2). These allegations fail to support a contention that any

“mandatory disclosure was not properly or timely submitted.” Cox, 2024 WL 3091056, at *3.

Rather, they allege that Defendant violated the TILA by failing to make a subsequent disclosure.

This claim is not actionable under TILA’s express language. TILA states that even when an “act,

occurrence, or agreement subsequent to the delivery of the required disclosures” renders the

required disclosures inaccurate, the “inaccuracy resulting therefrom does not constitute a

violation of [TILA].” 15 U.S.C. § 1634. Thus, Defendant’s subsequent “non-disclosure of the

securitization process,” which Plaintiff does not allege rendered any mandatory disclosures

in accurate, (see R.1), does not violate the TILA. Therefore, Plaintiff fails to state this TILA

claim.

C. TILA and UCC Securitization Claims

On the remaining TILA and UCC claims, Plaintiff alleges that “Defendant neglected to

include the note … in the security agreement and did not file a financing statement.” (R. 1,

PageID# 1). She alleges that Defendant “fail[ed] to perfect the security interest correctly” or

potentially eliminated its interest and her debt by later selling it. (See id. at PageID# 1–2). Based

on these assertions, she alleges that Defendant violated the TILA and the UCC, thereby

nullifying her debt. (R. 1, PageID# 1–2). Defendant argues that securitization does not make a

loan unenforceable. (R. 9, PageID# 58).

Defendant is correct that “as a matter of law, securitization alone does not render a note

… unenforceable and does not alter a borrower’s obligation to pay back h[er] loan.” Dauenhauer

v. Bank of N.Y. Mellon, 562 F. App’x 473, 480 (6th Cir. 2014) (per curiam) (citing Samples v.

Bank of Am., N.A., No. 3:12cv44, 2012 WL 1309135, at *3–5 (E.D. Tenn. Apr. 16, 2012)); see

also Cox, 2024 WL 3091056, at *3. “Rather, securitization creates ‘a separate contract, distinct

from [a p]laintiff’s debt obligations under the reference credit (i.e. the Note).’” Dauenhauer, 562

F. App’x at 480 (alteration in original) (citing Larota-Florez v. Goldman Sachs Mortg. Co., 719

F. Supp. 2d 636, 642 (E.D. Va. 2010)); see also Cox, 2024 WL 3091056, at *3. “Accordingly,

Plaintiff’s claim[s] that [Defendant] violated the TILA” and the UCC “fail[] as a matter of law.”

Cox, 2024 WL 3091056, at *3–4.

IV. Conclusion

For the foregoing reasons, Defendant’s Rule 12(b)(6) motion to dismiss, (R. 9), is

GRANTED. Plaintiff’s Complaint is dismissed in its entirety for failure to state an actionable

claim.

IT IS SO ORDERED.

s/ David A. Ruiz

David A. Ruiz

United States District Judge

Date: February 27, 2025