67 F.4th 797
6th Cir.2023Background
- In 1997 Marvin Fletcher executed a recorded Deed of Trust and HELOC with Regions Bank (then Pioneer Bank), maturing May 10, 2007.
- The Bank did not demand payoff, foreclose, or refinance at maturity; it continued accepting monthly interest payments, including after Marvin’s death on Dec. 24, 2009.
- Regions later claimed an oral extension (internal record showing an April 11, 2017 maturity); no written, acknowledged, or recorded extension exists.
- Regions filed foreclosure in Oct. 2018; the IRS and Fletcher brothers were defendants; the Bank sought a declaratory judgment and an equitable lien.
- The district court granted summary judgment for the Fletcher brothers, holding enforcement was time-barred under Tenn. Code Ann. § 28-2-111(a) because no written, recorded extension satisfied § 28-2-111(c) or the Statute of Frauds, and denying equitable estoppel and an equitable lien.
Issues
| Issue | Plaintiff's Argument (Regions) | Defendant's Argument (Fletchers) | Held |
|---|---|---|---|
| Whether the loan maturity was extended so suit was timely | Oral extension (phone call/internal record) or unilateral bank change made maturity Apr. 11, 2017 | No written, executed, recorded extension; original maturity was May 10, 2007 | No extension; suit barred by § 28-2-111(a) (statute expired May 10, 2017) |
| Whether oral modification or bank’s unilateral power can extend lien | Oral modification or HELOC term allowing unilateral changes (that benefit borrower) can alter maturity | Statute of Frauds and § 28-2-111(c) require a written, acknowledged, recorded instrument | Oral/unrecorded changes insufficient; writing and recording required |
| Whether partial performance (continued interest payments) or future-advance provisions toll/extend the lien | Continued payments or future-advances clause effectively extended maturity / show agreement | Payments do not toll § 28-2-111; future advances required a separate writing and none occurred | Payments/future-advance argument fails; partial performance does not avoid Statute of Frauds for real-property interests |
| Whether equitable estoppel or an equitable lien should bar SOL or secure the Bank | Brothers’ conduct (not probating, delaying notice, affidavits) misled Bank; equity should bar SOL or impose lien | Bank was not reasonably misled; Bank learned of death in 2011 and delayed action | Equitable estoppel and equitable lien denied; equity will not create rights outside statute when Bank could have protected itself |
Key Cases Cited
- Fidelity Mut. Life Ins. Co. v. Wall, 68 S.W.2d 108 (Tenn. 1934) (subsequent written instrument may be treated as new mortgage for § 28-2-111 purposes)
- Lambert v. Home Fed. Sav. & Loan Ass’n, 481 S.W.2d 770 (Tenn. 1972) (mortgage interests are subject to Statute of Frauds; oral extension insufficient)
- Buice v. Scruggs Equipment Co., 250 S.W.2d 44 (Tenn. 1952) (partial-performance exception to Statute of Frauds does not apply to transfer of real-property interests)
- Slaughter v. Slaughter, 922 S.W.2d 115 (Tenn. Ct. App. 1995) (payment of interest or principal does not toll § 28-2-111 limitations)
- Redwing v. Cath. Bishop for Diocese of Memphis, 363 S.W.3d 436 (Tenn. 2012) (equitable estoppel requires plaintiff’s reasonable reliance on defendant’s misleading conduct)
- Greer v. Am. Sec. Ins. Co., 445 S.W.2d 904 (Tenn. 1969) (elements and nature of an equitable lien)