Regions Bank v. Donnie Fletcher; Dennis Fletcher; Internal Revenue Service

RECOMMENDED FOR PUBLICATION
Pursuant to Sixth Circuit I.O.P. 32.1(b)
File Name: 23a0092p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
REGIONS BANK,
Plaintiff-Appellant,
v.
DONNIE FLETCHER; DENNIS FLETCHER; INTERNAL
REVENUE SERVICE,
Defendants-Appellees.
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No. 22-5725
Appeal from the United States District Court
for the Eastern District of Tennessee at Chattanooga.
No. 1:21-cv-00291—Travis Randall McDonough, District Judge.
Decided and Filed: May 4, 2023
Before: GRIFFIN, STRANCH, and DAVIS, Circuit Judges.
_________________
COUNSEL
ON BRIEF: Walter N. Winchester, E. Brian Sellers, WINCHESTER, SELLERS, FOSTER &
STEELE, P.C., Knoxville, Tennessee, for Appellant. William A. Harris, III, HARRIS LAW
FIRM, PLLC, Chattanooga, Tennessee, for Appellees Donnie and Dennis Fletcher. Michael J.
Haungs, Bethany B. Hauser, UNITED STATES DEPARTMENT OF JUSTICE, Washington,
D.C., for Appellee Internal Revenue Service.
_________________
OPINION
_________________
JANE B. STRANCH, Circuit Judge. In this judicial foreclosure action, Regions Bank
appeals the district court’s order granting summary judgment in favor of Donnie and Dennis
Fletcher (“the Fletcher brothers”). The district court concluded that Regions’ suit was barred by
>

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Tennessee’s statute of limitations for actions to enforce liens on real property, Tenn. Code Ann.
§ 28-2-111, and declined to establish an equitable lien in favor of the Bank. For the following
reasons, we AFFIRM the district court’s judgment.
I. BACKGROUND
In 1973, the brothers’ father, Marvin Fletcher, purchased real property located in
Sequatchie County, Tennessee. In 1997, he executed a Deed of Trust and a HELOC, a home
equity line of credit agreement (collectively, “the Loan”), in the amount of $200,000, in favor of
Regions Bank, which was known as Pioneer Bank at the time. The Deed of Trust was recorded
in the Register’s Office for Sequatchie County. The terms of the Loan provided for monthly
interest payments until the maturity date—May 10, 2007—at which point a final balloon
payment of the entire outstanding balance would become due. The Loan contained a provision
for “changing the terms of this agreement,” which stated that the Bank generally “may not
change the terms of this agreement,” with certain exceptions, including that “[the Bank] may
make changes that unequivocally benefit [the borrower].”
The Loan’s maturity date came and went in May 2007, but Regions Bank did not demand
payment of the entire balance, refinance the Loan, or foreclose on the property, although it had
the right to do so under the Loan. Instead, the Bank continued to accept monthly interest
payments. Marvin Fletcher passed away on December 24, 2009.1 Donnie and Dennis—who
used the property as their family trucking company’s place of business—made payments on the
Loan through their business both before and after their father’s death. The Fletchers’
bookkeeper, Carol Condra, wrote the checks to Regions Bank, which were drawn out of the
business account. Marvin signed the checks before his death, and Donnie signed them after.
The Bank did not find out about Marvin Fletcher’s death until December 15, 2011, but it
continued to accept payments from the brothers even afterward.
The Fletcher brothers maintain that they never requested an extension of the Loan’s
maturity date, never discussed potential extension terms with a representative of Regions Bank,
and never executed a written modification to the Loan. The Bank contends that Carol Condra
1Marvin Fletcher left a will, but it was never probated.

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called to discuss payments in May 2010 and requested an extension. The Bank claims it
reinstated the Loan after that phone call with a new maturity date of April 11, 2017. Carol
Condra denies requesting an extension and avers that, while she handled the payment of bills and
invoices for the Fletchers, she was never given the authority to enter or modify contracts on their
behalf. Pamela Harris, a representative of Regions Bank, testified that the Bank had a record of a
phone call, but had no record of the substance of the conversation or any written documentation
of an extension of the Loan. One of the Bank’s internal records simply reflects a maturity date
of April 11, 2017.
The Fletcher brothers continued to make monthly interest payments on the Loan until
September 2017. In August 2017, Donnie Fletcher realized that the Bank was sending
statements demanding payment of the entire debt and contacted the Bank. After visiting the
Signal Mountain branch of Regions Bank in person in September 2017 and making what would
be the final interest payment, a Bank representative informed Donnie Fletcher that the property
would be foreclosed on and “no further discussion would take place.” In total, Regions Bank
accepted around $100,000 in interest payments on the Loan after it learned of Marvin Fletcher’s
death.
Donnie Fletcher filed two Affidavits of Heirship on November 28, 2017, averring that, to
the best of his knowledge, there were no claims against his father’s estate, including taxes or
“other obligations.” However, Donnie Fletcher testified at his deposition that at the time of his
father’s death, he was aware of several outstanding debts, including federal tax liens.
On October 9, 2018, Regions Bank filed a foreclosure action against the property in
Tennessee state court, requesting a declaration that the Loan’s maturity date had been extended
and that it be granted the right to foreclose. The Bank named the Fletcher brothers, National
Loan Investors, and the IRS as defendants. The IRS removed the case to federal court. The
Bank amended its complaint, adding a request that the court grant the Bank an equitable lien
against the property. The IRS claims that the brothers owe over $65,000 in tax assessments on
the property and that any equitable lien held by the Bank is subordinate to the federal tax lien on
the property.

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After discovery, the Fletcher brothers moved for summary judgment, and the district
court granted their motion. The court determined that the statute of limitations had expired
because Tennessee law provides that “liens of mortgages, deeds of trust, and assignments of
realty executed to secure debts, shall be barred, and the liens discharged, unless suits to enforce
the same be brought within ten (10) years from the maturity of the debt.” Tenn. Code Ann. § 28-
2-111(a). Notwithstanding the brothers’ continued interest payments, it held that the maturity
date of the Loan had never been extended beyond the original May 2007 date, reasoning that
Tennessee law requires a written instrument, “duly executed and acknowledged,” and “filed for
record with the register of the county.” Tenn. Code Ann. § 28-2-111(c). Thus, the statute of
limitations expired on May 10, 2017, ten years beyond the Loan’s maturity date. The court also
rejected the argument that the brothers were estopped from raising the statute of limitations as a
defense and refused to establish an equitable lien on the property in favor of the Bank. The court
ultimately concluded that there were no genuine disputes of material fact and that the Fletcher
brothers were entitled to judgment as a matter of law on the Bank’s declaratory judgment and
equitable lien claims.
II. STANDARD OF REVIEW
We review de novo a district court’s grant of summary judgment, “drawing all reasonable
inferences in favor of the non-moving party.” V & M Star Steel v. Centimark Corp., 678 F.3d
459, 465 (6th Cir. 2012). Summary judgment is appropriate only when the evidence, taken in the
light most favorable to the nonmoving party, establishes that there is no genuine dispute of
material fact, and the movant is entitled to summary judgment as a matter of law. Fed. R. Civ. P.
56(c); Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-587 (1986). A
genuine issue of material fact exists when there are “disputes over facts that might affect the
outcome of the suit under the governing law.” Anderson v. Liberty Lobby, 477 U.S. 242, 248
(1986).
III. ANALYSIS
This appeal presents two main issues. First, whether the Loan’s maturity date was in
May 2007, making the Bank’s foreclosure suit untimely under Tennessee law, or whether the

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Loan’s maturity date was somehow extended to April 2017, rendering the suit timely. Second,
whether the Fletcher brothers are either equitably estopped from asserting the statute of
limitations as a defense, or the Bank is entitled to an equitable lien on the property. The parties
agree that Tennessee law applies.
We begin with the plain language of the statute of limitations. Tenn. Code Ann. § 28-2-
111(a) provides that:
Liens on realty, equitable or retained in favor of vendor on the face of the deed,
also liens of mortgages, deeds of trust, and assignments of realty executed to
secure debts, shall be barred, and the liens discharged, unless suits to enforce the
same be brought within ten (10) years from the maturity of the debt.
Applied here, the statute means that unless the original maturity date of May 10, 2007, was
extended, the Loan was discharged on May 10, 2017, and the Bank’s suit brought in October
2018 is barred. The statute further provides that liens on realty “may be extended without their
priority or legal effectiveness being in any way impaired, for any period of time agreed upon and
beyond the ten-year period from the maturity of the obligation or debt” provided that the
extension is “evidenced by a written instrument . . . [that is] duly executed and acknowledged,”
and “filed for record with the register of the county in which the realty affected is located.”
Tenn. Code Ann. § 28-2-111(c). The written instrument must “contain a brief recital of the facts
with reference to the original lien and shall provide that the lien shall continue, for a definite
period of time in the future[.]” Id. Additionally, Tennessee’s Statute of Frauds provides that
agreements to transfer an interest in land must be in writing. Tenn. Code Ann. § 29-2-101(a)(4).
Regions Bank does not contend that there is a written instrument evidencing an extension
of the Loan or that such an instrument was recorded. Instead, it raises a number of arguments,
including: that there was an oral modification to the Loan or it had the unilateral right to extend
the Loan; that the Loan contained a future advances provision that could extend the maturity date
for up to twenty years; that partial performance—the brothers’ continued monthly interest
payments—excused any writing requirement; and that the brothers are equitably estopped from
raising the statute of limitations as a defense or the Bank is entitled to an equitable lien. We
address each argument in turn.

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It is true, as the Bank argues, that Tennessee courts have relaxed § 28-2-111(c)’s
recording requirement and have declined to strictly enforce the statute of limitations when there
is a subsequent agreement in writing that “can be treated as a new mortgage or lien, executed and
created, within the ten-year period, to take the place of . . . the lien created in the original
instrument.” Fidelity Mut. Life Ins. Co. v. Wall, 68 S.W.2d 108, 110 (Tenn. 1934); Lindsey v.
Lindsey, 930 S.W.2d 553, 557 n.3 (Tenn. Ct. App. 1996). But see Bank of Am. v. Hall, No. 3:14-
CV-157-PLR-CCS, 2015 WL 7776559, at *3 (E.D. Tenn. Dec. 2, 2015) (“[A]bsent a duly
recorded extension, a renewal of the secured note will not extend the ten-year period.”). The
problem with several of the Bank’s arguments, however, is that a written instrument evidencing
the subsequent agreement is required. Tenn. Code Ann. § 28-2-111(c). “A mortgage, or a deed
of trust, in its legal aspect is a conveyance of an estate or an interest in land and as such [is]
within the meaning of the Statute of Frauds.” Lambert v. Home Fed. Sav. & Loan Ass’n, 481
S.W.2d 770, 772–73 (Tenn. 1972). A lien on real property “cannot be modified or extended by
an oral agreement to secure further indebtedness.” Id. at 773; Jackson v. CitiMortgage, Inc., No.
W2016-00701-COA-R3-CV, 2017 WL 2365007, at *7 (Tenn. Ct. App. May 31, 2017) (noting
that “any alleged oral contract or modification” purporting to modify a mortgage note “is
presumptively barred” by the Statute of Frauds); see also Hanas v. Seterus, Inc., 92 F. Supp. 3d
747, 751 (E.D. Tenn. 2015). Any extension must be in writing to satisfy the Statute of Frauds.
Because oral modifications to liens on real property are prohibited under Tennessee law,
it is unnecessary to resolve the parties’ disputes about whether bookkeeper Carol Condra called
the Bank in 2010 to request an extension, whether she could extend the terms of the Loan on the
Fletcher brothers’ behalf, or whether there was a meeting of the minds as to the essential terms of
the extension. Even when viewing the record in the light most favorable to the Bank, and
assuming the brothers or their representative verbally agreed to extend the maturity date of the
Loan, an oral modification cannot establish an extension. See Lambert, 481 S.W.2d at 773.
Although a screenshot of one internal record of the Bank’s shows that the Loan’s new maturity
date was April 11, 2017, the Bank does not argue that this screenshot is sufficient to satisfy the
writing requirement.

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The Bank also contends that whether or not the Fletchers requested an extension of the
loan, it had the unilateral authority under the HELOC agreement to change terms if they
“unequivocally benefit[ted]” the borrower, including to extend the maturity date of the Loan.
Setting aside whether extending the Loan’s maturity date would “unequivocally” benefit the
Fletcher brothers (which they dispute), § 28-2-111(c) “forbids the mere extension of the original
mortgage or lien” unless there is a “subsequent instrument of sufficient import” that it can be
treated as a new agreement, as the Bank’s own case citation makes clear. See Wall, 68 S.W.2d at
110. Without a writing evidencing the extension, § 28-2-111(c) bars the Bank’s claim to enforce
the Loan according to the new maturity date, even if it retained the power to make unilateral
changes benefitting the borrower.
Nor did the Loan’s future advances provisions automatically extend the Loan’s maturity
date by another ten years, as the Bank seems to argue. The future advances provisions in the
original Deed of Trust allowed for the borrower to receive additional loans from the Bank to be
secured by the property, provided that the due date of any new debt “not be more than twenty
years after” the original maturity date of May 10, 2007. But the Deed of Trust also provided that
“[a]ny such commitment must be agreed to in a separate writing.” The Bank does not address
this requirement, and its citation to In re Payne, 523 B.R. 560 (Bankr. E.D. Tenn. 2014) is not on
point, as that case involved a writing—a Chapter 11 Bankruptcy Plan—that the court held
satisfied the requirements of § 28-2-111(c). Id. at 579-80. And unlike Payne, there were never
any advances, written or oral, increasing the principal indebtedness in this matter, and the Bank
does not argue otherwise.
Next, Regions Bank invokes the doctrine of partial performance to argue that the Fletcher
brothers’ continued monthly interest payments made through their trucking company evidence
an agreement to extend the Loan’s maturity date. But, as the district court held, “payment of
principal or interest” will not “toll the statute of limitations placed on deeds of trust” under § 28-
2-111. See Slaughter v. Slaughter, 922 S.W.2d 115, 118 (Tenn. Ct. App. 1995). While the
Tennessee Supreme Court has recognized partial performance as an exception to the Statute of
Frauds, Buice v. Scruggs Equipment Co., 250 S.W.2d 44, 47-48 (Tenn. 1952), this exception is
unavailable when the agreement involves an interest in real property, see id.; Schnider v. Carlisle

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Corp., 65 S.W.3d 619, 622 (Tenn. Ct. App. 2001). As a Tennessee Court of Appeals has
explained, “[b]ased on this precedent, we fail to see how an oral agreement involving a transfer
of interest in land . . . can escape the bar of the Statute of Frauds based on the partial
performance doctrine.” Smith v. Hi-Speed, Inc., 536 S.W.3d 458, 477 (Tenn. Ct. App. 2016); see
also Owen v. Martin, No. M1999-02305-COA-R3-CV, 2000 WL 1817278, at *4 (Tenn. Ct. App.
Dec. 13, 2000) (collecting cases and noting that “it has long been the rule in this state that partial
performance will not prevent the application of the Statute of Frauds to an agreement involving
interests in real estate.”). In sum, a written instrument is required by both § 28-2-111(c) and the
Statute of Frauds. The Bank cannot get around that requirement by pointing to the Fletcher
brothers’ continued payments.
Bull Market, Inc. v. Elrafei, an unpublished Tennessee Court of Appeals decision cited
by the Bank, is not to the contrary. See No. W2016-01767-COA-R3-CV, 2017 WL 464923
(Tenn. Ct. App. Feb. 3, 2017). In Bull Market, a purchaser of real property entered into an
installment contract and signed a promissory note specifying the date on which monthly
payments would be made, but it began making payments on a different day of the month, which
the seller accepted for several years. Id. at *1. Seven years later, the seller sued for breach of
contract, attempting to nullify the agreement based on the “late” payments. Id. at *2. The court
concluded that “[a]fter a contract is made, it may be modified by express agreement or by
conduct that evidences the contracting parties’ consent” and that “the parties’ course of conduct
in carrying out the contract is the best evidence of their original intent.” Id. at *3. Bull Market,
however, involved successive written agreements, and the court simply considered parol
evidence to interpret the terms of those agreements. The case involved no argument, discussion,
or application of either the statute of limitations or the Statute of Frauds, and is therefore not
controlling here. See GRW Enterprises, Inc. v. Davis, 797 S.W.2d 606, 611-12 (Tenn. Ct. App.
1990) (“The parol evidence rule and the statute of frauds are separate rules that operate
independently from each other . . . . The statute of frauds . . . simply makes certain agreements
unenforceable through suit unless they are evidenced by a signed memorandum.”).
Because the Bank cannot show, as a matter of law, that the maturity date of the original
Loan was extended, its suit is untimely under Tenn. Code Ann. § 28-2-111(a). The only

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remaining questions are equitable: whether the Fletcher brothers should be equitably estopped
from asserting the statute of limitations as a defense, and whether the district court erred in
declining to establish an equitable lien in favor of the Bank.2
Regions Bank argues that the Fletcher brothers are equitably estopped from asserting the
statute of limitations as a defense based on their inequitable conduct. The Bank faults the
brothers for not probating Marvin Fletcher’s estate, not informing the Bank of Marvin’s death for
two years, and for filing Affidavits of Heirship in 2017 claiming there were no outstanding debts
on the property, even though the Bank had advised them that the Loan had matured. A
defendant is equitably estopped from asserting the statute of limitations as a defense “when the
defendant has misled the plaintiff into failing to file suit within the statutory limitations period.”
Redwing v. Cath. Bishop for Diocese of Memphis, 363 S.W.3d 436, 460 (Tenn. 2012). “The
focus of an equitable estoppel inquiry ‘is on the defendant’s conduct and the reasonableness of
the plaintiff’s reliance on that conduct.’” Id. at 461 (quoting Hardcastle v. Harris, 170 S.W.3d
67, 85 (Tenn. Ct. App. 2004). The plaintiff must also demonstrate that its delay in filing suit was
not attributable to its “own lack of diligence.” Id. (quoting Hardcastle, 170 S.W.3d at 85).
The Bank has failed to demonstrate that its reliance on the Fletcher brothers’ conduct was
reasonable. Although the brothers did not probate their father’s estate or notify the Bank
immediately of his death, the Bank nevertheless learned of Marvin Fletcher’s death in 2011—
after the maturity date of the Loan had passed and before the ten-year statute of limitations had
run. And Donnie Fletcher did not file his Affidavits of Heirship until after the Bank had
demanded that the brothers pay the entire outstanding balance of the debt. It is unclear how any
of these actions misled the bank into failing to file a timely foreclosure suit. Indeed, it appears
that any delay was due to the Bank’s own lack of diligence and failure to comply with Tennessee
laws requiring that lien extensions and contracts involving interests in real property be in writing.
The maturity date elapsed in 2007, when Marvin Fletcher was still alive. Yet the Bank did
nothing. It did not foreclose on the property, although it had the right to do so under the terms of
2The IRS’s brief chimes in on this issue alone, arguing that an equitable lien would be subordinate to the
federal tax lien on the property. Regions Bank does not dispute that the IRS’s liens would have priority over an
equitable lien.

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the Loan. Nor did it refinance the Loan, although it had that right too. Instead, Regions Bank
just continued to accept interest payments until it decided in September 2017 to foreclose on the
property without discussing refinancing with the Fletcher brothers. On this record, Regions
Bank has not shown that the brothers misled it into failing to file a suit before the limitations
period had run. The Fletcher brothers are not equitably estopped from asserting the statute of
limitations as a defense.
Whether the district court erred in refusing to impose an equitable lien on the property
involves a similar analysis. “An equitable lien is a right, not recognized at law, to have a fund or
specific property, or its proceeds, applied in whole or in part to the payment of a particular debt.”
Greer v. Am. Sec. Ins. Co., 445 S.W.2d 904, 907 (Tenn. 1969). “In order to create an equitable
lien, there must be proof (1) that the parties intended to make the particular property a security
for the obligation, (2) that valuable consideration passed between the parties, and (3) there is an
equitable reason for imposing the lien.” Ewing v. Smith, No. 85-294-II, 1986 WL 2582, at *5
(Tenn. Ct. App. Feb. 26, 1986) (citing Fed. Land Bank of Louisville v. Monroe Cnty., 54 S.W.2d
716, 717 (Tenn. 1933)).
Regions Bank contends that the evidence, viewed in the light most favorable to the Bank,
establishes that the Loan’s maturity date had been extended to April 11, 2017, and that equity
requires a finding that the ten-year period for enforcement did not begin to run until that date.
The problem with this argument is that “where the remedies available to a litigant are
circumscribed by the boundaries drawn at law . . . principles of equity cannot create rights
outside those boundaries.” ARC LifeMed, Inc. v. AMC-Tennessee, Inc., 183 S.W.3d 1, 26 (Tenn.
Ct. App. 2005). When a statute applies, courts “will, as a rule, apply the requirement of the
statute and not relieve the claim” unless the party claiming equity can show it could not have
“prevented the prejudicial situation in which he finds himself.” Swartz v. Atkins, 315 S.W.2d
393, 395 (Tenn. 1958). The Bank has not done so here. As addressed above, the Bank knew the
Loan was in default as early as 2011 (well within the statute of limitations period) but took no
action to foreclose or refinance. Had the Bank simply memorialized an extension to the Loan’s
maturity date in writing as required by Tenn. Code Ann. § 28-2-111(c), it would not be in this

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situation. On this record, we cannot find that equity excuses the Bank’s failures, and we decline
to impose an equitable lien on the property.
IV. CONCLUSION
For all these reasons, we AFFIRM the judgment of the district court.

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