Court Opinion

ID: 2757958
Source: CourtListenerOpinion
Date Created: 2014-12-05 17:00:56.69055+00
Date Added: 2024-06-11T10:34:19.804230
License: Public Domain

RECOMMENDED FOR FULL-TEXT PUBLICATION
                               Pursuant to Sixth Circuit I.O.P. 32.1(b)
                                      File Name: 14a0287p.06

                    UNITED STATES COURT OF APPEALS
                                  FOR THE SIXTH CIRCUIT
                                    _________________

 LORRIE THOMPSON,                                        ┐
                                  Plaintiff-Appellant,   │
                                                         │
                                                         │       No. 14-5561
        v.                                               │
                                                          >
                                                         │
 BANK OF AMERICA, N.A., et al.,                          │
                             Defendants-Appellees.       │
                                                         ┘
                          Appeal from the United States District Court
                       for the Middle District of Tennessee at Nashville.
                     No. 3:13-cv-00817—Todd J. Campbell, District Judge.

                             Decided and Filed: December 5, 2014

                  Before: SILER, SUTTON, and STRANCH, Circuit Judges.

                                      _________________

                                          COUNSEL

ON BRIEF: Carol A. Molloy, Lynnville, Tennessee, for Appellant. Edmund S. Sauer, Frankie
N. Spero, BRADLEY ARANT BOULT CUMMINGS LLP, Nashville, Tennessee, for Appellees.

                                      _________________

                                           OPINION
                                      _________________

       SILER, Circuit Judge. This appeal concerns the extent to which the securitization of a
mortgage note might affect the borrower’s obligations to repay the loan or cloud the property’s
title. Lorrie Thompson was facing foreclosure. She asked Bank of America (BOA) to modify
her repayment plan under the federal Home Affordable Modification Program (HAMP). BOA
denied the modification on the grounds of insufficient documentation, even though she sent BOA
the requested documents several times. She filed suit, seeking to quiet title and alleging, among

                                                1
No. 14-5561                    Thompson v. Bank of Am., et al.                              Page 2

other things, various theories of fraud.            She claims that because her mortgage note was
immediately “securitized” (sold to a pool of anonymous investors through a mortgage trust),
BOA falsely induced her into signing the mortgage by pretending it was an actual lender. She
alleges her title has become clouded on account of the transfer and securitization of the note.
She also alleges that BOA fraudulently induced her to seek modification of her repayment plan
while either knowing it lacked authority to modify her repayment terms or else intending to drive
her into foreclosure by giving her the run-around. The district court dismissed Thompson’s
claims under Fed. R. Civ. P. 9(b) and 12(b)(6). For the reasons explained below, we AFFIRM.

                                                        I.

        In 2006, Thompson signed a $354,800 mortgage note, with American Mortgage Express
Corp. (AME) as the lender. Section 1 of the note states: “I understand that the Lender may
transfer the Note.” The “Prepayment Addendum” to the note states, “Borrower understands that
Lender may transfer the Note, the related Mortgage, Deed of Trust, or Security Deed (‘Security
Instrument’) and this Addendum.” Similar language appears on the “Prepayment Rider.”

        The “uniform covenants” section of the deed of trust also states:

        The Note or a partial interest in the Note (together with this Security Instrument)
        can be sold one or more times without prior notice to Borrower. A sale might
        result in a change in the entity (known as the “Loan Servicer”) that collects
        Periodic Payments . . . and performs other mortgage loan servicing obligations
        . . . . There might also be one or more changes of the Loan Servicer unrelated to a
        sale of the Note.

The deed also authorizes the lender to appoint a successor or substitute trustee.

        The signature page of the note contains a signed, undated stamp memorializing AME’s
transfer of the note to Countrywide Bank, NA. The third page of the note is a blank allonge1
bearing a signed, undated stamp whereby Countrywide Bank, NA transferred the note to

        1
          An allonge is a slip of paper sometimes attached to a negotiable instrument for the purpose of receiving
further endorsements. ALLONGE, Black’s Law Dictionary (9th ed. 2009). Under UCC § 3-3-204(a) & cmt., an
allonge “is part of the instrument,” and is valid even if the instrument has enough space to hold additional
endorsements.
No. 14-5561                 Thompson v. Bank of Am., et al.                      Page 3

Countrywide Home Loans, Inc., and another signed, undated stamp endorsed from Countrywide
Home Loans to blank. BOA purchased Countrywide in 2008 and has possession of the note.

       In 2012, Thompson received notice from BOA offering to short-sell her house in lieu of
foreclosure. Thompson responded that she would rather pursue a modification of her repayment
terms under the HAMP program.           HAMP is a federal program enacted pursuant to the
Emergency Economic Stabilization Act, 12 U.S.C. §§ 5201–61, that gives lenders incentives to
offer loan modifications to borrowers who have a mortgage payment-to-income ratio of over
31%. See Olson v. Merrill Lynch Credit Corp., 576 F. App’x 506, 511 (6th Cir. 2014). The goal
of HAMP is to encourage mortgage holders to renegotiate qualifying loans to reduce the
homeowner’s mortgage payments to a sustainable level. Wilson v. HSBC Mortg. Servs., Inc.,
744 F.3d 1, 6 n.3 (1st Cir. 2014).

       Thompson states that over the next several months she received and complied with
numerous, often redundant, document requests related to her modification application. BOA
never granted her request for HAMP relief. She filed suit against BOA, Mortgage Electronic
Registration Systems, Inc. (MERS), and other defendants, including unidentified persons she
believes to be anonymous investors who are the true owners of her note. The district court
dismissed her claims for failure to comply with the applicable pleading standards.

                                                II.

       Although Thompson’s memoranda and briefs are not models of clarity, we can
summarize the basic theories that underlie her statutory, tort, and property law claims.

       Thompson’s major claims emerge from the fact that AME sold her debt to a pool of
anonymous investors in a series of transactions that she describes as “securitization” of her loan.
She claims securitization has severed whatever contractual relationship she might have had with
her lender, AME/BOA, with the effect that BOA is incapable of granting her a loan modification.
Thompson believes she is entitled to a loan modification under the HAMP program. She claims
BOA is only stringing her along, either because BOA lacks authority to grant a modification or
because BOA’s policy is to avoid granting modifications as BOA would prefer to foreclose.
No. 14-5561                 Thompson v. Bank of Am., et al.                   Page 4

       She also claims to have been victimized by fraud at the time she bought the property.
While Thompson admits she received a loan, she describes her entire closing as a sham and
claims her mortgage documents were fraudulent. She alleges that because the money that funded
her mortgage debt came from a pool of anonymous investors, AME was not a “lender” but “at
most an originator.” Thompson’s theory is that AME provided no “consideration” for the
mortgage contract, so the contract with AME is void and the mortgage note is a nullity. She says
the “coincidence of the money being received by the closing date” successfully created “the
illusion of a loan transaction” with AME. Her theory is that although she received a loan, her
contract to repay the loan was between herself and the anonymous investors who funded the loan
via several layers of electronic transactions.

       Thompson also argues that as her mortgage note changed owners and ended up as part of
an investment pool, the investors who acquired and sold her note through the process of
securitization may have paid some or all of her debt. She insists that she does not know how
much principal she owes on the loan; she needs discovery to uncover how much of her
indebtedness might already have been paid by third parties.

       Thompson also draws our attention to the use of MERS in the mortgage transactions.
MERS is a company that provides mortgage recording services to lenders and allows lenders to
trade the mortgage note and servicing rights on the market, with MERS maintaining electronic
recordings of each transaction. See MERS v. Neb. Dep’t of Banking and Fin., 704 N.W.2d 784,
787 (Neb. 2005). Thompson correctly states that MERS disclaims any ownership interest in the
notes that pass through its databanks. She argues that because MERS never held title to the
property and never processed funding or payments between herself and the unnamed creditors,
any assignment that was processed through MERS was a “sham” that generated a “wild deed.”
In fact, Thompson claims that the defendants’ use of MERS “is at least circumstantial evidence
of the intention to commit fraud” because its only purpose is “to cover and shield illegal
transactions.”
No. 14-5561                   Thompson v. Bank of Am., et al.                          Page 5

        Over the past few years, the district courts in this circuit, particularly in Tennessee, have
entertained a spate of civil actions that advance legal theories similar to Thompson’s.2 Like
Thompson’s, many of these civil actions are scattershot affairs, tossing myriad (sometimes
contradictory) legal theories at the court to see what sticks. To assist the district courts in
addressing this wave of creative litigation, we will address each of Thompson’s theories in detail.

        Before we discuss these claims from Thompson’s amended complaint, we will consider
two new allegations she brings before us. First, Thompson claims “there is a legitimate question
of fact as to whether the last page of the note containing the two endorsements . . . has anything
to do with” her loan. This allonge, she says, “has nothing on it linking the page” to her loan.
But Thompson did not raise this argument before the district court.

        Second, Thompson challenges the existence of Countrywide Bank FSB in the chain of
ownership. Although Countrywide Bank, NA is “named on documents” pertaining to the loan,
Countrywide Bank, FSB is not. But we take judicial notice of the fact that Countrywide Bank
changed its status from a “national association” bank (NA) to a “federal savings bank” (FSB) on
March 5, 2007.3 Thompson herself is aware that Countrywide Bank FSB was purchased by
BOA in 2008. This argument is a red herring.

        2
          See, e.g., Daee v. JP Morgan Chase Bank, N.A., No. 3:13-cv-1332, 2014 WL 5107050 (M.D. Tenn. Oct.
10, 2014); Deutsche Bank Nat’l Trust Co. v. Tibbs, No. 3:11-0763, 2014 WL 280365 (M.D. Tenn. Jan. 24, 2014);
Hixson v. Wilson & Assocs., PLLC, No. 1:12-cv-105, 2013 WL 6147826 (E.D. Tenn. Nov. 22, 2013); Cikovic v.
Homebridge Mortg. Bankers Corp., No. 12-671-KKC, 2013 WL 5437017 (E.D. Tenn. Sept. 27, 2013); Pugh v.
Bank of Am., No. 13-2020, 2013 WL 3349649 (W.D. Tenn. July 2, 2013); Dauenhauer v. Bank of N.Y. Mellon
(“Dauenhauer II”), No. 3:12-cv-01026, 2013 WL 2359602 (M.D. Tenn. May 28, 2013), aff’d, 562 F. App’x 473
(6th Cir. 2014); Mantsevich v. Countrywide Home Loans, Inc., No. 1:12-cv-157, 2013 WL 1326963 (E.D. Tenn.
Mar. 29, 2013); Smith v. America’s Wholesale Lender, No. 3-10-0800, 2013 WL 1131006 (M.D. Tenn. Mar. 18,
2013), aff’d sub nom. Smith v. BAC Home Loan Servicing, LP, 552 F. App’x 473 (6th Cir. 2014); Dauenhauer v.
Bank of N.Y. Mellon (“Dauenhauer I”), No. 3:12-cv-01026, 2013 WL 209250 (M.D. Tenn. Jan. 16, 2013); Gilliard
v. JP Morgan Chase Bank, N.A., No. 3:12-cv-236, 2012 WL 6139922 (E.D. Tenn. Dec. 11, 2012); Chapman v. Bank
of Am., No. 3-11-0504, 2012 WL 4090895 (M.D. Tenn. Sept. 17, 2012), aff’d, 543 F. App’x 554 (6th Cir. 2013);
Samples v. Bank of Am., N.A., No. 3:12-cv-44, 2012 WL 1309135 (E.D. Tenn. Apr. 16, 2012); Humphreys v. Bank
of Am. Corp., No. 11-2514-STA-tmp., 2012 WL 1022988 (W.D. Tenn. Mar. 26, 2012). Dauenhauer, Smith,
Cikovic, and Tibbs all involve the same attorney who represents Thompson.
        3
         Office of Thrift Supervision Order No. 2007-08                (March   5,   2007),   available   at
http://www.occ.gov/Static/ots/directors-orders/do-2007-08.pdf.
No. 14-5561                  Thompson v. Bank of Am., et al.                     Page 6

                                                  III.

       Before addressing Thompson’s individual claims, we need to address her background
argument that the securitization of her mortgage note altered her obligations under the note. On
this broad topic we make several observations relevant to Thompson’s claims.

       First, under Tennessee law, a promissory note is a negotiable instrument, unless it
contains a conspicuous statement that it is not negotiable. Tenn. Code. Ann. § 47-3-104. A note
can be sold or assigned to another party who then receives the right to enforce the instrument.
Id. §§ 47-3-201, 203, 301, 302. An assignment of a note is enforceable regardless of whether it
is recorded. W.C. Early Co. v. Williams, 186 S.W. 102, 103 (Tenn. 1916). An instrument may
be enforced by, among others, the “holder” of the instrument. Tenn. Code Ann. § 47-3-301.
When an instrument carries a blank endorsement, it becomes payable to the “bearer,” meaning
whoever possesses the note. Tenn. Code Ann. § 47-3-205.

       Second, securitizing a note does not sever the note from the deed of trust. Under
Tennessee law, the deed of trust follows the note. Whoever holds the note owns the deed. See
W.C. Early Co., 186 S.W. at 103-04; Clark v. Jones, 27 S.W. 1009, 1010 (Tenn. 1894).

       Third, federal law provides for the creation of mortgage-related securities. See Securities
Act of 1933, 15 U.S.C. §§ 77a–77aa; Secondary Mortgage Market Enhancement Act of 1984,
1984 Pub. L. 98-440, 98 Stat. 1689. The pooling of mortgages into investment trusts is not some
sort of illicit scheme that taints the underlying debt.

       Fourth, securitization of a note does not alter the borrower’s obligation to repay the loan.
Securitization is a separate contract, distinct from the borrower’s debt obligations under the note.
This means that payments related to the securitization of a note do not function to satisfy the
borrower’s mortgage obligations. See Dauenhauer v. Bank of N.Y. Mellon, 562 F. App’x 473,
480 (6th Cir. 2014).

       Fifth, courts have generally upheld the use of MERS in the transfer of mortgage notes.
Samples, 2012 WL 1309135, at *4 (collecting cases). Courts have also upheld language, like
No. 14-5561                  Thompson v. Bank of Am., et al.                          Page 7

that found in Thompson’s deed of trust,4 that grants MERS the power to act as agent for any
valid note holder, including assigning a deed and enforcing a note. Id. Since its founding in
1999, borrowers have attempted, without success, to attack the validity of their mortgage
obligations based on the involvement of MERS. See Dauenhauer, 562 F. App’x at 479 (quoting
Golliday v. Chase Home Fin., LLC, No. 1:10-cv-532, 2011 WL 4352554, at *7 (W.D. Mich.
Aug. 23, 2011)).

        Many of Thompson’s arguments boil down to her claim that she believed she would have
a traditional borrower/lender relationship with AME, and that AME (now BOA) would have
authority to modify the terms of the loan if modification was mutually agreeable (or, as
Thompson argues, required under the HAMP program).                  See Smith v. BAC Home Loans
Servicing, LP, 552 F. App’x 473, 476-77 (6th Cir. 2014) (analyzing a similar claim). But
Thompson’s expectations were not realistic under the express terms of the note and deed of trust
and under the laws pertaining to negotiable instruments and securities. In light of these five
principles, we now address Thompson’s claims in detail.

                                                   IV.

        When a district court grants a motion to dismiss for “failure to state a claim upon which
relief can be granted,” Fed. R. Civ. P. 12(b)(6), we review that decision de novo. To survive a
Rule 12(b)(6) motion, a complaint must comply with the pleading requirements of Rule 8(a),
which, among other things, requires “a short and plain statement of the claim showing that the
pleader is entitled to relief.” Ashcroft v. Iqbal, 556 U.S. 662, 667-68 (2009). The court must
construe the complaint in the light most favorable to the plaintiff and accept all well-pleaded
factual allegations as true. LULAC v. Bredesen, 500 F.3d 523, 527 (6th Cir. 2007). But a
pleading must go beyond “labels and conclusions” or a mere “formulaic recitation of the
elements of a cause of action.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). “‘[N]aked
assertions devoid of further factual enhancement’ contribute nothing to the sufficiency of the
complaint.” 16630 Southfield Ltd. P’ship v. Flagstar Bank, F.S.B., 727 F.3d 502, 506 (6th Cir.
2013) (quoting Iqbal, 556 U.S. at 678).

        4
          Thompson’s deed of trust states that MERS “is acting solely as a nominee for Lender and Lender’s
successors and assigns” and that “MERS is the beneficiary under this Security Instrument.”
No. 14-5561                 Thompson v. Bank of Am., et al.                       Page 8

                                                 V.

       Thompson brings a claim to quiet title. She argues that the securitization of her loan has
caused the title to become hopelessly clouded. She asks the court to declare her the sole owner
of the property, or at least to permit discovery to uncover the identities of the anonymous
investors she describes as the true lenders to whom she might owe mortgage payments.
Alternatively, Thompson suggests that third parties have already paid off her indebtedness to her
actual lender, and because she no longer owes money on the note, she has superior title. A party
wishing to obtain quiet title must plead that she has superior title against any other claimants.
See Hoyal v. Bryson, 53 Tenn. 139, 141 (1871).

       Thompson’s assertion that she is the only named party who can prove any form of
ownership in the property is unavailing. Tennessee is a “title theory” state. When a borrower
obtains a mortgage loan to buy the house, the lender, the holder of the note, has title to the
property. The borrower must satisfy her mortgage debt in order to obtain title. See Dauenhauer,
562 F. App’x at 481. Although Thompson has made conclusory allegations suggesting that
unidentified third parties have paid off her debt through the loan securitization process, she
makes no factual showing that her debt has been forgiven, cancelled, or fully paid. Also,
because Thompson is not a party or third-party beneficiary to the transactions whereby her note
was transferred, we fail to see how any of those funds could have been credited to her
indebtedness. Until the note is satisfied, the holder of the note has superior title to the property.
Nor has the presence of MERS disfigured Thompson’s chain of title. Courts have upheld
language in deeds of trust that, like Thompson’s, explicitly grants MERS the power to act as
agent for a note holder. See id. at 479.

                                                VI.

       Thompson has asserted claims of fraud in the inducement, common-law fraud, fraudulent
misrepresentation, and negligent misrepresentation. Each of these is governed by Fed. R. Civ. P.
9(b). See Pugh v. Bank of Am., No. 13-2020, 2013 WL 3349649, at *16 (W.D. Tenn. July 2,
2013) (explaining that a negligent misrepresentation claim must satisfy Rule 9(b)).             The
substance of these torts is governed by state law.
No. 14-5561                 Thompson v. Bank of Am., et al.                       Page 9

        Under Fed. R. Civ. P. 9(b), a party alleging fraud “must state with particularity the
circumstances constituting fraud or mistake. Malice, intent, knowledge, and other conditions of
a person’s mind may be alleged generally.” The purposes of Rule 9(b) are (1) to alert defendants
to the particulars of the allegations against them so they can intelligently respond; (2) to prevent
“fishing expeditions”; (3) to protect defendants’ reputations against fraud allegations; and (4) to
whittle down potentially wide-ranging discovery to only relevant matters. Chesbrough v. VPA,
P.C., 655 F.3d 461, 466-67 (6th Cir. 2011). Accordingly, to satisfy Rule 9(b), a plaintiff must
(1) specify the time, place, and content of the alleged misrepresentation, (2) identify the
fraudulent scheme and the fraudulent intent of the defendant, and (3) describe the injury resulting
from the fraud. U.S. ex rel. SNAPP, Inc. v. Ford Motor Co., 532 F.3d 496, 504 (6th Cir. 2008).

        In Hodge v. Craig, 382 S.W.3d 325, 342-43 (Tenn. 2012), the Tennessee Supreme Court
explained that the terms “intentional misrepresentation,” “fraudulent misrepresentation,” and
“fraud” all refer to the same tort, and expressed its preference for the term “intentional
misrepresentation.”      Thompson’s claims for “common law fraud” and “fraudulent
misrepresentation” are therefore one and the same.           Hodge enumerated the elements of
intentional misrepresentation as follows:

        To recover for intentional misrepresentation, a plaintiff must prove: (1) that the
        defendant made a representation of a present or past fact; (2) that the
        representation was false when it was made; (3) that the representation involved a
        material fact; (4) that the defendant either knew that the representation was false
        or did not believe it to be true or that the defendant made the representation
        recklessly without knowing whether it was true or false; (5) that the plaintiff did
        not know that the representation was false when made and was justified in relying
        on the truth of the representation; and (6) that the plaintiff sustained damages as a
        result of the representation.

Id. at 343.

        Regarding the separate tort of negligent misrepresentation, Tennessee has adopted the
definition found in the Restatement (Second) of Torts § 552, which strictly limits the tort to
“commercial” or “business” transactions. Hodge, 382 S.W.3d at 344-45; Robinson v. Omer, 952
S.W.2d 423, 427 (Tenn. 1997); Restatement (Second) of Torts § 552(1) & cmt. a. Tennessee’s
formulation of the tort creates liability only when:
No. 14-5561                     Thompson v. Bank of Am., et al.                             Page 10

        (1) the defendant is acting in the course of his business, profession, or
        employment, or in a transaction in which he has a pecuniary (as opposed to
        gratuitous) interest; and (2) the defendant supplies faulty information meant to
        guide others in their business transactions; and (3) the defendant fails to exercise
        reasonable care in obtaining or communicating the information; and (4) the
        plaintiff justifiably relies upon the information.

Robinson, 952 S.W.2d at 427 (quoting John Martin Co. v. Morse/Diesel, Inc., 819 S.W.2d 428,
431 (Tenn. 1991)).

        To prevail on a “fraudulent inducement” claim, the plaintiff must prove that the
defendant (1) made a false statement concerning a fact material to the transaction (2) with
knowledge of the statement’s falsity or utter disregard for its truth (3) with the intent of inducing
reliance on the statement, (4) that the plaintiff reasonably relied on the statement, and (5) that
this reliance resulted in an injury. Baugh v. Novak, 340 S.W.3d 372, 388 (Tenn. 2011).

        Each of these fraud theories requires that the defendant made a false statement of material
fact that is designed to induce the plaintiff to rely on it. Thompson essentially alleges two such
misrepresentations.

        Thompson’s first alleged misrepresentation is that at the time of the closing AME
withheld the identity of the true lender or lenders. She proffers two different theories on this
claim. Thompson’s first theory alleges that at the time she signed the mortgage papers, AME
and Countrywide had already made plans to sell the resulting note to a pool of investors.
Thompson says she has been injured because, without knowing her true “lender,” she has “been
left trying to obtain a modification from BOA, an entity that did not have the authority to grant
her a modification.” Thompson’s second, related, theory is that AME/BOA, knowing it was not
a “secured creditor” or actual “lender,” perpetrated a fraudulent scheme to extract fees and
payments during the life of the mortgage while obfuscating her chain of title, thus resulting in
“damages to her credit and reputation generally.”5

        5
          Related to this claim Thompson also argued in her amended complaint (but not in her appellate brief) that
BOA used an “inflated appraisal” of her property to trick her into getting a larger loan. We consider this claim
abandoned. United States v. Johnson, 440 F.3d 832, 845-46 (6th Cir. 2006). Even so, an appraisal does not provide
a basis for an intentional misrepresentation claim because an appraisal is an opinion, not a “past or present fact.”
See Homestead Grp., LLC v. Bank of Tenn., 307 S.W.3d 746, 755-56 (Tenn. Ct. App. 2009).
No. 14-5561                    Thompson v. Bank of Am., et al.                             Page 11

        We agree with the district court that Thompson did not adequately plead a fraud claim in
relation to the origination of her loan. Thompson argues that AME withheld the material fact
that it planned to (perhaps immediately) sell her note to another party. But the originating
documents are quite clear that AME reserved the right to sell Thompson’s note. Even viewing
the facts in the light most favorable to the plaintiff, AME never represented to Thompson that it
would hold or service her loan for any length of time.                       Without a plausible material
misrepresentation, Thompson has no basis for a claim of fraudulent inducement or intentional
misrepresentation at the time of closing. See Smith, 552 F. App’x at 476-77 (6th Cir. 2014)
(addressing an identical argument).

        Thompson’s second alleged misrepresentation is that BOA “intentionally failed to
disclose that it would fail to adhere to applicable HAMP guidelines.” These misrepresentations
allegedly happened during the period in 2012 and 2013 when she was fruitlessly applying for a
modification to her loan repayment terms.              Under Thompson’s theory, BOA perpetrated a
scheme to induce her “to continually apply for modification after modification[,] increasing the
fees charged and the accrued interest in order to foreclose.”

        While we sympathize with Thompson’s frustrating inability to procure a payment
modification,6 she has not articulated a plausible claim of intentional or negligent
misrepresentation. Thompson nowhere alleges that BOA promised to modify her payments
under HAMP. She has not pointed to a false “representation of a present or past fact” to support
an intentional misrepresentation claim.           Likewise, assuming that her payment modification
application qualified as a business transaction for negligent misrepresentation purposes,
Thompson has not identified the faulty information from BOA on which she reasonably relied.
A request for documents is not “faulty information meant to guide others in their business
transactions.” Although Thompson asserts she qualified for modification under the HAMP

        6
        Thompson is not alone. In its order denying class status in a multidistrict lawsuit against BOA for
mismanaging HAMP applications, a Massachusetts district court stated:
        This case demonstrates the vast frustration that many Americans have felt over the
        mismanagement of the HAMP modification process. Plaintiffs have plausibly alleged that Bank
        of America utterly failed to administer its HAMP modifications in a timely and efficient way; that
        in many cases it lost documents, or pretended it had not received them, or arbitrarily denied
        permanent modifications.
       In re Bank of Am. Home Affordable Modification Program (HAMP) Contract Litig., No. MDL 10-2193-
RWZ, 2013 WL 4759649, at *14 (D. Mass. Sept. 4, 2013).
No. 14-5561                  Thompson v. Bank of Am., et al.                  Page 12

regulations, she has not claimed that BOA promised she would receive a modification if she
applied for one, or that she relied on such a promise. At most, BOA informed Thompson that
she might qualify. Accepting as true Thompson’s allegations that BOA stonewalled her during
the modification application process, this conduct does not support a claim for negligent or
intentional misrepresentation.

                                               VII.

        Thompson also alleges that the named defendants intentionally interfered with the
contractual relations between herself and unnamed investors (whom she considers the true
“lender”) that initially funded (or swiftly purchased) her loan from AME. Thompson states that
she “unknowingly entered into a contractual relationship” that obligated her “to repay a loan on
unknown terms to John Does 1-1000 on terms that were set forth on the promissory note and
mortgage that were fabricated and falsified for the ‘closing.’”      She claims the defendants
interfered by withholding the identity of the true lender, i.e., John Does 1-1000. Concerning her
injury, Thompson alleges that (1) absent this contractual interference, her debt balance would
have been reduced by virtue of the payments made by third parties as her note changed hands;
(2) the obfuscation prevented her from reaching her “real creditor” in order to make payments,
obtain a modification, or settle the loan; and (3) the obfuscation “convoluted the entire chain of
title, causing it to become irretrievably broken and thus uninsurable, unmarketable and
worthless.” She also says the interference harmed the John Does by preventing Thompson from
sending her loan payments directly to them.

        The problem is that Thompson has no contractual relationship with the unnamed
investors. As the district court found, the defendants “could not interfere with a contractual
relationship that does not exist.” Thompson’s complaints merely assert that a contract exists.
She does not identify the contract or make any argument that an implied contract was formed.
While she argues to this court that an implied-in-fact contract existed, she failed to adequately
plead this theory to the district court.
No. 14-5561                  Thompson v. Bank of Am., et al.                    Page 13

                                                 VIII.

       Thompson also claims she has been victimized through slander of title. She says that
because her closing was a sham, the documents that have been recorded in Williamson County,
Tennessee, fraudulently contain the names of entities that have nothing to do with her loan. To
establish slander of title in Tennessee, a plaintiff must prove: (1) that she has an interest in the
property, (2) that the defendant published false statements about the title to the property, (3) that
the defendant was acting maliciously, and (4) that the false statements proximately caused the
plaintiff a pecuniary loss. Brooks v. Lambert, 15 S.W.3d 482, 484 (Tenn. Ct. App. 1999).
Likewise, libel of title occurs when a person,

       without privilege to do so, willfully records or publishes matter which is untrue
       and disparaging to another’s property rights in land as would lead a reasonable
       person to foresee that the conduct of a third party purchaser might be determined
       by the publication, or maliciously records a document which clouds another’s title
       to real estate.

Cowart v. Hammontree, No. E2013-00416-COA-R3-CV, 2013 WL 6211463, at *13 (Tenn. Ct.
App. Nov. 27, 2013). Both claims require a showing of malice. An erroneous assertion of title
made in good faith will not support a claim of slander or libel of title. But a statement made with
reckless disregard of the property owner’s rights or reckless disregard toward the truthfulness of
the statement may qualify as malicious. Brooks, 15 S.W.3d at 484.

       Thompson alleges that AME conspired with the anonymous investors to misrepresent on
the title documents that AME was the lender. This claim relies on her fraud theories that we
have already rejected. The information in Thompson’s recorded documents can only be false,
disparaging, or malicious to the extent that Thompson’s theories about securitization or MERS
are valid. Because we have determined that they are not, Thompson has not successfully pleaded
malice or false statement.

                                                 IX.

       Thompson also brings a claim under the Equal Credit Opportunity Act (ECOA),
15 U.S.C. §§ 1691–1691f. The ECOA prohibits creditors from discriminating against any credit
applicant “with respect to any aspect of a credit transaction . . . on the basis of race, color,
No. 14-5561                 Thompson v. Bank of Am., et al.                     Page 14

religion, national origin, sex, or marital status.” Id. § 1691(a)(1). One purpose of the ECOA is
to eradicate credit discrimination against women, especially married women whom creditors
traditionally refused to consider for individual credit. Mays v. Buckeye Rural Elec. Co-op., Inc.,
277 F.3d 873, 876 (6th Cir. 2002); see also Hood v. Midwest Sav. Bank, 95 F. App’x 768, 778
(6th Cir. 2004) (discussing the elements of an ECOA claim).

        The ECOA requires that the creditor take an “adverse action” against the plaintiff.
15 U.S.C. § 1691(d). The ECOA defines “adverse action” as “a denial or revocation of credit, a
change in the terms of an existing credit arrangement, or a refusal to grant credit in substantially
the amount or on substantially the terms requested.” Id. § 1691(d)(6). Thompson’s complaint—
that BOA has refused to modify her repayment terms under HAMP—does not fall within the
definition of “adverse action.” She fails to state a claim under the ECOA.

                                                X.

        Another of Thompson’s theories is that BOA injured her through negligent hiring and
supervision. A plaintiff in Tennessee may recover for negligent hiring, supervision, or retention
of an employee if she establishes, in addition to the elements of a negligence claim, that the
employer had knowledge of the employee’s unfitness for the job. Doe v. Catholic Bishop for
Diocese of Memphis, 306 S.W.3d 712, 717 (Tenn. Ct. App. 2008). Clearly, this requires the
plaintiff to identify the employee and explain what the employee did that negligently injured the
plaintiff.

        The district court found that Thompson failed to identify the employee who negligently
harmed her. Although Thompson named no names in the sections of her complaints dealing with
negligent hiring, she responds that she did name two BOA employees – Jana Parker and Jason
Mullins – in her complaints.

        Even assuming that these were the employees Thompson alleges were negligently
supervised, she does not point us to any specific negligent behavior on their part. In fact, her
theory is that BOA had an intentional policy of training its employees to avoid granting HAMP
modifications. If BOA was intentionally training its employees to intentionally defraud its
No. 14-5561                Thompson v. Bank of Am., et al.                 Page 15

customers, this theory sounds in fraud, not negligence. Nor does Thompson specifically address
the elements of negligence anywhere in her filings.

                                              XI.

       Thompson has also asked the court to issue declaratory and injunctive relief. Because
Thompson has not adequately pleaded her substantive claims, the court has no basis upon which
to declare her the sole title holder and enjoin the defendants from pursuing the collection of
payments or foreclosing the property.

       AFFIRMED.