Perry v. Queen
United States District Court for the Middle District of Tennessee
2006 WL 481666 (2006)
Facing foreclosure on his home, Perry (plaintiff), who had only a high school education, accepted about $11,000 from Sean Queen (defendant) to cover mortgage payments and keep, and in exchange deeded Queen the property, leased it back for a year, and retained an option to repurchase it for about $44,000. Perry never exercised the buyback option, and Queen sought to evict him, claiming outright ownership of the $94,000 property. Perry sued, arguing the deal was actually an equitable mortgage subject to Truth in Lending Act requirements Queen had not met; Queen moved to dismiss for lack of subject-matter jurisdiction.
Whether a real estate conveyance serves as a security device rather than a sale when the grantor was indebted to the grantee and intended the conveyance to serve as security for that debt.