action under idaho state law against each of the two defendants assuming every allegation in the complaint is true ironically after granting leave to amend over objection b bank of america to promote resolution on the merits the district court said no that the amended pleading in fact did not plead cause of action to hide a law and deprived the end rights of their ability to develop a factual record and ultimately have the dispute decide on the merits for better or worse in a sense that's your glance advantage because everything your client said we'll take is true correct so factual record only take away from that so you have the best actually ever going to get enough of it because we take the complaint as true or even counter claim is true you've got the best facts you're ever going to have so development of the factual record could only hurt you well i'm not sure i agree or honor i think we knew you kind of think there are better facts out there than you play at i think there are additional facts out there that might not yet have been uncovered because we all know that oftentimes that's what happens through discovery and that's why we take discovery and so we were deprived of that there are facts out there that are i guess i'll say it this way i mean you can plead anything in your complaint that you think is reasonably likely to be true but there might be some unsuspected but favorable facts out there yet i believe that's an easy case yes and that's why oftentimes you see complaints amended sometimes several tons once discovery begins and that and that's one of the great benefits of discovery into the under the and therefore in order to get out from that very straight law and i know which i was subject to you've got to plead more you've got to plead something different get a plea something better so there's the question you yes or not only did we go one step further than tell you that we played something better we sued a non bank defendant that doesn't lend money didn't lend money to the en there's not a mention of that non bank defendant in the district court's opinion dismissing the claims and we also see we also allege that the agent of that non bank defend and it's very clear some of the some of the most greater any long standing relationship between corker and your clients it's certainly not stated in the complaint i didn't see any in other words the only thing that happened is your client's went in to see corker to get a loan incorrect that's not the way that's an incorrect first time they got together that's incorrect if you look at paragraph four of the complaint i tried to find out just a month ago i ask you is there any long standing relationship or ongoing relationship you say no it's not inconsistent where the where where the i book i don't it's not in the complaint why the writes went into bank of america or that they specifically approached mr corker within the complaint in paragraph four is that on or around june first two thousand and six and this is very important your honour's dr  the bank of office bank of america branch in ketchum idaho to consult with the wealth management division about advice how he and his wife could accomplish their goals in other words they were looking for investment advisers concerning their portfolio and advice on their real of those types i don't know what i do know is the best i see you probably add is that the that corker that your clients placed trust in co it certainly is pled but there are many more facts in a conclusory allegation but facts are alleged that would show corker was acting as a financial advisor and encouraging your clients to take out the loan he had no lending authority so he clearly was not a lent a loan officer he worked for an entity that was a bank that was not a bank that didn't loan money and in addition your honor when mr corker presented to the end right after many meetings and this i believe is in paragraph seventeen of the first minute complaint that his advice is that they borrow more money to downsize and get into a smaller property they were very concerned because they had no source of income other than interest in the ira account and the complaint alleges that they expressed that concern to their trusted financial advisor and asked him if this is the prudent thing to do and he said he's if you have any more i don't want to live limit your interest oh certainly that he was a wealth management advisor they came to him to ask for advice and he and due diligence him and he  had the right qualifications for that advice he did not disclose that he was to receive compensation other benefits for directing loan business to bank of america so there was no reason for them not to have that trust in a financial advisor they walked in expecting them to expecting to have a trusting relationship with a financial advisor and so and that we plead that should be sufficient category under idaho law that if there's a special relationship well fall short of the do share relationship nonetheless the defendant under the special relationship would be liable for but what we believe is a milf met wealth management division turned out to be merrill lynch certainly help themselves out as having expertise and knowledge in financial advisory services and so that complaint there are several allegations that bank of it that merrill lynch and mr corker held themselves out as experts and that in fact the n writes are a lot of expertise which also then takes the case of the negligence claim at least extrapolate somewhat from those cases defined a special relationship here where someone holds himself out as a financial advisor but without a fiduciary relationship well i look at the death in case of the idaho supreme court that held that the seed agent a seed agency that certifies seed read that case yes but that's and to move from that case where they certified that these are good potato seeds and then it turns out they really aren't again it's sort of like professional services that mean there is there are all these cases out there not whole law but to move from those to find that there is a special edition ship giving rise to a cause of action or negligence to people who hold themselves out as banks or agents of banks or loan officers or financial advisors that's going to open up an unarmed us field a liability and idaho that i don't yet see quite see in the case law well here's here's a distinction that we need to draw in the way this case was pled we're not asking for any extension of that particular concept to bankers to loan officers that's not what mr corker was and that's not what bank of america investment services slash merrill lynch was they were not bankers the the the beginning of the the largest in the state below was in holding that the concept of a lender ball relationship being not to do share in nature simply doesn't way through i read it but you walk me away walk me through again so i got it from land mine right now his relationship to the lending agencies who's employed by what's the relationship and saw the way it was played is that mr cork has it is not part of the bank of america commercial loan and i mean we helped as you tell me who he is part of bank of america well it was bank of america investment services which was separate from the bank it was it owned by the bank i believe it was a subsidiary of the bank but it didn't lend money they didn't go there ask for money mr corker specifically it's the will put allegation is he didn't have loan lending authority so this whole idea various lending activity borrowing activities is he is he compensated is that he got a commission on any of these loans we allege that it was not disclosed to us but that in fact he did receive compensation and professional advancement and was incentivized to direct wealth management clients financial planning clients to the lending department of bank of america and it's that is that dual agency that undisclosed relationship is part and parcel of the negligence in breach but you sure do claim for the sign on the building say when they walk in we didn't play anything about the sign in the building but i can tell you what we played about the sign  walked into the bank in two thousand and six they believe that he was a vice president of the wealth management division of bank of america so we now know this know this is where sometimes discovery allows you to amid a conflict they know or thought they know he was an employee of the bank without lending authority and yet in a completely separate department of the bank that didn't lend money they didn't come to borrow money but what i'm trying to figure out is if we were to hold that there's a cause of action for negligence against mr corker and then as employer i'm trying to figure out ok how had he held himself out to the end rights as they walk in well you're telling me they walked into a bank of america and they see some guy that has on his desk vice president wealth management sounds like he's of employees of the bank that they're not you tell me he's not but if i'm walking into the bank and they're somebody says vice president what management my reasonable conclusion is you know play as a bank well those are those  e those are hypothetical respects the facts into some and that's maybe easy for us to make standing here in seattle but when mr n right walks into the bank and does not look for a loan also has not asked for a loan officer does not have to fill out a credit app does not ask to fill out a loan application instead ask to be shown somebody who can provide him financial advice and that's what the complaint says i came in looking for financial advice  hear from the other side ok i have to use of all your time or we've taken it but will give you a chance to respond thank you  securities i'll call them maryland today because it's easier at the time of the events that took place in the amended counterclaims however the merger with merrill lynch and bank of america bank of america investment securities had not yet happened and just to clear up one point in the record merrill lynch is not a subsidiary of bank of america but at the time of the events complained of was b o s a subsidiary bank of america it was an affiliate for sure i believe it was not i believe they are sister corporations that are ultimately held by the same bank holding corporation that the disclosures are made in our disclosure statement  to address one point that the court asked about the the branch in sun valley idaho it was a bank of america branch there's another bank of there now and it did have a sign that said bank of america  the issue here today clearly is is there a fiduciary relationship or a special relationship between the bank and or merrill lynch and the n right the fiduciary duty means that my clients would have had to put the interests of the end right ahead of their own interest and let's work on the special relationship because i start ups is easier i think for you to show there's no voodoo share relationship it's a closer question for me as to whether there's a special relationship such that there might be a cause of action for negligence correct your honor and the test for a special relationship and a fiduciary relationship are actually quite similar the court would look to items like the reposing special trust and confidence one of the elements in both of these is that the allegations must state that in this case either the bank or merrill lynch had reason to know or knew that that relationship was happening and that trust was their there can also be other factors that give rise to a special relationship as discussed in the context of an insurer and an insured have to say that it may be a stretch but for me is not much of a stretch if somebody holds himself out to be an advisor in a wealth management office in a bank and you come in and say what should i do and he says well here's a good idea well it sounds like  point under idaho law is that commercial relationships and particularly a relationship between a lender and a creditor or a bank and a borrower is not a special relationship not just not a fiduciary relationship but in special relationship cases not a special relationship the burden is on bank of this that he's not quite an employee of the bank he gets a commission from sort of setting this up but he's not a loan officer remember this point was insisted on by the other side what do we do with that your honor i can explain the situation with the agency i believe there's conflicting facts in the allegations that the end rights council is better explaining because i think they conflict and they cannot be reconciled thief the allegations state that the n writes came to bank of america to speak with a private bank the bank does take the position and i can state here today that mr corker was acting within his authority as an agent of bank of america at all times during these transactions the and right have also alleged that mr corker was an agent of merrill lynch now in this particular case there were no financial products offered by merrill and there were no retirement accounts there were no investment services there was absolutely no relationship or contract with merrill lynch so it's our position that in the context of working with the n writes mr corker was not an age of merrill lynch here's what bothers me about this case they come in seeking advice and seeking loans the bank learnt quicker learns that the house they think that they have they think is worth one point seven giving seventeen an interest only loan of the balloon payment at the end mr corker advises them to make payments out of the ira which is the only asset they've got that's not real property asset and this advice is awful there's just no other word for but awful doctors are very good doctors as assumed dr ann wright was but he doesn't sound like he was a sophisticated mr corker i don't know how he slept at night when he went home and said here's what i persuaded these people to do that maybe he should have known this was awful advice so they come in wealth management on his desk vice president and he says here's here's some things that do you can do and i would advise you to do it and you say he owes them no duty whatsoever that's your are that's your that's your position the position is that he owes them the duty that set forth in the loan documents and there is no date set forth there no i'm i'm i'm i'm please don't talk about fiduciary duty because i want the the one is a little harder which is the special relationship thank your honor on one point i would like to make clarification the amended counterclaims  do claim that the bank attained a ten million dollar appraisal they also claim that the bank should be held as being negligent for not obtaining an appraisal so there are conductor contradictory facts within the counter claims on that point the allegations that the n writes have made to support a special relationship are exactly the same allegations that they make to support a fiduciary relationship i understand that but the test is different the test starts with a starting point that you know a commercial contractual relationship there is no sessional relationship they have to show facts and circumstances that give rise to a situation where that special relationship happens in an idaho  if someone walks into what they think is a bank and there's those things person sitting it's at a desk with the sign says wealth management sue they would not have a cause of action and idaho in that situation if if there is a contract that set forth the obligations then we would be here interpreting the contract that's not our case there is no written agreement with respect to the the case is an idaho where the core relationship here is creditor and dad are the core advice given was about the loan products it was not about the other products that were offered by merrill lynch or by bank of america the only relevant to the situation of the retirement accounts of dr and mrs wright was that that could be used to repay the loan and i would take issue with that being a terrible idea i imagine there's many retirees that in fact do use their retirement accounts to pay their mortgages on fixed income that's the situation that we have here well if you assume that it is terrible advice and i have to say my quick understanding of this based only on reading of current time is that it was terrible advice i guess you could prove that it wasn't terrible gys but that would be on the assumption that there's some special relationship if the panel were inclined to hold that there is a special edition ship but the panel was somewhat nervous about idaho log asli we have no authority ourselves to make idaho law or whatever would be a good idea to certify this question to the idaho if the court feels that there is not existing case law that gives adequate guidance that could be a question for certification to the title supreme court i believe that they are in the existing chief law from idaho supreme court there is adequate there is a path that can be followed to reach the determination that these just are not the facts on which a special relationship arise i've said as i read the case law the easiest path is the one that would impossible path because i'm not saying that a special relationship or a fiduciary relationship cannot arise between a debtor creditor or in a commercial contacts what i'm saying is the starting point is that there is no such relationship bank and my client didn't hold any funds or make any trades for the end right there are no other facts or circumstances the the only advice given and the only advice identified by the court as a concern relates to repayment of the loans and that is not sufficient under idaho law to create a special relationship finally i would like to just raise one point about the judicial asop all argument the amended complaint was brought well let me back up the n writes made a motion to amend their complaint before a decision was rendered on the first motion to dismiss the standard that the n writes proposed for amendment of that complaint was a showing of good cause  the good cause was they did not know about merrill lynch and tell the deposition happened of mr corker after the cutoff date for jointer and amendment of the counter claims my client merrill lynch would not be here today had that representation not been made to the court the standard is good cause asset out not only in order itself but in the case law fight it by the end writes the district court once could cause shown the person opposing the amendment or joined or have to show that it is in the interest of justice for the amendment not to be allowed but district court specifically found that it was in the interest of of justice to allow the amendment and therefore apply the correct standard so i would request that this court judicially a stop the end writes from claiming in their brief today in their opening brief and in front of this court that at all times they relied upon merrill lynch as a financial adviser because that is directly contradictory to the allegations they made in their motion to amend and if the court has any other questions for me i'd be that would give rise to a viable cause of action however in our circumstance under the scheduling order that was issued by the district court the motion to allow the amendment was made after the deadlines had been set forth and the order specifically states that amendment and jointer shall only be allowed for good cause so both by court order and by the authority cited by the n write in their motion to dismiss the standard is g chance to sue merrill lynch you now directly allege the opposite i don't think so your honor well answer her answer point then sure because i'm only telling you i am i am intrigued by that and i think you need answered sure oftentimes you through discovery find out who the actual defendant should be you don't have knowledge who initially filed the complaint it was not disclosed to  writes when they approached the wealth manager at bank of america who we work for they just knew they weren't coming in to get loans it would come to get financial advice after some discovery was taken on the deficiency claim and it came to light that in fact mr corker worked for either merrill lynch or its predecessor and therein lies the substance of an amendment to a complaint we now know who the wrongdoer was and tell you a mentor complaint and name your wrongdoer it's simply nothing more than adding to a complaint fact developed through discovery that bolster the initial allegations namely that the n writes we're not dealing with a bank we're not dealing with a lender did not go in to borrow money they were dealing with what turned out to the merrill lynch or its predecessor bank of america investment services so there's no chicanery here there's no playing fast and loose with courts  there's no allegation that they relied on the name merrill lynch and merrill lynch is reputation what merrill lynch does that might not be so good but in this case there's nothing like that they found out who the right defendant was it's kind like your classic john doe cases i didn't i was in council that could have been a john doe names defendant there wasn't and when you figure out who those john those are you amended complaint to name the actual defendant so you know to throw around accusations at counsel somehow did something to mislead this court or a federal district court it is not why i am at so my law firm is and predecessor counsel didn't do that either up but the fact remains and it was pled discovery taught us who the right defendant should be and so we amended the complaint to name the correct defendant ok thank you very much  bank of america merrill lynch vs and right now submitted for decision at this point will take a break probably of about ten minutes thank you