* This order and judgment is not binding precedent, except under the

doctrines of law of the case, res judicata, and collateral estoppel. The court

generally disfavors the citation of orders and judgments; nevertheless, an order

and judgment may be cited under the terms and conditions of 10th Cir. R. 36.3.

F I L E D

United States Court of Appeals

Tenth Circuit

APR 6 2005

PATRICK FISHER

Clerk

UNITED STATES COURT OF APPEALS

FOR THE TENTH CIRCUIT

GILBERT WALKER; MARY NETTA

WALKER; FOUR WALKERS INC.;

TRAVIS WALKER,

Plaintiffs-Appellants,

v.

FIRST NATIONAL BANK OF

MEDICINE LODGE,

Defendant-Appellee.

No. 03-6314

(D.C. No. 02-CV-1082-HE)

(W.D. Okla.)

ORDER AND JUDGMENT *

Before TACHA , Chief Judge, HENRY , and O’BRIEN , Circuit Judges.

After examining the briefs and appellate record, this panel has determined

unanimously to grant the parties’ request for a decision on the briefs without oral

argument. See Fed. R. App. P. 34(f); 10th Cir. R. 34.1(G). The case is therefore

ordered submitted without oral argument. 
1 The promissory notes specify that they are to be governed and construed in

accordance with Kansas law, but, as the district court noted, both parties have

stated throughout this litigation that Oklahoma law governs the loan agreements. 

The district court therefore applied Oklahoma law, and neither party appeals that

decision.

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Plaintiffs Gilbert Walker, Mary Netta Walker, Travis Walker, and Four

Walkers, Inc., all residents of Oklahoma (collectively, the “Borrowers”), appeal

the district court’s grant of summary judgment in favor of defendant First

National Bank of Medicine Lodge, Inc., a Kansas corporation, (the “Bank”) on

their complaint alleging breach of contract, misrepresentation, breach of the

implied covenant of good faith and fair dealing, lender liability, promissory

estoppel, and fraud arising out of their indebtedness to the Bank. The district

court, applying Oklahoma law under its diversity jurisdiction, 1

 ruled that the

Borrowers’ contract-related claims were barred by Oklahoma’s statute of frauds,

and that they had not presented sufficient evidence to support a claim for fraud or

misrepresentation. “We review the district court’s grant of summary judgment de

novo, applying the same legal standard used by the district court.” Sandoval v.

City of Boulder , 388 F.3d 1312, 1320 (10th Cir. 2004) (quotation omitted). We

affirm.

I. BACKGROUND

In December 1999, Four Walkers, Inc., executed four promissory notes to

the Bank, each with different loan amounts and maturity dates, for a total
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principal loan amount of $975,000. Included was an operating loan for $275,000

with a maturity date of December 20, 2000 (“Note 108”). Gilbert and Mary

Walker, who own all of the interest in Four Walkers, Inc, and their son, Travis

Walker, each guaranteed all the four loans, and Gilbert and Mary Walker signed a

mortgage and security agreement and an agricultural security agreement to secure

the loans. Additionally, Gilbert and Mary Walker signed a quitclaim deed

transferring certain real estate to Four Walkers, Inc. 

Four Walkers, Inc. did not make payment on Note 108 by its December

2000 due date. In the spring of 2001, the Bank informed the Borrowers that it

was discontinuing agricultural loan operations. It agreed to extend Note 108’s

maturity date to June 2001, to give the Borrowers time to move their loans to

another financial institution. The Borrowers signed a Change in Terms

Agreement in April 2001, extending the final maturity date of Note 108 to June

30, 2001. Four Walkers, Inc. failed to pay the principal and interest due on Note

108 by the new due date, however. Because default on Note 108 constituted a

cross-default under all of the remaining notes, the Bank demanded immediate

payment on all loans, which, to date, the Borrowers have not made. 

The Borrowers then filed the instant complaint against the Bank, alleging

that they were induced into borrowing from the Bank based on oral

representations by Bank agents stating that the Bank would remain in the local
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area making agricultural loans for a substantial period of time, and that Note 108

would be renewed so long as the Borrowers met certain financial conditions. The

Borrowers further allege that the Bank fraudulently added the quitclaim deed to

the loan documents without their knowledge, and that they signed it without

knowing that it conveyed real property to Four Walkers, Inc. 

II. ANALYSIS

A. Statute of Frauds

Under Oklahoma law, a borrower may not “maintain an action to enforce or

seek damages for the breach of any term or condition of a credit agreement having

a principal amount greater than Fifteen Thousand Dollars . . ., unless such term or

condition has been agreed to in writing and signed by the party against whom it is

sought to be enforced or against whom damages are sought.” 15 Okla. Stat.

§ 140(B). It is undisputed that the loan agreements between the Borrowers and

the Bank are credit agreements within the meaning of section 140, and that none

of the alleged oral representations described by the Borrowers is included or

otherwise reflected in any of the loan documents. The district court ruled that,

because the Borrowers’ breach of contract, promissory estoppel, and lender

liability claims are predicated on alleged oral representations that were not

included in any loan documents or agreements, or otherwise reduced to writing,

these claims are clearly barred by section 140(B)’s statute of frauds provision. 
-5-

Aplt. App. Vol. III, at 394 (court order at 6, citing Big John’s Lumber Co. of

Muskogee, Inc. v. City Bank , 901 P.2d 832, 833-34 (Okla. Ct. App. 1995)).

On appeal, the Borrowers first contend that section 140’s statute of frauds

provision is not applicable where there is an allegation of fraud. As noted above,

they have asserted misrepresentation and fraud claims, alleging that the Bank

induced them to enter into the loan agreements and tricked them into signing the

quitclaim deed. They contend that in Brown v. Founders Bank and Trust Co. ,

890 P.2d 855 (Okla. 1994), the Oklahoma Supreme Court held that an allegation

of fraud avoids application of the statute of frauds, even to contract-related

claims. We disagree.

In Brown , the court held that the statute of frauds provision in section 140

does not bar a cause of action for fraud. See id. at 862-64. It concluded that the

purpose of the statute of frauds – to protect lenders from liability litigation and

promote certainty in credit agreements – would not be defeated by allowing fraud

claims because of the high standards needed to establish fraud. Id. at 863. 

Nothing in Brown or any other Oklahoma decision, however, supports the

Borrowers’ argument that a mere allegation of fraud avoids application of the

statute of frauds to contract and other claims. Brown simply holds that a

borrower is not precluded by section 140 from bringing a cause of action for

fraud, assuming the borrower can establish the elements of a fraud claim. See id .
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at 861-864. As discussed below, we agree with the district court that the

Borrowers failed to present evidence that would support a cause of action for

fraud against the Bank. Thus, the district court properly dismissed the breach of

contract, promissory estoppel and lender liability claims under section 140. 

B. Trade Usage and Duty of Good Faith

Next, the Borrowers argue that the district court erroneously rejected their

breach of contract claim and their tortious breach of contract claim based on their

allegation that the Bank violated the implied usage of trade and implied

obligation of good faith provisions found in the Uniform Commercial Code

(“UCC”). See 12A Okla. Stat. §§ 1-203, 1-205. They argue that under trade

usage and the implied duty of good faith, the Bank was obligated to renew Note

108. Note 108 expressly provides, however, that payment was due on demand or,

if no demand was made, on the December 20, 1999 due date, later amended to

June 30, 2001. Further, it contains no provision obligating the Bank to renew or

extend the loan. The district court ruled that neither an implicit trade usage nor

an implicit obligation of good faith can override an explicit contractual term. 

The Borrowers assert, without citation to any legal authority, that the

district court’s holding is contrary to the UCC. Borrowers are incorrect. As the

district court correctly explained, an explicit contract term, here the definitive and

unambiguous due date, controls over trade usage. 12A Okla. Stat. § 1-205(4).
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Similarly, the obligation of good faith cannot be employed to override express

contract terms or to obligate a party to accept additional terms or a material

change in the contract’s terms. See Kham & Nate’s Shoes No. 2, Inc. v. First

Bank of Whiting , 908 F.2d 1351, 1357-58 (7th Cir. 1990) (holding bank did not

violate good faith obligation by refusing to make further advances under loan

which did not require it, even where borrower able to repay); Roberts v. Wells

Fargo AG Credit Corp. , 990 F.2d 1169, 1174 (10th Cir. 1993) (rejecting similar

argument, under Oklahoma law, that bank should have renewed note under

implied duty of good faith, though loan did not require renewal); Badgett v.

Security State Bank , 807 P.2d 356, 359-60 (1991) (holding bank did not violate

good faith obligation by not renegotiating or restructuring loan because no

express term in the loan agreement required bank to do so). Thus, the district

court did not err in dismissing the Borrowers’ claims for breach and tortious

breach of contract. 

C. Misrepresentation and Fraud 

Finally, the Borrowers allege that they presented sufficient evidence to

submit their misrepresentation and fraud claims to a jury. We have reviewed the

record and the evidence presented, and we disagree. The allegations that the

Bank promised to renew Note 108 and promised to remain in the agricultural loan

business in the Borrower’s community are promises to act in the future. 
-8-

Oklahoma only permits a fraud claim based on the promise of future acts if the

plaintiff can establish that “the promise to act in the future is accompanied by an

intention not to perform and the promise is made with the intent to deceive the

promisee into acting where he would not otherwise have done so.” Citation Co.

Realtors v. Lyon , 610 P.2d 788, 790 (Okla. 1980) (noting general rule that

promise to do something in the future is not fraud). We agree with the district

court that the Borrowers presented no evidence that the Bank agents did not

believe their alleged representations at the time they made them. “There must be

evidence of each element of fraud presented before the issue may be properly

submitted to a jury.” Roberts , 990 F.2d at 1173 (upholding, under Oklahoma law,

grant of summary judgment to bank where borrower failed to present evidence

that bank’s “promise to perform was accompanied by an intent not to do so”).

We also agree with the district court that the Borrowers failed to present

evidence that would support a claim that the Bank fraudulently hid the quitclaim

deed from Gilbert and Mary Walker. The document is clearly entitled a quitclaim

deed in all-capital letters, and the Walkers admit that they signed the deed. They

contend, however, that an agent of the Bank hid the quitclaim deed under other

papers; Mr. Walker stated in his deposition that he specifically remembered that

this document was covered by other documents when he signed it, and that he was

prevented from reading it because of time, though he did not explain what those
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time constraints were. There is no evidence, however, that any agent of the Bank

told the Walkers they had to sign the documents quickly or that they otherwise

prevented the Walkers from reading the deed. As the district court ruled,

precisely the same allegations as made by the Walkers have been held by the

Oklahoma Supreme Court to be insufficient to establish an action for fraud. See

Silk v. Phillips Petroleum Co ., 760 P.2d 174, 178-79 (Okla. 1988) (rejecting

fraudulent concealment claim based on allegation that agent concealed lease

agreement under other documents and that she hurriedly signed it without reading

it, because no evidence that agent actively concealed lease from her or prevented

her from seeing or reading it). 

The judgment of the district court is AFFIRMED.

Entered for the Court

Deanell Reece Tacha 

Chief Judge