UNITED STATES COURT OF APPEALS 

FOR THE TENTH CIRCUIT 

 

FISH CREEK CAPITAL, LLC, a 

Wyoming limited liability company, 

 Plaintiff-Appellant, 

and 

FLAT CREEK CAPITAL, LLC, a 

Wyoming limited liability company, 

 Plaintiff, 

v. 

WELLS FARGO BANK, N.A., a national 

bank, 

 Defendant-Appellee. 

No. 11-8081 

(D.C. No. 2:11-CV-00176-NDF) 

(D. Wyo.)

 

 

ORDER AND JUDGMENT*

 

Before BRISCOE, Chief Judge, PORFILIO, Senior Circuit Judge, and MURPHY, 

Circuit Judge. 

 

 

 

*

 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. This order and judgment is not binding 

precedent, except under the doctrines of law of the case, res judicata, and collateral 

estoppel. It may be cited, however, for its persuasive value consistent with 

Fed. R. App. P. 32.1 and 10th Cir. R. 32.1. 

FILED 

United States Court of Appeals 

Tenth Circuit 

June 20, 2012

Elisabeth A. Shumaker 

Clerk of Court
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 Plaintiff Fish Creek Capital, LLC, appeals from the dismissal of its contract 

claims against Wells Fargo Bank, N.A. Exercising jurisdiction under 28 U.S.C. 

§ 1291, we affirm. 

 The Snake River Sporting Club Development Company (Snake River 

Company) obtained a subdivision permit from the Teton County Board of 

Commissioners (Teton County) in Jackson, Wyoming. In July 2005, Wells Fargo 

(successor by consolidation with Jackson State Bank and Trust) issued a letter of 

credit (LC) to Teton County. The purpose of the LC, which had a termination date of 

July 15, 2006, was “to ensure that [Snake River Company] will install 

INFRASTRUCTURE IMPROVEMENTS” in the Snake River Sporting Club 

Development (Snake River Development) by the LC’s termination date and to 

“insure that [Snake River Company] will be financially responsible should [it] fail to 

install [those improvements] in the specified time and manner.” App. at 19. Wells 

Fargo extended the LC by issuing three replacement LCs. The second terminated on 

July 14, 2007, the third on July 14, 2008, and the fourth on October 14, 2008 (later 

extended to February 12, 2009). Each LC stated that it was governed by the 

Wyoming Uniform Commercial Code. Snake River Company never completed the 

infrastructure improvements, and in January 2009, Teton County drew on the LC. 

Wells Fargo paid off on it, and Teton County completed the infrastructure in the fall 

of 2010. 
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Meanwhile, on August 30, 2006, Fish Creek obtained a $1.425 million loan 

from Wells Fargo for the purchase of property in the Snake River Development. The 

loan had a term of one year. Fish Creek’s co-plaintiff, Flat Creek Capital, LLC, 

granted a $500,000 mortgage to Wells Fargo against real property it owned to secure 

the loan to Fish Creek.1

 Sometime after Wells Fargo issued the third LC in July 

2007, one of Fish Creek’s principals met with Wells Fargo to notify the bank that 

extending the LC would adversely affect the value of property in the Snake River 

Development and make it difficult or impossible to sell because the infrastructure had 

not been timely completed. During this same time frame, Wells Fargo became a 

lender to the previous senior lender for the Snake River Development project, R.E. 

Loans, LLC, which subordinated its interests to Wells Fargo, thereby making Wells 

Fargo the lender to R.E. Loans and the senior lender for the Snake River 

Development. 

Ultimately, Wells Fargo gave notice of its intent to foreclose the mortgage Flat 

Creek had given to secure the Fish Creek loan. Fish Creek then filed this action. In 

its complaint, as clarified somewhat in its response to Wells Fargo’s motion to 

dismiss, Fish Creek claimed that Wells Fargo breached a covenant of good faith and 

fair dealing in their loan agreement by extending the second LC beyond the July 2007 

termination date. Fish Creek alleged that it had relied on the completion of the 

 

1

 Flat Creek is repeatedly identified in this action as “Flat Creek Capital, LLC,” 

although the entity’s name appears to be Flat Creek Capital Corporation, as set out on 

the mortgage. 
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infrastructure by that date in deciding to borrow funds to purchase property in the 

Snake River Development, and that Wells Fargo had negotiated extensions of the 

LCs for its own benefit, apparently evidenced by the fact that Wells Fargo’s funding 

exposure was reduced by more than $2.1 million between the second LC and the 

fourth LC. Fish Creek also claimed that it was a third-party beneficiary of the LCs 

and, as such, entitled to damages arising from Wells Fargo’s failure to pay on the LC 

that terminated on July 14, 2007. Fish Creek noted that property values in Teton 

Valley decreased dramatically between the July 2007 termination date and the 

eventual completion of the infrastructure in the fall of 2010. Fish Creek estimated 

that the value of its property in the Snake River Development had decreased over 

$700,000 during that time. 

 Wells Fargo moved to dismiss Fish Creek’s claims under Fed. R. Civ. 

P. 12(b)(6), arguing that it had no duty to Fish Creek under the loan transaction—and 

no duty at all under the LCs—to assure that Snake River Company completed the 

infrastructure improvements by any particular date. Wells Fargo contended that its 

only duty under the loan agreement was to advance the loan proceeds, which it did. 

Wells Fargo also argued that Fish Creek was not a third-party beneficiary of the LCs 

and, in any event, Well Fargo’s only duty under the LCs was to pay when Teton 

County drew on an LC, which it did. 

 The district court agreed with Wells Fargo’s position. The court first 

considered Fish Creek’s claim that Wells Fargo breached the covenant of good faith 
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and fair dealing, observing that Wells Fargo had no obligation under the loan 

agreement to complete the infrastructure by the summer of 2007; Wells Fargo’s only 

obligation was to lend money to Fish Creek, and it fulfilled that duty. The court also 

observed that there was no allegation that Wells Fargo promised Fish Creek that the 

infrastructure would be completed by any particular date. Because “[t]he covenant of 

good faith and fair dealing may not . . . be construed to establish new, independent 

rights or duties not agreed upon by the parties,” Whitlock Constr., Inc. v. S. Big Horn 

Cnty. Water Supply Joint Powers Bd., 41 P.3d 1261, 1267 (Wyo. 2002) (quotation 

omitted), the court concluded that the claim must be dismissed.2

Turning to the third-party-beneficiary breach-of-contract claim, the court 

rejected Fish Creek’s argument that Wells Fargo knew that lot owners were intended 

beneficiaries of the LCs. Fish Creek relied on two Wyoming statutes in support of 

that argument, Wyo. Stat. §§ 18-5-304 and 18-6-306(a)(viii). Section 18-5-304 

provides that “[n]o person shall sell land subject to subdivision regulation under this 

article, record a plat or commence construction of a subdivision without first 

obtaining a subdivision permit pursuant to W.S. 18-5-306 or, if applicable, W.S. 

18-5-316 from the board of the county in which the land is located.” In turn, 

§ 18-6-306(a)(viii) requires a developer to “provide a performance bond, acceptable 

letter of credit or other sufficient financial commitment to assure that any facilities 

 

2

 Because this is a diversity case, Wyoming law applies. See Cooperman v. 

David, 214 F.3d 1162, 1164 (10th Cir. 2000). 
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proposed or represented to be part of the subdivision will in fact be completed as 

proposed, or escrow sufficient monies out of land sales to guarantee that 

[infrastructure improvements] are installed.” The court found no legal basis in these 

statutes supportive of Fish Creek’s allegation that it was an intended third-party 

beneficiary of the LCs. Further, the LCs themselves provided no support for Fish 

Creek’s position because each one identified the Teton County Board of 

Commissioners as the beneficiary entitled to payment in the event Snake River 

Company failed to install the infrastructure improvements, and there was no 

indication that lot purchasers had any rights under the LCs. The court also 

recognized that the purpose of the statutory requirements is to protect a county from 

financial burden in the event a developer fails to complete a subdivision project, and 

that it is the county, not the issuer of an LC, who determines when and whether to 

draw on an LC. Teton County set the timelines for completion of the project, and 

when it ultimately drew on the LC, Wells Fargo fulfilled its sole obligation by paying 

on it. Accordingly, the district court concluded that it must dismiss Fish Creek’s 

second claim. 

 We review a dismissal under Fed. R. Civ. P. 12(b)(6) de novo. Kan. Penn 

Gaming, LLC v. Collins, 656 F.3d 1210, 1214 (10th Cir. 2011). “[I]n ruling on a 

motion to dismiss, a court should disregard all conclusory statements of law and 

consider whether the remaining specific factual allegations, if assumed to be true, 

plausibly suggest the defendant is liable.” Id. Having reviewed the record, the 
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applicable law, and the parties’ arguments, we agree with the district court that Fish 

Creek’s factual allegations did not plausibly suggest that Wells Fargo was liable. We 

therefore affirm the judgment for substantially the same reasons set forth in the 

district court’s well-reasoned dismissal order. We add only two points. First, Fish 

Creek did not allege that Teton County attempted or intended to draw on the LC that 

terminated in July 2007, so the allegation that Wells Fargo reduced its obligation by 

negotiating an extension of that LC fails the plausibility test. Second, provisions of 

the Wyoming Uniform Commercial Code, which expressly govern the LCs, reinforce 

the conclusion that Wells Fargo was not obligated to Fish Creek for any failure of 

performance in the underlying contract for which the LCs were issued. See Wyo. 

Stat. § 34.1-5-103(d) (“Rights and obligations of an issuer to a beneficiary or a 

nominated person under a letter of credit are independent of the existence, 

performance, or nonperformance of a contract or arrangement out of which the letter 

of credit arises or which underlies it, including contracts or arrangements between the 

issuer and the applicant and between the applicant and the beneficiary.”); id.

§ 34.1-5-108(f)(i)-(ii) (“An issuer [of an LC] is not responsible for (i) The 

performance or nonperformance of the underlying contract, arrangement or 

transaction; [or] (ii) An act or omission of others[.]”). 

 The judgment of the district court is AFFIRMED. 

 Entered for the Court 

 John C. Porfilio 

 Senior Circuit Judge