Opinion ID: 2979910
Heading Depth: 2
Heading Rank: 2

Heading: Plaintiffs’ National Bank Act Claim

Text: Generally, the National Bank Act forbids usurious interest, meaning that a bank cannot charge interest at a rate greater than is permitted by the law of the state, territory, or district in which it is located. 12 U.S.C. §§ 85–86; see also 12 C.F.R. § 7.4001. Where no local restriction exists, the National Bank Act sets the threshold for usurious interest at the greater of “7 per centum, or 1 per centum in excess of the discount rate on ninety-day commercial paper in effect at the Federal reserve bank in the Federal reserve district where” the lender is located. 12 U.S.C. 12 Case: 14-15297 Date Filed: 09/22/2015 Page: 13 of 18 § 85. A plaintiff who seeks to bring an action for violations of the above provisions must do so within two years of the allegedly usurious transaction. Id. § 86. Here, Plaintiffs claim that Bank of America violated the National Bank Act by charging them interest at a rate of 5.14% per annum, even though the relevant loan documents provided for a rate of interest at 2.34% per annum, and by engaging in “misappropriations, improper escrows, improper accounting, holdbacks, and other accounting discrepancies.” The district court dismissed this claim upon finding that Plaintiffs failed to demonstrate that the complained-oftransactions occurred within the National Bank Act’s two-year limitations period, id., and because the Second Amended Complaint did not “indicate how the interest rates assessed were usurious in nature,” rather than simply a breach of the loan documents. In their initial notice of appeal, Plaintiffs identified as erroneous the district court’s above conclusions, but they have not offered any argument on that point in their brief to this Court. Consequently, Plaintiffs have abandoned any objection that they might otherwise have made about the dismissal of their National Bank Act claim, meaning that the district court’s decision on this claim is therefore affirmed. See Access Now, Inc. v. Sw. Airlines Co., 385 F.3d 1324, 1330 (11th Cir. 2004) (“[T]he law is by now well settled in this Circuit that a legal claim or 13 Case: 14-15297 Date Filed: 09/22/2015 Page: 14 of 18 argument that has not been briefed before the court is deemed abandoned and its merits will not be addressed.”) and Little v. T-Mobile USA, Inc., 691 F.3d 1302, 1306 (11th Cir. 2012) (collecting cases). C. Plaintiffs’ Breach of Fiduciary Duty and Gross Negligence Claims Under Florida law, claims for both breach of fiduciary duty and gross negligence require as their first element that the defendant owe the plaintiff some legal duty. Gracey v. Eaker, 837 So. 2d 348, 353 (Fla. 2002); Lamm v. State St. Bank & Trust, 749 F.3d 938, 947 (11th Cir. 2014) (quoting Estate of Rotell ex rel. Rotell v. Kuehnle, 38 So. 3d 783, 789 (Fla. 2d Dist. Ct. App. 2010)). One circumstance in which such duties arise is when a fiduciary relationship exists between the parties. A fiduciary relationship can be either express or implied. Maxwell v. First United Bank, 782 So. 2d 931, 933 (Fla. 4th Dist. Ct. App. 2001). The former derives from a contractual obligation; the latter “is based on the circumstances surrounding the transaction and the relationship of the parties.” Id. In the present case, Plaintiffs assert that Defendants became their “financing ‘partner[s]’” by extending them a loan in 2008 and thereafter “aggressively solicit[ing them] to borrow more and more money.” From this premise, Plaintiffs infer that Defendants became their fiduciary, and were obliged to fulfill the duties attendant to that status. Plaintiffs further argue that Defendants breached these fiduciary duties by “approving participation in placing [Plaintiffs] wrongfully in 14 Case: 14-15297 Date Filed: 09/22/2015 Page: 15 of 18 default, when no such default existed, and intentionally instituting collection and threatening foreclosure proceedings, when then in violation of federal and state laws and regulations.” Plaintiffs’ characterization of their relationship with a lending institution is way off the mark. “Generally, the relationship between a bank and its borrower is that of creditor to debtor, in which [the] parties engage in arms-length transactions, and the bank owes no fiduciary responsibilities.” Capital Bank v. MVB, Inc., 644 So. 2d 515, 518 (Fla. 3d Dist Ct. App. 1994); see also Maxwell, 782 So. 2d at 934 and Metcalf v. Leedy, Wheeler & Co., 191 So. 690, 692–93 (Fla. 1939) (holding that defendants owed plaintiff no fiduciary or special duties in arm’s-length transaction). Likewise, in interpreting Florida law, we have noted that, “[u]nder Florida law, it is clear that a lender does not ordinarily owe fiduciary duties to its borrower.” Motorcity of Jacksonville, Ltd. v. Se. Bank N.A., 83 F.3d 1317, 1339 (11th Cir. 1996) (en banc), vacated, 519 U.S. 1087 (1997), reinstated, 120 F.3d 1140, 1145 (11th Cir. 1997) (en banc). That said, a fiduciary relationship could potentially arise in special circumstances “where ‘the bank knows or has reason to know that the customer is placing trust and confidence in the bank and is relying on the bank so to counsel and inform him.’” Building Educ. Corp. v. Ocean Bank, 982 So. 2d 37, 41 (Fla. 3d Dist. Ct. App. 2008) (quoting Susan Fixel, Inc. v. Rosenthal & Rosenthal, Inc., 842 15 Case: 14-15297 Date Filed: 09/22/2015 Page: 16 of 18 So. 2d 204, 208 (Fla. 3d Dist. Ct. App. 2003)); see also Barnett Bank of W. Fla. v. Hooper, 498 So. 2d 923, 925–26 (Fla. 1986). Such circumstances typically exist where a bank “(1) takes on extra services for a customer, (2) receives any greater economic benefit than from a typical transaction, or (3) exercises extensive control.” Capital Bank, 644 So. 2d at 519 (citing Tokarz v. Frontier Fed. Sav. & Loan Ass’n, 33 Wash. App. 456, 462 (1982)). Take, for example, the interactions between lender and borrower in Capital Bank. There, by purposefully creating a familial relationship of trust and confidence, a bank was found to owe fiduciary duties to a customer whom it then intentionally pressured into purchasing the malfunctioning assets of another customer that was on the verge of bankruptcy, just so the latter could pay back the debt it owed the bank. Id. at 519–21. Likewise, in First National Bank and Trust Company of Treasurer Coast v. Pack, a lender was found to owe its borrowers fiduciary duties when it acted as a conduit between the borrowers and a construction company building their house; assured the borrowers its representative would be present at the final walk-through and that any defects would be corrected; and advised the borrowers that it was unnecessary for them to retain an independent attorney to guide them through closing. 789 So. 2d 411, 415–16 (Fla. 4th Dist. Ct. App. 2001). 16 Case: 14-15297 Date Filed: 09/22/2015 Page: 17 of 18 Plaintiffs’ relationship with Defendants bears no similarity to the facts found in the above Florida cases. Plaintiffs offer no clue as to how their 2008 interaction with Defendants, in which they obtained the loan and home equity line of credit at issue, was anything but an ordinary commercial transaction. See Capital Bank, 644 So. 2d at 521. They do not allege that Defendants provided them with counseling services, assumed additional roles, established a confidential relationship, or in any way fostered or encouraged an environment of trust and counseling—let alone that Plaintiffs acted in reliance on any such perceived relationship. Contra Pack, 789 So. 2d at 415–16; Capital Bank, 644 So. 2d at 520–21; and Barnett Bank, 498 So. 2d at 925–26. Similarly, Plaintiffs complain about aggressive sales tactics in which Defendants allegedly engaged. Yet, Plaintiffs never claim that they succumbed to those tactics by actually purchasing any of the “extraordinary” banking services being offered. Cf. Capital Bank, 644 So. 2d at 519 (describing how the borrower relented to the lender’s urging to enter into a series of transactions with another of its customers) and Ocean Bank, 982 So. 2d at 40 (holding that bank owed no fiduciary duties to potential customer). Rather, their Second Amended Complaint merely enumerates a number of available products offered by Defendants, and the sales tactics used by the latter to market these products. That Defendants may have tried to sell to Plaintiffs products that it would have been imprudent for Plaintiffs 17 Case: 14-15297 Date Filed: 09/22/2015 Page: 18 of 18 to purchase does not transform an earlier and independent arm’s-length transaction into a fiduciary relationship. Nor could there be any breach of these imagined fiduciary duties because Plaintiffs never took the bait. Therefore, we conclude that the district court correctly dismissed Plaintiffs’ claims for breach of fiduciary duty and gross negligence.