Opinion ID: 1359201
Heading Depth: 1
Heading Rank: 4

Heading: dismissal of the counterclaim

Text: The district court's trenchant precis of Martinez's counterclaim leaves little room for improvement: You [Associates] should have known better than to loan me [appellant] the $9,314.22 that I requested to borrow; therefore, I don't need to pay you back and, instead, you can also give me all of the principal and interest (approximately $30,000) I've paid on my house mortgage. As the district court observed, a certain generosity of spirit is requisite to characterize the foregoing as a legal theory, although the words of the counterclaim suggest a putative issue of negligent lending. Martinez and Associates did business by mail and Martinez alleges that Associates, possessed of superior knowledge, failed to properly investigate Martinez before granting the loan in question. Martinez alleges a fiduciary relationship of which Associates [knew] or should have known   . The counterclaim portrays Martinez's loan applications as fraudulent in some fashion which, had Associates ferreted out, would have necessitated denial of the loan. The extent of the relationship between Martinez and Associates, for purposes of this action, is defined and delimited by the promissory note. Such a contractual relationship between a lender and its customer traditionally imposes duties upon the lender no higher than the morals of the market place. Rader v. Boyd, 252 F.2d 585, 587 (10th Cir.1957); In re M. Paolella & Sons, Inc., 161 B.R. 107, 118 (E.D.Pa.1993), aff'd, 37 F.3d 1487 (3rd Cir.1994). In the absence of special circumstances, the legal relationship between a lending institution and its customer is that of debtor or creditor. Resolution Trust Corp. v. Wellington Development Group, 761 F.Supp. 731, 737 (D.Colo. 1991) ( quoting Dolton v. Capitol Federal Sav. and Loan Ass'n, 642 P.2d 21, 23-24 (Colo. App.1981)); Rivera v. Central Bank & Trust Co., 155 Colo. 383, 395 P.2d 11, 13 (1964). This notion is consistent with our refusal to rewrite unambiguous contracts under the guise of interpretation. Lawrence v. Farm Credit System Capital Corp., 761 P.2d 640, 645 (Wyo.1988); cf. A. Brooke Overby, Bondage, Domination, and the Art of the Deal: An Assessment of Judicial Strategies in Lender Liability Good Faith Litigation, 61 Fordham L.Rev. 963, 1024 (1993). Theory, however, suggests that lenders may incur extra-contractual duties to customers through conduct which creates a special or fiduciary relationship. John M. Burman, Lender Liability in Wyoming, 26 Land and Water L.Rev. 707, 712 (1991). Although it freights some very specific kinds of legal rights and responsibilities, the concept of a fiduciary relationship is firmly grounded in equity. Denison State Bank v. Madeira, 230 Kan. 684, 640 P.2d 1235, 1241 (1982). Successful establishment of such a relationship may open the door to pursuit of a wide array of common law theories of lender duty to borrower, depending upon the law of the forum. Andrea Bloom, Lender Liability: Practice and Prevention, ch. 3 (1989 & Cum. Supp.1994 No. 2). If, as Professor Burman believes, the lender liability pendulum may now be swinging back toward lenders, the instant case can do little to slow that momentum. Burman, supra, 26 Land & Water L.Rev. at 755. That does not necessarily reflect our lack of interest in the varied theories of lender liability. However, improvident pleadings run a close second to bad facts as leading makers of bad law and we refuse to be drawn down the garden path by the instant confluence of both. Extra-contractual lender duties, if there are any, must necessarily be predicated upon demonstration of a special or fiduciary relationship. Burman, supra, 26 Land & Water L.Rev. at 712-13, 718 & 730. Such a relationship is extraordinary and not easily created. Gillum v. Republic Health Corp., 778 S.W.2d 558, 567 (Tex.App.1989). Fiduciary relationships cannot be the product of mere wishful thinking, carrying as they do the most profound of legal consequences. State Farm Mut. Auto. Ins. Co. v. Shrader, 882 P.2d 813, 832-33 (Wyo.1994). At best, it is unseemly to beg for equitable relief based upon one's own wrongdoing. Wettlin v. Jones, 32 Wyo. 446, 453, 234 P. 515, 517 (1925). Had Martinez succeeded in pleading breach of a fiduciary relationship by Associates, we would have remained chary of extending the helping hand of equity to a litigant who acts so as to hinder or defraud her creditors. Wantulok v. Wantulok, 67 Wyo. 22, 41, 214 P.2d 477, 484 (1950). Since Martinez's pleadings betray no hint of a fiduciary relationship, we need not dwell upon equity's distaste for unclean hands in order to fully dispose of her counterclaim. Of the two essential kinds of fiduciary relationships, the first arises from specific legal relationships. In cases of trustee and beneficiary, principal and agent, and the like, the relations are essentially fiduciary, and the inference or presumption follows of course. Hoge v. George, 27 Wyo. 423, 442, 200 P. 96, 102 (1921). The second is less susceptible of exact definition, being implied in law due to the factual situation surrounding the involved transactions and the relationship of the parties to each other and to the questioned transactions. Denison State Bank, 640 P.2d at 1241. See Binning v. Miller, 55 Wyo. 478, 497, 102 P.2d 64, 73-74 (1940). Courts of equity are not wont to artificially limit the factual scenarios which may give rise to those less clearly defined kinds of fiduciary relationships. Children's Home of Rockford v. Andress, 380 Ill. 452, 44 N.E.2d 437, 443 (1942). However, one asserting a fiduciary relationship bears the burden of establishing it by clear and convincing evidence, and we will not over reach ourselves to posit such a profound circumstance. Hoge, 200 P. at 102; Appleman v. Kansas-Nebraska Natural Gas Co., 217 F.2d 843, 848 (10th Cir.1954). Few, if any, courts see prior dealings or a longstanding lender-borrower relationship, without more, as crossing the threshold for establishment of a fiduciary relationship, because the nexus in a lender-borrower situation is a debtor-creditor relationship, and not a fiduciary relationship. Black Canyon Racquetball Club, Inc. v. Idaho First Nat. Bank, N.A., 119 Idaho 171, 804 P.2d 900, 905 (1991); cf. In re K Town, Inc., 171 B.R. 313, 319 (N.D.Ill.1994); and see O'Donnell v. Western Nat. Bank of Casper, 705 P.2d 1242, 1244-45 (Wyo.1985). If the unilateral actions or beliefs of a party were sufficient to establish a fiduciary relationship, then Martinez should have been afforded the opportunity to try her case on the merits, no matter how far-fetched. What her pleadings lack, and what they make clear that no amendment can supply, is a knowing undertaking by Associates for the benefit of Martinez. Committee on Children's Television, Inc. v. General Foods Corp., 35 Cal.3d 197, 197 Cal.Rptr. 783, 673 P.2d 660, 675-76 (1983). Fiduciary duty is not created by a unilateral decision to repose trust and confidence; it derives from the conduct or undertaking of the purported fiduciary[.] Farmers Ins. Co., Inc. v. McCarthy, 871 S.W.2d 82, 87 (Mo.App.1994). A fiduciary is defined as: A person having duty, created by his own undertaking, to act primarily for another's benefit in matters connected with such undertaking. Black's Law Dictionary 625 (6th ed. 1990) (emphasis added). The gravamen of Associates' offense, according to the counterclaim, was that they conducted business by mail and failed to undertake even a cursory investigation of the claims made by Martinez in her application. Such facts, were they proven, would not admit of a fiduciary relationship so much as they would disprove any possibility thereof. One may not unilaterally impose a fiduciary relationship on another without a conscious assumption of such duties by the one sought to be held liable as a fiduciary. Denison State Bank, 640 P.2d at 1243-44. See, Hoge, 200 P. at 102. The liberality with which we construe pleadings in favor of the party against whom a W.R.C.P. 12(b)(6) motion to dismiss has been granted does not go so far as to excuse omission of that which is material and necessary in order to entitle [one to] relief. Sump v. City of Sheridan, 358 P.2d 637, 642 (Wyo.1961). Here what is material and necessary to any finding of lender liability is not only omitted but excluded by that which is alleged. Furthermore, as the district court observed, there is nothing in the counterclaim which alleges that Associates did anything they were not entitled to do under the law. Mummery v. Polk, 770 P.2d 241, 243 (Wyo.1989). Under such circumstances, the counterclaim is ripe for summary dismissal. Mellencamp v. Riva Music Ltd., 698 F.Supp. 1154, 1160 (S.D.N.Y.1988). Sharing the reluctance of other courts to draw a fiduciary rabbit from a commercial loan agreement hat, we affirm the district court's dismissal of Martinez's counterclaim. Washington Steel Corp. v. TW Corp., 602 F.2d 594, 600 (3rd Cir.1979), overruled on other grounds sub nom. Clark v. K-Mart Corp., 979 F.2d 965, 967-68 (3rd Cir.1992).