Court Opinion

ID: 7920450
Source: CourtListenerOpinion
Date Created: 2022-09-08 22:21:46.828818+00
Date Added: 2024-06-11T16:32:59.961593
License: Public Domain

ADKINS, J.,
concurring in part and dissenting in part.
I agree with the majority’s conclusion that the Maryland Credit Agreement Act does not apply to, and therefore does not preclude, the Peases’ counterclaims of fraud, negligence, and breach of fiduciary duty, although I think its reasoning should be amplified. I disagree, however, with the majority’s holding that the use of oral statements to prove that a contract is void ab initio is barred by the Act.
I.
In its holding that tort claims are not barred by the Act, the majority relies primarily on legislative history indicating that the Act was intended only to apply to bar enforcement of “(1) *233an oral credit agreement; or (2) a verbal modification of their existing credit agreement.” The majority emphasizes that the Act was enacted in response to the numerous “multimillion dollar lawsuits [that were] being filed ... based on alleged verbal promises to lend and ... modifications of existing loan agreements.” Maj. Op. at 224, 6 A.3d at 875 (quoting Notes to H.B. 704 (1989)). I would explore, which the majority does not, how this legislative history is helpful to interpreting specific words of the Act.
Specifically, I believe that the legislative history sheds light on the meaning of “enforceable” as used in Subsection (b) of the Act—“a credit agreement is not enforceable by way of action or defense[.]” Maryland Code, (1973, 2006 RepLVol.), § 5-408 of the Courts and Judicial Proceedings Article (“CJP”). The Act defines “credit agreement” to include “agreeing to take or to not take certain actions by a financial institution in connection with an existing or prospective credit agreement.” CJP § 5-408(a)(ii). It then provides that a “credit agreement” is not “enforceable by way of action or defense” unless it is in writing. CJP § 5-408(b)(l). Wachovia argues that these provisions mean that any oral agreement or representation made by a bank in connection with a loan is barred, even when used to support a tort action. Thus, Wachovia interprets the word “enforce” to include an action in tort based on the oral agreement. This was the interpretation reached in ST Systems v. Md. Nat’l Bank, 112 Md.App. 20, 32, 684 A.2d 32, 38 (1996). Under this construction, a suit for damages in tort would “enforce” the oral agreement in the sense that it would impose liability on the bank for breaching the agreement. In my view, this argument merits more discussion than the brief treatment that the majority opinion accords it. I set forth my reasons for rejecting Wachovia’s argument in Section II hereof. Ultimately, though, I agree with the majority that the Act does not bar suits or counterclaims for damages in fraud, negligence, or breach of fiduciary duty.
*234I depart from the majority when it veers into discussion of an argument that the contract is void ab initio,1 and holds that the Act would bar such a claim. First, the majority fails to recognize that a successful claim of fraudulent inducement renders the contract voidable, not void ab initio. See Julian v. Buonassissi, 414 Md. 641, 667, 997 A.2d 104, 119 (2010) (“We have long recognized that contracts obtained by fraud are not absolutely void, but are voidable at the election of the parties affected by the fraud[.]”) (internal quotations and citations omitted); Wenstrom Consolidated Dynamo & Motor Co. of Balt. City v. Purnell, 75 Md. 113, 120, 23 A. 134, 136 (1891) (“[W]here a [party] has been deceived and induced to enter into a [contract], by misrepresentation and fraud ..., such contract, while not absolutely void, is voidable[.]”); Restatement (Second) of Contracts Section 164(1) (1981) (“If a party’s manifestation of assent is induced by either a fraudulent or a material misrepresentation by the other party upon which the recipient is justified in relying, the contract is voidable by the recipient.”).2 According to the Restatement, *235the same would be true in a successful claim of negligent material misrepresentation inducing a contract. See Restatement (Second) of Contracts § 164 cmt. b (1981) (“A representation need not be fraudulent in order to make a contract voidable under the rule stated in this Section. However, a non-fraudulent misrepresentation does not make a contract voidable unless it is material, while materiality is not essential in the case of a fraudulent misrepresentation.”).3 Thus, this case presents no issue about the effect of the Maryland Credit Agreement Act on credit agreements claimed to be void ab initio.
I also disagree with the majority’s holding that the Act bars use of oral statements that would render a contract void ab initio. The majority reasons that any “consideration of [Wachovia’s oral representations] to nullify the [commercial loan] ... is an attempt to enforce a verbal modification of the [commercial loan] existing between the Peases and Wachovia.” Maj. Op. at 230, 6 A.3d at 878. This determination utterly misconstrues the doctrine of “void ab initio.”
*236When a contract is void ab initio, it is “[n]ull from the beginning, as from the first moment when a contract is entered into[.]” Black’s Law Dictionary 1709 (9th ed.2009). It is as if the contract never existed in the first place. Cf. Julian v. Buonassissi, 414 Md. 641, 666, 997 A.2d 104, 119 (2010) (“A void contract ‘is not a contract at all[.]’ ”) (quoting Restatement (Second) of Contracts § 7 cmt. a (1981)). The contract never forms because there is no mutual assent, such as in situations where fraud in factum is alleged:
At the heart of the assertion of [fraud in factum] is the absence of that degree of mutual assent prerequisite to the formation of a binding contract; absent the proverbial “meeting of the minds” one cannot be said to have obligated himself in law and the purported transaction is regarded as void.
Richard A. Lord, 26 Williston on Contracts § 69:4, at 502 (4th ed.2003)(quoting Bancredit, Inc. v. Bethea, 68 N.J.Super. 62, 172 A.2d 10, 12 (App.Div.1961)) (emphasis added). Thus, contracts that are void ab initio are not legally recognized:
When deeds are ... void ab initio, [they are] wholly wanting in legal fitness to stand even as security for advances. They have in truth no lawful existence, and to use the expression of Mr. Sugden, 525, “It would be wholly inconsistent and absurd to recognize them for any lawful purpose.”
Slingluff v. Smith, 76 Md. 558, 560, 25 A. 674, 675 (1893) (emphasis added). As we said in Western Maryland R. Co. v. Blue Ridge Hotel Co., 102 Md. 307, 331, 62 A. 351, 355 (1905), a contract that is void ab initio,
will not be enforced by any species of action in a Court of Justice; ... it cannot be made good by ratification, or by any succession of renewals, and no performance on either side, can give validity to the unlawful contract, or form the foundation of any right of action upon it.
(quoting 10 Cyc. 1146 (1904)).
The majority’s reasoning is flawed. It characterizes a claim that a contract is void ab initio as one barred by the statute *237because “it is an attempt to enforce a verbal modification of the credit agreement.” Certainly, the Act bars using oral agreements to prove a contract modification in a suit to enforce the modified contract. “Modification,” however, contemplates that there is something that is to be modified. See Black’s Law Dictionary 1095 (9th ed.2009) (defining “modification” as a “change to something [.]”) (emphasis added). If the claim is that a party’s tortious conduct prevented the contract from ever forming at the outset, then there is simply nothing to enforce, and the Act does not apply. Accordingly, the Act would not bar a claim that a bank’s tortious conduct rendered the original commercial loan void ab initio.
I respectfully dissent from the majority on this issue.
II.
As the Circuit Court’s analysis of the Peases’ tort claims was overshadowed by its belief that the Maryland Credit Agreement Act categorically precluded the court from opening the confessed judgment, I believe that a more careful examination of that Act is key to this appeal. This Court has never before interpreted Maryland’s Credit Agreement Act. As with any statute, the general principles of interpretation apply:
In statutory interpretation, our primary goal is always to discern the legislative purpose, the ends to be accomplished, or the evils to be remedied by a particular provision, be it statutory, constitutional or part of the Rules. We begin our analysis by first looking to the normal, plain meaning of the language of the statute, reading the statute as a whole to ensure that no word, clause, sentence or phrase is rendered surplusage, superfluous, meaningless or nugatory. If the language of the statute is clear and unambiguous, we need not look beyond the statute’s provisions, and our analysis ends. If, however, the language is subject to more than one interpretation, or when the language is not clear when it is part of a larger statutory scheme, it is ambiguous, and we endeavor to resolve that ambiguity by looking to the stat*238ute’s legislative history, case law, and statutory purpose, as well as the structure of the statute.
People’s Ins. Counsel Div. v. Allstate Ins. Co., 408 Md. 336, 351-52, 969 A.2d 971, 979-80 (2009) (quotation marks and citations omitted).
The Maryland Credit Agreement Act was adopted in 1989 as a tool to limit lender liability.4 See Senate Judicial Proceedings Committee, ELD. 704, 1989 General Assembly of Maryland Floor Report (“Floor Report”). It precludes a credit agreement from being enforceable “by way of action or defense unless it: (1) Is in writing; (2) Expresses consideration; (3) Sets forth the relevant terms and conditions of the agreement; and (4) Is signed by the person against whom its enforcement is sought.” CJP § 5-408(b). Under the Act, a credit agreement “means a covenant, promise, undertaking, commitment, or other agreement by a financial institution to: 1. Lend money; 2. Forbear from repayment of money, goods, or things in action; 3. Forbear from collecting or exercising any right to collect a debt; or 4. Otherwise extend credit.” CJP § 5-408(a)(2)(i). The term “credit agreement” also “includes agreeing to take or to not take certain actions by a financial institution in connection with an existing or prospective credit agreement.” CJP § 5-408(a)(2)(ii).
*239According to the plain meaning of the Act, neither a commercial lender nor a commercial borrower may attempt to enforce an oral promise in an action on the contract. This bar includes any oral agreement to take or to not take certain actions in connection with an existing or prospective credit agreement. Thus, the Peases will not succeed in any claim that the promises made by Martin or Wachovia to forbear enforcing their judgment lien on the Peases’s home constituted a modification of the terms of the commercial loan. The issue that is not so clear, however, is whether the statutory bar against using these oral promises in defense of a contract enforcement suit will bar their use in all other causes of action—such as the fraud, breach of fiduciary duty, and negligence claims that the Peases assert as set-offs, to the confessed judgment.
In examining this question, I see cases interpreting Maryland’s general statute of frauds as apt guides. See CJP § 5-901. Indeed, legislative history reveals that the General Assembly enacted the Maryland Credit Agreement Act with the “intent ... to establish a statute of frauds ... [for] certain credit agreements made by financial institutions.... ” Floor Report, supra. Like the Act, CJP Section 5-901 requires that certain promises must be “in writing and signed by the party to be charged” to be enforceable.5 The statute of frauds applies to any guaranty, agreement made on consideration of marriage, or agreement that cannot be performed within one year from the making of the promise. See CJP § 5-901.
In interpreting this general statute of frauds, we have drawn a distinction between actions in contract and those in tort, explaining that “contracts which are voidable by reason of the statute of frauds ... can still afford a basis for a tort action____” Daugherty v. Kessler, 264 Md. 281, 286, 286 A.2d 95, 98 (1972) (quotation marks and citation omitted). As *240properly articulated by the CSA, “the statute of frauds does not bar a tort suit for either fraud or negligent misrepresentation because those counts are not based ‘on ... [the] contract’ between the parties but are based on misrepresentations that induced the contract.” Greenfield v. Heckenbach, 144 Md. App. 108, 140, 797 A.2d 68, 82 (2002) (citing 73 Am.Jur.2d Statute of Frauds § 492 (2001) (“tortfeasors and fraudulent intermeddlers will not be permitted to use the statute of frauds as a defense to a wrongful act or as a means of consummating a fraudulent design.”)). Although not the only basis for my decision, this Court’s previous treatment of our general statute of frauds lends support to a more narrow interpretation of the Maryland Credit Agreement Act.
Other states have also likened their credit agreement statutes to their general statutes of frauds, and on that basis reasoned that oral promises made in the context of a credit agreement could support tort claims. In Missouri, a credit agreement is an “agreement to lend or forbear repayment of money, to otherwise extend credit, or to make any financial accommodation” and a “debtor may not maintain an action upon or defense to a credit agreement unless the credit agreement is in writing----” Mo.Rev.Stat. § 432.045 (2009). When debtors alleged that a lender had conspired to fraudulently induce them into defaulting on their loan by making promises to remove liens on another property, the Missouri Court of Appeals held that the trial court improperly granted summary judgment in favor of the lender based upon an erroneous belief that Missouri’s credit agreement statute barred the debtors’ claims. See Mika v. Cent. Bank of Kansas City, 112 S.W.3d 82, 90 (Mo.Ct.App.2003). The court explained that a fraud exception to the general statute of frauds had existed for over one hundred years in that state, and that there was nothing in the express language or the legislative history of the statute to indicate that the legislature intended a different rule to be applied to credit agreements. Id. Moreover, the court reasoned, it would work a “gross injustice” to allow the “application of the bar [to] itself work[ ] a fraud[.]” Id.
*241Likewise, the Oklahoma Supreme Court has ruled that “[sjtatutes of frauds are enacted to prevent frauds not to perpetrate them. Such statutes are not intended to be used as shield or breastwork for a wrongdoer.” Brown v. Founders Bank and Trust Co., 890 P.2d 855, 868 (Okla.1994). In Brown, the court held that Oklahoma’s credit agreement statute did not bar a debtor’s claim of fraud where the bank that provided the debtor’s SBA loan dictated the location of the debtor’s prospective construction project but did not disclose that it owned the land targeted for development. Id. at 859, 863. The Oklahoma credit agreement statute provides that
No lender or borrower may maintain an action to enforce or seek damages for the breach of any term or condition of credit agreement ... 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.
Okla. Stat. tit. 15, § 140(B) (2010).6
The same conclusion was reached in Connecticut, whose statute of frauds provides in relevant part:
(a) No civil action may be maintained in the following cases unless the agreement, or a memorandum of the agreement, is made in writing and signed by the party, or the agent of the party, to be charged: ... (6) upon any agreement for a loan in an amount which exceeds fifty thousand dollars.
Conn. Gen.Stat. § 52-550(a)(6) (2010). In Union Trust Company v. Jackson, 42 Conn.App. 413, 679 A.2d 421, 425 (1996), the Connecticut Appellate Court reversed the trial court’s grant of summary judgment in favor of a lender because the borrowers had presented evidence to create an issue of material fact regarding part performance, a common law exception *242to the statute of frauds. Texas also joins this trend. Its statute provides that a “loan agreement[7] in which the amount involved in the loan agreement exceeds $50,000 in value is not enforceable unless the agreement is in writing and signed by the party to be bound or by that party’s authorized representative.” Tex. Bus. & Com.Code Ann. § 26.02(b) (2009). In 1001 McKinney Limited v. Credit Suisse First Boston Mortgage Capital, 192 S.W.3d 20, 29-30 (Tex.App.2005), the Court of Appeals held that Texas’s credit agreement statute of frauds did not bar actions sounding in tort, including common law fraud, and thus grant of summary judgment on that issue in favor of the creditor was improper.8 While not *243all states embrace the reasoning of these cases,91 think this is the better-reasoned interpretation.
In still other states, legislatures have included more far-reaching language in their credit agreement statutes, which the courts have interpreted as barring all actions in tort related to unenforceable agreements. For example, Colorado’s credit agreement statute precludes a debtor or a creditor *244from “fil[ing] or maintaining] an action or a claim relating to a credit agreement involving a principal amount in excess of twenty-five thousand dollars unless the credit agreement is in writing and is signed by the party against whom enforcement is sought.” Colo.Rev.Stat. § 38-10-124(2) (2010) (emphasis added). Thus, in Hewitt v. Pitkin County Bank & Trust Company, 931 P.2d 456, 459 (Colo.App.1995), the Colorado Court of Appeals held that Colorado’s credit agreement statute barred debtor’s numerous tort claims because that state’s legislature intended borrowers and lenders to “put it in writing,” to ensure the enforceability of any claims they may have in the future. The Illinois credit agreement statute also contains the same expansive language: “A debtor may not maintain an action on or in any way related to a credit agreement unless the credit agreement is in writing .... ” § 815 Ill. Comp. Stat. 160/2 (2010) (emphasis added). There, the intermediate appellate court interpreted the “related to” language to be a clear bar to actions based on the common law exceptions to that state’s statute of frauds, including promissory estoppel and fraud. See Klem v. First Nat’l Bank, 275 Ill.App.3d 64, 211 Ill.Dec. 828, 655 N.E.2d 1211, 1212-13 (1995).
Additionally, when the American Bar Association’s (“ABA”) Task Force on Lender Liability Limitation Amendments to State Statutes of Frauds drafted its own model credit agreement statute, it chose language that expressly prohibited any “action for legal or equitable relief____” John L. Culhane, Jr. & Dean C. Gramlich, Lender Liability Limitation Amendments to State Statutes of Frauds, 45 BUS. LAW. 1779, 1792 (1991). It then listed the type of actions forbidden, including “promissory or equitable estoppel[,]” “part performance[,]” and “negligent misrepresentation.” Id. This was done in order to “foreclose ‘end runs’ under [common law] theories ... [because] experience [told the Task Force] that borrowers [would] seek such relief, and that courts may sometimes afford such relief.” Id. at 1797.
Our General Assembly, however, chose not to include words such as “relating to” or specify tort theories as among the *245actions prohibited. The Maryland Act merely states that a credit agreement shall not be enforceable if it is not in writing. It contains no language indicating an intent to jettison all actions that rely on oral representations made in a commercial loan setting. If our General Assembly had intended the Credit Agreement Act to preclude tort actions, as did the ABA Task Force and the legislatures of Colorado and Illinois, then it could have drafted language to facilitate that end.
Timing and context are key to my interpretation—the Act was enacted after the tort exception to the general statute of frauds had already been established. Compare Daugherty, 264 Md. at 286, 286 A.2d at 98, with CJP § 5-408 (Act enacted in 1989, seventeen years after this Court’s decision refusing to interpret the general Statute of Frauds as barring oral statements supporting tort actions). When analyzing a statute, “we presume that the Legislature has acted with full knowledge of prior and existing law, legislation and policy!.]” Taylor v. Mandel, 402 Md. 109, 131, 935 A.2d 671, 684 (2007). The General Assembly’s decision not to word the Credit Agreement Act more broadly than the general statute of frauds is an indication that it did not intend for the Act to be interpreted differently.
The legislative history of the Act is also instructive. The Senate Judicial Proceedings Committee, in its analysis of House Bill 74 (the genesis of CJP Section 5-408) explained that this legislation “will protect lenders against claims that the lender made a verbal promise to loan money and then refused to do so, or that the lender verbally agreed to extend the terms of a loan.” Senate Judicial Proceedings Committee, H.D. 704, 1989 General Assembly of Maryland Floor Report. Notes attached to that bill explain: “All this legislation is saying is that in a commercial setting, if you are going to sue me to enforce an alleged loan agreement, get it in writing and get it signed.” See Bill File, H.D. 704, 1989 Gen. Assem., 399th Sess. (1989).10 This legislative history indicates that the *246thrust of the Act was to preclude claims seeking to enforce an oral contract to lend or modify the terms of a loan, which is not the type of claim advanced by the Peases. The Act contains no suggestion that a broader bar, which would apply to tort claims, was intended.
The Credit Agreement Act precludes admission of verbal representations made by Martin and/or Wachovia as support for a claim or defense on the contract. I would hold that the Act does not bar proof of the elements of a tort—distinct from a contract claim or defense—such as the duty of care required in negligence, or the specific intent to defraud required in fraudulent misrepresentation.11 This is no mere distinction *247without a difference. The torts of negligence12 and breach of fiduciary duty13 require a showing of a duty owed to the debtor. In ordinary loan transactions, the relationship between a debtor and a creditor is a contractual one, and is not fiduciary in nature. See Parker v. Columbia Bank, 91 Md. App. 346, 368, 604 A.2d 521, 532 (1992). To sustain an action sounding in tort, the complaining party must prove “a duty or obligation imposed by law independent of that arising out of the contract itself!'.]” Heckrotte v. Riddle, 224 Md. 591, 595, 168 A.2d 879, 882 (1961). The rigorous proof requirements of these and other torts will insure that neither borrowers nor would-be borrowers can evade the restrictions of the Act by *248simply adding a' new label to their claims or defenses.14
Accordingly, here, to prove a claim in negligence the Peases would have to prove that Wachovia owed a duty to them more extensive than the mere obligation of good faith dealing implied in every contract. See Clancy v. King, 405 Md. 541, 565, 954 A.2d 1092, 1106 (2008) (“Even if [a] contract [does] not contain this general good faith term, Maryland contract law implies such an obligation”). Arguably, an even greater burden of proof lies in the tort of fraud, where the Peases would have to show that the bank actually had the intent to defraud.15 See Parker, 91 Md.App. at 359, 604 A.2d at 527. *249These requirements are not insignificant hurdles for the Peas-es to overcome. I am confident that adopting this holding will not expose lenders, such as Wachovia, to an excessive amount of tort litigation or judgments based on oral representations made during the commercial lending process.
Accordingly, like the majority, I would remand the case to the trial court so that it may determine whether the Peases can allege a potentially meritorious tort defense that is sufficient to open, modify, or vacate the confessed judgments against them. I confess that I am somewhat skeptical of the Peases’s ability to do this on the facts as currently contained within their complaint. Nevertheless, with more discovery, they may be able to better develop the record.
Chief Judge BELL and Judge MURPHY authorize me to state that they join in the views expressed in this concurring and dissenting opinion.

. The Peases do not argue in their briefs that the loan was void ab initio, mentioning the phrase in their brief only as part of their review of what they filed in the Circuit Court. At oral argument, the following colloquy occurred:
Judge Murphy: [How does this case] play into the line of cases that say when there is a motion to reopen we apply a pretty liberal standard to allowing a hearing on the merits?
Counsel for Peases: Correct your honor, the line of cases indicates that confess judgments are freely opened upon a showing of a meritorious defense. A meritorious defense is described in [Nils, LLC v. Antezana, 171 Md.App. 717, 912 A.2d 45,] a defense that challenges the execution of the loan or the amount due under the note. We challenged that the loan that was executed, through the negligence or through fraud, was improperly created and therefore could either be void ab initio or as a setoff. In the event of a set-off, courts have stated that set-off is a meritorious defense. It is required under the Rule 6-11(c) that by motion of the defendant ... shall state a legal and factual basis for defense of that claim.... The defenses in this case that we claimed ... create a tort defense to the creation of the promissory note.
Presumably the majority relies on counsel's mention of the term as the justification for reaching the issue, even though it is not argued in the Peases’ briefs. I would not do so.

. The Restatement (Second) of Contracts (1981) gives the following example of a void contract in Section 163, Illustration 2:
*235A and B reach an understanding that they will execute a written contract containing terms on which they have agreed. It is properly prepared and is read by B, but A substitutes a writing containing essential terms that are different from those agreed upon and thereby induces B to sign it in the belief that it is the one he has read. B's apparent manifestation of assent is not effective.

. The Peases may also encounter problems with a “voidable” theory, because they would seek to void a loan agreement where they had already received the money. We have previously recognized the restitution obligation of a party seeking rescission. See, e.g., Lazorcak v. Feuerstein, 273 Md. 69, 75-77, 327 A.2d 477, 481-482 (1974) (“[T]he party seeking rescission must indicate to the other party at least the intent to restore the parties to the relative positions which they would have occupied if no such contract had ever been made[.]”) The court will relax the restoration requirement, but only in limited circumstances. See Funger v. Mayor of Somerset, 244 Md. 141, 151, 223 A.2d 168, 174 (1966) (listing seven situations in which rescission without restoration is appropriate). Under these standards, the Peases would presumably still have to account for the money they received if the contract were voided. Thus, the Peases’ more viable claim is a set-off by way of a claim for damages.

. Numerous jurisdictions across the country have enacted similar legislation. See, e.g., Ala.Code § 8-9-2(7) (2010) (Alabama); Alaska Stat. § 09.25.010(a)(13) (2010); Ariz.Rev.Stat. Ann. § 44-101(9) (2010) (Arizona); Ark.Code Ann. § 4-59-101(d) (2010) (Arkansas); Colo.Rev.Stat. § 38-10-124 (2009) (Colorado); Conn. Gen.Stat. § 52-550(a)(6) (2010) (Connecticut); Fla. Stat. § 687.0304(2) (2009) (Florida); Idaho Code Ann. § 9-505 (2010); § 815 Ill. Comp. Stat. 160/2 (2010) (Illinois); Ind.Code § 26-2-9-4 (2010) (Indiana); Iowa Code § 535.17 (2009); Kan. Stat. Arm. §§ 16-117 through -118 (2009) (Kansas); La.Rev.Stat. Ann. § 6:1122 (2009) (Louisiana); Mich. Comp. Laws § 566.132 (2010) (Michigan); Minn.Stat. § 513.33 (2009) (Minnesota); Mo.Rev.Stat. § 432.045 (2009) (Missouri); Nev.Rev.Stat. § 111.220(4) (2009) (Nevada); N.C. Gen.Stat. § 22-5 (2009) (North Carolina); Okla. Stat. tit. 15, § 140 (2010) (Oklahoma); Or.Rev.Stat. § 41.580(l)(h) (2009) (Oregon); Tenn.Code Ann. § 29-2-101(b) (2010) (Tennessee); Tex. Bus. & Com. Code Ann. § 26.02 (Vernon 2009) (Texas); and Utah Code Ann. § 25-5-4 (2009).

. CJP Section 5-901 codified the common law rule. See Collection & Investigation Bureau of Maryland, Inc. v. Linsley, 37 Md.App. 66, 67-68, 375 A.2d 47, 48 (1977) (discussing the historical origins of Maryland’s statute of frauds).

. A credit agreement is defined as "an agreement by a financial institution to lend money, extend credit or otherwise make any other financial accommodation, or to renew, extend, modify, rearrange or forebear the repayment of any such loan, extension of credit or financial accommodation....” Okla. Stat. tit. 15, § 140(A)(1) (2010).

. Texas defines a "loan agreement” as:
... one or more promises, promissory notes, agreements, undertakings, security agreements, deeds of trust or other documents, or commitments, or any combination of those actions or documents, pursuant to which a financial institution loans or delays repayment of or agrees to loan or delay repayment of money, goods, or another thing of value or to otherwise extend credit or make a financial accommodation. The term does not include a promise, promissory note, agreement, undertaking, document, or commitment relating to:
(A) a credit card or charge card; or
(B) an open-end account, as that term is defined by Section 301.002, Finance Code, intended or used primarily for personal, family, or household use.
Tex. Bus. & Com.Code Ann. § 26.02(a)(2) (2009).

. Michigan's intermediate appellate court adopted a different interpretation of its statute, which provides that "[a]n action shall not be brought against a financial institution to enforce \.. promises or commitments of the financial institution unless the promise or commitment is in writing and signed with an authorized signature by the financial institution....” Mich. Comp. Laws § 566.132(2) (2010). The statute governs promises to lend money, extend or modify credit, or waive a provision of a loan. Id. In Crown Technology Park v. D & N Bank, F.S.B., 242 Mich.App. 538, 619 N.W.2d 66 (2000), the Michigan Court of Appeals held that the state’s credit agreement statute barred a borrower's promissory estoppel suit because its language forbidding "an action” to enforce an oral credit agreement, without specifying the type of action prohibited, constituted an "unqualified and broad ban" of "any action.” Id. at 72-73 (emphasis in original). There, the borrower alleged that the bank made representations that it would waive its prepayment penalty, leading the borrower to pay off the loan earlier than originally contracted. Id. at 69. The borrower also based its claim for negligence in the inducement on the same representations. Id. at 73-74. The court applied an identical analysis to that tort claim *243because it considered that claim to be "intimately related to [the borrower's] promissory estoppel argument” and was nothing more than "an action to enforce an oral promise[.]” Id. The court did make clear, however, that "[i]f a borrower ha[d] a separate claim for negligence that [did] not rely on enforcing the terms of an alleged oral promise, then [the statute would not be] a bar to adjudicating the claim on its merits.” Id. at 73. I am not certain how to interpret this comment.

. Some states have interpreted their credit agreement statutes to bar actions, counterclaims or cross claims, but not affirmative defenses. These states read the text of their statutes to prohibit "only debtor-initiated action against a creditor.” Sees v. Bank One, Ind., N.A., 839 N.E.2d 154, 159 (Ind.2005) (reversing trial court’s grant of summary judgment in favor of creditor where debtor pled the affirmative defense of fraud in the inducement). In Hibernia National Bank v. Contractor's Equipment & Supply, 804 So.2d 760 (La.Ct.App.2001), Louisiana’s intermediate appellate court allowed an alleged debtor to introduce evidence that she was no longer a guarantor on a loan which the bank sought to enforce against her in an action initiated by her creditor. One year later, however, the Louisiana Supreme Court refused to allow a debtor's claims for negligent misrepresentation and breach of fiduciary duty because La.Rev.Stat. Ann. Section 6:1122 "precludefd] all actions for damages arising from oral credit agreements, regardless of the legal theory of recovery asserted.” Jesco Construction Corp. v. NationsBank Corp., 830 So.2d 989, 992 (La.2002). Florida’s intermediate appellate court has similarly interpreted Section 687.0304 of the Florida Code to forbid counterclaims such as breach of an oral agreement, Metro Building Materials Corporation v. Republic National Bank of Miami, 919 So.2d 595 (Fla.Dist.Ct.App.2006), but not affirmative defenses such as waiver, estoppel and bad faith, Brenowitz v. Central National Bank, 597 So.2d 340 (Fla.Dist.Ct.App.1992). On the other hand, Minnesota courts deem Section 513.33 of the Minnesota Code to be a bar to the affirmative defenses of "unilateral and mutual mistake, no meeting of the minds, and contract modification,” which sound in contract. BankCherokee v. Insignia Dev., LLC, 779 N.W.2d 896, 902 (Minn.Ct.App.2010). That state is silent as to whether defenses sounding in tort would also be prohibited. Because Maryland’s statute expressly prohibits defenses seeking to enforce an oral credit agreement, I do not focus on the distinction between debtor-initiated actions and affirmative defenses. See CJP § 5-408(b).

. This session of the General Assembly was originally referred to as the 395th Session, and documents from that session bear that designa*246tion. The revised numbering "incorporates William J. Shepherd’s discovery [of an unrecorded session in 1876] during his research for ... the State Archives[,] ... [as well as] three of the extralegal conventions that sat between 1774 and 1776.” See 186 Archives of Maryland 127 (1994-95), available at http://www.msa.md.gov/megafile/msa/speccol/sc 2900/sc2908/000001/000186/html/aml86-127.html (last visited Aug. 10, 2010). The revised numbering is "the standard by which legislative sessions are counted to include all sessions convened.” Id.

. Wachovia also cannot rely on the parol evidence rule to quell the Peases’ claims of fraud and negligent misrepresentation. In Greenfield v. Heckenbach, 144 Md.App. 108, 797 A.2d 63 (2002), purchasers of real estate asserted claims of fraud and negligent misrepresentation against the couple that had sold them the property. Before the purchase, the sellers had shown the then-prospective buyers building plans of a house the sellers were constructing on an adjoining property. Id. at 115, 797 A.2d at 67-68. According to the plans, the newly constructed structure would not obstruct the buyers’s view of the water. Id. at 115-16, 797 A.2d at 68. Later, the parties entered into a contract of sale that contained an integration clause:
This Contract and any Addenda thereto contain the final and entire agreement between the parties, and neither they nor their agents shall be bound by any terms[,] conditions, statements, warranties or representations, oral or written, not herein contained.
Id. at 117, 797 A.2d at 68. After returning from vacation, however, the buyers discovered that the sellers’s new house, which deviated from the original plans, did indeed block the buyers’s view of the water. Id. at 118, 797 A.2d at 69. The buyers sued and the sellers argued that any oral representations made by them regarding their construction plans were barred by the parol evidence rule. Id. at 113, 797 A.2d at 66. The CSA concluded that the parol evidence rule could not work to exclude evidence of the representations when that evidence was being *247introduced to support tort claims of fraud and negligent representation, reasoning that
[a] party to a contract cannot, by misrepresentation of a material fact, induce the other party to the contract to enter into it to his damage, and then protect himself from the legal effect of such misrepresentation by inserting in the contract a clause to the effect that he is not to be held liable for the misrepresentation which induced the other party to enter into the contract. The effect of misrepresentation and fraud cannot be thus easily avoided. If it could be, the implied covenant of good faith and fair dealing existing in every contract would cease to exist.
Id. at 137, 797 A.2d at 80 (quoting Martens Chevrolet, Inc. v. Seney, 292 Md. 328, 338 n. 7, 439 A.2d 534 (1982)).

. The following four elements compose the tort of negligence: (1) a duty owed to the plaintiff (or to a class of which he is a part), (2) a breach of that duty, (3) a legally cognizable causal relationship between the breach of duty and the harm suffered, and (4) damages. See Jacques v. First Nat’l Bank of Md., 307 Md. 527, 531, 515 A.2d 756, 758 (1986) (emphasis added). Ordinarily, there is no affirmative duty of disclosure between parties dealing at arm’s length, but a party does have “the duty to disclose facts discovered after having made a representation to another if one knows or believes these facts make untrue or misleading the original statement (even though the statement may have been true, or believed true, when made).” 2 Fowler V. Harper, Fleming James, Jr., & Oscar S. Gray, Harper, James and Gray on Torts § 7.14 (3rd ed.2006).

. To prevail on a claim of breach of fiduciary duty, a party must prove: "(1) the existence of a fiduciary relationship, (2) a breach of duty owed by the fiduciary to the beneficiary, and (3) harm resulting from the breach.” Alleco Inc. v. Harry & Jeanette Weinberg Found., 340 Md. 176, 192, 665 A.2d 1038, 1046 (1995) (emphasis added).

. Thus, I do not agree with the CSA’s view that the economic policy of CJP Section 5-408 "is only upheld if tort claims based on an unenforceable alleged agreement are excluded.” ST Systems Corp. v. Maryland Nat'l Bank, 112 Md.App. 20, 32, 684 A.2d 32, 38 (1996) (emphasis in original). In ST Systems, Maryland National Bank offered conditional commercial financing to ST Systems Corporation. Id. at 24-25, 684 A.2d at 34. One condition of the loan was that no material adverse change in the financial condition of either ST Systems or its principal could arise prior to the loan closing date. Id. at 26, 684 A.2d at 35. After the closing documents were drawn, the principal of ST Systems informed the bank, for the first time, that he had an outstanding personal liability of $4,000,000. Id. at 25-26, 684 A.2d at 35. As a result, the bank withdrew the financing proposal. Id. at 26, 684 A.2d at 35. ST Systems filed a complaint against Maryland National Bank alleging breach of contract and various tort claims based on the bank’s conduct during the loan negotiations, including fraud in the inducement and breach of fiduciary duty. Id. The CSA affirmed the trial court’s dismissal of ST Systems's tort claims because it interpreted the Maryland Credit Agreement Act as excluding all tort claims based on an unenforceable alleged agreement. Id. at 32, 684 A.2d at 38. The court stated that "[s]ubjecting lenders to expensive tort claims would allow parties to avoid [the Act’s] protective reach, thereby rendering [it] merely a symbolic shell without any real effect.” Id. The CSA also concluded that if the legislature had wished to allow tort claims based on oral representations, it would have so expressed its intent in the Act. Id. at 33, 684 A.2d at 38. This is clearly at odds with our interpretation, which rests on the established presumption that the legislature knew of the caselaw permitting tort actions based on agreements that were otherwise invalid because of the statute of frauds, and thus would have specified a different result if it so desired. See discussion, supra.

. In an action for civil fraud based on an affirmative misrepresentation, a plaintiff must prove that:
(1) the defendant made a false representation to the plaintiff, (2) either the falsity of the representation was known to the defendant or *249the representation was made with reckless indifference to its truth, (3) the misrepresentation was made for the purpose of defrauding the plaintiff, (4) the plaintiff relied on the misrepresentation and had the right to rely on it, and (5) the plaintiff suffered compensable injury as a result of the misrepresentation.
Hoffman v. Stamper, 385 Md. 1, 28, 867 A.2d 276, 292 (2005) (emphasis added).