Court Opinion

ID: 4262432
Source: CourtListenerOpinion
Date Created: 2018-04-09 19:53:19.54539+00
Date Added: 2024-06-11T12:51:47.984101
License: Public Domain

FILED
                                              ZOLIP.1 OF APPEALS DWI
                                               STATE OF WASHINGTON
                                               2018 APR -9 (H 9: 23

 IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
                     DIVISION ONE
ACCESS THE USA, LLC, a Washington             )       No. 75747-4-1
limited liability company, 520 BRIDGE         )
REPLACEMENT FUND 11, LP, a Washington         )
limited partnership, and PREMIER 520          )
BRIDGE REPLACEMENT FUND 11, LP, a             )
Washington limited partnership,               )
                                              )
                          Appellants,         )
                                              )
             V.                               )
                                              )
THE STATE OF WASHINGTON, a                    )
government entity; THE OFFICE OF              )
THE TREASURER, a government entity            )      UNPUBLISHED OPINION
and agency of the State of Washington;        )
CITIGROUP GLOBAL MARKETS, a New               )      FILED: April 9, 2018
York corporation,                             )
                                              )
                           Respondents.       )
                                              )

      VERELLEN, C.J. — Access the USA, LLC formed limited partnerships with
foreign investors under the EB-5 Immigrant Investor Program, intending to invest

in State-issued bonds to fund construction of the new SR-520 Bridge. Access

submitted applications to open accounts with Citigroup Global Markets, the lead

underwriter. But on the bond pricing day, Citigroup had not opened accounts for

the limited partnerships, who were therefore unable to purchase bonds. Access
No.75747-4-1/2

sued Citigroup on theories of violation of the Corisumer Protection Act(CPA),1

breach of contract, promissory estoppel, and negligent misrepresentation.

Access also sued the State, alleging tortious interference with business

expectancy and negligent misrepresentation.

       Because Access's alleged claims of deception are limited to its unique

private interaction with Citigroup and no hypothetical facts support an impact on

the public interest, the trial court properly dismissed its CPA claim under

CR 2(b)(6).

       Because Access fails to establish an enforceable contract, the trial court

properly dismissed Access's breach of contract claim on summary judgment.

       Access offers no facts or reasonable inferences of an actionable promise

or reliance. The trial court properly dismissed Access's promissory estoppel

claim against Citigroup.

       Because Access cannot point to a false statement by Citigroup or the

State of a presently existing fact, the trial court properly dismissed its claims for

negl gent misrepresentation.

       Access establishes neither an intentional interference nor an improper

purpose or means. The trial court properly dismissed Access's claim that the

State intentionally interfered with its business expectancy.

       Therefore, we affirm.

       1 Ch. 19.86 RCW.

                                          2
No. 75747-4-1/3

                                     FACTS

      The EB-52 Immigrant Investor Program (EB-5 Program) allows foreign

investors and their families to obtain residency in the United States. The EB-5

Program is administered by the United States Citizenship and Immigration

Service (USCIS). Qualifying investments must meet threshold requirements for

job creation, term of investment, and risk. The investments are prepared by

USCIS-approved regional centers.

      Access is an approved regional center. Michael Mattox manages Access.

He eveloped a municipal bond investment strategy. In this model,foreign

investors participate in limited partnerships, which purchase municipal

infrastructure bonds. Access served as general partner in these limited

partnerships. Together with other requirements, each EB-5 applicant must invest

at lest $1,000,000.3 Access forms and manages the limited partnerships that

serve as the "funding accounts" for foreign investments. As part of Access's

effort to establish funding accounts for a May 2012 bond offering, Access and its

investors established two Washington limited partnerships.

       Washington bond sales are conducted pursuant to recognized procedures

established by the legislature and the Office of the State Treasurer. The Office of

the State Treasurer competitively selects underwriters and establishes a lead

underwriter. Each selected underwriter has a long history of working with State

      2 Employment-Based     Immigration, Fifth Preference.
     3 The minimum qualifying investment to participate either within a high
une ployment or rural area in the United States is $500,000.

                                        3
No. 75747-4-1/4

bond offerings and extensive experience in municipal bond offerings. Through its

bond offerings, the State sells its bonds to underwriters. The underwriters,

pursuant to a contract with the State, select the investors to purchase the bonds.

       To purchase bonds, an investor must open an account with an

underwriter. The process of opening an account with the underwriter is called

"onboarding." Citigroup was the lead underwriter for the bond offering at issue in

this appeal. Each underwriter determines its own onboarding process. Citigroup

conducts a process that complies with federal money laundering and other

regulations.

       Before any SR-520 bond offering, Mattox contacted Ellen Evans, the

deputy treasurer for debt management at the Office of the State Treasurer,

asking for a private sale of those State bonds. Evans declined, explaining that

the State "has a long-standing history of raising money exclusively through public

sales of State securities and.. . we value the transparency of the public

marketplace." Evans learned that Mattox had reached out to other State

officials "to promote his investment program,"5 which made her wary. Evans

advised members of the finance team and other State officials to respond that

the State finances its capital projects with public sales of securities. Evans was

concerned about the potential impact an EB-5 Program investment could have

on the purchase of the bonds. Evans did not understand how State bonds

qualify for the EB-5 program because of the low risk due to the State's excellent

credit rating and because an investor's purchase would not itself create jobs.

       4   Clerk's Papers(CP)at 1029.
       5   Id.

                                         4
No.75747-4-1/5

Evans was also cautious of the potential impact an EB-5 investment could have

on the volatility of the Washington bond market—if the federal government did

not approve Mattox's proposed EB-5 investment plan, all the bonds purchased

on behalf of those investors would likely be placed on the secondary market for

noneconomic reasons.

       I. First Bond Offering

       In October 2011, Access purchased $48,000,000 in bonds in a State bond

offering for the SR-520 project(2012C). J.P. Morgan Securities LLC served as

the ead underwriter. USCIS had not previously approved a purchase of publicly-

issued bonds as a qualifying EB-5 investment.

       State employees were aware of Access's interest in the bonds and

communicated with J.P. Morgan representatives about its vetting process.

Evans was involved in this communication, telling J.P. Morgan she did not

understand how the State's bonds would fit within the EB-5 program because

there was little risk involved, and the investor's bond purchase was not itself

creating jobs. Evans encouraged J.P. Morgan to perform due diligence on

Access and its investors. J.P. Morgan completed its account creation process

and sold some of the 2012C bonds to Access.

       II. Second Bond Offering

       The State scheduled a second bond offering for May 22, 2012, called

GARVEE6 2012F (2012F) with Citigroup Global Markets as the lead underwriter.

      6 GARVEE stands for Grant Application Revenue Vehicle, and refers to a
debt instrument backed by a pledge from the federal government for future Title
23 funding. GARVEE bonds enable the State to accelerate construction
                                         5
No. 75747-4-1/6

In November 2011, Access, together with its investors, established two

Washington limited partnerships7 (the LP Funds) and placed the limited

partnership assets in escrow. Mattox intended that the LP Funds would

purchase $143,000,000 in bonds. Mattox received millions from investors, all

before any communication with Citigroup about the offering.

       Mattox initially contacted representatives from J.P. Morgan to onboard the

2012F LP Funds, but was advised "to place its order through Citigroup."8

       Mattox called Citigroup's director of institutional sales, John Leahy, on

April 9, 2012. Mattox told Leahy he wanted to open new client accounts with

Citigroup and place an order in the anticipated 2012F offering. According to

Matox, Leahy said "he would begin the account opening process at Citigroup so

that Access the USA and the 2012F Limited Partnerships could participate in the

2012F Offering."9

       Leahy e-mailed Mattox on April 16, 2012, asking if "there's someone we

can call to get the paperwork started."19 On April 30, Mattox sent electronic

copies of Access's information to Leahy to "facilitate the account setup."11 Over

the following weeks, Mattox and Leahy communicated regarding onboarding

time ines for a project and spread the cost of transportation infrastructure over its
useful life.
       7 The 520 Bridge Replacement Fund 11, LP and Premier 520 Bridge
Rep acement Fund 11, LP.
       8   CP at 1587.
       9 CP at 946-47.
       19 CP at 1479.
       11 CP at 1458.

                                          6
No.75747-4-1/7

issues. Leahy e-mailed Mattox on May 9 asking for his percentage of ownership

interest. And up to two business days before the offering, Mattox sent Citigroup

documents for the onboarding process. The stated investment purpose raised

concerns with Citigroup and the Office of the State Treasurer.

       Representatives from the State, including Evans, worked with

representatives from Citigroup leading up to the 2012F bond offering to facilitate

the ale. Similar to her position before the first bond offering, Evans remained

concerned whether State bonds were appropriate for the EB-5 program because

of their low risk and whether EB-5 investors owning State bonds would increase

volatility in the State bond market. Evans expressed her concerns in meetings

which Citigroup representatives attended.

      According to Jay Wheatley,12 Citigroup's underwriter responsible for

allocating the bonds, he had never talked to anyone with the State about Mattox

or Access and acknowledged that there "were some concerns, but nothing to the

degree of we don't want their interest."13 Citigroup employees Leahy and Jerry

Bobo acknowledged they were aware of Evans' concern but they had their own

concerns about the relationship between the bonds and the EB-5 program.

       Citigroup was unable to complete the onboarding for the LP Funds before

the offering date, and accounts were never opened. Therefore, the LP Funds

were unable to purchase any bonds in the 2012F bond offering.

             referred to as George Wheatley throughout the record.
       12 Also

     13 CP at 1164-65; see also CP at 1173(Wheatley's colleague Joseph
Con ellan corroborates Wheatley's deposition testimony).

                                        7
No. 75747-4-1/8

       On the evening of the failed purchase, Mattox e-mailed the State

Treasurer saying he learned the State directed the underwriters not to sell bonds

to his "company because of the concern of negative publicity of our investors."14

In the e-mail, Mattox does not include any suggestion that Access had a contract

with Citigroup to buy bonds or that Citigroup had promised to sell them bonds.

Mattox e-mailed the agents for his investors and Citigroup, repeating his belief

that they had been discriminated against. According to Mattox, Leahy told him in

a plione call that there was nothing he could do, and "things are going on in the

back room that I can't tell you about, you are not getting your bonds."15

      Ill. Procedural History

      Access sued the State and Citigroup.16 Access alleged discrimination,

violation of the Washington securities act,17 and violation of the CPA. The United

States District Court for the Western District of Washington dismissed Access's

federal discrimination claim and, upon remand, the King County Superior Court

dismissed the remaining state law claims, including the CPA claim, under

CR 2(b)(6).

      Access filed an amended complaint alleging Citigroup breached its oral

agreement with Access, the State tortuously interfered with Access's business

expectancy or contract with Citigroup, Access relied on Citigroup's promises to

its detriment, and that Citigroup and the State made negligent

       14   CP at 1519.
       15   CP at 1592.
       16 Access   named other defendants, but they were dismissed.
       17   Ch. 21.20 RCW.

                                         8
No.75747-4-1/9

misrepresentations. The trial court granted summary judgment in favor of

Citigroup and the State and denied Access's motion for reconsideration.

       Access appeals.

                                      ANALYSIS

       We review summary judgment decisions de novo.18 The moving party

must show there are no genuine issues of material fact.18 Once a moving

defendant makes this showing, the burden shifts, "and if the plaintiff fails to make

a showing sufficient to establish the existence of an element essential to its case,

on which it will bear the burden of proof at trial," summary judgment in favor of

the moving defendant is appropriate.20

       We review a CR 12(b)(6) dismissal de novo.21 Dismissal is appropriate

"only if the court concludes, beyond a reasonable doubt, the plaintiff cannot

prove 'any set of facts which would justify recovery."22 "We regard "the plaintiff's

allegations in the complaint as true and consider hypothetical facts outside the

record.'"23 '"[A]ny hypothetical situation conceivably raised by the complaint

defeats a[CR] 12(b)(6) motion if it is legally sufficient to support plaintiffs

       18   Mohr v. Grantham, 172 Wash. 2d 844, 859, 262 P.3d 490(2011).
       19 Young   v. Key Pharmaceuticals, Inc., 112 Wash. 2d 216, 225, 770 P.2d 182
(1989).
       20 Simmons v.   City of Othello, 199 Wash. App. 384, 390, 399 P.3d 546
(2017).
       21   Kinney v. Cook, 159 Wash. 2d 837, 842, 154 P.3d 206 (2007).
       22Id.(quoting Tenore v. AT & T Wireless Servs., 136 Wash. 2d 322, 330, 962
P.2d 104(1998)).
      23 Deegan v. Windermere Real Estate/Center-Isle, Inc., 197 Wash. App. 875,
884, 391 P.3d 582(2017)(quoting FutureSelect Portfolio Mgmt. v. Tremont Grp.
Holdings, Inc., 175 Wash. App. 840, 865, 309 P.3d 555(2013)).

                                           9
No.75747-4-1/10

claim.'"24 Trial courts grant motions to dismiss "sparingly and with care," and

"only in the unusual case in which plaintiff includes allegations that show on the

face of the complaint that there is some insuperable bar to relief."25

I. Claims Against Citigroup

       A. CPA

       Access argues it alleged sufficient facts supporting its CPA claim and that

it should have survived a CR 12(b)(6) motion.

       The CPA aims to "protect the public and foster fair and honest

competition."26 To prevail in a CPA action, a plaintiff must establish (i) an unfair

or deceptive act or practice, (ii) occurring in trade or commerce,(iii) a public

interest impact,(iv) injury to plaintiff's business or property, and (v)that the

injuries were caused by the unfair or deceptive act or practice.27 Whether a

part cular action gives rise to a CPA violation presents a question of law.28

       Access contends Leahy's statements about creating accounts for the LP

Funds were unfair or deceptive.

       "The 'unfair or deceptive' element can be established in one of three ways:

(i) per se unfair or deceptive conduct, (ii) an act that has the capacity to deceive

       24 Id. (alterations in original)(quoting Halvorson v. Dahl, 89 Wash. 2d 673,
674, 574 P.2d 1190 (1978)).
       25 Kinney, 159 Wash. 2d at 842 (internal quotation marks omitted)(quoting
Hoffer v. State, 110 Wn.2d 415,420, 755 P.2d 781 (1988)).
       28   RCW 19.86.920.
      27 Hangman Ridge Training Stables, Inc. v. Safeco Title Ins. Co., 105
Wash. 2d 778, 780, 719 P.2d 531 (1986).
      28 Leingang v. Pierce County Med. Bureau, Inc., 131 Wash. 2d 133, 150, 930
P.2d 288 (1997).

                                          10
No.75747-4-1/11

a substantial portion of the public, or (iii) an unfair or deceptive act or practice not

regulated by statute but in violation of the public interest."29 Deception exists

where there is a representation, omission or practice that is likely to mislead a

reasonable consumer.3° Neither intent nor actual deception is required to prove

a deceptive act or practice, the focus is whether the conduct "has the capacity to

deceive a substantial portion of the public."31 But in applying the capacity to

deceive requirement, our concern "has been to rule out those deceptive acts and

practices that are unique to the relationship between plaintiff and defendant. The

definition of 'unfair' and 'deceptive' must be objective to prevent every consumer

cornplaint from becoming a triable violation of the act."32 Accurate information

may be deceptive "if there is a representation, omission or practice that is likely

to mislead."33 "Misrepresentation of the material terms of a transaction or the

failure to disclose material terms violates the CPA.'"34

       The acts and practices of Citigroup were unique to the relationship

between the parties. Access cannot show "a real and substantial potential for

repetition, as opposed to a hypothetical possibility of an isolated unfair or

       29 State v. Mandatory Poster Agency, Inc., 199 Wash. App. 506, 518, 398
P.3d 1271 (2017).
       39 Panag v. Farmers Ins. Co. of Wash., 166 Wash. 2d 27, 50, 204 P.3d 885
(2009)(quoting Sw. Sunsites, Inc. v. Fed. Trade Comm'n, 785 F.2d 1431, 1435
(9th Cir. 1986)).
       31   Hangman Ridge, 105 Wash. 2d at 785.
      32 Behnke v. Ahrens, 172 Wash. App. 281, 292-93, 294 P.3d 729(2012)
(emphasis added).
       33 Panag, 166 Wash. 2d at 50.
        Bain v. Metropolitan Mortg. Grp., Inc., 175 Wash. 2d 83, 116, 285 P.3d 34
       34
(2012)(quoting State v. Kaiser, 161 Wash. App. 705, 719, 254 P.3d 850(2011)).

                                           11
No.75747-4-1/12

deceptive act's being repeated."35 Here, Access alleged (i) it made a single

attempt to purchase bonds for the May 2012 offering, (ii) it provided "a unique

and mutually beneficial service" to foreign investors, and (iii) these investors were

only able to invest in limited debt offerings meeting specific criteria.

       As a separate element, a claimant must establish an unfair or deceptive

act which is "injurious to the public interest."36 Access's contention that this

private dispute affects the public interest is not persuasive. Generally,"a breach

of private contract affecting [only] the parties to the contract is not an act or

practice affecting the public interest."37 "[1]t is the likelihood that additional

plaintiffs have been or will be injured in exactly the same fashion that changes a

factual pattern from a private dispute to one that affects the public interest."35

Our Supreme Court has looked to four factors to determine public interest:

       (1) Were the alleged acts committed in the course of defendant's
       business? (2) Did defendant advertise to the public in general?
       (3) Did defendant actively solicit this particular plaintiff, indicating
       potential solicitation of others? (4) Did plaintiff and defendant
       occupy unequal bargaining positions? As with the factors applied
       to essentially consumer transactions, not one of these factors is
       dispositive, nor is it necessary that all be present. The factors in
       both the "consumer" and "private dispute" contexts represent indicia
       of an effect on public interest from which a trier of fact could
       reasonably find public interest impact.[39]

       Here, Access neither alleges nor argues any hypothetical fact that

Citigroup solicited its business. Access suggests Citigroup's failure to onboard

       35   Behnke, 172 Wash. App. at 295.
       36   RCW 19.86.093.
       37 Behnke, 172 Wash. App. at 293.
       38 Hangman Ridge, 105 Wash. 2d at 790.

       39 Id. at 790-91.

                                            12
No.75747-4-1/13

the LP Funds forced Citigroup to purchase the remainder of the bonds for resale

on the secondary market, decreasing the bonds' marketability "to the detriment of

Washington citizens."4° But Access does not offer authority that sales on the

secondary market for bonds frustrated the goals of the CPA. Moreover, there is

no allegation or hypothetical fact that the unique interaction with the LP Funds for

the urpose of participating in the 2012F bond offering has or will injure others in

"exactly the same fashion."41 This was a private dispute about opening private

accounts.42

       We conclude the trial court properly dismissed Access's CPA claim under

CR 12(b)(6) because Access did not allege anything more than a private dispute

with no public impact.

       B. Breach of Contract

       Access argues Citigroup breached its agreement to onboard the LP Funds

and present the bond orders.

      A plaintiff must establish the existence of a valid contract, breach, and

damages proximately caused by the breach.43 To form a contract, the parties

must objectively manifest their mutual assent." Typically, this manifestation

      40 Appellant's   Br. at 20.
      41   Behnke, 172 Wash. App. at 293.
       42 In passing, Access also contends Citigroup and the State abused open
market principles by removing "marginalized or minority interests from public
bond sales," Appellant's Br. at 20, but offers no compelling authority supporting
this theory of public impact.
       43 Nw. Indep. Forest Mfrs. v. Dep't of Labor & Indus., 78 Wash. App. 707,
712, 899 P.2d 6(1995).
       44 Keystone Land & Dev. Co. v. Xerox Corp., 152 Wash. 2d 171, 177, 94

P.3d 945(2004).
                                        13
No.75747-4-1/14

includes an offer and acceptance.° "An offer consists of a promise to render a

stated performance in exchange for a return promise being given."46

"Acceptance is the offeree's communication by word, sign, or writing to be

bound" by the terms of the offer.47 The terms of the agreement must be

sufficiently definite.° "If an offer is so indefinite that a court cannot decide just

what it means, and fix exactly the legal liability of the parties, its acceptance

cannot result in an enforcible agreement."49 As acknowledged by our Supreme

Codrt, the primary concern regarding valid contract formation is to "avoid trapping

parties in surprise contractual obligations."50

       Access contends Citigroup agreed to onboard the LP Funds and present

the bond orders in exchange for receiving Access's business. Access argues the

following exchange constituted a valid offer and acceptance:

       First, Mr. Leahy offered to onboard the [LP Funds] in exchange for
       the right to present their orders to Citigroup's underwriters. In
       accepting this offer, Mr. Mattox lost the opportunity to work with
       [J.P. Morgan].[511

But n Mattox's declaration, he said:

       45   Id. at 178.
       46   Pac. Cascade Corp. v. Nimmer, 25 Wash. App. 552, 556,608 P.2d 266
(1980).
       47 Taufen    v. Estate of Kirpes, 155 Wash. App. 598, 603, 230 P.3d 199
(2010).
       48Keystone Land & Dev. Co., 152 Wash. 2d at 178.
      49 Sandeman v. Sayres, 50 Wash. 2d 539, 541, 314 P.2d 428 (1957).
      50 Keystone Land & Dev. Co., 152 Wash. 2d at 178 (quoting Teachers Ins. &
AnnJity Ass'n v. Tribune Co.,670 F. Supp. 491, 497 (S.D.N.Y.1987)).
       51   Appellant's Br. at 23.

                                           14
No. 75747-4-1/15

      During this initial conversation, he was confident that Citigroup
      would be able to onboard the 2012F LPs and set up the accounts
      necessary to present their orders. John Leahy also told me that
      because he was a Citigroup trader and Citigroup was underwriting
      the deal, and that Citigroup was the lead in determining the
      allocation of bonds which would put us in a good position to get the
      bonds we needed ...

              . . . On this basis, and being satisfied with what Mr. Leahy
      said to me, I agreed that Citigroup should go forward with the
      plan.[521

Washington courts routinely reject contract claims based on preliminary

negotiations and informal discussions.53 Here, the record is devoid of an

objective manifestation. At most, Leahy expressed optimism about opening

accounts and placing orders. He used terms that were prospective in nature,

such as "would be able to" and that it "would put us in a good position."54 There

was neither a promise that the bonds would be issued nor a guaranteed outcome

of the onboarding process. The onboarding depended on the due diligence and

know-your-customer standards.55 Leahy could not guarantee the LP Funds

woild satisfy Citigroup's onboarding requirements, Mattox and Leahy were

aware it was a complicated process, and Leahy's efforts are evidenced by the
   1
continuing requests for more information and his communication with other
    I
       52 CP at 1588(emphasis added).
       53 See Keystone Land & Dev. Co., 152 Wash. 2d at 178-79(no contract
where defendant stated it was "prepared to negotiate" and the parties could later
draft an agreement); Pac. Cascade Corp., 25 Wash. App. at 558 ("the parties'
informal exchange of correspondence did not result in a contractual
relationship"); see also BP W. Coast Prods. LLC v. SKR Inc., 989 F. Supp. 2d
1109, 1121 (W.D. Wash. 2013)(rejecting contract claim on summary judgment
because agreement to use "best efforts" to fill buyers' orders did not establish a
duty to perform).
       54 CP at 1588.
       55 31 U.S.C. § 5318(h) & (i); 31 C.F.R. § 1020.210 & .220.

                                        15
No.75747-4-1/16

Citigroup representatives. These preliminary discussions between Mattox and

Leahy do not establish an enforceable contract.

       We conclude the trial court properly granted summary judgment

dismissing Access's breach of contract claim.

       C. Promissory Estoppel

      Alternatively, Access argues it justifiably relied on Citigroup's promise.

       Under promissory estoppel, the plaintiff must show:

      "(1)[a] promise which (2)the promisor should reasonably expect to
      cause the promisee to change his position and (3) which does
      cause the promisee to change his position (4)justifiably relying
      upon the promise, in such a manner that(5) injustice can be
      avoided only by enforcement of the promise."[56]

The doctrine "was developed to cover certain situations in which consideration is

lacking."57 Promissory estoppel requires a promise that is clear and definite.58

Our Supreme Court "has adopted the Restatement's definition of'promise':'A

promise is a manifestation of intention to act or refrain from acting in a specified

     so made as to justify a promisee in understanding that a commitment has

       56 Havens v. C & D Plastics, Inc., 124 Wash. 2d 158, 171-72, 876 P.2d 435
(1994)(alteration in original)(quoting Klinke v. Famous Recipe Fried Chicken,
Inc., 94 Wash. 2d 255, 259 n.2, 616 P.2d 644 (1980)).
       57 Hatfield v. Columbia Fed. Say. Bank, 57 Wash. App. 876, 885, 790 P.2d
1258(1990).
       58 Havens, 124 Wash. 2d at 173. Contrary to Access's arguments that this
standard is limited to the employment setting, Washington cases have applied
the clear and definite standard in other settings. See Tacoma Auto Mall, Inc. v.
Nissan N. Am., Inc., 169 Wash. App. 111, 128, 279 P.3d 487(2012); State v. Miller,
32 Wash. 2d 149, 158, 201 P.2d 136 (1948); Viewcrest Condo. Ass'n v. Robertson,
197 Wash. App. 334, 337, 387 P.3d 1147(2016); Peters v. Watson Co., 40 Wash. 2d
121, 122-23, 241 P.2d 441 (1952).

                                         16
No. 75747-4-1/17

been made.'"59 The promise "must be explicit rather than implicit," and

promissory estoppel "may not be used as a way of supplying a promise.'"6°

       Similar to its breach of contract theory, Access suggests Leahy "promised

to onboard the 2012F LPs and present their orders."61 Access also contends

Leahy promised that Citigroup "would accept the 2012F LPs' orders if placed

through [another broker,] LPL Financial."62

       But a promise that is "'vague, general or of indeterminate application' is

not enforceable."63 In his declaration, Mattox said he asked Leahy "whether

Citigroup could onboard" the LP Funds before the pricing day, and Leahy

responded that it "would not be a problem" and "Citigroup was the lead in

determining the allocation of bonds which would put us in a good position."64

Statements of mere future intent are insufficient to constitute a promise under the

doctrine.65 "An intention to do a thing is not a promise to do it."66 An enforceable

promise requires "an express undertaking or agreement" that "something shall

     59 Wash. Educ. Ass'n v. Dep't of Ret. Sys., 181 Wash. 2d 212, 225, 332 P.3d
428(2014)(quoting RESTATEMENT(SECOND)OF CONTRACTS § 2(1)(1981)).
     69 Tacoma Auto Mall, Inc., 169 Wash. App. at 128 (quoting Havens, 124
Wash. 2d at 173).
       61   Appellant's Br. at 26.
       62 Appellant's   Br. at 27.
       63 Aguilar v. Intl Longshoremen's Union Local No. 10, 966 F.2d 443, 446
(9th Cir. 1992)(quoting Hass v. Darigold Dairy Prods. Co., 751 F.2d 1096, 1100
(9th Cir. 1985)).
       64 CP at 1588 (emphasis added).

       65 Elliot Bay Seafoods, Inc. v. Port of Seattle, 124 Wash. App. 5, 13, 98 P.3d
491 (2004).
       66   Id.

                                         17
No. 75747-4-1/18

happen... in the future."67 Here, the alleged promise relies on statements of

intent, not promises to perform. Leahy could not guarantee or promise new

accounts because federal law required Citigroup to thoroughly vet new

applicants, including anti-money laundering and know-your-customer

investigations into each entity before opening any account.68

      Access contends its reliance on Leahy's promise was justified. A plaintiff

must show it changed its position based on the promise, and did so justifiably.68

Though "justifiable reliance is normally a question of fact, summary judgment is

appropriate if reasonable minds could reach but one conclusion."76 As this court

has recognized, "[w]hile reliance requires examination of relevant factors, we

reject the contention that such examination cannot be done in a summary

judgment motion."71

       Here, Mattox raised money from investors before receiving any purported

promise from Citigroup. Mattox formed the LP Funds in November 2011 and

raised the funds for the proposed bond purchase before contacting Citigroup.

Access does not establish an action or forbearance of definite and substantial

character performed in reliance upon Leahy's statements.

      67  Meissner v. Simpson Timber Co., 69 Wash. 2d 949, 957, 421 P.2d 674
(1966)(quoting RESTATEMENT OF CONTRACTS § 2(1)(1932)).
       68 31 U.S.C. 5318(h) & (i); 31 C.F.R. §§ 1010.210-.220.

       69 Wash. Educ. Ass'n, 181 Wash. 2d at 224-25 (quoting Havens, 124 Wash. 2d
at 171-72).
       79 Cornerstone Equip. Leasing, Inc. v. MacLeod, 159 Wash. App. 899, 905,
247 P.3d 790(2011)(citing Havens, 124 Wash. 2d at 181).
       71 Stew. v. Estate of Steiner, 122 Wash. App. 258, 275, 93 P.3d 919
(2004).

                                         18
No. 75747-4-1/19

      Mattox's declaration, together with the e-mails, do not support his alleged

change of position and reliance based on Leahy's statements about setting up

accounts.

      To determine if reliance is justified, courts also look to

      (1)the sophistication and expertise of the plaintiff in financial and
      securities matters;(2) the existence of long standing business or
      personal relationships;(3) access to the relevant information;
      (4)the existence of a fiduciary relationship;(5) concealment of the
      fraud;(6)the opportunity to detect the fraud;(7) whether the
      plaintiff initiated the stock transaction or sought to expedite the
      transaction; and (8)the generality or specificity of the
      misrepresentations.1721

      Mattox is an entrepreneur with over 20 years of experience running

businesses, including purchasing bonds. Access did not have a longstanding

business or personal relationship with Citigroup, and Access initiated the contact

and expressed interest in making a purchase.

      Access argues only Citigroup had access to the relevant information,

Mattox had no independent capability to detect the fraud, and Leahy's

misrepresentations were "specific and pointed, and reasonably calculated to lead

Mr. Mattox into believing Citigroup would onboard [the LP Funds] and present

their orders."73 But Mattox had access to the same offering information as Leahy

and knew about the upcoming 2012F bond offering before contacting Leahy.

The record does not reflect Leahy made a misrepresentation to Mattox or misled

him The alleged "specific and pointed" misrepresentations concerned general,

asp rational, and indefinite statements.

      72   Id. at 274.
      73 Appellant's     Br. at 29.

                                           19
No.75747-4-1/20

       We conclude Access did not change its position and justifiably rely on

Citigroup's optimistic intent to onboard the LP Funds.

       D. Negligent Misrepresentation

       Access argues Citigroup negligently misrepresented the facts upon which

Access relied.

       A plaintiff must prove by clear, cogent, and convincing evidence:

      (1) the defendant supplied information for the guidance of others in
      their business transactions that was false,(2)the defendant knew
      or should have known that the information was supplied to guide
      the plaintiff in his business transactions,(3) the defendant was
      negligent in obtaining or communicating the false information,
      (4)the plaintiff relied on the false information,(5)the plaintiffs
      reliance was reasonable, and (6)the false information proximately
      caused the plaintiff damages.[74]

       Washington courts apply the Restatement of Torts approach.75 Unless

there is clear, cogent, and convincing evidence that the information supplied by

the defendant is false, a claim for negligent misrepresentation fails.76 "[A]false

representation as to a presently existing fact is a prerequisite to a

misrepresentation claim," a discussion about future action is "not a

representation of a presently existing fact."77 Failing to perform "promises of

       74Ross v. Kirner, 162 Wn.2d 493,499, 172 P.3d 701 (2007).
         RockRock Group, LLC v. Value Logic, LLC, 194 Wash. App. 904, 914, 380
P.3d 545 (2016).
      76 Elliot Bay Seafoods, Inc., 124 Wash. App. at 14.

       77 Donald B. Murphy Contractors, Inc. v. King County, 112 Wash. App. 192,
1971-98, 49 P.3d 912(2002)(emphasis added). To the extent Access suggests a
present state of mind to engage in a future act equates to a "present fact," see
Appellant's Br. at 30; Appellant's Reply at 13, Access presents no authority
supporting such an expansive view of what constitutes a present fact.

                                         20
No. 75747-4-1/21

future conduct. . . cannot alone establish the requisite negligence for negligent

misrepresentation."78
    1
       In Havens v. C & D Plastics, Inc., the defendants' alleged oral statements

during negotiations promising authority and duration of employment were

"promises of future conduct."78 Our Supreme Court held the plaintiff could not

base a misrepresentation on these oral statements because they lacked "any

false representation as to a presently existing fact, a prerequisite to a

misrepresentation claim."80 Similarly, in Donald B. Murphy Contractors v. Kinq

Cotintv, the plaintiff argued the county made promises to purchase and maintain

insurance for a construction project.81 This court held the county's "promise to

procure insurance was not a representation of a presently existing fact."82

       Here, Access focuses its negligent misrepresentation claim on Leahy's

comments before and after the pricing day. Access contends Leahy's

statements misrepresented that (i) "Citigroup was in the process of onboarding,"

(ii) Citigroup was prepared to accept the orders from the LP Funds through LPL

Financial, and (iii) the State was capable of independently allocating bonds.83

       Leahy communicated obstacles in the onboarding process to Mattox. In

Mattox's declaration, he acknowledged Leahy told him about "certain challenges

Citigroup was experiencing in the onboarding, but then repeatedly told me it

       78   Havens, 124 Wash. 2d at 182.
       78   124 Wash. 2d 158, 179-82, 876 P.2d 435 (1994).
       88   Id. at 182(emphasis added).
       81   112 Wash. App. 192, 197,49 P.3d 912(2002).
       82   Id. at 198.
       83 Appellant's     Reply Br. at 13.

                                             21
No.75747-4-1/22

would be `no problem' to complete the process."84 This aspirational language

does not amount to a presently existing fact. And it was Sharla Cameron of LPL

Financial, not Leahy, who suggested the LP Funds could place the orders

through LPL Financial and that there was confusion about the name for the

accounts.

      We conclude Access does not establish Citigroup misrepresented a

presently existing fact or reliance. Therefore, the negligent misrepresentation

claim was properly dismissed.

II. Claims Against the State

      A. Tortious Interference

      Access argues the State tortiously interfered with its agreement with

Citigroup.

      The plaintiff must establish

      (1) the existence of a valid contractual relationship or business
      expectancy;(2) that defendants had knowledge of that relationship;
      (3) an intentional interference inducing or causing a breach or
      termination of the relationship or expectancy;(4)that defendants
      interfered for an improper purpose or used improper means; and
      (5) resultant damage.[861

      To survive summary judgment, a plaintiff must present factual evidence to

support each element of its claim and cannot rely on assertions or allegations.86

      84 CP   at 1590(emphasis added).
       85 Leingang, 131 Wash. 2d at 157; Pleas v. City of Seattle, 112 Wash. 2d 794,
800, 803-04, 774 P.2d 1158 (1989).
       86 Roger Crane & Assocs., Inc. v. Felice, 74 Wash. App. 769, 779, 875 P.2d
705 (1994).

                                        22
No. 75747-4-1/23

      The State argues Access cannot establish intentional interference by the

State that induced or caused a breach or termination of Access's relationship or

expectancy with Citigroup or that the State interfered for an improper purpose or

used improper means.

      "[I]ntentional interference denotes purposefully improper interference."87

An intentional interference "requires an improper objective of harming the person

or the use of wrongful means that in fact cause injury to the person's contractual

or business relationships."88

       Here, Evans merely expressed her concerns and did not intentionally

interfere. Evans was unsure about the suitability of the EB-5 investors for State

bond offerings, and explained that the State wanted to avoid any potential

volatility in the market. Evans expressed concerns about the potential EB-5

investments in the 2012F bond offering when the subject came up in meetings

with investment bankers and financial advisors, which included Citigroup

representatives.

       Access does not suggest that the State's interests in ensuring a

successful underwriting and market stability were inappropriate. And the lead

underwriter for Citigroup testified nobody told him about a governmental

investigation of Access before the pricing day.

       But even if the State did intentionally interfere, Access must also show

that the State "interfered for an improper purpose or used improper means."88

       87 Schmerer v.   Darcy, 80 Wash. App. 499, 505, 910 P.2d 498(1996).
       88Id. (citing Pleas, 112 Wash. 2d at 804).
      89 Leinqang, 131 Wash. 2d at 157; Pleas, 112 Wash. 2d at 804.

                                        23
No. 5747-4-1/24

       In Pleas v. City of Seattle, our Supreme Court adopted the Oregon

Supreme Court's approach that a claim for tortious interference can be

established only "'when interference resulting in injury to another is wrongful by

some measure beyond the fact of the interference itself. Defendant's liability

may arise from improper motives or from the use of improper means.'"9°

       The improper motive or purpose inquiry focuses on the reasons for the

defendant's interference, such as greed or retaliation.91 "Conclusory statements

and speculation will not preclude a grant of summary judgment."92 Arbitrary and

capricious actions may constitute improper means of interference,93 but

exercising one's legal interests in,good faith is not improper interference.94

       Here, Access questions Evans' motives but does not offer compelling

authority that its speculative accusations are sufficient to preclude summary

judgment. Access contends Evans' actions backfired and caused some bonds to

go unpurchased, resulting in a sale on the secondary market, but the focus of the

      9° 112 Wash. 2d 794, 804, 774 P.2d 1158(1989)(quoting Top Serv. Body
Shop, Inc. v. Allstate Ins. Co., 283 Or. 201, 204,582 P.2d 1365 (1978)).
        See Schmerer, 80 Wash. App. at 505; Cherberq v. Peoples Nat. Bank of
       91
Wash., 88 Wash. 2d 595, 606, 564 P.2d 1137(1977)).
       92   Elcon Constr., Inc. v. E Wash. Univ., 174 Wash. 2d 157, 169, 273 P.3d 965
(20 2).
       93 Pleas, 112 Wash. 2d   at 805.
       94 Tacoma   Auto Mall, Inc., 169 Wash. App. at 132; Elcon Constr., Inc., 174
Wash. 2d at 168-70 (trial court properly dismissed claim for tortious interference
based upon legitimate motive by defendant in protecting its legal interest);
Cornish Coll, of the Arts v. 1000 Virginia Ltd. P'ship, 158 Wash. App. 203, 225-26,
242 P.3d 1 (2011)(trial court properly dismissed claim when plaintiff failed to
provide sufficient facts to prove defendant had improper motive).

                                         24
No. 75747-4-1/25

analysis is the motive and purpose, not the end result.95 Evans expressed the

State's legitimate interests in a successful underwriting and maintaining market

stability.96

          Access argues Evans used improper means because Citigroup already

had policies in place to assure the bond offering would not fall through, thus, in

voic ng her concerns to Citigroup, Evans acted "outside the scope of her

authority as a deputy treasury secretary."97 But her duties as deputy treasury

secretary include oversight of State bond sales. There is no evidence that Evans

instructed underwriters not to cooperate with Access, told the underwriters about

any FBI investigation, or urged the underwriters to disregard their own policies.

          As to the question of any privilege, Access challenges the validity of

Stid ham v. State Department of Licensinq.98 But Washington courts have

acknowledged the application of overlapping privilege in both defamation and

tortious interference settings.99 In any event, we need not reach the State's

alternative argument regarding privilege in this setting.

        95 Leahy's alleged statement about things "going on in the back room that I
can't tell you about," CP at 1592, does not support a reasonable inference that
Evans had an improper motive.
          96 Access suggestsEvans'failure to take steps to confirm or deny the
bas's for her concerns reveals her improper motive but does not offer authority
that a formal investigation or inquiry was required.
          97 Appellant's   Br. at 35.
      •   98 30 Wash. App. 611, 637 P.2d   970(1981).
                v. Reed, 89 Wash. App. 474, 490-91, 949 P.2d 441 (1998); Liberty
          99 Aitken
Bank of Seattle, Inc. v. Henderson, 75 Wash. App. 546, 564-65, 878 P.2d 1259
(1994); Lawson v. Boeing, 58 Wash. App. 261, 269, 792 P.2d 545 (1990).

                                           25
No. 75747-4-1/26

       We conclude Access does not establish any genuine issue of fact

regarding the third and fourth elements of its tortious interference claim.

Therefore, it was properly dismissed.

       B. Negligent Misrepresentation

       Access argues summary judgment was improper because there are

issues of material fact regarding its negligent misrepresentation claim against the

State. As discussed above, a claim for negligent misrepresentation requires a

misrepresentation as to a presently existing fact.

       Access does not offer compelling authority or citations to the record

showing it relied on a presently existing fact communicated by the State. And

Access does not establish a causal link between the alleged misrepresentations
                 '
and its failure to purchase the 2012F bonds. Access relies on its claim that the

State misrepresented its role in the bond sale process but repeatedly cites to

statements made by Leahy, not Evans.

       We conclude Access's negligent misrepresentation claim against the State

was properly dismissed.

       Therefore, we affirm.

WE CONCUR:

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