Mozingo v. Wells Fargo Bank (Lawyers Weekly No. 002-161-12, 25 pp.) (Terry L. Wooten, J.) 4:11-cv-00522; D.S.C.
Holding: In its role as a trustee of plaintiff’s trust, the defendant-bank allegedly gave plaintiff advice in April 2008 about a contract that plaintiff then signed in June 2008. Since plaintiff terminated the bank’s role as trustee in May 2008, the bank’s April 2008 advice about the June 2008 contract cannot serve as the basis for plaintiff’s breach of fiduciary duty claim.
Defendant’s motion for summary judgment is granted.
In the first place, plaintiff has not presented evidence from which a jury could conclude that the bank advised him in April 2008 to enter into the June 2008 loan. Plaintiff’s primary piece of evidence regarding advice rendered in April 2008 is a “Hold Indication” form. This form shows a hold amount of $5 million and a loan amount of $4 million. At the time of the signing of this document, plaintiff had two $2 million loans with maturity dates of June 30, 2008. Consequently, plaintiff had to take some action with respect to these loans prior to June 30 or face default. It thus made sense for the parties to discuss the outstanding loans since both were trustees of plaintiff’s revocable trust. However, plaintiff has not presented evidence from which a jury could find the bank, in April 2008, advised him to enter into the June 2008 loan the way it was structured or advised him that it was his best option to the exclusion of other financing arrangements.
Even assuming advice relating to the June 2008 loan was given in April 2008, summary judgment is appropriate because of the May 2008 revocation of the trust relationship. The Hold Indication form was signed by bank employees on April 21 and 22, 2008, but plaintiff did not act on the alleged advice when it was rendered. Instead, on May 1, 2008, plaintiff revoked the trust relationship by removing the bank as a co-trustee. Plaintiff not only removed the bank as trustee in May, but he also entered into a new relationship with the bank on June 3, 2008 by signing an investment agency agreement (IAA), which outlined the bank’s powers and responsibilities going forward. After all of this occurred, plaintiff then signed the June 2008 loan documents on June 12, 2008. In light of what transpired between April 2008 and the signing of the June 2008 loan documents, the court finds that the bank owed plaintiff no fiduciary duties relating to his decision to enter into the June 2008 loan.
Assuming the bank gave advice regarding the June 2008 loan in April 2008, plaintiff cannot look back to this advice to impose a duty on the bank to protect his interest when he later entered into the loan. Plaintiff cannot have it both ways. He cannot revoke his trust relationship with the bank and still expect the bank to act with the care of a trustee when he subsequently enters into a loan, simply because a discussion related to the loan occurred prior to his removing the bank as a co-trustee.
Contrary to plaintiff’s argument, the IAA imposed no fiduciary duties on the bank.
In his fraud claim, plaintiff alleges that the bank promised to count his stock in International Speedway Corp. as part of his collateral, though it did not meet the loan documents’ specifications for collateral. The bank later refused to count the Speedway stock until plaintiff sold other assets and paid the proceeds toward the loan balance. However, a mere broken promise is not actionable even if a party acts in reliance on the promise.
Dismissed.