The Caper Corporation v. Wells Fargo Bank, N.A.

Filing

UNPUBLISHED PER CURIAM OPINION filed. Originating case number: 7:12-cv-00357-D Copies to all parties and the district court/agency. [999397340].. [13-2152]

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UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT

No. 13-2152

THE CAPER CORPORATION,
Plaintiff - Appellant,
v.
WELLS FARGO BANK, N.A., as successor by merger to Wachovia
Bank, N.A.,
Defendant – Appellee.

Appeal from the United States District Court for the Eastern
District of North Carolina, at Wilmington. James C. Dever III,
Chief District Judge. (7:12−cv−00357−D)

Submitted:

March 21, 2014

Before KING and
Circuit Judge.

THACKER,

Decided:

Circuit

Judges,

and

July 17, 2014

DAVIS,

Senior

Affirmed by unpublished per curiam opinion.

S. Leigh Rodenbough, IV, James C. Adams, II, Benjamin R. Norman,
BROOKS, PIERCE, MCLENDON, HUMPHREY & LEONARD, LLP, Greensboro,
North Carolina, for Appellant. William L. Esser IV, Matthew H.
Mall, PARKER POE ADAMS & BERNSTEIN LLP, Charlotte, North
Carolina, for Appellee.

Unpublished opinions are not binding precedent in this circuit.

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PER CURIAM:
This case arises from an interest rate swap agreement
and

accompanying

loan

contract

between

Appellant

The

Caper

Corporation (“Appellant”) and Appellee Wells Fargo (“Appellee”),
as successor in interest to Wachovia Bank, N.A.

The district

court dismissed all ten of Appellant’s causes of action, which
sound in both contract and tort, for failure to state a claim
under Federal Rule of Civil Procedure 12(b)(6).

For the reasons

that follow, we affirm.
I.
A. 1
Appellant

is

a

real

estate

development

corporation

organized under Florida law and headquartered in North Carolina.
Beginning in the early 1980s, Appellant financed many of its
commercial
obtained

and

residential

from

Appellee

development
and

its

projects

through

loans

predecessors-in-interest.

Consistent with this relationship, on April 8, 2005, Appellee
loaned

Appellant

Appellant

could

$3.8

million

purchase

(the

an

“Original

office

1

Loan”)

building

so

located

that
in

The facts set forth in this section are derived from the
complaint, the “documents incorporated into the complaint by
reference,” Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551
U.S. 308, 322 (2007), and the documents “attached to the motion
to dismiss” that are “integral to the complaint and authentic,”
Philips v. Pitt Cnty. Mem’l Hosp., 572 F.3d 176, 180 (4th Cir.
2009).

2

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Wilmington,

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North

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Carolina

“Property”).

(the

The

seven-year

loan agreement, which was secured by a deed of trust to the
Property, included a one-year variable interest rate followed by
a

six-year

fixed

interest

rate.

Appellant

used

the

loan

disbursement to purchase the Property and, effective July 1,
2005, leased it to a commercial tenant for a term of seven
years.
Several
Appellant

decided

months
to

after

seek

executing

refinancing

the
in

Original

order

to

certain portions of the Property for the tenant’s use.

Loan,
develop

Appellee

responded to Appellant’s inquiry with a term sheet (the “Term
Sheet”) offering a $10.3 million (later reduced by agreement to
$4.3 million), ten-year refinanced loan with a variable interest
rate

set

at

the

one-month

London

Interbank

Offered

Rate

(“LIBOR”) plus 1.75% (later reduced by agreement to LIBOR plus
1.70%).

The proposed refinanced loan, according to the Term

Sheet, would include a 0.25% fee and “[o]ther costs as required
including

appraisal

fee,

environmental

insurance and legal fees (if applicable).”

assessment,
J.A. 23. 2

title

The Term

Sheet further provided that Appellant could obtain a fixed rate

2

Citations to the “J.A.” refer to the Joint Appendix filed
by the parties in this appeal.

3

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through

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a

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separate

interest

“available upon request.”

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rate

swap

agreement,

which

was

Id. at 13.

As described by the district court, an interest rate
swap agreement
is
a
standalone
interest
rate
hedging
instrument whereby two parties pay each
other interest based on a notional principal
amount
(i.e.,
an
agreed
hypothetical
principal amount).
The first party pays a
fixed interest rate to the second party,
while the second party pays a variable
interest rate to the first party. If the
first party is a borrower with a variable
interest rate loan, where the loan interest
rate and swap interest rate are the same,
and the notional principal amount is equal
to the loan principal, the loan holder
effectively pays only a fixed interest rate.
Incoming payments under the interest
rate
swap offset any interest due under the loan,
leaving a net payment at the fixed interest
rate.
The Caper Corp. v. Wells Fargo Bank, N.A., No. 7:12-CV-357-D,
2013 WL 4504450, at *1 n.1 (E.D.N.C. Aug. 22, 2013) (internal
citations

omitted).

Notably,

the

Term

Sheet

stated

that

Appellee would extend any swap agreement at “a market-derived
rate.”

J.A. 22.

Appellee orally advised Appellant that the

proposed refinanced loan, on the other hand, was being offered
at “market rates.”
Intent
equivalent,

Id.
on

securing

Appellant’s

a

president,

fixed-rate
Walter

loan

Pancoe

or

its

(“Pancoe”),

contacted Appellee about the swap option mentioned in the Term

4

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Sheet.
agent,

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Following
Matt

Boss

a

brief

Pg: 5 of 36

telephone

(“Boss”),

sent

conversation,

Pancoe

a

letter

Appellee’s
(the

“Swap

Letter”) proposing an interest rate swap as a way “to hedge
against

future

interest

rate

increases

on

[Appellant’s]

[anticipated] floating rate loan.”

J.A. 116.

In explaining the

proposed

described,

inter

swap,

the

Swap

Letter

alia,

the

possibility of “termination fees” if the “swap transaction is
unwound before its stated maturity,” id., and identified some of
the risks involved in executing a swap agreement before closing
on the proposed refinanced loan:
Caper can even use a swap to lock in a fixed
rate in advance of its loan closing. Please
be aware, however, that any swap is a
separate contract and would be an ongoing
obligation whether or not the loan takes
place.
The
risk
of
the
swap
being
unnecessary
(because
the
loan
never
materializes or for other reasons) should be
carefully
considered
by
Caper
before
entering into a swap to lock in a rate.
Id. at 117 (emphasis supplied); see also id. at 120.

The letter

went on to disclaim any advisory role on the part of Appellee,
repeatedly stating that Appellant “must make its own evaluation
of the proposed transaction . . . and the risks involved.”

Id.

at 120.
Thereafter, on November 21, 2005, Appellant elected to
enter

into

“Original

a

Swap

ten-year

swap

Agreement”)

agreement

prior

5

to

with

closing

Appellee
on

the

(the

proposed

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refinanced loan.

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As is typical in such contracts, the Original

Swap Agreement was governed by an International Swap Dealers
Association

Master

Agreement

and

Schedule

(collectively,

the

“Master Agreement”), which set forth the general terms governing
the

transaction,

and

a

more

particularized

containing the specific financial terms.

Confirmation

The swap itself was

based on a notional amount of $4.3 million, pursuant to which
Appellant would make payments at a fixed 6.91% interest rate and
Appellee would make payments at a variable interest rate of the
one-month LIBOR plus 1.70%.

By its plain language, the Original

Swap

expire

Agreement

was

set

to

on

January

15,

2016

(the

“Termination Date”), and one party would be required to pay the
other a variable, market-based termination fee in the event of
an

early

termination. 3

The

Original

Swap

Agreement

further

provided that the parties were obliged to make all “payments
that become due” under the Agreement “whether or not” the terms
of

the

ultimate

loan

differed

from

the

Agreement

or

“the

Termination Date . . . occur[ed] . . . after the maturity date
of any loan.”

J.A. 77.

3

The precise amount of the termination fee, and the party
responsible therefor, depended upon the relative positions of
the fixed rate in the Original Swap Agreement and the market
fixed rate for a swap with the same maturity date and structure
remaining under the Agreement at the time of the early
termination.

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At some point after the execution of the Original Swap
Agreement, Appellee decided to align the term of the proposed
refinanced loan with the term of the Property’s existing lease,
shortening its offered loan term from ten to six years.
complained

to

Appellee

that,

as

a

consequence

Pancoe

of

this

modification, the terms of the proposed refinanced loan and the
Original Swap Agreement no longer matched, i.e., the parties’
obligations

under

the

Original

Swap

Agreement

would

outlast

their obligations under the proposed refinanced loan by almost
four years.

In response, Appellee’s agent, Randall C. Tomsic

(“Tomsic”),

allegedly

obligations

under

the

assured
[proposed

Pancoe,
refinanced

“if

[Appellant’s]

loan]

ended,

its

obligations under the [Original Swap Agreement] would end at the
same time without any additional payment obligations.”

J.A. 17.

Mollified by this representation, Appellant entered into a sixyear refinanced loan agreement with Appellee (the “Refinanced
Loan”) on January 23, 2006, in the principal amount of $4.3
million,

with

a

variable

LIBOR plus 1.70%. 4

interest

rate

set

at

the

one-month

The Refinanced Loan was set to mature on

March 15, 2012.

4

Notably, the executed loan documents contain no mention of
the parties’ alleged oral agreement as to the simultaneous
termination, without an accompanying fee, of the of the Original
Swap Agreement and the Refinanced Loan.
Rather, the relevant
promissory note provides, “[a]ll swap agreements . . . between
(Continued)
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Subsequently, on February 2, 2006, the parties agreed
to amend the terms of the Original Swap Agreement so that the
monthly payments for the Refinanced Loan and the Original Swap
Agreement would fall on the same dates.

At this time, the

complaint alleges, Appellee “refus[ed] to amend the [Original
Swap

Agreement]

to

shorten

its

term”

to

match

that

of

the

Refinanced Loan “because shortening the term of the Original
Swap

would

approximately

have

resulted

$14,000.”

in
J.A.

a

loss

18.

to

[Appellee]

Indeed,

the

of

amended

Confirmation ultimately executed by the parties in June 2006
(“Amended Swap Agreement” or “Amendment”) -- which reset the
monthly payment dates for the swap, as the parties agreed -neither shortened the term of the Original Swap Agreement nor
included any language waiving the early termination fee.

To the

contrary, the Amendment actually extended the Termination Date
of

the

Original

Swap

Agreement

from

January

15,

2016,

to

February 10, 2016, and added an “Additional Termination Event”
pursuant to which the swap would “terminate and be replaced by
an obligation of one party to make a [termination fee] payment
to

the

other

party”

if

the

Agreement

[Appellant] and [Appellee] . . . are
governed by [their] written provisions .
in full force and effect, unaffected
prepayment” of the Refinanced Loan. J.A.

8

became

unsecured

after

independent agreements
. ., which will remain
by any repayment [or]
127.

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March 15, 2012.
“[a]ll

Id. at 49.

provisions”

of

the

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The Amendment also incorporated
Master

Agreement

“expressly modified” in the Amendment itself.
For

the

next

four

years,

that

were

not

Id.

Appellant

made

monthly

payments to Appellee as required by the Refinanced Loan and the
Amended

Swap

Property

Agreement.

decided

that

expired in June 2012.

In

it

April

would

not

2011,

the

tenant

of

renew

the

lease

when

the
it

As a result, Appellant asked Appellee for

an extension of the Refinanced Loan or, in the alternative, for
a

new

short-term

loan.

Appellant

also

requested

that

the

Amended Swap Agreement be terminated when the Refinanced Loan
matured “without any additional payment obligation,” as Appellee
had allegedly promised.

J.A. 19.

In a series of discussions,

Appellee initially “reconfirmed” Appellant’s understanding as to
the contemporaneous termination of the Amended Swap Agreement
and the Refinanced Loan, id., but later advised that it intended
to hold Appellant to the terms of the agreement as written.

On

April 11, 2012, after much back-and-forth, Appellee agreed to
extend the term of the Refinanced Loan from March 15, 2012, to
September 30, 2012, and the parties executed a loan modification
to that effect.
Prior to the new maturity date of the Refinanced Loan,
Appellant

entered

into

a

contract

to

sell

the

Property

and

requested a “payoff from [Appellee] for the Refinanced Loan in
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anticipation

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of

a

closing.”

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J.A.

21.

Appellee

informed

Appellant that it was invoking its contractual right to withhold
the

deed

of

trust

to

the

Property

pending

repayment

of

the

Refinanced Loan, termination of the Amended Swap Agreement, and
satisfaction

of

any

termination

fee.

On

June

28,

2012,

Appellant closed on the sale of the Property and repaid the
Refinanced Loan in full, triggering Appellee’s contractual right
to terminate the swap at a cost to Appellant of $568,337 (the
“Termination

Fee”).

That

same

day,

Appellant

paid

the

Termination Fee and executed a Confirmation of Termination, to
which it appended language noting that it acted “under duress[]
and with full reservation of rights to contest its liability for
the Termination Fee.”

Id. at 139.

Appellee then released the

deed of trust on the Property.
B.
Appellant filed a complaint against Appellee in the
Superior

Court

of

November 26, 2012.

New

Hanover

County,

North

Carolina,

on

Appellee removed the case to the Eastern

District of North Carolina on December 27, 2012, invoking the
court’s diversity jurisdiction pursuant to 28 U.S.C. § 1332.
Subsequently, on January 30, 2013, Appellee moved to dismiss
Appellant’s complaint in its entirety for failure to state a
claim

under

Federal

Rule

of

Civil

10

Procedure

12(b)(6).

The

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district court granted Appellee’s motion on August 22, 2013.
Appellant timely filed a notice of appeal.
II.
We
Appellee’s

review
motion

de

novo

to

the

dismiss

district

pursuant

court’s
to

grant

Rule

of

12(b)(6).

Spaulding v. Wells Fargo Bank, N.A., 714 F.3d 769, 776 (4th Cir.
2013).
facts

To survive such a motion, the complaint must contain
sufficient

speculative

“to

level”

raise

and

“state

plausible on its face.”
544, 555, 570 (2007).

a

right
a

to

claim

relief
to

above

relief

that

the
is

Bell Atl. Corp. v. Twombly, 550 U.S.
Although we must view the facts alleged

in the complaint “in the light most favorable to the plaintiff,”
Nemet
250,

Chevrolet,
255

(4th

inferences,

Ltd.

Cir.

v.

Consumeraffairs.com,

2009),

unreasonable

we

will

not

conclusions,

.

Inc.,

accept
.

.

591

F.3d

“unwarranted

arguments,”

or

“allegations that offer only naked assertions devoid of further
factual enhancement.”

U.S. ex rel. Oberg v. Penn. Higher Educ.

Assistance Agency, 745 F.3d 131, 136 (4th Cir. 2014) (internal
quotation marks omitted).
III.
Appellant’s complaint sets forth ten causes of action:
(1)

fraud

as

to

the

termination

fee;

(2)

negligent

misrepresentation as to the termination fee; (3) duress as to
the termination fee; (4) fraudulent overcharges; (5) negligent
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misrepresentation as to the overcharges; (6) breach of fiduciary
duty; (7) constructive fraud; (8) unfair and deceptive trade
practices

in

rescission

violation

or

of

reformation

N.C.
of

Gen.
the

Stat.

swap

§

75-1.1;

agreement

due

(9)
to

commercial frustration of purpose and mutual mistake; and (10)
rescission

or

unsuitability.

reformation
We

hold

of

the

that

the

swap

agreement

district

court

due

to

correctly

granted Appellee’s motion to dismiss all ten counts.
A.
As a federal court sitting in diversity, we must apply
the substantive law of the forum state, including its choice of
law rules.

Kenney v. Indep. Order of Foresters, 744 F.3d 901,

905 (4th Cir. 2014).
Carolina

varies

The proper choice-of-law analysis in North

depending

on

how

a

claim

is

characterized.

Choice of law in contracts cases is governed by the rule of lex
loci contractus, see Tanglewood Land Co. v. Byrd, 261 S.E.2d
655,

656

governed

(N.C.
by

the

1980),
rule

and
of

choice
lex

loci

of

law

delicti,

Baughman, 368 S.E.2d 849, 854 (N.C. 1988).
contracting

parties

have

agreed

in

“that

a

torts
see

cases

is

Boudreau

v.

Further, where the
given

jurisdiction’s

substantive law shall govern the interpretation of the contract,
such a contractual provision will be given effect.”
S.E.2d at 656.

12

Byrd, 261

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The complaint sets forth ten causes of action, eight
tort claims (Counts One – Eight) and two contract claims (Counts
Nine – Ten).

The relevant contracts contain a New York choice

of law provision, and the parties agree that the law of New York
applies to Counts Nine and Ten.

See J.A. 73 (“[T]his Agreement

will be governed by and construed in accordance with the law of
the state of New York[.]”).

The parties disagree, however, as

to the law to be applied to the tort claims set forth in Counts
One – Eight.
prefers

that

Appellee favors New York law, while Appellant
of

North

Carolina.

Nevertheless,

the

parties

concede that the approach to interpreting the tort claims is the
same under either legal regime.

In the interest of simplicity,

and because it will not affect the outcome of this appeal, we
will analyze the tort claims under the law of North Carolina.
See Okmyansky v. Herbalife Int’l of Am., Inc., 415 F.3d 154, 158
(1st

Cir.

2005)

determination

(“[W]hen

would

not

the

resolution

alter

the

of

a

disposition

choice-of-law
of

a

legal

question, a reviewing court need not decide which body of law
controls.”).

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B.
1.
Counts One and Two:
Fraud and Negligent Misrepresentation (Termination Fee)
In

Counts

One

and

Two

of

its

complaint,

Appellant

alleges that Appellee fraudulently or negligently misrepresented
that Appellant’s obligations under the Original and Amended Swap
Agreements
without

(collectively,

any

satisfaction

financial
or

the

“Swap

penalty

termination

of

to
the

Agreement”)
Appellant,
Refinanced

would

end,

upon

the

Loan.

The

district court held that Appellant did not state a claim for
fraud or misrepresentation because its “reliance on such oral
misrepresentations was not reasonable or justifiable in light of
the written contract.”

The Caper Corp. v. Wells Fargo Bank,

N.A., No. 7:12-CV-357-D, 2013 WL 4504450, at *7 (E.D.N.C. Aug.
22, 2013).

We agree.
To state a claim for actual fraud, the plaintiff must

allege facts plausibly showing that (1) the defendant made a
false representation of a material fact; (2) the defendant made
the representation with the intent to deceive the plaintiff; (3)
the plaintiff relied on the representation and its reliance was
reasonable; and (4) the plaintiff suffered damages because of
its reliance.
2007).

See Forbis v. Neal, 649 S.E.2d 382, 387 (N.C.

Pursuant to Federal Rule of Civil Procedure 9(b), the

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plaintiff must plead with particularity “the time, place, and
contents of the false representations, as well as the identity
of the person making the misrepresentation and what he obtained
thereby.”

McCauley v. Home Loan Inv. Bank, F.S.B., 710 F.3d

551, 559 (4th Cir. 2013) (internal quotation marks omitted).
state

a

claim

for

negligent

misrepresentation,

the

To

plaintiff

must allege facts plausibly showing that it “‘[1] justifiably
relie[d]

[2]

to

[its]

detriment

[3]

on

information

prepared

without reasonable care [4] by one who owed the relying party a
duty of care.’”

Dallaire v. Bank of America, N.A., --- S.E.2d -

---, 2014 WL 2612658, at *5 (N.C. 2014) (quoting Raritan River
Steel Co. v. Cherry, Bekaert & Holland, 67 S.E.2d 609, 612 (N.C.
App. 1988)).
The “question of justifiable reliance [for negligent
misrepresentation
reliance

in

claims]

fraud

is

actions.”

analogous
Marcus

to

Bros.

that

of

reasonable

Textiles,

Inc.

v.

Price Waterhouse, LLP, 513 S.E.2d 320, 327 (N.C. 1999) (internal
quotation marks omitted); see also Helms v. Holland, 478 S.E.2d
513,

517

(N.C.

1996)

(“Justifiable

reliance

is

an

essential

element of both fraud and negligent misrepresentation.”).

For

both

use

claims,

the

recipient

of

a

representation

must

reasonable care to ascertain the truth of that representation in
order to reasonably rely on the same.

See Fox v. S. Appliances,

Inc., 141 S.E.2d 522, 526 (N.C. 1965).
15

A plaintiff, in other

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words, “cannot establish justified reliance . . . if [it] fails
to

make

reasonable

inquiry

regarding

Dallaire, 2014 WL 2612658, at *5.

the

alleged

statement.”

Where a plaintiff “could have

discovered the truth [about the misrepresentation] upon inquiry,
the complaint must allege that [the plaintiff] was denied the
opportunity to investigate or . . . could not have learned the
true

facts

by

exercise

of

reasonable

survive a motion to dismiss.

diligence”

in

order

to

Pinney v. State Farm Mut. Ins.

Co., 552 S.E.2d 186, 192 (N.C. App. 2001) (emphasis supplied)
(internal quotation marks omitted); see also Oberlin Capital,
L.P. v. Slavin, 554 S.E.2d 840, 846–47 (N.C. App. 2001); Hudson–
Cole Dev. Corp. v. Beemer, 511 S.E.2d 309, 313 (N.C. App. 1999).
As a corollary of this broader principle, “[a] person
who executes a written instrument is ordinarily charged with
knowledge of its contents and may not base an action for fraud
on ignorance of the legal effect of its provisions.”

Int’l

Harvester Credit Corp. v. Bowman, 316 S.E.2d 619, 621 (N.C. App.
1984) (internal citations omitted).

A party who signs a written

contract
is under a duty to ascertain its contents,
and in the absence of a showing that he was
wilfully
misled
or
misinformed
by
the
defendant as to these contents, or that they
were kept from him in fraudulent opposition
to his request, he is held to have signed
with full knowledge and assent as to what is
therein contained.

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Harris v. Bingham, 97 S.E.2d 453, 454 (N.C. 1957); see also
Davis v. Davis, 124 S.E.2d 130, 133 (N.C. 1962) (“One who signs
a written contract . . . is bound thereby unless the failure to
read

is

justified

by

some

special

circumstance.”).

In

the

absence of some further misconduct on the part of the defendant,
then, a plaintiff who relies upon a misrepresentation that is
directly contradicted by a subsequent written agreement cannot
establish justifiable reliance sufficient to support a claim of
fraud or negligent misrepresentation as a matter of law.

See

Isley v. Brown, 117 S.E.2d 821, 823–24 (N.C. 1961); Cobb v.
Penn.

Life

Ins.

Co.,

715

S.E.2d

541,

549

(N.C.

App.

2011);

Sullivan v. Mebane Packaging Group, Inc., 581 S.E.2d 452, 459
(N.C. App. 2003); Bowman, 316 S.E.2d at 621. 5
Here, Appellant seeks relief for fraud and negligent
misrepresentation on the grounds that it detrimentally relied on
Tomsic’s

assurances

that,

“if

[Appellant’s]

obligations

under

the [proposed refinanced loan] ended, its obligations under the
5

Notably, the general rule charging “[a] person who
executes a written instrument . . . with knowledge of its
contents” and foreclosing a related action for fraud “do[es] not
apply
to
situations
in
which
the
person
making
the
misrepresentations stands in a fiduciary relationship to the
signing party.” Bowman, 316 S.E.2d at 621 (citing Vail v. Vail,
63 S.E.2d 202, 206 (N.C. 1951)).
Although Appellant seeks to
take advantage of this exception, we conclude, for the reasons
explained in greater detail below, that Appellant has failed to
establish the existence of a fiduciary relationship with
Appellee. Consequently, we will not address this exception.

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[Original Swap Agreement] would end at the same time without any
additional

payment

alleges

that

between

November

obligations.”

Tomsic

made

21,

this

2005,

J.A.

17.

The

representation

when

the

at

parties

complaint

some

point

executed

the

Original Swap Agreement, and January 23, 2006, when the parties
executed the Refinanced Loan.

Critically, as reflected in both

the complaint and the accompanying contracts, Appellant executed
the Amended Swap Agreement after this alleged misrepresentation
took place, despite the fact that Appellee “refus[ed] to amend
the [Original Swap Agreement] to shorten its term and address
Appellant’s concerns.”

J.A. 19.

The Amendment, by its plain terms, provided that the
Swap Agreement would not terminate until February 10, 2016, well
after the maturation date of the Refinanced Loan, and set forth
a monthly payment schedule through that date.

The “Additional

Termination

further

Event”

included

in

the

Amendment

stated

that, if the Agreement became unsecured after March 15, 2012 -the

scheduled

obligations

closing

under

date

this

of

the

[Amendment]

Refinanced
w[ould]

Loan

--

terminate

“all

and

be

replaced by an obligation of one party to make a payment to the
other

party”

under

the

covering termination fees.

provisions

of

the

Master

Agreement

Id. at 49 (emphasis supplied); see

also id. (“Such payment will be due . . . by the party obligated
to pay that amount under [the Master Agreement].”).
18

Appellant

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also acknowledged,

inter

Pg: 19 of 36

alia,

“that

the

payments

due

by

it

under this [Amendment] shall be due . . . whether or not . . .
the term of any Financing is shorter or longer than the Term of
this [Amendment], or any other terms of any Financing differ
from the terms of this [Amendment].”
The
provisions
Master

final

clause

of

in

contained

Agreement

Id. at 47.

incorporated

or

will

the

govern

expressly modified herein.”

this

Amendment
by

reads,

“[a]ll

reference

[Amendment]

in

the

except

as

J.A. 49 (emphasis supplied).

Those

“govern[ing]” terms include a merger clause, which states that
the

Master

entire

Agreement

agreement

supersed[ing]
respect

and

and

all

oral

thereto,”

and

any

Confirmations

understanding
communication
a

clause

of
and

“constitute[]

the

parties

prior

prohibiting

.

writings

oral

the
.

.

with

amendments,

which specifies that “[n]o amendment, modification or waiver . .
. will be effective unless in writing . . . and executed by each
of

the

parties

or

confirmed

by

an

exchange

of

telexes

electronic messages on an electronic messaging system.”
64.

or

Id. at

Finally, in addition to setting forth a detailed process

for calculating termination fees, the Master Agreement states,
[Appellant] . . . understands that the terms
under
which
any
Transaction
may
be
terminated early are set forth in this
Agreement (including any Confirmation of
such Transaction), and any early termination
of a Transaction other than pursuant to the
provisions of this Agreement (including any
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such Confirmation) is subject to mutual
agreement
of
the
parties
confirmed
in
writing, the terms of which may require one
party to pay an early termination fee to the
other party based upon market conditions
prevailing at the time of early termination.
Id. at 75 (emphasis supplied); see also id. at 77.
As

the

foregoing

provisions

exemplify,

Appellee’s

alleged oral misrepresentation -- that the Swap Agreement and
the Refinanced Loan would contemporaneously terminate without an
early

termination

fee

–-

is

directly

contradicted

by

the

unambiguous written terms of both the Amendment and the Master
Agreement.

Appellant admits to receiving the Amendment, which

was sent by facsimile, from Appellee.

See J.A. 18 (alleging

that Appellee “sent [the Amendment]” to Appellant on June 6,
2006); see also id. at 46-53, 86-92 (executed copies of the
Amendment attached to the complaint and the motion to dismiss,
respectively).
that

the

agreement

The

Amendment

required

foregoing

correctly

sets

by

[Appellee].”

executing

a

copy

Id. at 50.

.

Appellant

forth
.

.

the

and

to

“confirm

terms

of

returning

it

our
to

Pancoe “[a]ccepted and [c]onfirmed”

the Amendment with his signature, the authenticity of which is
unchallenged.
The

Id.
complaint

does

not

allege

that

Appellee

misrepresented the character or terms of the Amendment itself or
otherwise

interfered

with

Pancoe’s

20

ability

to

read

and

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understand

Filed: 07/17/2014

the

same. 6

Pg: 21 of 36

Indeed,

the

full

extent

of

the

misrepresentation alleged in the complaint is Appellee’s preAmendment oral promise to permit the early termination of the
Original Swap Agreement without an attendant termination fee -the

complaint

does

not

charge

Appellee

with

providing

any

assurances as to whether this alleged agreement survived the
parties’ execution of the Amendment.
immediately

ascertained

the

truth

Appellant thus could have
of

its

post-Amendment

liability for a termination fee by simply reviewing the plain
language of the Amendment and the Master Agreement, which it had
a duty to read.

See Davis, 124 S.E.2d at 133.

The reasonableness of a party’s reliance “is generally
a question for the jury, except in instances in which ‘the facts
are so clear as to permit only one conclusion.’”

Dallaire, 2014

WL 2612658, at *5 (quoting Marcus Bros., 513 S.E.2d at 327).

6

In

Although Appellant alleges that Appellee “deceptively”
inserted the Additional Termination Event into the Amendment
without its “prior agreement,” it neither disputes Pancoe’s
execution of the contract as written nor provides any sort of
factual elaboration as to how this alleged “decepti[on]” was
achieved. J.A. 18. This allegation is thus nothing more than a
“‘naked assertion[] devoid of further factual enhancement,’” and
we will not credit it. U.S. ex rel. Oberg v. Penn. Higher Educ.
Assistance Agency, 745 F.3d 131, 136 (4th Cir. 2014) (quoting
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)); see also Nemet
Chevrolet, Ltd. v. Consumeraffairs.com, Inc., 591 F.3d 250, 255
(4th Cir. 2009) (“[B]are assertions devoid of further factual
enhancement fail to constitute well-pled facts for Rule 12(b)(6)
purposes.”).

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this

Doc: 30

case,

Filed: 07/17/2014

even

accepting

Pg: 22 of 36

as

true

that

Appellee

orally

misrepresented Appellant’s obligation to pay a termination fee,
Appellant still cannot establish that it justifiably relied on
that misrepresentation as a matter of law.
relevant

pleading

discovered

the

requirements,
truth

[about

because
the

In terms of the

Appellant

“could

misrepresentation]

have
upon

inquiry,” it was required to –- and did not -- allege that “[it]
was denied the opportunity to investigate or . . . could not
have

learned

the

true

facts

by

exercise

of

reasonable

diligence.”

Pinney, 52 S.E.2d at 192 (internal quotation marks

omitted).

With

Appellant’s

reliance

respect
on

to

the

Appellee’s

claims’
oral

substantive

merit,

misrepresentation

was

not reasonable or justifiable as a matter of law because the
misrepresentation
provisions

of

was

the

directly

contradicted

subsequently-executed

governing Master Agreement.

by

Amendment

numerous
and

See Bowman, 316 S.E.2d at 621.

the
On

both fronts, we conclude that Counts One and Two of Appellant’s
complaint

fail

to

misrepresentation

state

under

Fed.

claims
R.

for
Civ.

fraud
P.

or

12(b)(6)

negligent
and

were

properly dismissed.
2.
Count Three: Duress
In Count Three of its complaint, Appellant alleges a
claim of economic duress resulting from Appellee’s refusal to
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release the deed of trust to the Property until Appellant paid
the termination fee.
was

entitled

Agreement

to

hold

“[u]ntil

[Appellant]

are

Pursuant to the Master Agreement, Appellee
any

such

collateral

time

completely

as

supporting

all

such

satisfied

the

Swap

obligations

notwithstanding

of
any

repayment, acceleration, satisfaction, discharge or release of
any . . . loan or other financing.”

J.A. 77.

The deed of

trust, too, allowed Appellee to hold the deed until Appellant
paid all obligations due under the Swap Agreement.

See id. at

104-105

simple”

(granting

Appellee

the

Property

“in

fee

to

“secure payment and performance of obligations under” the Swap
Agreement

until

performed”).

“all

[o]bligations

are

timely

paid

and

Inasmuch as “[a] threat to do what one has a legal

right to do cannot constitute duress,” Bell Bakeries, Inc. v.
Jefferson Std. Life Ins. Co., 96 S.E.2d 408, 416 (N.C. 1957)
(internal

quotation

marks

omitted),

we

conclude

that

the

district court properly dismissed Count Three for failing to
state a claim under Fed. R. Civ. P. 12(b)(6).
3.
Counts Four and Five:
Fraud and Negligent Misrepresentation (Overcharges)
In Counts Four and Five of its complaint, Appellant
alleges that Appellee fraudulently or negligently misrepresented
that Appellant would receive a “market rate” as the fixed rate

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under the Swap Agreement.
6.91%

fixed

interest

Pg: 24 of 36

In actuality, Appellant alleges, the

rate

was

approximately

32

basis

points

(.32%) above the interdealer broker market rate, resulting in
“overcharges” of at least $97,666.
dismissed

both

“fail[ed]

to

of

these

plausibly

J.A. 24.

claims,

allege

The district court

concluding

that

that

[Appellee]

Appellant

misrepresented

that it offered [Appellant] the interdealer broker market rate.”
Caper Corp., 2013 WL 4504450, at *10.
The

complaint

Again, we agree.

provides

scant

support

for

the

conclusion that Appellant was entitled to the interdealer broker
market rate, which Appellant itself admits is “a closed market[]
open to only the largest commercial and investment banks.”
23.

Appellant

relies

primarily

on

the

J.A.

following

two

allegations: (1) Appellee “represented the interest rate swap
would be extended to [Appellant] at ‘a market-derived rate’” in
the

Term

telephone
offered

to

Sheet;

and

(2)

conversations
Caper

at

“Boss

that

market

the

similarly

advised

Refinanced

rates.”

Id.

at

Loan
22.

Pancoe
was

in

being

Appellant

contends that these two statements, taken together, caused it to
believe that Appellee was offering the Swap Agreement at “market
rates,” i.e., the “interdealer broker market rate” with “no mark
up” for Appellee.

Id. at 23.

This understanding was bolstered,

Appellant claims, by the fact that the Term Sheet disclosed the

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fees Appellee would collect for the proposed refinanced loan but
did not disclose any fees for the proposed swap agreement.
The
forth

relevant

above,

consist

allegations
primarily

Id.

in

the

complaint,

as

a

few

vague

undated

of

and

set

averments of Appellee’s purported misrepresentations, which are,
in turn, couched in terms of both “market rate” and “marketderived rate.”

J.A. 22 (emphasis supplied).

Critically, the

complaint is completely devoid of any allegation that Appellee
ever explicitly offered Appellant the interdealer broker market
rate or even intimated that the interdealer broker market rate
was,

in

fact,

the

which it referred.

“market

rate”

or

“market-derived

rate”

to

See, e.g., Caper Corp., 2013 WL 4504450, at

*10 (observing that “[t]he phrase ‘market-derived rate’ implies
something other than a market rate.”).
contains

no

allegation

clarification

as

to

that

the

The complaint further

Appellant

meaning

of

sought

any

“market

sort

rate”

before

allegedly relying to its detriment on its own definition.
Dallaire,

2014

WL

2612658,

at

*5

(“A

party

cannot

of

See

establish

justified reliance on an alleged misrepresentation if the party
fails

to

make

statement.”).
complaint

reasonable

inquiry

regarding

the

alleged

Indeed, as described by the district court, the

“state[s]

nothing

more

than

conjecture

on

[Appellant’s] part that [Appellee’s] offer of a ‘market rate’ or

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‘market-derived
rate.’”

rate’

meant

Pg: 26 of 36

the

‘interdealer

broker

market

Caper Corp., 2013 WL 4504450, at *10.
Even

viewing

the

adequately

pleaded

facts

in

Appellant’s favor and giving it the benefit of all reasonable
inferences, we must conclude Appellant has failed to plausibly
allege

that

Agreement

Appellee

at

the

offered

the

interdealer

fixed

broker

rate

market

of

the

Swap

rate

or

that

Appellant justifiably relied on such a representation.

We thus

agree with the district court that Appellant has failed to state
a claim for fraud or negligent misrepresentation under Fed. R.
Civ.

P.

12(b)(6)

with

respect

to

Appellee’s

alleged

“overcharges.”
4.
Counts Six and Seven:
Breach of Fiduciary Duty and Constructive Fraud
In Counts Six and Seven of its complaint, Appellant
alleges that Appellee breached its fiduciary duty to Appellant
and committed constructive fraud.

Both of these claims require

the existence of an antecedent fiduciary relationship between
Appellant and Appellee.

See Green v. Freeman, 749 S.E.2d 262,

268 (N.C. 2013) (“‘For a breach of fiduciary duty to exist,
there

must

first

be

a

fiduciary

relationship

between

the

parties.’” (quoting Dalton v. Camp, 548 S.E.2d 704, 707 (N.C.
2001)));

Forbis, 649 S.E.2d at 388 (“A claim of constructive

26

Appeal: 13-2152

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fraud

.

.

Filed: 07/17/2014

.

arises

.

Pg: 27 of 36

a

where

confidential

or

fiduciary

relationship exists.” (internal quotation marks omitted)).

We

conclude, as did the district court, that Appellant has failed
to

allege

facts

sufficient

to

state

a

plausible

claim

of

a

fiduciary relationship with Appellee.
As a general rule, “[a] fiduciary relationship . . .
aris[es] when ‘there has been a special confidence reposed in
one who in equity and good conscience is bound to act in good
faith and with due regard to the interests of the one reposing
confidence.’”
749

S.E.2d

Dallaire, 2014 WL 2612658, at *3 (quoting Green,
at

“characterized

268).
by

Such

relationships

‘confidence

reposed

on

are
one

ordinarily
side[]

and

resulting domination and influence on the other,’” which results
in “a heightened level of trust and the duty of the fiduciary to
act

in

the

best

interests

of

the

other

(quoting Dalton, 548 S.E.2d at 708).
or

debtor-creditor

arm’s

length

relationships,

transactions

fiduciary duties.

and

do

in
not

party.”

Id.

at

*3

Ordinary borrower-lender
contrast,

are

typically

marked

give

rise

by
to

See id. at *4 (“[B]orrowers and lenders are

generally bound only by the terms of their contract and the
Uniform Commercial Code.” (citation omitted)).
remains

at

least

“theoretically”

possible

Nevertheless, it

for

“a

particular

bank-customer transaction to ‘give rise to a fiduciary relation

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given the proper circumstances.’”

Id. (quoting Branch Banking &

Trust Co v. Thompson, 418 S.E.2d 694, 699

(N.C. App. 1992)).

Appellant, in short, does not allege in its complaint
any facts that would show Appellee had the “amount of control
and domination required to form a fiduciary relationship outside
that of the normal relationships recognized by law.”

S.N.R.

Mgmt. Corp. v. Danube Part. 141, LLC, 659 S.E.2d 442, 451
App.

2008)

(internal

quotation

marks

omitted).

(N.C.

Appellant’s

longstanding business relationship with Appellee, particularly
Appellee’s role in “author[ing] the terms and details of many of
[Appellant’s] financial transactions,” J.A. 12, is indicative of
nothing more than a typical lender-borrower or debtor-creditor
relationship.

See

Thompson,

418

S.E.2d

at

699

(The

“mere

existence of a debtor-creditor relationship . . . [does] not
create

a

fiduciary

omitted)).

relationship.”

Similarly,

Appellee’s

(internal
“superior

quotation
knowledge

marks
of

the

terms and risks and pricing” of interest rate swap agreements,
J.A. 36, does not give rise to a concomitant duty for Appellee
to

put

the

interests

of

Appellant,

a

corporation

with

equal

bargaining position dealing at arm’s length, ahead of its own.
See S. Atl. Ltd. P’ship of Tenn. L.P. v. Riese, 284 F.3d 518,
533

(4th

Cir.

2002)

(“[E]ven

when

parties

to

an

arms-length

transaction have reposed confidence in each other, no fiduciary
duty arises unless one party thoroughly dominates the other.”
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(citing Tin Originals, Inc. v. Colonial Tin Works, Inc., 391
S.E.2d 831, 833 (N.C. App. 1990))).
The
respect

to

remaining

allegations

Appellant’s

in

relationship

the

with

complaint
Appellee

with

consist

primarily of conclusory recitations of the elements of a breach
of fiduciary duty claim and are entitled to no weight.
Caper Corp., 2013 WL 4504450, at *8.

See

Consequently, we conclude

that the district court properly dismissed Appellant’s breach of
fiduciary duty and constructive fraud claims pursuant to Fed. R.
Civ. P. 12(b)(6).
5.
Count Eight: Unfair and Deceptive Trade Practices
In

Count

Eight

of

its

complaint,

Appellant

alleges

that Appellee engaged in acts or practices prohibited by North
Carolina’s

Unfair

(“UDTPA”),

N.C.

and

Gen.

Deceptive

Stat.

§

Trade

75–1.1.

Practices
Appellant

statute
does

not

identify any specific violations of the UDTPA within this count,
but

instead

incorporates

preceding allegations.

generally

all

of

the

complaint’s

On this count, too, we conclude that

Appellant has failed to allege facts sufficient to state a claim
under Fed. R. Civ. P. 12(b)(6).
To
practices,

state

the

a

claim

plaintiff

must

for

unfair

allege

or

facts

deceptive
plausibly

trade
showing

that “‘(1) [the] defendant committed an unfair or deceptive act
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or practice, (2) the action in question was in or affecting
commerce,

and

plaintiff.’”

(3)

the

act

proximately

caused

injury

to

the

Bumpers v. Comm’y Bank of N. Virginia, 747 S.E.2d

220, 226 (N.C. 2013) (quoting Dalton, 548 S.E.2d at 711).

If

the claim arises from the defendant’s alleged misrepresentation,
the plaintiff must also plausibly allege that it “reasonabl[y]
reli[ed]” on that misrepresentation.
if

it

has

a

tendency

or

Id.

capacity

to

An act is “deceptive”
deceive

a

reasonable

businessperson, see RD & J Props. v. Lauralea–Dilton Enters.,
LLC, 600 S.E.2d 492, 501 (N.C. App. 2004), and “unfair” if it is
“immoral, unethical, oppressive, unscrupulous, or substantially
injurious to consumers” such that it “amounts to an inequitable
assertion of . . . power or position,”

Carcano v. JBSS, LLC,

684 S.E.2d 41, 50 (N.C. App. 2009) (internal quotation marks
omitted).

Whether actions are deceptive or unfair within the

meaning of the UDTPA is a question of law.

Dalton, 548 S.E.2d

at 711.
On

appeal,

Appellant

takes

the

position

that

“everything alleged [in the complaint] constitutes an unfair and
deceptive

trade

unconvinced.

practice.”
The

Appellant’s

Br.

49.

unlawful

acts

or

allegedly

We

are

practices

identified in the complaint are either factually unsubstantiated
or well within Appellee’s contractual rights –- none “have the
capacity to deceive a reasonable businessperson,” RD & J Props.,
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600 S.E.2d at 501, or otherwise qualify as unfair or deceptive
under the UDTPA.
the

complaint

Appellee’s

In any event, as we have already discussed,
fails

alleged

to

establish

reasonable

misrepresentations

as

a

reliance

matter

of

on
law,

precluding Appellant from seeking relief under N.C. Gen. Stat.
§ 75–1.1.

See Bumpers, 747 S.E.2d at 226-27.

We therefore

affirm the district court’s dismissal of this count.
6.
Counts Nine and Ten: Rescission or Reformation
In Counts Nine and Ten of its complaint, which are
governed

by

New

York

law, 7

Appellant

seeks

reformation

or

rescission of the Swap Agreement on the grounds of commercial
frustration

of

purpose,

mutual

mistake,

and

unsuitability.

Although there is some debate as to whether Appellant preserved
its right to pursue these claims by executing the Confirmation
of

Termination

“under

duress[]

and

with

full

reservation

rights to contest its liability for the Termination Fee,”

of

J.A.

139, we will simply assume, without deciding, that Appellant’s
rights have been preserved.

7

As we have explained, the substantive law governing these
claims is dictated by the New York choice of law provision in
the Swap Agreement.
See J.A. 73 (“[T]his Agreement will be
governed by and construed in accordance with the law of the
state of New York[.]”).

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a.
Frustration of Purpose
Appellant contends that it is entitled to rescission
or

reformation

of

the

Swap

Agreement

because

the

artificial

depreciation of LIBOR, coupled with the ensuing worldwide credit
crisis that began in October 2008, “dramatically increased the
interest

rate

risk

of

[Appellant]

as

opposed

to

hedging

or

limiting it,” frustrating the purpose of the Swap Agreement.
J.A. 38.

We conclude that Appellant has failed to allege facts

sufficient

to

establish

entitlement

to

the

remedies

of

rescission and reformation.
The frustration of purpose doctrine is traditionally
employed

as

an

affirmative

defense

to

a

contract

claim,

operating to discharge a party from its outstanding contractual
obligations due to a supervening frustration.
(Second) of Contracts § 265.
unanticipated

“‘change

in

See Restatement

The defense is applicable where an
circumstances

makes

one

party’s

performance [under a contract] virtually worthless to the other,
frustrating

his

purpose

in

making

the

contract.’”

PPF

Safeguard, LLC v. BCR Safeguard Holding, LLC, 924 N.Y.S.2d 391,
394

(N.Y.

App.

Div.

2011)

(quoting

Restatement

(Second)

of

Contracts § 265 cmt. a).

“[T]he frustrated purpose must be so

completely

the

the

basis

of

contract

that,

as

both

parties

understood, without it, the transaction would have made little
32

Appeal: 13-2152

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sense.”

Filed: 07/17/2014

Crown It Servs., Inc. v. Koval–Olsen, 782 N.Y.S.2d 708,

711 (N.Y. App. Div. 2004).
and

its

Pg: 33 of 36

utility

cataclysmic,

is

wholly

The doctrine is a “narrow one,” id.,

“limited

to

unforeseeable

instances
event

where

renders

a
the

virtually
contract

valueless to one party,” United States v. Gen. MacArthur Senior
Village, Inc., 508 F.2d 377, 381 (2d Cir. 1974).
We

note

at

the

outset

that

it

is

far

from

clear

whether the frustration of purpose doctrine, which ordinarily
operates

as

an

excuse

for

nonperformance,

is

an

appropriate

vehicle for the claim at issue here, i.e., an affirmative cause
of action seeking rescission or reformation of a fully-performed
contract.

We

need

not

dwell

on

this

question,

however,

as

Appellant’s claim -– whether or not appropriately framed –- is
substantively meritless.
accompanying

contracts,

As detailed in the complaint and the
the

Swap

Agreement

was

“virtually worthless” by the depreciated LIBOR.
LLC, 924 N.Y.S.2d at 394.

not

rendered

PPF Safeguard,

Pursuant to the plain terms of the

Swap Agreement, Appellant made payments at a fixed interest rate
throughout the entire term of the Refinanced Loan.

Appellant

was thus protected from the uncertainty of a variable interest
rate and,

indeed,

paid

precisely

“the

amount

of

interest

agreed to and expected to pay under the Swap Agreement.”
Corp., 2013 WL 4504450, at *12.

it

Caper

To the extent the ultimate

Termination Fee was higher than Appellant may have hoped for or
33

Appeal: 13-2152

Doc: 30

expected,

Filed: 07/17/2014

“[i]t

is

not

Pg: 34 of 36

enough”

for

the

purposes

of

the

frustration of purpose doctrine “that the transaction has become
less profitable for the affected party or even that he will
sustain a loss.”

Rockland Dev. Assoc. v. Richlou Auto Body,

Inc., 570 N.Y.S.2d 343, 344 (N.Y. App. Div. 2004).
We agree with the district court that the purpose of
the Swap Agreement was not frustrated.
relief

based

on

the

frustration

of

Appellant’s claim for

purpose

doctrine,

to

the

extent it even states a viable claim, thus fails as a matter of
law.
b.
Mutual Mistake
With respect to Appellant’s mutual mistake claim, a
mutual mistake may be a ground for reforming or rescinding a
contract where “the parties have reached an oral agreement and,
unknown

to

either,

agreement.”
1986).

the

signed

writing

not

express

that

Chimart Assocs. v. Paul, 489 N.E.2d 231, 234 (N.Y.

“The mutual mistake must exist at the time the contract

is entered and must be substantial.”
Sewanhaka
1993).

does

Cent.

High

Sch.

Dist.,

Gould v. Bd. of Educ. of

616

N.E.2d

142,

146

(N.Y.

More specifically, “[t]he mistake must be ‘so material

that . . . it goes to the foundation of the agreement.’”

Simkin

v. Blank, 968 N.E.2d 459, 462 (N.Y. 2012) (quoting Da Silva v.
Musso, 428 N.E.2d 382, 387 (N.Y. 1981)).
34

Court-ordered relief

Appeal: 13-2152

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Pg: 35 of 36

should not be granted on the basis of a mutual mistake except in
“exceptional

situations.”

Id.

(internal

quotation

marks

omitted).
Here, Appellant alleges that the parties were mutually
mistaken as to whether LIBOR was “a rational and fundamentally
sound choice for [the] floating [interest] rate” to be used in
the Swap Agreement.

J.A. 38.

The alleged importance of this

understanding to the Swap Agreement, however, is belied by the
contract itself, which makes clear that the parties entered into
the Agreement in order to receive the difference between the
floating and fixed interest rates.

See Simkin, 968 N.E.2d at

462 (“The mistake must . . . go[] to the foundation of the
agreement.’”
omitted)).
parties

(emphasis

supplied)

(internal

quotation

marks

The Swap Agreement makes no mention of whether the

believed

LIBOR

to

be

a

fundamentally

sound

market

indicator, much less whether such an understanding was the basis
for the parties’ selection of a LIBOR-derived variable interest
rate.

To the contrary, as the district court noted, “[t]he

complaint shows that the parties chose the one-month LIBOR rate
not for its virtue as a fundamentally sound market indicator,
but

in

order

to

match

the

terms

of

the

[Refinanced

Loan].”

Caper Corp., 2013 WL 4504450, at *11.
Inasmuch

as

Appellant’s

allegedly

“foundational”

concern as to the reliability of LIBOR is completely absent from
35

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Filed: 07/17/2014

Pg: 36 of 36

any of the relevant contracts or supporting documentation, this
case does not present one of those “‘exceptional situations’”
warranting reformation or rescission on the basis of a mutual
mistake.

Simkin,

N.E.2d at 387).

968

N.E.2d

at

462

(quoting

Da

Silva,

428

This claim, consequently, fails as a matter of

law.
c.
Unsuitability
Finally, Appellant sets forth a claim for rescission
or reformation based on “unsuitability” as “a variation on its
breach of fiduciary duty claim.”

Appellant’s Br. 55.

We need

not resolve the parties’ dispute as to whether this claim exists
under

New

fiduciary

York

law

–-

relationship.

it

necessarily
We

therefore

fails

for

affirm

lack

the

of

a

district

court’s dismissal of this claim.
IV.
For

the

foregoing

reasons,

the

judgment

of

the

district court is
AFFIRMED.

36