Martinez v. Associates Financial Services Co. of Colorado, Inc.

Decision Date13 March 1995
Docket NumberNo. 94-102,94-102
Citation891 P.2d 785
PartiesBonnie I. MARTINEZ, Appellant (Defendant), v. ASSOCIATES FINANCIAL SERVICES COMPANY OF COLORADO, INC., Appellee (Plaintiff).
CourtWyoming Supreme Court

Jo Ann Fulton, Laramie, for appellant.

Michele K. McKellar of Moore, Smith & Williams, P.C., Fort Collins, for appellee.


TAYLOR, Justice.

Appellee brought an action to recover from appellant on a promissory note. Appellant counterclaimed, alleging negligent lending. The district court denied the counterclaim and entered partial summary judgment in favor of appellee. Having received scarcely a nibble from the district court, appellant casts the same bait into appellate waters. Sharing the district court's measured distaste for red herring, we affirm in all respects.


Appellant, Bonnie Martinez (Martinez), states her issues:

I. Did the district court err in dismissing defendant's [Martinez's] counterclaim?

II. Did the district court err in adjudicating material facts concerning appellant's default on the promissory note and finding no issues of material fact regarding the terms and conditions of the promissory note and mortgage and remedy provision contained therein?

Appellee, Associates Financial Services Company of Colorado, Inc. (Associates), restates the issues with a prefatory query:

I. Whether the appellant has filed a brief containing cogent argument and citations of authority sufficient to support reversal?

II. Whether the district court erred in dismissing defendant's/appellant's counterclaim?

III. Whether the district court erred in granting plaintiff's/appellee's motion for summary judgment?

Definitive answers to the two shared issues should satisfy the curiosity articulated in Associates' first issue.


Martinez feels aggrieved by the district court's dismissal of her negligent lending counterclaim, pursuant to W.R.C.P. 12(b)(6), for failure to state a claim upon which relief could be granted, and attacks the summary judgment subsequently entered against her. On the W.R.C.P. 12(b)(6) dismissal, we divine the "facts" by viewing Martinez's pleadings with a liberality verging on charity, resolving any doubt in favor of her contentions. Osborn v. Emporium Videos, 848 P.2d 237, 239-40 (Wyo.1993). Our factual perspective on summary judgments is not markedly different; although, like the district court, we have the additional benefit of peripheral vision afforded by the capacity to consider matters outside the pleadings. Davis v. Davis, 855 P.2d 342, 345 (Wyo.1993). In May of 1990, Martinez executed a promissory note to Associates for the principal sum of $9,314.22, secured by a home mortgage. When she defaulted on a $202.36 note payment in late 1990, Associates served Martinez with a notice of right to cure default on December 31, 1990. Disregarding a murky record on this point, we will assume, as did the district court, that Martinez dutifully cured the default which was the subject of that notice.

Thereafter, however, Martinez admits that she refused to make further payment on her note over the succeeding sixteen months. On May 26, 1992, Associates sued for the principal amount, interest, collection costs and legal fees. Martinez counterclaimed, alleging that Associates was impermissibly diffident in conducting its business with her by mail but, because of superior knowledge and unequal bargaining power, knew or should have known that they had thereby established a fiduciary relationship with her.


Little additional ink need be spilled here about the jealousy with which we dispense approval of W.R.C.P. 12(b)(6) dismissals, past the declaration that dismissal of any claim is a "drastic" remedy which will only be sustained on appeal if "there is no doubt that the [appellant] cannot prove any set of facts that would entitle [her] to relief." Johnson v. Aetna Cas. & Sur. Co. of Hartford, Conn., 608 P.2d 1299, 1302 (Wyo.1980). W.R.C.P. 8 adopts the common sense approach of notice pleading. Jackson State Bank v. Homar, 837 P.2d 1081, 1085 (Wyo.1992). The theory is that if the underlying allegations admit of any possibility that they may be the "proper subject of relief," we ought not deprive Martinez of the opportunity to test her counterclaim on its merits. Beaudoin v. Taylor, 492 P.2d 966, 970 (Wyo.1972) (quoting Foman v. Davis, 371 U.S. 178, 182, 83 S.Ct. 227, 230, 9 L.Ed.2d 222, 226 (1962)).

We are not appreciably more generous in granting approbation to summary judgments. Hozian v. Weathermon, 821 P.2d 1297, 1298-99 (Wyo.1991). The odds favoring summary judgments do improve marginally insofar as the interpretation of unambiguous contracts remains solely a question of law, making disputes relating to such pacts proper grist for the mill of summary judgment. Sturman v. First Nat. Bank, 729 P.2d 667, 677 (Wyo.1986). Standing in the shoes of the district court, we must determine anew whether any genuine issue of material fact exists and, if not, whether the party prevailing below is entitled to judgment as a matter of law. Lincoln v. Wackenhut Corp., 867 P.2d 701, 702 (Wyo.1994).


The district court's trenchant precis of Martinez's counterclaim leaves little room for improvement:

"You [Associates] should have known better than to loan me [appellant] the $9,314.22 that I requested to borrow; therefore, I don't need to pay you back and, instead, you can also give me all of the principal and interest (approximately $30,000) I've paid on my house mortgage."

As the district court observed, a certain generosity of spirit is requisite to characterize the foregoing as a "legal theory," although the words of the counterclaim suggest a putative issue of negligent lending. Martinez and Associates did business by mail and Martinez alleges that Associates, possessed of "superior knowledge," failed to properly investigate Martinez before granting the loan in question. Martinez alleges a "fiduciary relationship" of which Associates "[knew] or should have known * * *." The counterclaim portrays Martinez's loan applications as fraudulent in some fashion which, had Associates ferreted out, would have necessitated denial of the loan.

The extent of the relationship between Martinez and Associates, for purposes of this action, is defined and delimited by the promissory note. Such a contractual relationship between a lender and its customer traditionally imposes duties upon the lender "no higher than the morals of the market place." Rader v. Boyd, 252 F.2d 585, 587 (10th Cir.1957); In re M. Paolella & Sons, Inc., 161 B.R. 107, 118 (E.D.Pa.1993), aff'd, 37 F.3d 1487 (3rd Cir.1994). In the absence of special circumstances, the legal relationship between a lending institution and its customer is that of debtor or creditor. Resolution Trust Corp. v. Wellington Development Group, 761 F.Supp. 731, 737 (D.Colo.1991) (quoting Dolton v. Capitol Federal Sav. and Loan Ass'n, 642 P.2d 21, 23-24 (Colo.App.1981)); Rivera v. Central Bank & Trust Co., 155 Colo. 383, 395 P.2d 11, 13 (1964). This notion is consistent with our refusal to rewrite unambiguous contracts under the guise of interpretation. Lawrence v. Farm Credit System Capital Corp., 761 P.2d 640 645 (Wyo.1988); cf. A. Brooke Overby, Bondage, Domination, and the Art of the Deal: An Assessment of Judicial Strategies in Lender Liability Good Faith Litigation, 61 Fordham L.Rev. 963, 1024 (1993).

Theory, however, suggests that lenders may incur extra-contractual duties to customers through conduct which creates a special or fiduciary relationship. John M. Burman, Lender Liability in Wyoming, 26 Land and Water L.Rev. 707, 712 (1991). Although it freights some very specific kinds of legal rights and responsibilities, the concept of a fiduciary relationship is firmly grounded in equity. Denison State Bank v. Madeira, 230 Kan. 684, 640 P.2d 1235, 1241 (1982). Successful establishment of such a relationship may open the door to pursuit of a wide array of common law theories of lender duty to borrower, depending upon the law of the forum. Andrea Bloom, Lender Liability: Practice and Prevention, ch. 3 (1989 & Cum.Supp.1994 No. 2).

If, as Professor Burman believes, "the lender liability pendulum may now be swinging back toward lenders," the instant case can do little to slow that momentum. Burman, supra, 26 Land & Water L.Rev. at 755. That does not necessarily reflect our lack of interest in the varied theories of lender liability. However, improvident pleadings run a close second to bad facts as leading makers of bad law and we refuse to be drawn down the garden path by the instant confluence of both.

Extra-contractual lender duties, if there are any, must necessarily be predicated upon demonstration of a special or fiduciary relationship. Burman, supra, 26 Land & Water L.Rev. at 712-13, 718 & 730. Such a relationship is extraordinary and not easily created. Gillum v. Republic Health Corp., 778 S.W.2d 558, 567 (Tex.App.1989). Fiduciary relationships cannot be the product of mere wishful thinking, carrying as they do the most profound of legal consequences. State Farm Mut. Auto. Ins. Co. v. Shrader, 882 P.2d 813, 832-33 (Wyo.1994).

At best, it is unseemly to beg for equitable relief based upon one's own wrongdoing. Wettlin v. Jones, 32 Wyo. 446, 453, 234 P. 515, 517 (1925). Had Martinez succeeded in pleading breach of a fiduciary relationship by Associates, we would have remained "chary" of extending the helping hand of equity to a litigant who acts so as to hinder or defraud her creditors. Wantulok v. Wantulok, 67 Wyo. 22, 41, 214 P.2d 477, 484 (1950). Since Martinez's pleadings betray no hint of a fiduciary relationship, we need not dwell upon equity's distaste for unclean hands in order to fully dispose of her counterclaim.

Of the two essential kinds of fiduciary relationships, the first arises from specific legal relationships. "...

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