Negligence claim related to bank loans; Duty; Disclosures; Hord v Environmental Research Inst of MI; Principle that there is no legal duty to exercise reasonable care in determining loan eligibility; Ulrich v Federal Land Bank of St Paul; Silent fraud; Roberts v Saffell

The court held that plaintiff’s negligence claim against defendant-bank failed because no legal duty existed between them on the basis of the complaint’s allegations, which also fell short of providing the necessary elements for a silent fraud claim. Thus, the court affirmed summary disposition for defendant. Plaintiff operates a farming business, and defendant has served as its agricultural lender. He sued defendant “for the alleged actions or inactions of its agricultural specialist,” nonparty-B. Plaintiff’s negligence claim alleged “that defendant owed him a duty to respond fully, fairly, accurately, and timely to his requests for lending; to use due care not to cause harm in the performance of an undertaking, and to act in a nonnegligent manner.” As to the silent fraud claim, he alleged that B never intended to loan requested additional funds, “was ‘duty-bound’ to timely disclose whether” they would be made, and B’s “failure to respond created an assumption that [they] would be available.” The court first noted that plaintiff did not identify any “regulation, statute, provision in a contract, or other basis for finding a fiduciary relationship between himself and defendant.” He cited two recognized legal duties, but the court found neither of them were “triggered by the facts in the complaint. Specifically, while Michigan law recognizes a legal duty to act with due care when one assumes to act on another’s behalf,” there was no allegation that B “or any other representative did this.” The absence of any alleged action or statement “evidencing a commitment on defendant’s part to renew the loans at the existing rates or to issue additional financing” was fatal to plaintiff’s second asserted legal duty, based on Hord. Plaintiff did not allege that B “made any disclosure of any information that was truthful and incomplete.” The court found that, at best, plaintiff alleged “that defendant unduly delayed in notifying him of a decision as to his eligibility for a loan.” And in Ulrich, it “determined that no legal duty exists to exercise reasonable care in determining eligibility for a loan.” That analysis applied here.