Parker v. Columbia Bank

In these difficult economic times with falling real estate prices, lender liability suits have become one of the few “growth industries.” This appeal is a part of that “industry,” involving, as it does, a number of issues concerning a bank’s duties and responsibilities to its borrowers. This case arises out of two actions, now consolidated, relating to a residential construction loan secured by appellants, Robert and Margaret Parker (“the Parkers”), from appellee, The Columbia Bank (“Columbia”). The Parkers appeal the order of the Circuit Court for Montgomery County granting Columbia’s motion to dismiss 1 the Parkers’ suit for fraud, fraudulent concealment, negligent misrepresentation, negligence, breach of fiduciary duty, and breach of contract; and the order of that court ratifying the foreclosure sale by Columbia of real estate used by the Parkers to secure this construction loan.

(0

During 1988, the Parkers, physicians employed at the National Institutes of Health, began to look for a larger *352 home in Montgomery County. After “many drives throughout Montgomery County” they met George Evangelos Paleólogos (“Paleólogos”), a builder who had contracted with friends of the Parkers to construct a custom home in Brookeville, Maryland. Paleólogos introduced the Parkers to a project in which his construction company, Evangelos Enterprises, Ltd. (“Evangelos”), planned to build a group of seven custom homes in a subdivision known as “Brookeville Farms.” Dr. Parker 2 spoke with Paleólogos and other subdivision buyers, “observed the displays” in Paleólogos’ sale office and “the work under way” on Paleólogos’ own house. From these conversations and observations, Dr. Parker “gained the impression that he [Paleólogos] was competent.” After several meetings with Paleólogos, the Parkers believed that Paleólogos “could build the house” the Parkers “wanted at a price [they] could afford.”

On September 21, 1988, the Parkers entered into a contract with Evangelos for the construction of a 5,000-square-foot house at a cost of $385,000. The Parkers “selected a floor plan and numerous features that customized the house to meet the specific needs of [their] family. The construction documents called for more than 5,000 square feet of finished living space, 7 bedrooms, 5 full and 2 half baths, 10-foot ceilings on the first floor, a soaring cathedral ceiling 27 feet high in the family room, 3 fireplaces, huge arched windows, and other features that made this the home [the Parkers] felt [they] could keep forever.” In order to verify that Paleólogos could build this house for $385,000, Dr. Parker asked him if he could and the builder “said yes.”

On October 15, 1988, the Parkers entered into a contract with the “Brookeville Development Partnership” for the purchase, at the price of $160,000, of the lot on which the house was to be built. While the land contract stated that the seller of the property, the Brookeville Development *353 Partnership, “is not involved in the construction or development of the home,” Paleólogos signed the land contract on behalf of the seller. The land contract, but not the construction contract, included a provision that its execution would be contingent on the Parkers’ obtaining a loan to finance the purchase.

Over the following weeks, the Parkers sought a lender to finance the purchase of the land, the construction of the house, and the mortgage. They spoke with representatives of three banks regarding financing. In late October and early November, they contacted Mr. Clements, a loan officer at Sandy Spring Bank, who had provided funding for two other couples, friends of the Parkers, in the Brookeville Farms development. Dr. Parker told Mr. Clements that he was “looking for financing that would provide 80% of the appraised value, which was expected to be between $700,-000 and $750,000.” As Dr. Parker recognized, “this would result in financing essentially 95-100% of the construction and land costs.” Mr. Clements, according to Dr. Parker, “did not believe his Bank’s loan board would allow such a financing package.” Accordingly, the Parkers submitted no loan application to Sandy Spring. Dr. Parker next spoke to Mr. Bollinger at First Annapolis Savings & Loan. Paleólogos, who told Dr. Parker that “he was also dealing” with First Annapolis, referred Dr. Parker to that institution. Again, Dr. Parker “asked for a package that would essentially finance 95% of the construction and land costs, based on 80% of the appraised value as completed.” Again, the loan officer indicated that the “Bank could not do that.” Again, no loan application was submitted.

Dr. Parker then spoke with Michael T. Galeone, a senior vice president of Columbia Bank. 3 On January 7, 1990, the Parkers made an application to Columbia for a construction *354 loan. Dr. Parker again explained that he “was looking for financing on 80% of the appraised price rather than 80% of the purchase price.” Moreover, Dr. Parker alleges he told Galeone that “if the house could not be built for this, we could not proceed with the project.” Mr. Galeone asked Dr. Parker “what he knew about” Paleólogos and “how” Dr. Parker “came to know” Paleólogos. Dr. Parker, in response, related his conversations with Paleólogos and observations of Paleólogos’ own house and sales displays, which are outlined above. Dr. Parker provided Galeone with Paleólogos’ address and telephone number so Columbia could do its own check on the qualifications of the builder.

The Parkers allege that, over the next two months, they spoke with Galeone on numerous occasions and he “intentionally cultivated a relationship of trust and confidence with” them and they “came to regard him and Columbia as an adviser and consultant with respect to the project.” They further allege that, to induce them to enter into a construction loan with Columbia, Galeone represented that: (1) he was “experienced in the placement and administration of loans similar to the construction loan needed for the house” while in fact he had never administered a loan involving draw payments to a builder; (2) Columbia had “thoroughly investigated” Paleólogos and determined he was qualified to undertake this project, while in fact this investigation was “perfunctionary” and overlooked information which would show he was not qualified; (3) Galeone and Columbia would protect the Parkers’ interest, as well as Columbia’s, throughout construction of the house, while in fact Galeone had no intention of protecting the Parkers’ interest unless it coincided with Columbia’s; (4) construction draws would only be issued after Columbia had obtained inspections to insure that work had been done in accordance with the draw schedule, while in fact Columbia intended to advance funds, if requested by Paleólogos, ahead of the draw schedule and regardless of inspections; and (5) in response to the Parkers’ specific inquiries, “Galeone told them that in the event of a default by the builder, *355 Columbia would find or recommend another builder and would see that the house was completed within budget,” while in fact Columbia intended to provide no such protection to the Parkers.

On March 3, 1989, Columbia issued a commitment letter to the Parkers for financing the project. The bank undertook to provide financing for 96% to 97% of the costs of the project, i.e., the Parkers would provide $21,290 and Columbia would loan them $529,000. The Parkers accepted Columbia’s offer of financing the next day, March 4,1989. On March 17, 1989, the Parkers and Columbia entered into a written construction loan agreement in the amount of $529,-000 to cover the Parkers’ purchase of the land and the construction loan. They allege that they had “little or no experience in matters relating to real estate,” that Galeone knew this, and that “but for” Galeone’s representations set forth above, they “would not have entered into the loan agreement with Columbia.” At closing, Columbia disbursed $234,290 of the loan proceeds to the Parkers, $85,000 of which was paid by the Parkers to Evangelos and the remainder of which was used by the Parkers to pay the balance of the purchase price for the land.

In administering the loan, Columbia did not adhere to the draw schedule set forth in the Parkers’ construction contract with Evangelos. The Parkers allege in their amended complaint that another draw schedule was substituted by Columbia and Evangelos without the Parkers being advised of its terms, but Dr. Parker explains in his affidavit that he and Galeone did discuss amending the draw schedule. 4 In *356 any event, the construction loan entered into by Columbia and the Parkers provides that disbursements of the construction loan “will be made by two party checks payable to both the Borrowers and their general contractor, unless Lender exercises its rights hereunder to make disbursements directly to any party.” 5 Columbia, in fact, released all loan draws to the Parkers in the form of a two-party check payable to the Parkers and Paleólogos as follows: $85,000 at closing on March 17, 1989; $55,000 on May 31, 1989; $50,000 on June 29, 1989; 6 and $110,000 on September 18, 1989. In addition to personally signing each draw check, the Parkers talked with Paleólogos “at least 2-3 times a week from mid-March, 1989 through mid-November, 1989.” They also frequently talked with other families who were having houses built by Evangelos in Brookeville Farms.

At the same time that Columbia was developing its relationship with the Parkers, it was, according to the amended complaint, “developing a relationship” with Paleólogos and Evangelos in order to bring Columbia significant lending business from the builder. None of the details of how this “relationship” was developed are set forth in the complaint except that it is alleged that “one or more” managing agents of Columbia obtained construction services from Paleólogos and Evangelos during 1989 “at little or no charge.” It is not alleged, however, that either Paleólogos *357 or Evangelos had any banking relationship with Columbia until March 10, 1989, after Columbia had offered, and the Parkers had accepted, financing. On that date, Evangelos opened an account with Columbia by depositing $500. Over the course of the summer, nearly 100 checks drawn upon that account were returned for insufficient funds. On August 15, 1989, Columbia approved a line of credit to Evangelos in the amount of $250,000, which was immediately drawn upon and exhausted within a day. During the next four months, another seventy checks drawn on the Evangelos account were returned for insufficient funds; however, all required interest payments were made on the $250,000 line of credit until January 1990. Columbia did not contemporaneously disclose any of its transactions with, or information about, Paleólogos to the Parkers; the Parkers allege that these nondisclosures are fraudulent.

After the last draw, in September 1989, Evangelos performed little, if any, additional work on the Parkers’ house. The Parkers assert that as of that date, although 80% of the construction loan funds had been paid, the project was only 40% complete. In September, Paleólogos advised Columbia and the Parkers that he needed additional financing in order to proceed with the project and that he intended to use his residence and adjacent land as collateral. Dr. Parker asked Galeone to have the bank’s attorneys examine the builder’s condition; he asserts that he repeated this request weekly for six weeks and Galeone repeatedly refused it, stating that “the value is in the ground,” and there was nothing to worry about. In November 1989, when the Parkers received a supplier’s notice of intent to file a mechanic’s lien, they asked Paleólogos and Galeone about the builder’s financial status. Galeone told Dr. Parker that he “knew nothing of” the liens and “would look into it.” Paleólogos told Dr. Parker that he was experiencing a cash-flow problem but was seeking refinancing to continue the project and that the “lien would be taken care of.” Dr. Parker spoke the next day to Galeone who purportedly reassured him; *358 Dr. Parker then relayed to Galeone the builder’s assurances.

In February, 1990, the Parkers learned that in order to complete the project according to its original specifications and to build the necessary road mandated by county regulations, a sum of approximately $350,000 would be necessary, in addition to the existing construction balance of $300,000 and the land loan of $144,000. Even if this amount was reduced by $160,000 in proceeds from their former home, the remaining balance of $634,000 was “far beyond Plaintiffs’ means” and “substantially higher than the $385,000 mortgage balance originally contemplated.” The Parkers ceased making payments on their loan to Columbia. 7 The Parkers assert that if Columbia had not “engaged in the misrepresentations, concealments and silence” alleged in the complaint, they would never have entered into the loan agreement and/or “would have timely undertaken steps to investigate further and would have sought competent professional assistance to salvage the project within budget” and thereby avoided thousands of dollars in damages.

In November, 1990, the Parkers filed a complaint against Columbia for fraud, fraudulent concealment, negligence, negligent misrepresentation, breach of fiduciary duty, and civil conspiracy. They subsequently amended their complaint to include as defendants Galeone and John M. Bond, a director of the bank, and to add counts for fraud in the inducement and breach of contract. On May 24, 1991, the action was dismissed. 8 Also in November, 1990, Galeone as trustee and Louis J. Ebert as substitute trustee acted to foreclose on a deed of trust, which encumbered the Parkers’ building lot and the partially completed house. The Parkers *359 sought an interlocutory injunction and a stay of the foreclosure sale, which were denied. After the foreclosure sale, the Parkers filed exceptions to the trustees’ report of sale, which were overruled after a hearing on the merits. The Parkers appealed the order to dismiss, except for the dismissal of the civil conspiracy count, and the order ratifying the foreclosure sale.

(ii)

Many of the counts in the Parkers’ complaint involve their central claim that special circumstances exist here which trigger a duty on the part of appellees to the Parkers; two counts, however, are not premised on any claim of duty. These are: fraud (including fraudulent misrepresentation and fraudulent inducement) and breach of contract. We consider these counts first.

In order to recover on a claim for fraud, a plaintiff must show: (1) that the defendant made a false representation; (2) that its falsity was either known to the defendant, or the misrepresentation was made with such reckless indifference to the truth as to be equivalent to actual knowledge; (3) that it was made for the purpose of defrauding the person claiming to be injured thereby; (4) that such person not only relied upon the misrepresentation, but had a right to rely upon it in the full belief of its truth, and would not have done the thing from which the injury had resulted had not such misrepresentation been made; and (5) that such person actually suffered damage directly resulting from such fraudulent misrepresentation. Martens Chevrolet, Inc. v. Seney, 292 Md. 328, 333, 439 A.2d 534, 537 (1982) (quoting Gittings v. Von Dorn, 136 Md. 10, 15-16, 109 A. 553, 554-555 (1920)). It seems clear that the Parkers’ allegations, if proved, do satisfy the second, third, and fifth elements of a cause of action for fraud. Accordingly, we turn our attention to the first and fourth elements.

In order to constitute a “false representation,” a statement must be a misrepresentation of material fact. Snyder v. Herbert Greenbaum & Associates, 38 Md.App. *360 144, 148, 380 A.2d 618, 621 (1977). It cannot be an “estimate” or “opinion,” id. at 149, 380 A.2d at 622, or “puffing.” Po lson v. Martin, 228 Md. 343, 346, 180 A.2d 295, 296-297 (1962). See also Howard v. Riggs Nat’l Bank, 432 A.2d 701, 706 (D.C.1981) (bank officer’s recommendation to customer of contractor whose work was “very good ... very beautiful” did not constitute misrepresentation of fact). Galeone’s alleged misrepresentations as to his own experience in loan administration and Paleólogos’ qualifications and the September, October, and November assurances that “the value is in the ground” and there is “nothing to worry about,” clearly fall in the category of “opinion” rather than fact. See, Snyder, 38 Md.App. at 148, 380 A.2d at 621; Howard, 432 A.2d at 706. Moreover, the assurances made in the fall are very similar to the “puffing” statements discounted in Poison, 228 Md. at 346-347, 180 A.2d at 297. (Just as Galeone refused to ask bank lawyers to investigate Paleólogos because the “value was in the ground,” the seller in Poison told the buyer that he would not give a guarantee because the seller would not “need one” since the house was built according to the code specifications).

The remainder of the representations — that Columbia would protect the Parkers, that Columbia would permit construction draws only after inspections to be sure that work had been done in accordance with the approved draw schedule, and that Columbia would provide a new builder to construct the project at the contracted price if Paleólogos defaulted — do, however, constitute statements of fact. These statements reflect expressions of future conduct, but they also reflect a present intention to perform those future acts. Maryland law is clear that, while “fraud cannot be predicated on statements that are merely promissory in nature, or upon expressions as to what will happen in the future,” Levin v. Singer, 227 Md. 47, 63, 175 A.2d 423, 431-432 (1961); see also Howard v. Riggs Nat’l Bank, supra, 432 A.2d at 706, “the existing intention of a party at the time of contracting is a matter of fact” and “fraud may be *361 predicated on promises made with a present intention not to perform them.” Levin, supra, 227 Md. at 63-64, 175 A.2d at 431-432. See also Tufts v. Poore, 219 Md. 1, 147 A.2d 717 (1959); Bocchini v. Gorn Management Co., 69 Md.App. 1, 21, 515 A.2d 1179, 1189-1190 (1986).

Nor do we believe that the three remaining alleged misrepresentations can be dismissed on the ground that there was no reasonable reliance on them which resulted in injury. Reasonable reliance is one of the most slippery aspects of a fraud case. It is particularly slippery here because, since the Parkers had entered into a construction contract with Paleólogos months before applying for a loan from Columbia, it would be exceedingly difficult for them even to allege that they reasonably relied upon any representations by Columbia in contracting with Paleólogos. Compare Yousef v. Trustbank, 81 Md.App. 527, 536, 568 A.2d 1134, 1138 (1990); Garner v. Hickman, 709 P.2d 407, 409-10 (Wyo.1985). This is not, however, what the Parkers allege. Rather, they allege that they reasonably relied upon Galeone’s representations in determining whether to contract with Columbia for the loan; that, in fact, their land contract had a financing contingency; and that, in any event, but for Galeone’s representations, they would not have entered into the loan agreement with Columbia and incurred the damages resulting from its mismanagement of the loan. 9

In determining if reliance is reasonable, a court is required to “view the act in its setting, which will include *362 the implications and promptings of usage and fair dealing.” Giant Food, Inc. v. Ice King, Inc., 74 Md.App. 183, 192, 536 A.2d 1182, 1186, cert. denied, 313 Md. 7, 542 A.2d 844 (1988) (quoting Glanzer v. Shepard, 233 N.Y. 236, 240-41, 135 N.E. 275 (1922) (Cardozo, J.)). The Parkers are well educated, professional people. They specifically allege, however, that they had little or no experience in real estate transactions; had never built a custom home; were relying on Columbia’s counsel, advice and representations regarding all aspects of the project that related to financing; and that Columbia and its agents knew of the Parkers’ lack of sophistication and reliance. A commercial borrower’s reliance on these sorts of representations (particularly that the bank was protecting the borrower’s interest and would provide a new builder to construct the project at the contracted price if the original builder defaulted) might well be unreasonable as a matter of law. We cannot find, at this stage in the proceedings, however, that reliance on these representations by the Parkers, who were not commercial borrowers but allegedly unsophisticated and inexperienced residential borrowers, is unreasonable as a matter of law.

Columbia asserts that all three remaining representations are contradicted “by the express terms” of the loan agreement between Columbia and the Parkers and so parol evidence as to them must be rejected. See Trotter v. Lewis, 185 Md. 528, 45 A.2d 329 (1946) (written contract merges all prior and contemporaneous negotiations on the subject matter of the contract). The bank concedes that a “limited exception to the parol evidence rule permits the introduction of promissory fraud to establish that a written contract was fraudulently induced.” See Schmidt v. Millhauser, 212 Md. 585, 130 A.2d 572 (1957). Citing cases from other jurisdictions, Columbia maintains, however, that courts have “generally held” that this “limited exception” is not applicable, and that “parol evidence of promissory fraud may not be introduced to contradict the express terms of the written contract.”

*363 Our review of out-of-state case law on the subject indicates that courts are divided on the question. Some jurisdictions have held parol evidence cannot be introduced to prove a representation “directly at variance” with a writing. See, e.g., Davis v. Gulf Oil Corp., 572 F.Supp. 1393, 1400-01 (C.D.Calif.1983) (applying California law). See also Runnemede Owners, Inc. v. Crest Mortgage Corp., 861 F.2d 1053, 1058-59 (7th Cir.1988) (applying Illinois law). Other courts have expressly rejected this view. See, e.g., Delta Services & Equipment, Inc. v. Ryko Mfg. Co., 908 F.2d 7, 12 (5th Cir.1990) (applying Iowa law) (if fraud is alleged, parol evidence may be considered which “adds to, varies or contradict the express terms of the written contract”); Tandy Brands v. Harper, 760 F.2d 648, 651, n. 1 (5th Cir.1985) (applying Texas law) (“fraudulent statements made in the inducement of a contract are admissible regardless of whether they contradict” its written terms); Wilburn v. Stewart, 110 N.M. 268, 270, 794 P.2d 1197, 1199 (N.M.1990). Although this precise question has never been addressed in Maryland, both the Court of Appeals and this court have cited Professor Corbin to the effect that, in determining issues of fraud, “there is no parol evidence rule to be applied.” Whitney v. Halibut, Inc., 235 Md. 517, 527, 202 A.2d 629, 633 (1964); Smith v. Rosenthal Toyota, Inc., 83 Md.App. 55, 63, 573 A.2d 418, 422, cert. denied, 320 Md. 800, 580 A.2d 219 (1990). Accordingly, we do not believe that, in Maryland, the parol evidence rule bars evidence as to any assertedly fraudulent misrepresentations. 10

*364 The terms of a written contract can, of course, be used as evidence of the reasonableness of the Parkers’ reliance upon alleged misrepresentations contrary to those terms. See Entre Computer Centers, Inc. v. FMG of Kansas City, Inc., 819 F.2d 1279, 1286 (4th.Cir.1987), overruled on different grounds, Busby v. Crown Supply, Inc., 896 F.2d 833 (4th Cir.1990) (“a person cannot reasonably rely upon ... allegedly fraudulent statements made in the face of plainly contradictory contractual language”). In light of the fact that fraud must be established by clear and convincing evidence, it well may be that when the facts are more fully developed, a court will conclude, as a matter of law, that the reliance here was not reasonable. 11 See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 254, 106 S.Ct. 2505, 2513, 91 L.Ed.2d 202 (1986).

In the amended complaint, however, the Parkers have alleged a cause of action in fraud against the appellees (except for Bond), 12 as to the following alleged misrepresentations by Galeone: (1) Galeone and Columbia would protect the Parkers’ interest, as well as Columbia’s, throughout the construction of the house, while in fact Galeone had no intention of protecting the Parkers’ interest unless it coincided with Columbia’s; (2) construction draws would only be *365 issued after Columbia had obtained inspections to insure that work had been done in accordance with the draw schedule, while in fact Columbia inte*' ' to advance funds ahead of the draw schedule and regaialess of draw inspections if requested by Paleólogos; and (3) in the event of default by Paleólogos and Evangelos, Columbia “would find or recommend another builder and would see that the house was completed within budget” while, in fact, Columbia intended to provide no such protection to the Parkers.

(iii)

The Parkers’ breach of contract claim alleges a violation of the express terms of the contract and of an implied duty of good faith. First, the Parkers assert that Columbia breached the express terms of Article 9, Section 9.1 of the loan agreement by disbursing draws when the loan was out of balance. Section 9.1 provides:

Lender's Duty to Disburse — Lender agrees, upon Borrower’s compliance with all conditions precedent to the Opening of the Loan, and provided the Loan is in balance, to open the Loan hereunder and to continue to disburse the same so long as the Loan remains in balance and Borrowers have complied with all conditions precedent from time to time and is not in default hereunder.

This section does not prohibit Columbia from disbursing draws if the loan is out of balance; it merely provides that Columbia is not obligated to disburse draws when the loan is out of balance. By its terms, Section 9.1 is for Columbia’s protection, not the Parkers’. Columbia was not contractually obligated to make sure that the Parkers’ loan remained in balance. Rather, it was the Parkers who were obligated to maintain the loan in balance. Indeed, to the extent that the loan became out of balance, the Parkers were expressly obligated, under Section 8.1 of the loan agreement, to invest additional funds in the project to rectify the problem.

The Parkers also allege that Columbia breached an implied duty of good faith and fair dealing “by advanc *366 ing the builder funds for work not done, failing to disclose to the Parkers the true financial condition of the project and by actively misleading” the Parkers as to its condition. Under Maryland law, a duty of good faith and fair dealing is an implied term in certain contracts, see Food Fair Stores, Inc. v. Blumberg, 234 Md. 521, 535-36, 200 A.2d 166, 174-175 (1964), but this duty simply prohibits one party to a contract from acting in such a manner as to prevent the other party from performing his obligations under the contract. See Automatic Laundry Service v. Demas, 216 Md. 544, 141 A.2d 497 (1958). Thus, the duty of good faith merely obligates a lender to exercise good faith in performing its contractual obligations; it does not obligate a lender to take affirmative actions that the lender is clearly not required to take under its loan documents. See Centennial Industries, Inc. v. Union Trust Company of Maryland, 75 Md.App. 202, 540 A.2d 1169, cert. denied, 313 Md. 505, 545 A.2d 1343 (1988). See also Taggart & Taggart Seed, Inc. v. First Tennessee Bank, 684 F.Supp. 230 (E.D.Ark.1988), aff'd, 881 F.2d 1080 (8th Cir.1989); Badgett v. Security State Bank, 116 Wash.2d 563, 807 P.2d 356 (1991); Creeger Brick & Bldg. Supply v. Mid-State Bank & Trust Co., 385 Pa.Super. 30, 560 A.2d 151 (1989); Coles Department Store v. First Bank, 240 Mont. 226, 783 P.2d 932 (1989); Thormahlen v. Citizens Savings & Loan, 73 Or.App. 230, 698 P.2d 512, rev. denied, 299 Or. 443, 702 P.2d 1111 (1985).

Here, the Parkers have not alleged that Columbia prevented them from performing any of their contractual obligations under the loan agreement. The Parkers have merely alleged that Columbia failed to take certain actions that Columbia was clearly not required to take under the loan agreement. In essence, the Parkers contend that Columbia should have protected their interests by monitoring Evangelos’s work to make sure that the loan was in balance and that Evangelos was performing the work covered by each draw. Columbia, however, as discussed above, had no obligation under the loan agreement to make sure that the loan was in balance. Similarly, Columbia had no obligation *367 under the loan agreement to inspect Evangelos’s work to make sure that the work covered by each draw had been performed. Rather, Section 12.10 of the loan agreement expressly provided that any actions taken by Columbia to inspect or monitor the builder’s work was exclusively for Columbia’s benefit. Accordingly, Columbia had no contractual obligation to do any of the things that the Parkers alleged it should have done, and so the court below did not err in dismissing the Parkers’ breach of contract claim.

(iv)

In order to state a cause of action as to all of their remaining claims — fraudulent concealment, negligent misrepresentation, negligence, and breach of fiduciary duty— the Parkers must demonstrate a duty owed to them by Columbia. See Impala Platinum v. Impala Sales, Inc., 283 Md. 296, 323, 389 A.2d 887, 903 (1978) (ordinarily, nondisclosure does not constitute fraud unless there exists a duty of disclosure); Martens Chevrolet v. Seney, supra, 292 Md. at 337, 439 A.2d at 539 (in order to state a claim for negligent misrepresentation, plaintiff must allege that defendant, who had a duty oí care to plaintiff, negligently asserted a false statement); Jacques v. First Nat’l Bank, 307 Md. 527, 531, 515 A.2d 756, 758 (1986) (in order to state a claim for negligence, plaintiff must allege a duty owed by the defendant to plaintiff); Restatement (Second) of Torts § 874, comment b (1979) (in order to state a cause of action for breach of fiduciary duty, plaintiff must allege a breach of fiduciary duty to him causing damages).

In pressing these claims, the Parkers heavily rely upon Jacques v. First Nat’l Bank, supra. There, the Court of Appeals held that a bank, which contracted for a specified fee to process a residential loan application, was required to “use reasonable care” in doing so. Id. at 540, 515 A.2d at 762. Thus, as Judge McAuliffe carefully explained for the Court in Jacques, the basis for the duty of care was an express, albeit oral, contract. As we have held, supra, here Columbia did not breach its contract with the Parkers. *368 Accordingly, unlike Jacques, no contractual promise provides a predicate for a tort duty of reasonable care here.

Moreover, recently in Yousef v. Trustbank Sav., F.S.B., 81 Md.App. 527, 568 A.2d 1134 (1990), we reiterated a long-standing principle of Maryland law that the relationship of a bank to its customer in a loan transaction is ordinarily a contractual relationship between a debtor and a creditor, and is not fiduciary in nature. Id. at 536, 568 A.2d at 1138 (citing University Nat’l Bank v. Wolfe,