              United States Court of Appeals
                        For the Eighth Circuit
                    ___________________________

                            No. 12-3161
                    ___________________________

                              Cynthia L. Roers

                   lllllllllllllllllllll Plaintiff - Appellant

                               Alan J. Roers

                                     Plaintiff

                                       v.

Countrywide Home Loans, Inc.; Countrywide Bank, N.A.; LandSafe Appraisal
                Services, Inc., a Minnesota corporation

                  lllllllllllllllllllll Defendants - Appellees
                     ___________________________

                            No. 12-3252
                    ___________________________

                              Cynthia L. Roers

                                llllllPlaintiff

                                Alan J. Roers

                   lllllllllllllllllllll Plaintiff - Appellant

                                       v.
  Countrywide Home Loans, Inc.; Countrywide Bank, N.A.; LandSafe Appraisal
                  Services, Inc., a Minnesota corporation

                       lllllllllllllllllllll Defendants - Appellees
                                        ____________

                     Appeals from United States District Court
                    for the District of Minnesota - Minneapolis
                                   ____________

                              Submitted: June 14, 2013
                               Filed: August 30, 2013
                                   ____________

Before LOKEN, BEAM, and BYE, Circuit Judges.
                           ____________

BYE, Circuit Judge.


       Cynthia and Alan Roers appeal the district court's grant of summary judgment
in favor of Countrywide Home Loans, Countrywide Bank, Bank of America, and
LandSafe Appraisal Services (collectively "Countrywide") on their claims of
intentional and negligent misrepresentation, breach of fiduciary duty, and for
rescission of contracts. We affirm the judgment of the district court with respect to
the claims of misrepresentation and breach of fiduciary duty. On the Roerses' claims
for rescission, we reverse and remand for further proceedings consistent with this
opinion.

                                            I

       In July 2006, Alan and Cynthia Roers expressed interest in purchasing property
(the "ranch") located in Minnetrista, Minnesota. The seller represented to the Roerses


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that the ranch consisted of forty-five acres, divided into twenty-five acres in the rear,
on which the house was located, and twenty acres in the front.

       Unable to finance the purchase himself, Alan Roers worked with Countrywide
representative Jodi Ennen to obtain a loan. Ennen discovered that Cynthia separately
owned three parcels of property, two in Edina, Minnesota, and one in Minnetrista,
Minnesota, all of which were encompassed by a prenuptial agreement. After
repeatedly expressing to Ennen her reluctance to encumber her own properties,
Cynthia ultimately agreed to mortgage the three properties to secure the necessary
funding for the ranch. The two properties in Edina were encumbered in the amount
of $350,000 each, and the property in Minnetrista was encumbered in the amount of
$446,800, for a total of $1,146,800. The Roerses aver Countrywide assured them the
front twenty acres of the ranch could be subdivided and sold to pay off the mortgages
on Cynthia's properties.

       In the fall of 2006, in connection with the sale, Countrywide conducted two
appraisals on the ranch through its subsidiary Landsafe. Both appraisals concluded
the ranch consisted of just over forty-five acres of land, valued between $4.1 and $4.2
million. Alan Roers individually entered into a purchase agreement with the seller
for $4.1 million and a mortgage agreement with Countrywide for $2,870,000, for a
total of four mortgage agreements through Countrywide, valued collectively at
$4,016,000.

      Closing took place on December 29, 2006, at which the Roerses were
represented by their then-attorney. The purchase was financed with loans on the
ranch itself and on Cynthia's three non-marital properties. Consistent with the
purchase agreement description, the mortgage on the ranch identified the mortgaged
property as "20 County Road 20," located within Section 6, Township 117, Range 24,
in Hennepin County. The Roerses began residing at the ranch shortly after closing.



                                          -3-
        In April 2007, Cynthia Roers noticed a "For Sale" sign on the front twenty
acres of the ranch. The Roerses then learned that, contrary to their understanding, the
purchase agreement had only transferred possession of the rear twenty-five acres of
the ranch and made no provision for the front twenty acres. They sued the seller, the
seller's realtor, and the real estate agency in state court alleging fraud, negligent
misrepresentation, breach of fiduciary duty, and breach of contract. Ultimately, the
parties reached a confidential settlement, and the seller still owns the front twenty
acres of the ranch.

       In 2009, the Roerses divorced. Alan continues to reside on the ranch but has
fallen in arrears on his mortgage payments. Accordingly, Countrywide has initiated
foreclosure proceedings on the ranch. Because the Roerses were unable to sell the
front twenty acres of the ranch as they had expected, Cynthia's nonmarital properties
remain encumbered and may also be foreclosed upon.

       On July 26, 2010, Cynthia filed suit against Countrywide Home Loans,
Countrywide Bank, and LandSafe, alleging claims of intentional and negligent
misrepresentation, and seeking rescission of the mortgage agreements on her
nonmarital properties based upon the parties' mutual mistake of fact. Alan separately
filed suit against Bank of America1 and LandSafe on October 10, 2010, asserting
claims of negligent misrepresentation, breach of fiduciary duty, and seeking
rescission of all four mortgage agreements. The district court consolidated both cases
and granted summary judgment in favor of Countrywide on all claims. The Roerses
each appeal.2


      1
        Alan Roers refers to Bank of America and Countrywide interchangeably. In
the interest of concision, both entities are referred to here as "Countrywide."
      2
       These appeals were argued consecutively before our panel on June 14, 2013,
and, in light of their significant factual and legal commonality, have now been
consolidated for disposition.

                                         -4-
                                           II

       We review a grant of summary judgment de novo, applying the same standard
as the district court. Jaurequi v. Carter Mfg. Co., 173 F.3d 1076, 1085 (8th Cir.
1999). Summary judgment shall be awarded to a party if there exists no genuine issue
as to any material fact and the moving party is entitled to judgment as a matter of law.
Fed. R. Civ. P. 56(a). When ruling on a summary judgment motion, a court must
view the evidence "in the light most favorable to the nonmoving party." Dush v.
Appleton Elec. Co., 124 F.3d 957, 962-63 (8th Cir. 1997) (citing F.D.I.C. v. Bell, 106
F.3d 258, 263 (8th Cir. 1997)).

             A. Rescission of Mortgages on the Nonmarital Properties

       The Roerses first appeal the district court's grant of summary judgment in favor
of Countrywide on their claims for rescission of the three mortgage agreements
involving Cynthia's nonmarital properties. In cases involving a mutual mistake of
fact, Minnesota courts have adopted the Restatement (Second) of Contracts § 152.
See Winter v. Skoglund, 404 N.W.2d 786, 793 (Minn. 1987). Section 152(1)
provides,

      Where a mistake of both parties at the time a contract was made as to a
      basic assumption on which the contract was made has a material effect
      on the agreed exchange of performances, the contract is voidable by the
      adversely affected party unless he bears the risk of the mistake.

The Roerses argue each element is met in this case because (1) the parties were
mutually mistaken in their belief that the entire ranch was being sold and financed;
(2) the mistake was material to the parties' decision to enter into the mortgage
agreements; and (3) the mistake so imbalanced the agreed upon exchange that they
cannot fairly be required to carry it out.


                                          -5-
                      1. Existence of a Mutual Mistake of Fact

         The Roerses must first prove the existence of "a mistake of both parties at the
time a contract was made as to a basic assumption on which the contract was made
. . . ." Restatement (Second) of Contracts § 152(1) (1981). Both the Roerses and
Countrywide admit they were mistaken as to the amount of land being sold and,
therefore, financed, with the ranch at the time they entered into the mortgage
agreements on Cynthia's nonmarital properties. Accordingly, the remaining issue is
whether the amount of land being purchased was a basic assumption on which the
mortgage agreements were made.

       We are unpersuaded by Countrywide's assertion that mortgage agreements are
purely financial in nature and are, therefore, merely an exchange of monetary
promises wholly separate from the collateral they are intended to fund. Countrywide
conducted two appraisals on the ranch to determine its value and the corresponding
sum the Roerses would need to obtain for its purchase. We note the very act of
appraising land prior to financing a mortgage suggests the metes and bounds of a
property are a "basic assumption on which [a mortgage] contract [i]s made." See
Restatement (Second) of Contracts § 152(1). Here, the appraisals identified a forty-
five-acre parcel valued between $4.1 and $4.2 million. To reach the agreed-upon sum
of $4.1 million, Cynthia agreed to encumber her nonmarital properties for a total of
$1,146,800.

       In other words, based on the assumption the Roerses were purchasing a forty-
five-acre property, Countrywide made the assumption the Roerses would require $4.1
million in financing, and the parties entered into a trio of mortgage agreements to
satisfy a portion of that debt. Countrywide cannot fairly argue the size and,
consequently, the value of the ranch was not a basic assumption on which it and the
Roerses relied in mortgaging her nonmarital properties. Accordingly, we conclude,
at a minimum, a fact question exists as to whether the parties were operating under

                                          -6-
a mutual mistake as to a basic assumption on which the mortgage agreements were
made. See Aronovitch v. Levy, 56 N.W.2d 570, 575 (Minn. 1953) (noting existence
of a mutual mistake is a question of fact for the fact finder’s determination).

                            2. Materiality of the Mistake

      Having established a mutual mistake of fact existed at the time the parties
entered into the mortgage agreements, we next consider whether the mistake had "a
material effect on the agreed exchange of performances . . . ." Id. For a mistake to
be material, it must go to the "very nature of the property," rather than merely to its
monetary value. Gartner v. Eikill, 319 N.W.2d 397, 399 (Minn. 1982); see also
Sheng v. Starkey Labs., Inc., 117 F.3d 1081, 1084 (8th Cir. 1997) ("Before a
misconception will render a contract voidable, it must be more th[a]n an error about
the monetary value of the consideration; it must go to the very nature of the deal.").
Countrywide argues the parties' mistake as to the ranch's acreage relates only to the
property's value and was, thus, immaterial with respect to the financing agreement.
We disagree.

        Acreage undoubtedly affects the monetary value of a land sale and any
contingent finance agreements. It is illogical, however, to argue that because a
mistake affects the value of the bargain, it is rendered immaterial. Indeed, it is
difficult to conceive of a mistake which would have no effect on value but could
nevertheless be construed as material. The mistake in this case is not one in which
the parties erroneously believed the ranch was worth $4.1 million only to discover
later that it is not. Rather, the parties assumed the Roerses were purchasing a tract of
land substantially distinct from the property they ultimately acquired (i.e., a twenty-
five-acre lot versus a forty-five-acre lot). Surely, this is a mistake as to the "very
nature of the property," whatever effect it may ultimately have on the property's
value.



                                          -7-
       Moreover, the Roerses aver they would not have entered into the mortgage
agreements but for Countrywide's assurance they could subdivide and sell the front
twenty acres of the ranch. Because the Roerses received approximately one half of
the land they anticipated and Cynthia's properties accounted for less than one half of
the ultimate purchase price, it is conceivable Cynthia would never have mortgaged
her three properties were the parties not laboring under their mistaken assumption
with respect to the ranch. Construing the facts, as we must, in the Roerses' favor, we
conclude a fact question remains as to whether the ranch's acreage and corresponding
value were material to the finance agreements for Cynthia's separate properties.

                             3. Adversely Affected Party

       The district court ultimately held "[e]ven if the amount of land was a basic
assumption on which the exchange was based, . . . Alan and Cynthia are not entitled
to relief under the doctrine of mutual mistake because Alan and Cynthia are not the
adversely affected parties." It reasoned "[f]or a party to show it is adversely affected,
it must demonstrate 'the exchange is not only less desirable to him but is also more
advantageous to the other party.'" Restatement (Second) of Contracts § 152 cmt. c
(1981). Because the Roerses received the financing they sought, whereas
Countrywide did not receive the forty-five-acre ranch it anticipated as a security
interest, the district court determined Countrywide had been the truly adversely
affected party. We find this reasoning misguided.3


      3
       Countrywide argues the Roerses failed to assign error to the district court's
finding that they were not the adversely affected party and have thus waived the error.
We disagree. The Roerses' briefs assert the parties' mistake is so imbalanced that they
cannot fairly be required to carry out their agreement. This argument is clearly
derived from comment (c) of § 152(1), on which the district court relied in its analysis
regarding the adversely affected party. Moreover, by arguing that enforcement of the
agreement would be unfair to them, the Roerses inherently label themselves the
adversely affected party.

                                          -8-
       Section 152(1) suggests an "adversely affected party" may seek rescission of
a contract on the grounds of a mutual mistake. Comment (c) to that section provides
guidance on identifying an adversely affected party:

      He must show that the resulting imbalance in the agreed exchange is so
      severe that he can not fairly be required to carry it out. Ordinarily he
      will be able to do this by showing that the exchange is not only less
      desirable to him but is also more advantageous to the other party.
      Sometimes this is so because the adversely affected party will give, and
      the other party will receive, something more than they supposed.
      Sometimes this is so because the other party will give, and the adversely
      affected party will receive, something less than they supposed. In such
      cases the materiality of the effect on the agreed exchange will be
      determined by the overall impact on both parties. In exceptional cases
      the adversely affected party may be able to show that the effect on the
      agreed exchange has been material simply on the ground that the
      exchange has become less desirable for him, even though there has been
      no effect on the other party. . . . The standard of materiality here . . . is
      a flexible one to be applied in the light of all the circumstances.

When read in context, it appears the district court's analysis misstates the standard set
forth in comment (c). To identify themselves as adversely affected, the Roerses are
not required to demonstrate the exchange is more advantageous to Countrywide, as
the district court suggests. Rather, comment (c) prescribes a totality-of-the-
circumstances approach, in which either or both parties may be adversely affected by
a mutual mistake. As an aside, it is difficult to conceive of a scenario in which a party
would seek to rescind a contract by which she is not adversely affected. We find no
textual or logical support for the district court's zero-sum treatment of this issue.

       Just as Countrywide received a lesser security interest in the ranch, the Roerses
received a lesser piece of collateral to offer in exchange for over four million dollars
in loans. Accordingly, they stand to lose not only the ranch, but also three separate
properties valued at approximately $1.15 million. In light of all the circumstances,

                                          -9-
we acknowledge the adverse effects to Countrywide if it cannot recoup its losses.
However, the district court erred in concluding as a matter of law that the Roerses are
not also adversely affected parties in this case. Whether the Roerses have been
adversely affected and are, therefore, eligible to seek rescission of the mortgage
agreements remains an open question to be resolved by a fact finder.

           B. Negligent Misrepresentation & Breach of Fiduciary Duty

       Alan next argues the district court erred in granting summary judgment in favor
of Countrywide on his claims of negligent misrepresentation and breach of fiduciary
duty. Both claims are premised on Jodi Ennen's representation that the Roerses
would be able to subdivide and sell the front twenty acres of the ranch to satisfy the
debts on Cynthia's nonmarital properties. The district court concluded both claims
failed because Alan could not show Ennen owed the Roerses a duty of care. See
Florenzano v. Olson, 387 N.W.2d 168, 173-74 (Minn. 1986) (a claim for negligent
misrepresentation requires a showing of negligence on the part of the misrepresenter);
Domagala v. Rolland, 805 N.W.2d 14, 22 (Minn. 2011) ("To recover for a claim of
negligence, a plaintiff must prove (1) the existence of a duty of care, (2) a breach of
that duty, (3) an injury, (4) that the breach of the duty of care was a proximate cause
of the injury."). We agree.

       The general rule in Minnesota is that "lenders bear no fiduciary duty to
borrowers." Ming'ate v. Bank of Am., N.A., No. 11-1787, 2011 WL 4590431, at *5
(D. Minn. Sept. 30, 2011) (applying Minnesota law). Here, however, Alan argues
Ennen fostered a "special relationship" with the Roerses beyond a typical lender-
borrower relationship by offering to "quarterback" the deal and inducing Cynthia's
reluctant agreement to mortgage her nonmarital properties. Minnesota courts have
recognized a special relationship giving rise to a fiduciary relationship between a
bank and its customers when (1) the bank knows or has reason to know the customer
is placing trust and confidence in the bank and relying on the bank to counsel and

                                         -10-
inform him, see Klein v. First Edina Nat'l Bank, 196 N.W.2d 619, 623 (Minn. 1972);
(2) confidence is placed on the bank which results in superiority and influence over
the customer, see Midland Nat'l Bank of Minneapolis v. Perranoski, 299 N.W.2d 404,
413 (Minn. 1980); (3) combined with a confidential relationship, the bank has greater
access to facts and legal resources, see May v. First Nat'l Bank of Grand Forks, 427
N.W.2d 285, 289 (Minn. Ct. App. 1988); or (4) the bank and the customer have
disparate levels of business experience and the bank invites the customer to place his
confidence in the bank, see Murphy v. Country House, Inc., 240 N.W.2d 507, 512
(Minn. 1976).

       Alan has provided no evidence to suggest any of the above circumstances is
present here. Ennen evaluated the Roerses' assets, offered them options to procure
the financing they required to purchase the ranch, and relied upon a third-party's
appraisal to formulate the ultimate mortgage agreements. Having reviewed the record
before the district court, we agree with its conclusion that Ennen and the Roerses
were parties to a typical borrower-lender relationship in which Ennen owed no duty
of care to the Roerses under Minnesota law. Accordingly, the district court did not
err in granting Countrywide's motion for summary judgment on Alan's claims for
negligent misrepresentation and breach of fiduciary duty.

                         C. Claims Abandoned on Appeal

       Both Alan and Cynthia purport to appeal the district court's order, granting
summary judgment in favor of Countrywide, in its entirety. Aside from the claims
discussed above, however, neither Cynthia nor Alan addresses any remaining claims
on appeal. Specifically, Cynthia's brief argues the district court erred only with
respect to her rescission claim and makes no mention of her claims for intentional or
negligent misrepresentation. Similarly, Alan's brief echoes Cynthia's arguments
regarding rescission for her nonmarital properties but makes no mention of his claim
for rescission of the mortgage agreement on the ranch itself. By failing to assign

                                        -11-
error to those portions of the district court's order, the Roerses have waived any
alleged error with respect to those findings. See United States v. Gonzales, 90 F.3d
1363, 1369-70 (8th Cir. 1996).

                                         III

       For the foregoing reasons, we affirm the judgment of the district court with
respect to the Roerses' claims of intentional and negligent misrepresentation, breach
of fiduciary duty, and for rescission of the mortgage agreement on the ranch. With
respect to the Roerses' mutual-mistake claims regarding Cynthia's nonmarital
properties, the judgment of the district court is reversed. On those claims, we remand
for further proceedings consistent with this opinion to determine whether the Roerses
should be permitted to rescind the mortgage agreements by returning to Countrywide
the $1,146,800 owed in exchange for unencumbrance of the affected properties.
                        ______________________________




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