                           NOT FOR PUBLICATION

                    UNITED STATES COURT OF APPEALS
                                                                           FILED
                            FOR THE NINTH CIRCUIT
                                                                           OCT 25 2016
                                                                        MOLLY C. DWYER, CLERK
                                                                         U.S. COURT OF APPEALS
BANK OF AMERICA, N.A.,                           No. 14-35428

              Plaintiff-counter-                 D.C. No. 1:11-cv-00656-EJL
              defendant-Appellee,

 v.                                              MEMORANDUM*

NANCY K. ENRIGHT; LEE P.
ENRIGHT,

              Defendants-counter-
              claimants-Appellants,

MERRILL LYNCH PIERCE FENNER &
SMITH, INC., successor by merger to
Bank of America Investment Services,
Inc.,

              Counter-defendant-Appellee.


                    Appeal from the United States District Court
                              for the District of Idaho
                     Edward J. Lodge, District Judge, Presiding

                      Argued and Submitted October 4, 2016
                              Seattle, Washington

Before: W. FLETCHER, GOULD, and N.R. SMITH, Circuit Judges.


      *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
       Plaintiffs Nancy and Lee Enright appeal from the district court’s order

granting a motion to dismiss for failure to state a claim pursuant to Federal Rule of

Civil Procedure 12(b)(6) by defendants Bank of America, N.A. (Bank of America)

and Merrill Lynch Pierce Fenner & Smith, Inc. (Merrill Lynch). We have

jurisdiction under 28 U.S.C. § 1291 and we affirm.

       The present litigation began when Bank of America filed a complaint seeking

a deficiency judgment against the Enrights in Idaho state court in November 2011.

The Enrights removed the case to federal court. After obtaining leave to amend,

they filed an amended counterclaim against Bank of America and a claim adding

Merrill Lynch, a defendant as a successor-by-merger to Banc of America

Investment Services, Inc. Bank of America and Merrill Lynch filed a joint motion

to dismiss for failure to state a claim, which the district court granted with

prejudice. The parties later stipulated to an entry of judgment in favor of Bank of

America on the deficiency claim. The Enrights appealed, challenging the district

court’s dismissal with prejudice.

       We review a district court’s grant of a motion to dismiss de novo. Cervantes

v. Countrywide Home Loans, Inc., 656 F.3d 1034, 1040 (9th Cir. 2011). “To

survive a motion to dismiss, a complaint must contain sufficient factual matter,

accepted as true, to ‘state a claim to relief that is plausible on its face.’ ” Ashcroft v.



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Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S.

544, 570 (2007)).

      The Enrights allege six causes of action against Bank of America and Merrill

Lynch: breach of fiduciary duty; constructive fraud; fraud by failure to disclose;

intentional misrepresentation; negligence; and breach of implied covenant of good

faith and fair dealing.

      1. Fiduciary duty. Under Idaho law, a party claiming a breach of fiduciary

duty must show the defendant was “in a superior position to the other and that such

a position enables him to exercise influence over one who reposes special trust and

confidence in him,” and the “facts and circumstances must indicate that the one

reposing the trust has foundation for his belief that the one giving advice or

presenting arguments is acting not in his own behalf, but in the interests of the other

party.” High Valley Concrete, L.L.C. v. Sargent, 234 P.3d 747, 752 (Idaho 2010)

(internal quotations omitted). The Enrights failed to plead facts to support their

conclusory allegation that Robert Corker, an employee of Bank of America and/or

Banc of America Investment Services, was acting as their financial advisor. See

Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007) (“labels and

conclusions,” standing alone, are insufficient to state a claim). The only

relationship between the parties established by the facts as pleaded was that

between a lender and a borrower. A lender-borrower relationship, however, does

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not give rise to fiduciary duties under Idaho law. See Black Canyon Racquetball

Club, Inc. v. Idaho First Nat’l Bank, N.A., 804 P.2d 900, 905 (Idaho 1991).

      2. Constructive fraud. “[C]onstructive fraud comprises all acts, omissions

and concealments involving a breach of legal or equitable duty, trust, or confidence,

which result in damage to another.” Doe v. Boy Scouts of America, 356 P.3d 1049,

1054-55 (Idaho 2015) (citing McGhee v. McGhee, 353 P.2d 760, 762 (Idaho 1960)).

Relationships recognized by Idaho law as giving rise to a constructive fraud claim

include those between a lawyer and client, High Valley, 234 P.3d at 754, fiancees,

McGhee, 353 P.2d at 762, and tenants-in-common, Watts v. Krebs, 962 P.2d 387,

391-92 (Idaho 1998). The Enrights have failed to plead facts sufficient to establish

such a “relationship of trust and confidence” between themselves and Corker as an

agent of Bank of America and/or Banc of America Investment Services. See High

Valley, 234 P.3d at 752.

      3. Fraud by failure to disclose. The Enrights allege Bank of America and

Banc of America Investment Services committed fraud by failing to disclose: the

relationship between Corker, their alleged investment advisor, and Bank of

America; the relationship between Banc of America Investment Services, Corker’s

employer, and Bank of America; the compensation Corker received for procuring

the Enrights’ business; and the riskiness of the loan. “A duty to disclose exists in

the following circumstances: ‘(1) if there is a fiduciary or other similar relation of

                                            4
trust and confidence between the two parties; (2) in order to prevent a partial

statement of the facts from being misleading; or (3) if a fact known by one party

and not the other is so vital that if the mistake were mutual the contract would be

voidable, and the party knowing the fact also knows that the other does not know

it.’ ” James v. Mercea, 277 P.3d 361, 365-66 (Idaho 2012) (quoting Sowards v.

Rathbun, 8 P.3d 1245, 1250 (Idaho 2000)). None of these circumstances are

present: no relationship of trust and confidence existed between the Enrights and

Corker; no partial statement would have misled the Enrights as to Corker’s

employer or compensation structure; and the Enrights have failed to allege that

Bank of America or Merrill Lynch knew, and knew the Enrights did not know, a

fact “so substantial and fundamental” to the loan agreements as to defeat their

purpose. See Primary Health Network, Inc. v. State, Dep't of Admin., 52 P.3d 307,

312 (Idaho 2002).

      4. Intentional Misrepresentation. The Enrights allege that three statements

made by Corker, as an employee of Bank of America and/or Banc of America

Investment Services, were fraudulent: (1) a statement that the Enrights “qualified”

for two mortgages and a line of credit; (2) a statement that the Enrights could repay

their loans through the sale of their property in Idaho, which would occur within

two years; and (3) a threat to foreclose on the property in Idaho if the Enrights did

not make interest-only payments on the loan with their IRA funds. “In order to

                                           5
prevail on a fraud claim [under Idaho law], a plaintiff must show: (1) a statement or

a representation of fact; (2) its falsity; (3) its materiality; (4) the speaker's

knowledge of its falsity; (5) the speaker's intent that there be reliance; (6) the

hearer's ignorance of the falsity of the statement; (7) reliance by the hearer; (8)

justifiable reliance; and (9) resultant injury.” King v. Lang, 42 P.3d 698, 703-04

(Idaho 2002). The Enrights failed to show the statements meet the first two criteria.

The first statement was not false. The Enrights did qualify for the loans because

they actually entered into those loans, a fact the counter-complaint concedes. The

other two statements are opinions or predictions as to future events, which “cannot

form the basis of a fraud claim.” Country Cove Dev., Inc. v. May, 150 P.3d 288,

294 (Idaho 2006).

       5. Negligence. The Enrights allege that Bank of America and Banc of

America Investment Services were negligent in issuing loans to them in light of

their financial situation, and in advising them to use IRA funds to make payments

on the two mortgages after their line of credit was exhausted. The injuries alleged

by the Enrights are solely economic. Under Idaho law, an action in negligence will

not lie for purely financial injuries unless the plaintiff and defendant have a “special

relationship” under Idaho law. Duffin v. Idaho Crop Imp. Ass’n, 895 P.2d 1195,

1200-01 (Idaho 1995). A “special relationship” arises where a “professional or

quasi-professional performs personal services” or where “an entity holds itself out

                                              6
to the public as having expertise regarding a specialized function.” Blahd v.

Richard B. Smith, Inc., 108 P.3d 996, 1001 (Idaho 2005). No Idaho cases support

the Enrights’ claim that they had a “special relationship” with Bank of America or

Banc of America Investment Services on the facts as pleaded in the

countercomplaint. Cf. Black Canyon Racquetball Club, Inc. v. Idaho First Nat’l

Bank, N.A., 804 P.2d 900 (Idaho 1991) (no “special relationship” exists between a

commercial borrower and lender). The Enrights are therefore barred by the

economic loss rule from stating a claim for negligence.

         6. Finally, the Enrights claim that Bank of America breached its implied

covenant of good faith and fair dealing. “Good faith and fair dealing are implied

obligations of every contract,” Luzar v. Western Surety, 692 P.2d 337, 340 (Idaho

1984), but these duties “arise[] only in connection with terms agreed to by the

parties,” Idaho First Nat’l Bank v. Bliss Valley Foods, 824 P.2d 841, 863 (Idaho

1991) (quoting Badgett v. Security State Bank, 807 P.2d 356, 360 (Wash. 1991)).

The Enrights do not identify any terms of their loan agreements with Bank of

America that were breached. The district court was therefore correct to dismiss this

claim.

         Because the Enrights failed to plead facts sufficient to support their claims

for relief, the district court did not err in dismissing with prejudice.

         AFFIRMED.

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