                 United States Court of Appeals
                            For the Eighth Circuit
                        ___________________________

                                No. 12-2334
                        ___________________________

                      Affordable Communities of Missouri

                       lllllllllllllllllllll Plaintiff - Appellant

                                           v.

    Federal National Mortgage Association, a federally chartered corporation

                       lllllllllllllllllllll Defendant - Appellee

                EF&A Capital Corporation; EF&A Funding LLC

                            lllllllllllllllllllll Defendants
                                    ____________

                     Appeal from United States District Court
                  for the Eastern District of Missouri - St. Louis
                                  ____________

                            Submitted: March 12, 2013
                               Filed: May 9, 2013
                                ____________

Before MURPHY, SMITH, and GRUENDER, Circuit Judges.
                           ____________

MURPHY, Circuit Judge.

     Affordable Communities of Missouri purchased the Jefferson Arms
Apartments, a senior independent living complex in St. Louis, Missouri, in 1993. In
1999 Affordable refinanced its debt on Jefferson Arms with a loan from Eichler,
Fayne, and Associates (EFA) which would penalize Affordable if it voluntarily
prepaid the debt. EFA sold the loan to Federal National Mortgage Association
(Fannie Mae) but continued to service it. In 2005 the city of St. Louis threatened to
condemn Jefferson Arms, and Affordable sold the property to another developer.
EFA demanded that Affordable pay the prepayment penalty. Affordable disagreed
that it was subject to the penalty, and it sued EFA and Fannie Mae for negligent
misrepresentation, breach of contract, breach of the covenant of good faith and fair
dealing, and unjust enrichment. After Affordable settled its claims again EFA, Fannie
Mae moved to dismiss. The district court granted Fannie Mae's motion, concluding
that EFA had not acted as Fannie Mae's agent in originating the loan and that the loan
documents unambiguously authorized the prepayment penalty. Affordable appeals.
We affirm in part, reverse in part, and remand for further proceedings.

                                          I.

       Affordable is a Nevada limited partnership that owned the Jefferson Arms
Apartments, a senior independent living center in St. Louis, and its adjoining parking
garage. Jefferson Arms had been built at the beginning of the twentieth century, and
after purchasing it in 1993 Affordable invested significant funds renovating and
modernizing the property.

      In August 1998 Affordable contacted EFA seeking to refinance its existing
secured debt on Jefferson Arms. EFA originates loans secured by mortgages on
multifamily properties like Jefferson Arms, operating exclusively under Fannie Mae's
delegated underwriting and servicing (DUS) program. Since federal law prohibits
Fannie Mae from originating loans, see 12 U.S.C. § 1719(a)(2)(B), it operates the
DUS program to purchase loans on the secondary mortgage market. These loans
were originated and serviced by lenders such as EFA. Fannie Mae imposes certain
requirements on loans originated through the DUS program, and originators share
with Fannie Mae the associated risk of loss on any such loans.

                                         -2-
        Representatives of EFA and Affordable met to discuss refinancing. The EFA
representative explained that the DUS program penalized borrower prepayment
because that would cause Fannie Mae to forfeit expected interest income on the loan.
The EFA representative gave Affordable the choice between one of two prepayment
penalties. One was a "yield maintenance" option which would impose a onetime fee
upon prepayment. The second was a "defeasance" option which would allow Fannie
Mae to use prepayment funds to purchase securities at the prevailing rate for
mortgages on multifamily apartment buildings, and then to substitute those assets for
its lien on Jefferson Arms. Both prepayment penalties would be calculated to ensure
that Fannie Mae would collect no less if Affordable repaid the debt early. According
to Affordable, the EFA representative indicated that "the defeasance option should
cost a borrower less than the yield maintenance option." Based on this advice,
Affordable selected the defeasance option.

        EFA agreed to lend Affordable approximately $8 million, and in April 1999
they executed loan documents consisting of a "Fannie Mae Multifamily Note" and a
"Fannie Mae Multifamily Security Instrument." The security instrument incorporated
by reference an exhibit describing the defeasance provision, which stated that the
penalty would not apply in the case of "a prepayment occurring as the result of any
. . . condemnation award under the Security Instrument." Rather, in the event of
condemnation, any proceeds from the sale would be transferred to Fannie Mae to
satisfy the debt, and Affordable would not be liable for any additional fees. After
executing the loan, EFA sold and assigned it to Fannie Mae in the secondary
mortgage market.

      In 2005, the city of St. Louis threatened to use its eminent domain power to
acquire Jefferson Arms through condemnation. The city suggested that as an
alternative to condemnation, Affordable could convey Jefferson Arms to another
developer who would rehabilitate the property. Affordable agreed to sell Jefferson
Arms to the new developer, noting in its sale documents that the property was being

                                         -3-
transferred in lieu of the threatened condemnation. Affordable then wrote to EFA to
inform it of the sale and seek a release of its lien on the property. Since the sale had
occurred in lieu of condemnation, Affordable contended that it was covered by the
"condemnation award" exception in the loan documents and did not trigger the
prepayment penalty.

       Fannie Mae disagreed that the sale fell within any exception to the prepayment
penalty, and EFA informed Affordable on behalf of Fannie Mae that the lien would
not be released until the defeasance process was complete. To complete the process,
Affordable was required to pay a "defeasance deposit" equal to one percent of the
outstanding loan and to give Fannie Mae notice of the defeasance so it could purchase
securities to substitute for the mortgage on Jefferson Arms. Fannie Mae determined
that the appropriate substitute collateral was a Fannie Mae investment security with
an interest rate of less than five percent. Since the interest rate on Affordable's loan
was more than seven percent, Affordable was obligated to make up the difference.
In July 2006 Affordable completed the defeasance process, obtained a release of the
lien on Jefferson Arms, and sold the property to the new developer. Affordable
alleges that it paid Fannie Mae approximately $500,000 through the defeasance
process in addition to the outstanding loan balance.

       In March 2011 Affordable sued EFA and Fannie Mae in state court for
negligent misrepresentation, breach of contract, breach of the covenant of good faith
and fair dealing, and unjust enrichment. Affordable contended that EFA had
negligently misrepresented that the defeasance provision would cost less than the
yield maintenance option, and that Fannie Mae was vicariously liable for the
misrepresentation because EFA had acted as Fannie Mae's agent when it originated
the loan. Affordable also argued that EFA and Fannie Mae had breached the security
instrument by enforcing the prepayment penalty because the sale had occurred in lieu
of condemnation, and such a sale was exempted under the defeasance provision of the
loan documents. It sought to recover the $500,000 cost of the defeasance process.

                                          -4-
       The suit was removed to federal district court, and Affordable settled its claims
against EFA in May 2012. Fannie Mae then moved to dismiss Affordable's claims
against it. It argued that Affordable's negligent misrepresentation claim should be
dismissed because Affordable had failed to plead facts showing that EFA was acting
as Fannie Mae's agent when the alleged misrepresentation occurred. Fannie Mae also
contended that Affordable's claims for breach of contract, breach of the covenant of
good faith and fair dealing, and unjust enrichment should be dismissed because the
loan documents had unambiguously authorized the prepayment penalty. The district
court agreed with Fannie Mae and granted its motion to dismiss on all counts.

       Affordable appeals, arguing that the district court erred by concluding that
there had been no agency relationship between Fannie Mae and EFA when the loan
was executed and by determining that the loan documents exempted only
prepayments that were the result of an actual, not merely threatened, condemnation.

                                          II.

       We review the grant of a motion to dismiss de novo, taking the facts alleged
in the complaint as true. Zutz v. Nelson, 601 F.3d 842, 848 (8th Cir. 2010). To
survive a motion to dismiss, a complaint "need not include detailed factual
allegations," C.N. v. Willmar Pub. Sch., Indep. Sch. Dist. No. 347, 591 F.3d 624, 629
(8th Cir. 2010), but it must contain "enough facts to state a claim to relief that is
plausible on its face," Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). The
plausibility standard requires a plaintiff to "plead[] factual content that allows the
court to draw the reasonable inference that the defendant is liable for the misconduct
alleged." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).




                                          -5-
                                          A.

       Affordable first argues that the district court erred by concluding that EFA had
not acted as Fannie Mae's agent when it originated the loan secured by Jefferson
Arms. The parties agree that Missouri law governs. Three elements are required to
demonstrate an agency relationship under Missouri law: (1) the agent has the power
"to alter legal relationships between the principal and a third party," (2) the agent is
"a fiduciary of the principal," and (3) the principal has "the right to control the
conduct of the agent with respect to matters entrusted to the agent." State ex rel.
McDonald's Corp. v. Midkiff, 226 S.W.3d 119, 123 (Mo. 2007). The "absence of any
one of the three elements of agency defeats a claim that agency exists." State ex rel.
Bunting v. Koehr, 865 S.W.2d 351, 353 (Mo. 1993). Affordable bears the burden of
proving an agency relationship, and when there is no conflicting evidence the
existence of such a relationship is a question of law. Jennings v. City of Kansas City,
812 S.W.2d 724, 732–33 (Mo. Ct. App. 1991).

       The district court concluded that Affordable's complaint had not alleged
sufficient facts to satisfy any of the three elements of an agency relationship, and it
dismissed Affordable's negligent misrepresentation claim against Fannie Mae. It first
determined that EFA had no power to alter the legal relationship between Affordable
and Fannie Mae because "there was no legal relationship between [Affordable] and
Fannie Mae at all until Fannie Mae purchased" the loan. It similarly concluded that
a fiduciary relationship could not have existed between EFA and Fannie Mae before
the loan was purchased. The district court finally determined that Affordable failed
to demonstrate that Fannie Mae had the right to control EFA, because the fact that
"Fannie Mae mandated the form of the loan documents . . . does not tend to establish
that Fannie Mae could control EFA's conduct before Fannie Mae purchased the
[l]oan."




                                          -6-
        We agree that Affordable did not establish the first element of an agency
relationship because it failed to plead facts demonstrating that EFA had the power "to
alter [the] legal relationship[] between" Fannie Mae and Affordable when the alleged
misrepresentation occurred. Midkiff, 226 S.W.3d at 123. Affordable pled in its
complaint that Fannie Mae imposed "certain rules and requirements" for loans it
would purchase under the DUS program, and that "Fannie Mae purchase[d] loans
originated from EFA and serviced by EFA." Affordable's complaint did not allege,
however, that Fannie Mae was obligated to purchase EFA's loan on Jefferson Arms
because it complied with Fannie Mae's specifications. We are also unpersuaded by
Affordable's "labels and conclusions," Twombly, 550 U.S. at 555, that "[a]t all
relevant times, . . . EFA acted as an agent of Fannie Mae" and that an EFA
representative had negotiated the loan terms "on behalf of . . . Fannie Mae." We
conclude that Affordable failed to plead facts demonstrating the first element of an
agency relationship under Missouri law, and we thus need not consider the other
elements. See Koehr, 865 S.W.2d at 353.

       The facts as pled also do not create a "reasonable inference" that Fannie Mae
is violating federal law, Iqbal, 556 U.S. at 678, as would be the case if EFA were
acting as its agent. Fannie Mae was established as a "secondary market facilit[y] for
residential mortgages" to provide "stability," "liquidity," and other "ongoing
assistance" to the secondary mortgage market. 12 U.S.C. § 1716(1), (3). Congress
intended Fannie Mae's operation to impose "a minimum of adverse effect upon the
residential mortgage market and minimum loss to the Federal Government," id.
§ 1716(5), and it accordingly cabined Fannie Mae's role to the secondary mortgage
market by prohibiting it from originating loans, see id. § 1719(a)(2)(B). Viewing
EFA as Fannie Mae's agent here would make Fannie Mae a loan originator and would
render the DUS program in violation of federal law. Such a conclusion is at odds
with congressional intent and the record in this case, and we decline to adopt it. See
Mendrala v. Crown Mortg. Co., 955 F.2d 1132, 1140–41 (7th Cir. 1992).



                                         -7-
                                          B.

      Affordable next argues that the district court erred by concluding that the loan
documents unambiguously required it to complete the defeasance process. It
contends that the "condemnation award" exclusion in the defeasance provision
exempted its sale in lieu of threatened condemnation from the prepayment penalty,
and that Fannie Mae breached its agreement with Affordable by imposing the
prepayment penalty. To show that Fannie Mae breached under Missouri law,
Affordable must prove: (1) "the existence and terms of a contract," (2) that it
"performed or tendered performance pursuant to the contract," (3) that Fannie Mae
breached the contract, and (4) damages. Keveney v. Mo. Military Acad., 304 S.W.3d
98, 104 (Mo. 2010). Only the third element is disputed here.

       To determine whether Fannie Mae breached, we look to the terms of the loan
documents. The "cardinal rule" of contract interpretation is to "ascertain the intention
of the parties and to give effect to that intention." J.E. Hathman, Inc. v. Sigma Alpha
Epsilon Club, 491 S.W.2d 261, 264 (Mo. 1973). We must construe a contract "as a
whole so as to not render any terms meaningless," favoring "a construction that gives
a reasonable meaning to each phrase and clause and harmonizes all provisions." State
ex rel. Riverside Pipeline Co., L.P. v. Pub. Serv. Comm'n, 215 S.W.3d 76, 84 (Mo.
2007). Contract interpretation is a question of law unless the provision is ambiguous.
Weitz Co. v. MH Washington, 631 F.3d 510, 524 (8th Cir. 2011) (applying Missouri
law). Ambiguity is viewed in the context of the "entire written agreement," Shaw
Hofstra & Assocs. v. Ladco Dev., Inc., 673 F.3d 819, 826 (8th Cir. 2012) (citation
omitted) (applying Missouri law), and "exists when there is duplicity, indistinctness,
or uncertainty in the meaning of the words used in the contract," Peters v. Emp'rs
Mut. Cas. Co., 853 S.W.2d 300, 302 (Mo. 1993).

     Three sections of text in the loan documents are relevant to the issue of
ambiguity. First, the defeasance provision in Schedule B to the note specifies that

                                          -8-
Affordable "shall not have the right voluntarily to prepay any of the principal of this
Note," but that this restriction "shall not apply to a prepayment occurring as a result
of the application of any insurance proceeds or condemnation award under the
Security Instrument." Second, paragraph 10 of the note, entitled "Voluntary and
Involuntary Prepayments," employs identical language and is referenced by Schedule
B. Third, paragraph 20 of the security instrument is entitled "Condemnation" and
requires that Affordable "promptly notify Lender of any action or proceeding relating
to any condemnation or other taking, or conveyance in lieu thereof, of all or any part
of the Mortgaged Property, whether direct or indirect (a 'Condemnation')." Paragraph
20 also provides that Affordable "transfers and assigns" to Fannie Mae "any award
or payment with respect to . . . any Condemnation, or any conveyance in lieu of
Condemnation."

       The district court determined that the "condemnation award" exemption in
Schedule B was unambiguous, and that it applied only to an actual condemnation
award and not to a sale conducted in lieu of condemnation. It first reasoned that
Schedule B had not employed the capitalized defined term "Condemnation" from
paragraph 20 of the security instrument, which would have included a "conveyance
in lieu thereof." It further concluded that "the plain meaning of the phrase
'condemnation award' . . . refers to a formal condemnation award, in this case, under
the applicable Missouri statutes and procedures." Since Affordable had transferred
Jefferson Arms under threat of condemnation, but without an actual condemnation
award, the district court concluded that Affordable had failed to state a breach of
contract claim against Fannie Mae.

       The term "condemnation award" in Schedule B is made ambiguous by
duplication and "indistinctness" of the various condemnation provisions throughout
the loan documents. Peters, 853 S.W.2d at 302. The same language in Schedule B
regarding prepayment resulting from a "condemnation award" is used in paragraph
10 of the note. Paragraph 10 compares the effect of "Voluntary and Involuntary

                                         -9-
Prepayments" on the penalty provision. Section (a) of paragraph 10 states that a
prepayment penalty will apply if Affordable "voluntarily prepay[s] all . . . of the
unpaid principal balance" (emphasis added). Section (b) recognizes an exception for
"any prepayment occurring as a result of the application of any insurance proceeds
or condemnation award." Paragraph 10 thus creates "uncertainty" as to whether the
parties intended to exempt from the penalty provision all involuntary prepayments or
merely to exempt prepayments resulting from formal condemnation awards. Peters,
853 S.W.2d at 302. Since a sale in lieu of condemnation does not occur voluntarily,
a reading of "condemnation award" to include such a sale would harmonize Schedule
B and paragraph 10 of the note. See Riverside Pipeline Co., 215 S.W.3d at 84.

       Nor does the plain language of Schedule B require that only a formal
condemnation award be exempted. Schedule B excludes prepayments arising from
"the application of any . . . condemnation award under the Security Instrument,"
which indicates that the term is to be construed according to meaning given in the
security instrument. Although "Condemnation" rather than "condemnation award"
appears as a defined term in the security instrument, we decline to view capitalization
as dispositive. We also note that the defined terms to which the district court
assigned great weight are inconsistently applied throughout the loan documents.
Immediately after defining the term "Condemnation" to include "a conveyance in lieu
thereof," for example, paragraph 20 of the security instrument states that Affordable
assigns to Fannie Mae "any payment with respect to . . . any Condemnation, or any
conveyance in lieu of Condemnation."

       Reading "condemnation award" in Schedule B to carry the meaning ascribed
to "Condemnation" in paragraph 20 would give "reasonable meaning to each phrase
and clause and harmonize[] all provisions." Riverside Pipeline Co., 215 S.W.3d at
84. It would also make little sense to distinguish between a condemnation award and
a sale in lieu of condemnation since both arise from the same set of involuntary
circumstances.

                                         -10-
       Viewing the language in the context of "the entire written agreement," Shaw
Hofstra & Assocs., 673 F.3d at 826, and considering the likely "intention of the
parties," J.E. Hathman, 491 S.W.2d at 264, we conclude that the agreement is
ambiguous as to whether "condemnation award" includes a sale in lieu of
condemnation. We therefore reverse the dismissal of Affordable's breach of contract
claim against Fannie Mae and remand to the district court.

       Affordable also challenges the district court's dismissal of its claims for breach
of the implied covenant of good faith and fair dealing and unjust enrichment. The
district court dismissed both claims after determining that the prepayment penalty had
been unambiguously authorized by the loan documents. We affirm, but on other
grounds. See Liberty Mut. Fire Ins. Co. v. Scott, 486 F.3d 418, 422 (8th Cir. 2007).
To state a claim for breach of the implied covenant of good faith and fair dealing,
Affordable was required to plead facts showing that Fannie Mae had acted in bad
faith. See Koger v. Hartford Life Ins. Co., 28 S.W.3d 405, 412 (Mo. Ct. App. 2000).
Affordable pled only that Fannie Mae "materially breached the covenant of good faith
and fair dealing in the Note and the Security Instrument" without pointing to any
specific facts to support its claim. Such "conclusory statements" without appropriate
"factual content" are insufficient to survive a motion to dismiss, Iqbal, 556 U.S. at
678, and we therefore affirm the district court's dismissal of that claim.

       We also agree with the district court that Affordable's unjust enrichment claim
should be dismissed. Unjust enrichment is "an equitable remedy based on the concept
of a quasi-contract," Reyner v. Crawford, 334 S.W.3d 168, 174 (Mo. Ct. App. 2011),
and a plaintiff may not "recover under both an express contract and unjust
enrichment," Chem Gro of Houghton, Inc. v. Lewis Cnty. Rural Elec. Coop. Ass'n,
No. 2:11CV93 JCH, 2012 WL 1025001, at *3 (E.D. Mo. Mar. 26, 2012)
(unpublished) (citing Banner Iron Works, Inc. v. Amax Zinc Co., 621 F.2d 883, 889
(8th Cir. 1980)). Rather, if a "plaintiff has entered into an express contract for the
very subject matter for which he seeks recovery, unjust enrichment does not apply,

                                          -11-
for the plaintiff's rights are limited to the express terms of the contract." Howard v.
Turnbull, 316 S.W.3d 431, 436 (Mo. Ct. App. 2010). Affordable accepts that the
dispute in this case is contractual, indicating in its brief that "the sole issue on appeal
is whether the Loan Documents are unambiguous." We agree that the resolution of
this case depends on the district court's interpretation of the condemnation provision
on remand. Equitable relief is therefore unavailable, Howard, 316 S.W.3d at 436, and
the district court did not err in dismissing Affordable's unjust enrichment claim.

                                           III.

      We accordingly affirm the district court's dismissal of Affordable's claims for
negligent misrepresentation, breach of the covenant of good faith and fair dealing,
and unjust enrichment. We reverse its dismissal of Affordable's breach of contract
claim and remand for further proceedings consistent with this opinion.
                      ______________________________




                                           -12-
