                              PUBLISHED

                  UNITED STATES COURT OF APPEALS
                      FOR THE FOURTH CIRCUIT


                             No. 15-2104


DREAMSTREET INVESTMENTS, INC., d/b/a DS Builders, a North
Carolina Corporation,

                Plaintiff - Appellant,

           v.

MIDCOUNTRY BANK, a Federal Savings Bank,

                Defendant - Appellee.



Appeal from the United States District Court for the Middle
District of North Carolina, at Greensboro. Catherine C. Eagles,
District Judge. (1:14-cv-00521-CCE-JEP)


Argued:   October 25, 2016                Decided:   November 30, 2016


Before WILKINSON, KING, and HARRIS, Circuit Judges.


Affirmed by published opinion. Judge Harris wrote the opinion,
in which Judge Wilkinson and Judge King joined.


ARGUED: Rachel Marie Stevens, DREAMSTREET INVESTMENTS, INC.,
Raleigh, North Carolina, for Appellant.    Robert Eli Levin,
HAYWOOD, DENNY & MILLER, L.L.P., Durham, North Carolina, for
Appellee.   ON BRIEF: Matthew Ivan Van Horn, LAW OFFICE OF
MATTHEW I. VAN HORN, PLLC, Raleigh, North Carolina, for
Appellant.
PAMELA HARRIS, Circuit Judge:

      This case arises from a “seller holdback” agreement between

Dreamstreet Investments, Inc., which was selling a vacant lot

for home construction, and MidCountry Bank, which was financing

the lot’s purchase by a third party.                   Under the agreement, part

of   the    purchase    price     owed    to       Dreamstreet   instead      would    be

retained     by     MidCountry,       pending      completion    of    the    home    and

subject to certain conditions.

       On    June     16,     2009,     Dreamstreet         contacted       MidCountry,

challenging the propriety of the seller holdback agreement and

threatening to sue.            Over four years later, Dreamstreet made

good on its threat.             In a complaint filed on June 28, 2013,

Dreamstreet alleged that MidCountry fraudulently induced it to

enter into the seller holdback agreement, in violation of North

Carolina’s Unfair and Deceptive Trade Practices Act (“UDTPA”).

A    subsequent      amendment    added        a    claim   under     the    common-law

doctrine of constructive fraud.

       The district court granted summary judgment to MidCountry.

Dreamstreet’s UDTPA claim, the court held, was barred by the

applicable        four-year    statute     of       limitations.        And    on     the

undisputed record facts, the court concluded, Dreamstreet could

not establish the necessary elements of a constructive fraud

claim.      We agree, and for the reasons given below, we affirm the

district court’s decision.

                                           2
                                             I.

                                             A.

     At     issue    in       this    case       is    an        agreement     between      two

commercial       entities:        Dreamstreet,             a    real   estate      investment

corporation;       and    MidCountry,        a        bank.          The   terms      of    that

agreement    are    not       contested.          What         is   disputed    is    how   the

agreement came to be, and whether MidCountry has lived up to its

obligations to Dreamstreet. 1

     The    case    began      when    Jason      Pittman,          through     his    company

Dreamstreet Investments, entered into a purchasing agreement to

sell an unimproved lot to Carl Ingraham for $115,000.                                 Ingraham

hoped to build a home on the property, and to fund his purchase,

he applied for an owner-builder loan from MidCountry.                                An owner-

builder loan would allow Ingraham to borrow the purchase price

of the lot, and then, acting as his own general contractor, to

make additional draws on the remaining loan amount to fund the

construction of his home.

     Under       MidCountry’s        underwriting              standards,      Ingraham     was

required    to    make    a    down-payment           of       approximately     $43,000     to

qualify for the loan.                But Ingraham was unable to meet this



     1 On review of a grant of summary judgment to MidCountry, we
view the facts in the light most favorable to Dreamstreet, as
the non-moving party.   See Henry v. Purnell, 652 F.3d 524, 531
(4th Cir. 2011) (en banc).



                                             3
requirement, and so Dreamstreet and MidCountry entered into the

seller     holdback      agreement       (the       “Agreement”)     at    issue      here.

Under the Agreement, Dreamstreet would forgo immediate receipt

of $43,200 of the purchase price of the lot.                       That money instead

would     be    retained    by    MidCountry,           ensuring     –    according      to

MidCountry – that there would be sufficient funds to complete

construction of Ingraham’s home.                     Upon completion of the home,

the money would be released to Dreamstreet.

        Additional conditions of the Agreement were memorialized in

an email sent and signed by Pittman on June 12, 2008, which the

parties agree establishes the terms of their agreement.                               Under

those terms, the $43,200 would not be disbursed to Dreamstreet

if   Ingraham      defaulted      on    his        MidCountry    loan     or    failed   to

complete       construction      on    his     home.      Specifically,         the   email

stated:        “I [Dreamstreet] understand that the only reason the

holdback would not be available was if [Ingraham] was in default

or unable to complete construction on the home and at that point

MidCountry       would     use        those        remaining     funds     to    complete

construction on the home.”              J.A. 80.

        After   sending    the    June        12    email,     Pittman    contacted      his

attorney, his banker, and a real estate appraiser to discuss the

seller holdback agreement because it did not “sound right” to

him.     J.A. 195.        Pittman concluded that he would complete the

transaction and sell the Dreamstreet lot to Ingraham only if

                                               4
Ingraham    provided     him    with     a       promissory      note    to   cover    the

holdback, secured by a deed of trust on the property.                             On June

19, 2008, Ingraham and Dreamstreet executed a promissory note

for $49,450, secured by a deed of trust, and closed on the sale

of the lot.

       A year later, shortly before the promissory note was due

and after several unsuccessful attempts to contact MidCountry,

Dreamstreet    sent      a     lengthy       email     to      MidCountry        demanding

immediate return of what it now viewed as the improper $43,200

holdback.     According to the June 16, 2009 email, Pittman had

consulted with his attorney, and it was their view that the

holdback    actually     had        “nothing      to   d[o]”     with     ensuring     the

availability of funds for Ingraham’s construction project, and

“never should have been held back in the first place.”                           J.A. 86.

Pittman    promised    to     report     MidCountry         to   the    North     Carolina

Banking     Commission        and     also       to    file      a     lawsuit     against

MidCountry:      “[I]        have    already       paid   my     attorney     $1,000    to

initiate this process,” and “[w]e will be sending out complaints

via certified mail on the 26th.”                 Id.

       For over four years, Dreamstreet failed to follow through

on its threat.    During that time, Ingraham defaulted on his loan

with   MidCountry.       On     February         25,   2010,     MidCountry       notified

Ingraham that his mortgage loan had come due on September 19,

2009; that his failure to make payments on the loan in December

                                             5
2009 and January and February 2010 had put him in default; and

that MidCountry          intended   to    commence       foreclosure       proceedings.

At   around     the   same    time,      on    December     10,    2009,    the   county

inspection department certified the construction on Ingraham’s

land as compliant with building and zoning regulations. 2                         And on

March     30,    2012,     MidCountry         foreclosed     on    Ingraham’s      home.

Although      Dreamstreet’s     promissory          note    against    Ingraham      was

secured by a deed of trust on the property, it appears that

Dreamstreet did not assert any security interest in connection

with the foreclosure.



                                              B.

      Dreamstreet         finally     filed        the     promised    suit       against

MidCountry       on    June   28,     2013. 3         Alleging      that     MidCountry

fraudulently induced it to enter into the Agreement and never

intended    to     release    the   $43,200        holdback,      Dreamstreet      raised

claims     under      North   Carolinaʹs           Unfair    and    Deceptive      Trade


      2Whether the Certificate of Compliance received by Ingraham
demonstrated completion of Ingraham’s home for purposes of the
Agreement is disputed by the parties.        We may assume for
purposes of this appeal that the home was completed on December
10, 2009.
      3Dreamstreet originally filed suit in North Carolina state
court against Carl Ingraham and his wife, as well as MidCountry.
After Dreamstreet    voluntarily   dismissed the   Ingrahams  as
defendants, MidCountry removed the action to federal district
court, invoking diversity jurisdiction. See 28 U.S.C. § 1332.



                                              6
Practices Act and for common-law constructive fraud.                                MidCountry

moved    for    summary       judgment.             Dreamstreet’s       UDTPA       claim,    it

asserted,      was     barred     by     the    applicable          four-year    statute      of

limitations.            And       the     constructive          fraud        claim     failed,

MidCountry argued, because as a matter of law, Dreamstreet could

not   show     the     required         element      of    a   fiduciary        relationship

between the parties.

      The district court granted MidCountry’s motion for summary

judgment in an oral ruling.                    It agreed with MidCountry that the

four-year statute of limitations barred the UDTPA claim.                                On the

constructive        fraud     claim,      the    district       court       assumed    without

deciding       that     there      was     a     fiduciary          relationship       between

MidCountry and Dreamstreet.                    But because Ingraham defaulted on

his loan, the court concluded, the Agreement’s conditions on

release of the holdback were not satisfied, and thus MidCountry

did     not    breach       any    fiduciary         duty      it    may     have     owed    to

Dreamstreet.         Dreamstreet timely appealed.



                                               II.

      We review de novo the district court’s grant of summary

judgment.       Durham v. Horner, 690 F.3d 183, 188 (4th Cir. 2012).

Summary judgment is appropriate only if no material facts are

disputed      and     the   moving      party       is    entitled     to    judgment    as    a



                                                7
matter of law.         Henry v. Purnell, 652 F.3d 524, 531 (4th Cir.

2011) (en banc).

                                         A.

     Dreamstreet’s       first     contention   on   appeal    is    that     the

district court erred in holding that its UDTPA claim is time-

barred.      Under North Carolina law, UDTPA claims are governed by

a four-year statute of limitations, and that limitations period

begins to run when an alleged violation occurs.               See N.C. Gen.

Stat.    §   75-16.2   (setting    out    limitations   period);     Hinson   v.

United Fin. Servs., Inc., 473 S.E.2d 382, 386–87 (N.C. Ct. App.

1996) (applying UDTPA limitations period).              And when, as in this

case, a UDTPA claim is based on alleged fraudulent conduct, then

the violation occurs – and the limitations clock starts running

– “at the time that the fraud is discovered or should have been

discovered with the exercise of reasonable diligence.”                 Rothmans

Tobacco Co., Ltd. v. Liggett Grp., Inc., 770 F.2d 1246, 1249

(4th Cir. 1985) (citing Wilson v. Crab Orchard Dev. Co., 171

S.E.2d 873, 884 (N.C. 1970)).

     The     parties    do   not   dispute    this   governing      framework. 4

Instead, they disagree as to whether Dreamstreet discovered or


     4  Dreamstreet does suggest that it is “perhaps more
appropriate” to analogize its action to one for breach of
contract, in which case the limitations period would begin to
run at the time of the breach.    Appellant Br. at 22; see Ring
Drug Co. v. Carolina Medicorp Enters., Inc., 385 S.E.2d 801, 804
(Continued)
                                         8
should have discovered the fraud of which it complains more than

four years before it filed suit on June 28, 2013.                       According to

Dreamstreet, the earliest date on which it could have discovered

or   been    expected      to    discover    MidCountry’s       alleged     fraud    was

December 10, 2009 – within the four-year limitations period –

when    Ingraham        received    the    certificate     of   compliance     on    his

home.        It    was     not     until    then,    Dreamstreet       argues,      that

MidCountry        was    required    to     make    good   on   the    Agreement      by

releasing the holdback to Dreamstreet, and thus not until then

that Dreamstreet could have known that MidCountry did not intend

to honor the Agreement.

       What that position fails to account for is the undisputed

fact that on June 16, 2009 – approximately two weeks outside the

four-year limitations period – Dreamstreet itself announced that

it planned to sue MidCountry on the same theory it advances in

this litigation: that the seller holdback was a sham.                          In its

June    16    email,       Dreamstreet       explained      that      the   extensive



(N.C. Ct. App. 1989) overruled on other grounds by Crossman v.
Moore, 459 S.E.2d 715 (N.C. 1995). Like the district court, we
disagree.   In both its complaint and its brief before this
court, Dreamstreet makes clear that its claim “is based on
deceptive statements made by MidCountry” in order to induce
Dreamstreet to enter into a “sham seller holdback scheme.”
Appellant Br. at 22; see also J.A. 437 (district court
explaining that “all the conduct the plaintiff is contending
constitutes the [UDTPA violation] occurred back in 2008, in the
inducement to enter into” the Agreement).



                                             9
documents it had shared with its attorney – “all emails from

[MidCountry] during the initial closing, along with my note,

deed    of    trust,       and   a    budget          spreadsheet       from    [MidCountry]

regarding      Carl     Ingraham’s          house       budget”     –    were     enough       to

convince     both     Dreamstreet          and    its    counsel     that      the     holdback

funds were not intended for Ingraham’s construction budget and

“never should have been held back in the first place.”                                J.A. 86.

       By    June    16,    2009,     in     other      words,     Dreamstreet         and    its

attorney      were     privy     to    information          that    led     it    to     accuse

MidCountry of fraud and threaten to “get a judge . . . to force

the release of those funds.”                  Id.       Dreamstreet cannot now claim

that   it    lacked        “capacity       and     opportunity      to     discover”         that

fraud, Grubb Props., Inc. v. Simms Inv. Co., 400 S.E.2d 85, 88

(N.C. Ct.      App.    1991),        until       six    months    later,       when    Ingraham

received a certificate of compliance.                      The limitations period on

Dreamstreet’s UDTPA claim began running by June 16, 2009, see,

e.g., Newton v. Barth, 788 S.E.2d 653, 662 (N.C. Ct. App. 2016)

(UDTPA claim triggered when party discovers or should discover

facts constituting alleged fraud), more than four years before

Dreamstreet filed suit.               With respect to the UDTPA claim, the

district court properly granted summary judgment to MidCountry

on statute of limitation grounds.




                                                 10
                                        B.

       We turn next to Dreamstreet’s constructive fraud claim, on

which    the    district     court   also     granted    summary       judgment    to

MidCountry.      Under North Carolina law, the key to a constructive

fraud claim is a fiduciary relationship between plaintiff and

defendant.      It is that relationship of “special confidence” that

gives rise to a special duty to “act in good faith and with due

regard to the interests of the one reposing confidence.”                       Branch

Banking & Trust Co. v. Thompson, 418 S.E.2d 694, 699 (N.C. Ct.

App.    1992)    (internal      quotation     marks    and    citation    omitted).

When such a fiduciary relationship exists – and only when it

exists – a plaintiff need not bear the “exacting” burden of

proving actual fraud, but may instead rely on a presumption of

constructive fraud that arises under equity “when the superior

party obtains a possible benefit.”                    Cash v. State Farm Mut.

Auto. Ins. Co., 528 S.E.2d 372, 380 (N.C. Ct. App. 2000); see

also White v. Consol. Planning, Inc., 603 S.E.2d 147, 156 (N.C.

Ct.    App.    2004)   (constructive     fraud    plaintiff      need    not    prove

intent to deceive).

       MidCountry      argues    that   Dreamstreet      cannot     show    such    a

relationship in this case, and we agree.                     Under North Carolina

law,    fiduciary      relationships    are    characterized      by    “confidence

reposed on one side, and resulting domination and influence on

the other.”       Dallaire v. Bank of America, N.A., 760 S.E.2d 263,

                                        11
266 (N.C. 2014) (internal quotation marks and citation omitted).

Lawyers and their clients, for instance, or trustees and their

beneficiaries,         share    such       relationships,      with      a   “heightened

level of trust” matched with a corresponding duty to “maintain

complete loyalty.”             Id.     By contrast, parties to a contract –

like    the     Agreement        between       MidCountry      and       Dreamstreet     –

generally do not become each other’s fiduciaries; what they owe

each other is defined by the terms of their contracts, with no

special duty of loyalty.              Branch Banking, 418 S.E.2d at 699; see

also Dallaire, 760 S.E.2d at 267 (borrowers and lenders, unlike

fiduciaries, “are generally bound only by the terms of their

contract and the Uniform Commercial Code”).                     As a matter of law,

there can be no fiduciary relationship between “parties in equal

bargaining positions dealing at arm’s length, even though they

are    mutually        interdependent          businesses.”              Strickland      v.

Lawrence, 627 S.E.2d 301, 306 (N.C. Ct. App. 2006).

       On   the      record     in     this    case,     it    is    clear      that    the

relationship between MidCountry and Dreamstreet was no more than

the standard one between two commercial entities negotiating a

contract at arm’s length.                    There is nothing to suggest that

Dreamstreet         “reposed    any    sort    of    special    confidence,”       Branch

Banking,      418    S.E.2d    at     699,    in    MidCountry;     on    the   contrary,

skeptical of MidCountry’s proposal, Pittman consulted with an

attorney,      a     banker,    and    a     real    estate    appraiser        about   the

                                              12
holdback     before    closing     on   the     sale   of   the    lot.      Such

consultation with outside experts, North Carolina courts have

held, is inconsistent with a claim of fiduciary relationship or

constructive fraud.         See id. (no fiduciary relationship where

complaining party consulted with banker and accountant before

entering into agreement); see also Sullivan v. Mebane Packaging

Grp., Inc., 581 S.E.2d 452, 462 (N.C. Ct. App. 2003) (evidence

that    complaining        party    obtained      outside     counsel      rebuts

presumption of constructive fraud).

       Nor is there any indication that Dreamstreet was in the

kind of unequal bargaining position that might qualify as an

indication of a fiduciary relationship under North Carolina law.

Dreamstreet emphasizes that it was MidCountry that devised the

holdback arrangement and then proposed it to Dreamstreet.                     But

the fact that one party proposes or advocates for a transaction

is   not    enough    to   establish    unequal    bargaining      power    and   a

fiduciary relationship.            North Carolina law makes clear, for

instance, that borrowers ordinarily do not enjoy a fiduciary

relationship or the protection of a special duty of loyalty when

it comes to their lenders, even when those lenders encourage

them to borrow.        See Dallaire, 760 S.E.2d at 266-67 (assurances

by   bank   lender    regarding    mortgage     loan   do   not   turn    ordinary

debtor-creditor        relationship      into     fiduciary       relationship);

Branch Banking, 418 S.E.2d at 699 (reliance on representations

                                        13
of   creditor    does     not    turn     debtor-creditor       relationship          into

fiduciary      relationship).           Dreamstreet     was     in    a    position     to

consult with an attorney before agreeing to MidCountry’s terms.

If Dreamstreet had concerns, then it could have declined the

holdback proposal and forgone the sale of its lot – or it could

take steps to protect itself, as it did, by insisting on a

promissory note with Ingraham, secured by a deed of trust.

       We do not doubt, as Dreamstreet argues, that a fiduciary

relationship does not depend in every case on the existence of a

formal legal relationship like that between attorney and client

or   trustee    and   beneficiary.          See    Bumgarner         v.   Tomblin,     306

S.E.2d 178, 183 (N.C. Ct. App. 1983) (finding issue of fact as

to   fiduciary    relationship       where      plaintiffs      had       long-term    and

regular dealings with defendant with special legal skills and

real estate expertise).             But it is clear that more is required

than a “mutually interdependent” business relationship between

two parties to a commercial contract.                  Strickland, 627 S.E.2d at

306; see Branch Banking, 418 S.E.2d at 699.                           The undisputed

facts of this case reveal an ordinary contractual relationship,

with   nothing     that     could    give       rise   to   a   special        fiduciary

relationship.         And       because    the     existence         of    a   fiduciary

relationship is a necessary element of constructive fraud, the




                                           14
district court properly granted summary judgment to MidCountry

on this claim, as well. 5



                              III.

     For the foregoing reasons, we affirm the judgment of the

district court.


                                                        AFFIRMED




     5 As noted above, the district court assumed the existence
of a fiduciary relationship for purposes of its decision, and
granted summary judgment on the ground that Dreamstreet could
show no breach of any fiduciary duty it was owed. See Governors
Club, Inc. v. Governors Club Ltd. P’ship, 567 S.E.2d 781, 787–88
(N.C. Ct. App. 2002) (constructive fraud plaintiff must show
existence of fiduciary duty and breach of that duty).    Because
we hold that Dreamstreet cannot show the necessary fiduciary
relationship as a matter of law, we need not address the
district court’s alternative holding.



                               15
