a dismissal of the Complaint at this juncture, as it raises an issue which must be resolved at a later stage. The court is unable to hold as a matter of law that a lapse of two years, in the context of this series of repo transactions, rendered the City's reliance on Bradford's statements unreasonable.
Bradford's final argument in favor of dismissal of the Complaint is that its alleged failure to inform Harrisburg that it would become a substantial creditor of E.S.M. does not constitute an actionable omission under Rule 10b-5 or the principles of common-law fraud.
In general, an omission is actionable only when there is an independent duty to disclose the omitted information. Staffin v. Greenberg, 672 F.2d 1196, 1202 (3d Cir. 1982). "Mere bystanders, even if aware of the fraud, cannot be held liable for inaction since they do not . . . associate themselves with the venture or participate in it as something they wish to bring about." IIT, An International Investment Trust v. Cornfeld, 619 F.2d 909, 927 (2d Cir. 1980). Such an independent duty exists, for example, where the party who is alleged to be under an obligation to disclose stands in a fiduciary relationship to the party seeking disclosure. Chiarella v. United States, 445 U.S. 222, 229-30, 63 L. Ed. 2d 348, 100 S. Ct. 1108 (1980); Federal Land Bank of Baltimore v. Fetner, 269 Pa. Super. 455, 410 A.2d 344 (1979), cert. denied, 446 U.S. 918, 64 L. Ed. 2d 273, 100 S. Ct. 1853 (1980) (Pennsylvania common law requires the existence of a "confidential relationship" as prerequisite to liability for omissions).
Plaintiff asserts that Bradford was its fiduciary and therefore was under a duty to the City to disclose the omitted information. In order to demonstrate the existence of a fiduciary relationship, the plaintiff must show "a relationship involving trust and confidence, and 'the proof must show confidence reposed by one side and domination and influence exercised by the other'". Lehner v. Crane Co., 448 F. Supp. 1127, 1131 (E.D. Pa. 1978) (citations omitted). A fiduciary relationship "arises whenever a trust, continuous or temporary, is specially reposed in the skill or integrity of another, or the property, or pecuniary interest, in the whole or in a part . . . is placed in the charge of another; it may exist in the absence of a specific or technical trust or agency." Consolidated Oil and Gas, Inc. v. Ryan, 250 F. Supp. 600, 604 (W.D. Ark. 1966), aff'd, 368 F.2d 177 (8th Cir. 1966). However, it is not enough to show that the plaintiff reposed its trust in the defendant; the latter must also have accepted the fiduciary relationship. "Merely reposing confidence in another may not, of itself, create the (fiduciary) relationship . . . there must be such circumstances as indicate a just foundation for a belief that in giving advice . . . one is acting not in his own behalf, but in the interests of the other party." Consolidated Oil, 250 F. Supp. at 604.
An independent duty to speak may also arise in certain circumstances absent a fiduciary relationship. In determining whether such a duty to speak exists, the following factors should be considered:
the relationship between the plaintiff and the defendant, the parties' relative access to the information to be disclosed, the benefit derived by the defendant from the purchase or sale, defendant's awareness of plaintiff's reliance on defendant in making its investment decisions, and defendant's role in initiating the purchase or sale.