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BERRY v. FIRST NATL. BANK OF MERCER CTY.

August 29, 1994

DAVID E. BERRY, Plaintiff,
v.
FIRST NATIONAL BANK OF MERCER COUNTY, Defendant.



The opinion of the court was delivered by: MCKELVIE

 Wilmington, Delaware

 August 29, 1994

 McKelvie, District Judge (sitting by designation)

 This is a tort case. The plaintiff, David E. Berry, is a guarantor of a construction loan. The defendant, First National Bank of Mercer County ("FNB"), is the bank that provided the loan. This case arises out of FNB's foreclosure on the loan and its efforts to collect from Berry amounts owed on the loan.

 Berry claims FNB negligently failed to determine at the time it made the loan that the signatures of certain other guarantors were forgeries and it breached duties of good faith and fair dealing in pursuing him and not the other guarantors. He seeks compensatory damages in excess of $ 50,000 as well as interest, costs, and attorney fees.

 During a July 11, 1994, telephone conference, the court reviewed the status of the case with counsel and invited the parties submit letter memoranda on whether or not the defendant was entitled to summary judgment. The court has received the parties' papers and now addresses the merits of the claims.

 NATURE AND STAGE OF THE PROCEEDINGS

 In April, 1989, Berry and Dominic Meffe decided to acquire a parcel of real estate in Sharon, Pennsylvania and build a restaurant on it. They incorporated Sharon Sizzlin' and borrowed $ 750,000 from FNB as a construction loan secured by the real estate. Meffe and Berry guaranteed the loan. Docket Item ("D.I.") 16. Robert and Maria Care and Stavros Koumaras also apparently guaranteed the loan.

 As the result of defaults on the loan, FNB foreclosed on the mortgaged property. On May 25, 1990, FNB obtained judgment against Berry in the Court of Common Pleas of Mercer County pursuant to the confession of judgment clause in the suretyship agreement. Id. Berry did not seek to reopen the Common Pleas judgment. Instead, on July 1, 1991, Berry, filed this case alleging (1) FNB negligently failed to ensure that the guarantees on its original financing commitments were legal and accurate and failed to use due diligence in making the loan to Meffe; and (2) FNB breached its duty of fair dealing owed to Berry. D.I. 1.

 DISCUSSION

 The plaintiff invokes this court's diversity jurisdiction. 28 U.S.C. ยง 1332. The agreement provides that this dispute shall be governed by Pennsylvania law. D.I. 16.

 A court may grant summary judgment if it finds "no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed. R. Civ. P. 56(c); Turner v. Schering-Plough Corp., 901 F.2d 335, 340-41 (3d Cir. 1990). Furthermore, a court may grant summary judgment where the only issues to be resolved are purely legal. United States v. Reader's Digest Ass'n, 662 F.2d 955, 960-61 (3d Cir. 1981), cert. denied, 455 U.S. 908, 71 L. Ed. 2d 446, 102 S. Ct. 1253 (1982). Here, the issues to be resolved raise purely legal questions and thus summary judgment is proper.

 First, Berry alleges FNB negligently failed to ensure that the signatures of the other guarantors of the loan were "legal and accurate." D.I. 1. A plaintiff cannot pursue a negligence claim absent a duty on the part of the defendant owed to that plaintiff. Boyce v. United States Steel Corp., 446 Pa. 226, 285 A.2d 459, 461 (Pa. 1971). Generally, courts have not found a duty running from a lender to a guarantor or to a debtor, unless the lender assumes such a duty. Scott v. First Investment Corp., 556 F. Supp. 782, 784 (W.D. Pa. 1983) (holding that a bank owed no duty to a borrower of funds used to purchase a home where the bank allegedly made negligent inspection of home prior to loaning money finding inspection of home purely for bank's benefit); Carlsberg Resources Corp. v. Cambria Savings & Loan Ass'n, 413 F. Supp. 880, 885 (W.D. Pa. 1976) (holding that a bank owed no duty to a purchaser of property where the bank held a mortgage on that property and allegedly negligently disbursed funds for the construction of a mobile home park on that property), aff'd, 554 F.2d 1254 (3d Cir. 1977); Federal Land Bank of Baltimore v. Fetner, 269 Pa. Super. 455, 410 A.2d 344, 346 (Pa. Super. Ct. 1979) (same), cert. denied, 446 U.S. 918, 64 L. Ed. 2d 273, 100 S. Ct. 1853 (1980); accord Bank Leumi Trust Co. of New York v. Block 3102 Corp., 580 N.Y.S.2d 299, 300 (N.Y. App. Div. 1992) (interpreting New York law). In Bank Leumi, the court stated ...


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