Background
Thomas McWilliams operated a farming business financed by Tri-County Bank. By 2023, his agricultural loans totaled approximately $654,000 and were secured by a mortgage, farm equipment, and other assets. McWilliams alleged that he repeatedly asked the bank’s agricultural specialist, Paul Burgess, to renew the existing loans and provide additional financing for crop inputs and livestock purchases, but Burgess delayed responding.
McWilliams obtained alternative financing for the 2023 planting season at a higher interest rate. The bank renewed his existing loans at a higher rate in February 2024, and Burgess informed him in June 2024 that the bank would not provide the requested additional funds. McWilliams sued for negligence and silent fraud, alleging that the delay caused lost crops and cattle sales, increased borrowing costs, and mental anguish. The circuit court granted the bank summary disposition under MCR 2.116(C)(8) for failure to state a legally sufficient claim.
The Court’s Holding
The Michigan Court of Appeals affirmed. It held that the complaint did not establish that the bank owed McWilliams a legal duty to respond to his financing requests within a particular time or to renew his loans at existing rates or provide additional credit. The bank did not assume a duty to act on McWilliams’s behalf merely because Burgess said he would respond to the requests, and Michigan law does not recognize a duty to exercise reasonable care in determining loan eligibility.
The silent-fraud claim also failed because McWilliams alleged neither a legal or equitable duty of disclosure nor a false or misleading representation intended to deceive. Burgess’s statement that he would respond, followed by an eventual response, was not an incomplete or misleading disclosure. At most, the allegations described an unduly delayed response, which did not support liability for negligence or silent fraud.
Key Takeaways
- A lender’s delay in deciding whether to renew or expand financing does not, by itself, create an actionable negligence claim under Michigan law.
- A duty arising from an undertaking requires words or conduct showing that the defendant assumed an obligation to act on the plaintiff’s behalf.
- Silent fraud requires both a legal or equitable duty to disclose and a false or misleading representation by words or conduct; mere nondisclosure is insufficient.
Why It Matters
The decision reinforces the limits of tort liability in ordinary lender-borrower relationships. Even when delayed lending decisions foreseeably disrupt a borrower’s business, the borrower must identify a recognized source of duty—such as a statute, regulation, contract, fiduciary relationship, undertaking, or misleading partial disclosure—to proceed on negligence or silent-fraud theories.