Unpublished Disposition, 852 F.2d 571 (9th Cir. 1988)

MEMORANDUM^* 

Cameo Western argues on appeal that although it was not strictly either a partner or joint venturer with Continental, the parties did enter into a " 'special relationship' ... so as to give rise to a fiduciary relationship between the parties...." Opening Br. at 9. The district court disagreed. We review de novo the district court's partial summary judgment on this issue.

Under California law, " [a] confidential relationship 'may be said to exist whenever trust and confidence is reposed by one person in the integrity and fidelity of another.' And where the person in whom such confidence is reposed, by such confidence obtains any control over the affairs of the other, a trust or fiduciary relationship is created." Main v. Merrill, Lynch, Pierce, Fenner & Smith Inc., 67 Cal. App. 3d 19, 31, 136 Cal. Rptr. 378, 385 (1977) (citations omitted). See also Vai v. Bank of America National Trust and Savings Ass'n, 56 Cal. 2d 329, 364 P.2d 247, 15 Cal. Rptr. 71 (1961); Walker v. KFC Corp., 728 F.2d 1215, 1221 n. 5 (9th Cir. 1984).

To establish the predicates of a fiduciary relationship, Cameo asserts the following facts: 1) that Aaron Kolkey, and his solely owned company Cameo Development, joined the project not for profit, but because of Mr. Kolkey's friendship with Samuel Kahn; 2) that after Fidelity Federal became the construction lender for the project, "Continental's connection with the project began to strongly resemble that of an equity partner or joint venturer with Cameo"; 3) that Cameo and Continental's joint efforts in August 1984 to restructure the loan for a second time and Peter Donovan's alleged representation that the restructuring had been approved created a situation in which Cameo had reposed trust and confidence in the bank and then had been misled to its detriment.

Accepting Cameo's asserted facts as true, they fail to establish the existence of a fiduciary duty. That Aaron Kolkey may have joined the project for personal rather than business reasons does not create a confidential relationship between the parties. That as a result of the first restructuring of the loan, Continental's return on its investment was directly linked to Cameo's success in selling houses does not transform the ordinary relationship between lender and borrower into a joint venture. See Connor v. Great Western Savings and Loan Assn, 69 Cal. 2d 850, 447 P.2d 609, 73 Cal. Rptr. 369 (1968). Nor did the communality of interest between Cameo and Continental vest Continental with control over the developer; managerial control over the project, including the sale of homes, continued to rest with Cameo. Finally, Mr. Donovan's communications with Cameo, including his representation that senior management had approved the restructuring of the loan, did not give Continental the sort of control over Cameo's affairs from which a fiduciary duty arises. "The key factor in the existence of a fiduciary duty lies in control by a person over the property of another." Vai v. Bank of America, 56 Cal. 2d 329, 338, 364 P.2d 247, 252, 15 Cal. Rptr. 71, 76 (1961). Although Continental's alleged misrepresentations might have disadvantaged Cameo, those misrepresentations did not give Continental control over Cameo's property.¹ 

In sum, we agree with the district court that Cameo failed to demonstrate the existence of a fiduciary duty.

On the first day of trial, Cameo moved to amend its complaint to add a claim of fraudulent concealment. The district court denied the motion. We review for abuse of discretion. Mende v. Dun & Bradstreet, Inc., 670 F.2d 129, 131 (9th Cir. 1982).

We hold that the district court did not abuse its discretion in denying Cameo leave to amend its complaint on the first day of trial, a year and a half after its original complaint was filed, to state a cause of action based not on newly discovered facts but rather on a previously unalleged legal theory. See, e.g., Stein v. United Artists Corp., 691 F.2d 885, 898 (9th Cir. 1982) (" [H]ere Stein provided no satisfactory explanation for his failure to fully develop his contentions originally, and the amended complaint was brought only to assert new theories, if anything, and was not premised upon new facts").

AFFIRMED.