Unpublished Disposition, 869 F.2d 1499 (9th Cir. 1989)

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US Court of Appeals for the Ninth Circuit - 869 F.2d 1499 (9th Cir. 1989)

UNITED STATES of America, Plaintiff-Appellee,v.SOUTH SOUND NATIONAL BANK, Third-Party Defendant--Appellee,Jack E. Mcgill, Virginia L. Mcgill, Defendants--Third-PartyPlaintiffs-- Appellants.

No. 86-4053.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted Feb. 7, 1989.Decided March 1, 1989.

W.D. Wash.


Appeal from the United States District Court for the Western District of Washington Jack E. Tanner, District Judge, Presiding.

Before REINHARDT, KOZINSKI and TROTT, Circuit Judges.


Jack E. McGill and Virginia L. McGill (McGills) borrowed $80,000 from South Sound Bank (Bank); 90 percent of the loan was guaranteed by the Small Business Administration (SBA). Upon the McGills' default, SBA sued to obtain judgment on the promissory note and to foreclose the deeds of trust given by the McGills to secure the loan. The McGills raised the affirmative defense that the Bank had breached its fiduciary duty; they also claimed contract damages as third party beneficiaries of the Guaranty Agreement or the Authorization and Loan Agreement between the Bank and the SBA. The district court held that the bank did not breach any fiduciary duty and that the McGills were not third party beneficiaries of the agreements between the Bank and the SBA.

We agree with the district court. First, the record does not support appellants' claim that there was a special relationship between the McGills and the Bank that would impose a fiduciary or quasi-fiduciary duty upon the Bank. See Tokarz v. Frontier Federal Savings and Loan Ass'n, 33 Wash. App. 456, 656 P.2d 1089, 1094 (1983). Nor did the Bank breach any implied duty of good faith towards the McGills. Second, the McGills are not third-party beneficiaries of the agreements between the Bank and the SBA. See United States v. Martin, 344 F. Supp. 350, 356 (E.D. Mich. 1972). Finally, the SBA was not precluded by its own regulations from bringing this action to enforce the note and deeds of trust. In fact, 13 C.F.R. Sec. 120.5(a) (1) (iii) (1980) and 13 C.F.R. Sec. 122.10(b) (1) (iii) (1980), the regulations cited by the McGills, have no relevance to these proceedings.



This disposition is not appropriate for publication and may not be cited to or by the courts of this circuit except as provided by 9th Cir.R. 36-3