Bluebonnet Hotel Ventures, L.L.C. v. Wells Fargo Bank, N.A., 754 F.3d 272

Bluebonnet is a single-purpose entity formed to build and operate a Baton Rouge hotel and to sell tax-exempt Gulf Opportunity Zone bonds to investors.
Bluebonnet sought Wells Fargo’s letter of credit and underwriting for the bond sale; a March 2007 term sheet stated the letter was not a commitment to lend.
Negotiations collapsed; Regions Bank issued a $2.5 million letter of credit for Bluebonnet to meet deadlines, but bonds were not sold to the public.
Wells Fargo proposed a separate swap agreement to hedge floating-rate risk; Wells Fargo sent a descriptive presentation with a non-contingent disclaimer.
Bluebonnet entered the swap agreement before its issuance and effective date; later, rising rates would have allowed Bluebonnet to profit, while falling rates obliged Bluebonnet to pay Wells Fargo.
Bluebonnet sued Wells Fargo for rescission based on failure of cause, negligence, and detrimental reliance; the district court granted summary judgment on failure of cause, and this appeal followed.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether there was a failure of cause warranting rescission.	Bluebonnet contends the swap was entered to fix rates; failure of cause occurred when financing failed.	Wells Fargo argues the swap formed an independent obligation not contingent on financing; no failure of cause.	No genuine issue; no failure of cause; affirmed.

Dameware Development, L.L.C. v. American General Life Insurance Co., 688 F.3d 203 (5th Cir. 2012) (no failure of cause where contract focuses on non-tax benefits)
Angelo & Son, LLC v. Piazza, 1 So.3d 705 (La. Ct. App. 2008) (resident failure of cause does not automatically rescind; depends on contract terms)
Campbell v. Melton, 817 So.2d 69 (La. 2002) (ambiguity and parol evidence standards; contract interpretation governs rescission analysis)