Dallaire v. Bank of America, N.A., 367 N.C. 363

In 2007 Jacques and Fernande Dallaire refinanced their home with Bank of America after a 2006 Chapter 7 discharge; the property remained subject to three preexisting liens, including a senior BB&T lien.
The Dallaires claim they disclosed the bankruptcy to a Bank of America loan officer, who repeatedly assured them the new loan would hold first-priority status.
Bank of America engaged HomeFocus and LSI to perform title and curative work; LSI cleared the loan to close based on an incorrect belief that the BB&T lien had been extinguished.
Bank of America’s new $166,000 loan replaced earlier Bank of America liens but did not pay or subordinate the BB&T lien; the result left Bank of America’s loan junior and the Dallaires personally liable.
The Dallaires sued for breach of fiduciary duty, negligent misrepresentation, negligent title search, and breach of contract; the trial court granted summary judgment to defendants, the Court of Appeals reversed in part, and the Supreme Court of North Carolina granted discretionary review.
The Supreme Court reversed the Court of Appeals, holding (1) no fiduciary duty arose from ordinary loan-officer assurances about lien priority, and (2) negligent misrepresentation failed because the Dallaires did not show they made reasonable inquiry or were prevented from investigating.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether lender owed borrower a fiduciary duty based on loan officer’s assurances about lien priority	Dallaire: modern loan origination gives lenders control and borrowers trust, so fiduciary duties can arise from loan-officer assurances	Bank of Am.: ordinary borrower-lender relations are arm’s length; mere assurances do not create special confidence or fiduciary status	No fiduciary duty — routine borrower-lender interaction; officer’s statements insufficient to create special confidence
Whether negligent misrepresentation claim survives where borrower relied on loan officer’s statements about lien priority	Dallaire: they reasonably relied on Bank of America’s statements and non-lawyer title work about the effect of bankruptcy on liens	Bank of Am.: reliance was unjustified because the Dallaires made no reasonable inquiry and were not prevented from investigating	No negligent misrepresentation — plaintiffs failed to show they made reasonable inquiry or were denied opportunity to investigate

Green v. Freeman, 367 N.C. 136 (2013) (definition and elements of fiduciary relationship)
Dalton v. Camp, 353 N.C. 647 (2001) (special confidence test for fiduciary duty)
Sec. Nat’l Bank of Greensboro v. Educators Mut. Life Ins. Co., 265 N.C. 86 (1965) (ordinary debtor-creditor relationship does not create fiduciary duty)
Raritan River Steel Co. v. Cherry, Bekaert & Holland, 322 N.C. 200 (1988) (elements of negligent misrepresentation and duty of care)
Marcus Bros. Textiles, Inc. v. Price Waterhouse, LLP, 350 N.C. 214 (1999) (when reliance is a question for jury versus judgment as a matter of law)