921 F. Supp. 2d 56 | S.D.N.Y. | 2013
OPINION
The Bank of New York Mellon (“BNY Mellon”) acted for the Southeastern Pennsylvania Transportation Authority (“SEPTA”) under a Master Trust Agreement (the “MTA”), principally as a custodian for securities of pension and other funds managed for SEPTA by other investment managers. From time to time, BNY Mellon and a predecessor provided foreign exchange (“FX”) services, exchanging dollars for foreign currencies or vice versa in connection with purchases and sales of securities or other instruments for the trust. This is one of many actions in which SEPTA and others who dealt with BNY Mellon in more or less similar circumstances claim that BNY Mellon overcharged them for these FX services, allegedly in breach of the pertinent contracts and/or of alleged fiduciary duties, and by misrepresenting or failing fully to disclose the manner in which it charged for these activities.
Important to this and presumably other such cases is a contention that BNY Mellon was obligated contractually to provide currencies at “best execution” prices but failed to do so. The matter is now before the Court on defendants’ motion to dismiss the second amended complaint (the “SAC”), principally on the ground that BNY Mellon had no such “best execution” obligation and that the pleading does not allege any legally sufficient claim.
It is undisputed that the parties executed the MTA and that at least some of SEPTA’s investment managers at various times signed varying versions of a second document. But neither the complaint nor the other materials before the Court unequivocally establishes all of the terms of the contract or contracts that governed all of the relevant transactions. In part, but only in part, that is attributable to the practice, common in this new electronic age, of putting putative terms and conditions of business transactions on Internet web pages that may change from time to time and that may or may not have been assented to. So this matter quite plainly is not susceptible of disposition on a motion to dismiss the complaint. The contract claim — which is the heart and soul of the case — would not be appropriate for such disposition even on assumptions resolving many of the uncertainties surrounding the contract in favor of the defendants. Nonetheless, it has proven appropriate, notwithstanding the
Facts
Parties
SEPTA “is a regional public transportation authority serving” various Pennsylvania counties.
The Bank of New York Mellon Corporation (“BNY Mellon Corp.”) is a Delaware corporation with its headquarters and principal place of business in New York.
Procedural Posture
SEPTA brought this action in the Eastern District of Pennsylvania on March 7, 2011, and filed the SAC on June 1, 2011. It alleges four causes of action based on the defendants’ provision of FX services: breach of fiduciary duty and unjust enrichment and, in the alternative, breach of contract and breach of the implied covenant of good faith and fair dealing.
The Master Trust Agreement
The principal relationship among the parties is set forth in the MTA, effective January 1, 1990, and amended in 1999.
In addition to whatever custodial or investment responsibilities BNY Mellon may have with regard to particular assets under the MTA, the agreement explicitly permits BNY Mellon to “provide such ancillary services as SEPTA and the Master Trustee may agree upon from time to time.”
FX Transactions
When SEPTA’s investment managers bought foreign assets, they typically required conversion of U.S. dollars to obtain the required foreign currencies.
BNY Mellon executed FX transactions for the Master Trust in two different ways: “direct” trading and “indirect” trading.
The precise mechanism and procedures applicable to indirect trading under standing instructions are matters of some con
A. FX Procedure Form
The only one of these documents actually signed by SEPTA or one of its investment managers is the. FX Procedure Form.
According to the SAC, “in the recent past” BNY Mellon began requiring custodial clients or their investment managers to sign a one-page “Foreign Exchange Procedure Form” relating to indirect trading.
Defendants have submitted with their motion to dismiss what appear to be five such forms executed by SEPTA or its investment managers in 2000, 2003, 2004, 2007, and 2011, respectively.
In a form signed in March 2000, SEPTA’S investment manager, Brandywine Asset Management, elected to have Mellon Bank, N.A., for an account listed on the form arrange execution of FX both in the context of (1) the purchase and sale of securities and (2) income received from securities or interest received on cash balances.
In a form signed in August 2003, another of SEPTA’s investment managers, Evergreen Investments, also elected for Mellon to arrange FX executions with respect to securities purchases/sales and income conversions for another account.
Two later forms, signed by Brandywine and SEPTA in August 2004 and September 2007, respectively, elected for Mellon to arrange execution of FX related to income conversions.
Finally, a form signed by SEPTA in February 2011 contained yet different language. As in the September 2007 form, SEPTA elected for BNY Mellon Asset Servicing to execute FX transactions in the AIG PEP V account with respect to income conversions.
B. FX Policies and Procedures
The second pertinent document, according to the SAC, is the FX Policies and Procedures.
The version current w hen the SAC was filed allegedly provided the following: First, it stated that BNY Mellon would “publish a ‘Daily Schedule’ of program FX [buy and sell] rates, available prior to 9:00 a.m. [E]asterntimeat https://gm.bankofny. com/FX/ErisaRates.aspx.”
BNY Mellon has submitted with its motion to dismiss three documents that seem to be versions of the FX Policies and Procedures document referenced by the SAC. The first appears identical to the version alleged by the SAC.
The other two documents both are entitled “Mellon Foreign Exchange Procedures.” One is dated July 27, 2004. The other is undated but BNY Mellon says that it “believes [it] to be the Mellon Foreign Exchange Procedures in effect from at least 2000 until the July 27, 2004 procedures came into effect.”
C. The Daily Schedule Web Page
As noted above, both the February 2011 version of the FX Procedure Form and the most recent version of the FX Policies and Procedures refer to a web page, https:// gm.bankofny.com/FX/ErisaRates.aspx, which this opinion will refer to as the “Daily Schedule Web Page.”
As alleged in the SAC and is apparent in the snapshot, the Daily, Schedule Web Page posted a list of guaranteed prices for a large number of currencies, including for each currency the prices at which BNY Mellon would buy or sell the currency
The SAC alleges that the Daily Schedule Web Page contained also at least two hyperlinks, one to the FX Policies and Procedures and one to another web page called the “Standing Instructions Web Page.”
D. The Standing Instructions Web Page
Besides being linked to by the Daily Schedule Web Page, the Standing Instructions Web Page allegedly was accessible directly at the time the SAC was filed at https://gm.bankofny.com/FX/Trade Execution/StandingInstruction.aspx.
The Standing Instructions Web Page stated that “Standing Instructions captures all types of custody-related foreign exchange funding needs and automates the currency execution and settlement ____ providing] a complete FX solution allowing clients to concentrate on their core businesses.”
“Clients benefit from:
• Automatic capture of FX trade requirements from underlying custody activity.
• Pre-trade administration associated with regulated markets.
• Aggregation and netting of trades based on guidelines tailored to client needs.
• FX execution according to best execution standards.
• Settlement of cash to accounts.
• Automated sweeps of residual local currency balances into base currency-
• Automatic reporting of trade details to investment accounting systems.
• Report on FX execution in a timely and flexible fashion.”62
The page stated also the following:
“We consider best execution, as it relates to the Standing Instruction process, as providing a consistent, accurate, and efficient means of facilitating pretrade, trade and post-trade activities. These activities include identification of trade requirements, pre-trade administration associated with regulated markets, arranging settlement, reconciling discrepancies, posting cash to accounts and reporting all relevant transaction*69 details to investment accounting systems.”63
The SAC alleges that the Standing Instructions Web Page “sets forth additional obligations to which BNY Mellon is subject ... when executing FX transactions”
Alleged Manipulation ofFX Trades
The SAC alleges that, upon receiving instructions to execute an FX trade under standing instructions, BNY Mellon would convert funds from United States dollars into a foreign currency in order to complete the requested transaction.
According to the SAC, on May 2, 2011, after the unsealing of qui tam complaints filed against BNY Mellon in Florida and Virginia, BNY Mellon emailed clients a document entitled “Overview of BNY Mellon’s Foreign Exchange Services.”
Discussion
I. Motion to Dismiss Standard
To survive a Rule 12(b)(6) motion, a plaintiff must plead facts sufficient “to state a claim to relief that is plausible on its face.”
II. Claims
A. Breach of Express Contract
Count III of the SAC alleges that BNY Mellon breached the express terms of its contract
BNY Mellon does not challenge either the existence of a contract or damages. It contends only that it did not breach the contract because the contract did not obligate it to provide “best execution.” That term, it argues, appeared only on the Standing Instructions Web Page, which it submits was not a part of the contract. Alternatively, it argues that even if the Standing Instructions Web Page was part of the contract, BNY Mellon complied with any such obligation as a matter of law.
1. Whether the Standing Instructions Web Page Imposed Contractual Obligations
The challenge in assessing this claim is that the parties did not reduce their relationship to a single writing. “To determine whether or not a writing is the parties’ entire contract, the writing must be looked at and if it appears to be a contract complete within itself, couched in such terms as import a complete. legal obligation without any uncertainty as to the object or extent of the parties’ engagement, it is conclusively presumed that the writing represents the whole engagement of the parties.”
SEPTA executed two documents with BNY Mellon: the MTA and the FX Procedure Form.
The parties agree that FX Procedure Form incorporated the FX Policies and Procedures in setting forth BNY Mellon’s obligations. As discussed, the version of this document in effect when the SAC was filed required BNY Mellon to publish a daily schedule of FX prices each morning and then, absent contrary directions from SEPTA or its investment manager, to execute any required FX transaction at a price no less favorable than the daily schedule price (the daily schedule rule, or “DSR”) and within three percent of the relevant interbank rate (the “3% Rule”).
The FX Policies and Procedures leaves a noticeable gap in BNY Mellon’s obligations. On the one hand, it does not impose any express pricing mechanism on BNY Mellon, providing only that the price satisfy the outer bounds established by the DSR and 3% Rule. On the other hand, it does not state expressly that BNY Mellon was free to charge whatever it wished as long as those two requirements were satisfied. Nor does it contain an integration clause making clear that the document
BNY Mellon contends that this gap demonstrates that it had no obligation to apply any particular methodology so long as it complied with the DSR and 3% Rule. SEPTA contends that the gap should be filled by reference to the Standing Instructions Web Page, which allegedly shows that BNY Mellon was required to apply a best execution pricing methodology that gave SEPTA the best price possible in the circumstances in addition to meeting the DSR and 3% Rule.
SEPTA makes two separate arguments as to why the Standing Instructions Web Page should be considered. First, it argues that the FX Policies and Procedures defines the sum total of BNY Mellon’s contractual obligations, that it is ambiguous, and that the ambiguity must be resolved by resort to the extrinsic evidence of the Standing Instruction Web Page. Second, it contends that the Standing Instructions Web Page is a part of the parties’ contract and therefore directly imposes obligations on BNY Mellon.
a. Whether the FX Policies and Procedures Is Ambiguous
“Pennsylvania law on contract interpretation and ambiguity is somewhat complicated; while the broad principles are clear, it is not a seamless web.”
“Ambiguity in a contract can be either patent or latent. While a patent ambiguity appears on the face of the instrument, a latent ambiguity arises from extraneous or collateral facts which make the meaning of a written agreement uncertain although the language thereof, on its face, appears clear and unambiguous. A party may use extrinsic evidence to support its claim of latent ambiguity, but this evidence must show that some specific term or terms in the contract are ambiguous; it cannot simply show that the parties intended something different that was not incorporated into the contract. Lest the ambiguity inquiry degenerate into an impermissible analysis of the parties’ subjective intent, such an inquiry appropriately is confined to the parties linguistic reference. The parties’ expectations, standing alone, are irrelevant without any contractual hook on which to pin them.”87
Thus, a contract is not “rendered ambiguous by the mere fact that the parties do not agree on the proper construction,”
SEPTA’s claim that the FX Policies and Procedures itself is ambiguous fails for want of such a contractual hook. Neither the DSR nor the 3% Rule could be clearer. SEPTA has identified nothing in either that remotely could be construed to impose or allude to a best execution pricing obligation, even assuming that the extrinsic evidence from the Standing Instruction Page were considered.
b. Whether the Standing Instructions Web Page Is PaH of the Contract
The fact that the FX Policies and Procedures document is not ambiguous does not end the matter. The SAC alleges that the Standing Instructions Web Page itself is a part of the parties’ contractual relationship. Assessing this claim requires interpreting the incorporation language in the FX Procedure Form, as this is the one document executed by the parties that can explain what comprised the contract. Here, SEPTA stands on better ground because, while the FX Policies and Procedures is clear and unambiguous, relevant versions of the FX Procedure Form are less so.
The SAC alleges that the version of the form applicable when the SAC was filed provides a hyperlink to the Daily Schedule Web Page, which itself links to the Standing Instructions Web Page.
Several versions of the FX Procedure Form support BNY Mellon’s reading of the contract. In particular, the August 2003, August 2004, and September 2007 versions all required SEPTA or its investment managers to acknowledge receipt of “Mellon’s Foreign Exchange Procedures” and provided that “all FX transactions processed through Mellon ... will be executed pursuant to these Procedures.”
The problem for BNY Mellon is the February 2011 form. This version does not reference any single named document as the aforementioned forms did. Rather, it indicates that the FX trades will be executed “per the procedures available at https://gm.bankofny.com/FX/ErisaRates. aspx.”
Thus, a manager considering whether to elect to receive standing instruction services who followed that link then would have been presented not with a set of procedures or guidelines, but instead with, inter alia, the latest daily schedule of prices, a link to the FX Policies and Procedures, and a link to the Standing Instructions Web Page. To be sure, the link to the FX Policies and Procedures stated: “Click here to view The Bank of New York Mellon’s Policies and Procedures for FX processed through BNY Mellon Custody,” strongly suggesting that this document provided at least some of the governing “procedures available at https://gm. bankofny.com/FX/ErisaRates.aspx” that were referenced in the form. But what to make of the form’s reference to “trading program guidelines” available on the Daily Schedule Web Page? That term does not appear anywhere on the Daily Schedule Web Page or the FX Policies and Procedures.
The Court cannot now conclude as a matter of law that only the link to the FX Policies and Procedures, and not the link to the Standing Instructions Web Page, was to be followed in defining BNY Mellon’s contractual obligations under the February 2011 form. The Standing Instructions Web Page set forth a number of features of the trading program, most of which are not addressed otherwise in the FX Policies and Procedures.
SEPTA next contends that BNY Mellon breached its obligation to provide “FX execution according to best execution standards”
Defendants concede that “best execution” is a term commonly used in the securities business with a meaning that essentially matches the definition that SEPTA advances.
BNY Mellon contends that this definition is inapplicable to its obligations here as a matter of law. While BNY Mellon’s contentions ultimately may prove meritorious, none warrants dismissal at this stage.
First, BNY Mellon argues that the SAC fails to allege that this established concept in securities trading has any meaning in the context of FX trading. This draws too fine a distinction. BNY Mellon concedes that the concept has meaning in the financial industry in situations in which a bank buys or sells a financial product as a principal, the bank and counterparty have not negotiated a specific price, and the bank is
Second, BNY Mellon points out that, even in the securities business, an obligation of best execution still entitles the broker-dealer “to mark up the price to cover its costs and earn a profit.”
Third, BNY Mellon contends that the best execution obligation is irreconcilable with the pricing terms in the FX Policies and Procedures, which it reads as expressly permitting pricing provided only that it does not conflict with the DSR and 3% Rule. The Court disagrees. Both the DSR and 3% Rule are phrased only as limitations. As noted earlier, there is nothing in the FX Policies and Procedures that says that BNY Mellon was free to price FX however it wished aside from these requirements. To be sure, if BNY Mellon prevails on its contention that it had no obligation to provide best execution pricing as SEPTA contends, then the natural consequence may be that BNY Mellon was permitted to price the FX however it chose aside from those two requirements. But that hardly creates an irreconcilable conflict when the question is whether there is a best execution pricing obligation in the first instance.
The real thrust of BNY Mellon’s argument appears to be that a best execution pricing obligation would render the DSR and 3% Rule superfluous. This plainly would not be the case with the DSR which, unlike best execution pricing, provides a prospective guarantee that the price would be no worse than that listed in the daily schedule on a given morning, no matter how unfavorably the market might move over the course of a day. Nor would it be the case with the 3% Rule. As defendants themselves point out, the best execution obligation, as understood in securities trading, allows the broker to take into account a number of factors in setting the price, including a markup to the broker for costs and profit. While the three percent band around the relevant interbank rate may have been a wide one, it cannot be concluded as a matter of law that a best execution pricing methodology would have rendered that requirement superfluous.
More to the point, defendants themselves concede the true purpose of the 3% Rule in its FX trading program procedures: to allow participation by custodial clients that were qualified ERISA plans.
“[T]he exchange rate used by such bank or broker-dealer (or affiliate) for a particular foreign exchange transaction does not deviate by more than 3 percent from the interbank bid and asked rates for transactions of comparable size and maturity at the time of the transaction*78 as displayed on an independent service that reports rates of exchange in the foreign currency market for such currency.”116
The FX Policies and Procedures corroborates the point: “This Program is designed to provide ERISA plan accounts the ability to engage in FX transactions with [BNY Mellon] in compliance with one or more prohibited transaction exemptions.”
Thus, while defendants at times seek to paint the 3% Rule as the focus of the pricing bargain that it struck with its clients, the procedures themselves permit the inference that the 3% Rule was designed simply to make the program obviously ERISA-compliant. While ERISA compliance perhaps was not meaningful for SEPTA, which is not itself alleged to have been an ERISA plan, it does demonstrate that there is nothing irreconcilable between the existence of a best execution pricing obligation and the 3% Rule.
Finally, BNY Mellon contends that, whatever best execution may be understood to mean as a matter of industry usage, the Standing Instructions Web Page provided a definition of “best execution” ' that is entirely unrelated to pricing.
“We consider best execution, as it relates to the Standing Instruction process, as providing a consistent, accurate, and efficient means of facilitating pretrade, trade, and post-trade activities. These activities include identification of trade requirements, pre-trade administration associated with regulated markets, arranging settlement, reconciling discrepancies, posting cash to accounts and reporting all relevant transaction details to investment accounting systems.”
Although this statement does suggest that BNY Mellon viewed its best execution standard as involving many aspects of trade facilitation other than pricing, the language does not expressly forswear the industry understanding of the term. One at least plausibly might read this sentence as adding to BNY Mellon’s obligations, rather than implicitly redefining an oft-used industry pricing term without saying so expressly. In addition, the use of the term “efficient” could be read to support an understanding of the term that includes best execution pricing. Simply put, while defendants’ argument about the proper construction of this contract term may prove sufficient to warrant summary judgment or a verdict at trial, the Court cannot now conclude that SEPTA’s reading of the contract is implausible as a matter of law.
B. Count IV: Implied Covenant of Good Faith and Fair Dealing
SEPTA claims also that BNY Mellon breached the contract in issue here
Pennsylvania courts have adopted Section 205 of the Restatement (Second) of Contracts,
“In the absence of an express provision, the law will imply an agreement by the parties to a contract to do and perform those things that according to reason and justice they should do in order to carry out the purpose for which the contract was made and to refrain from doing anything that would destroy or injure the other party’s right to receive the fruits of the contract.”126
“Courts employ the doctrine of necessary implication as a means of avoiding injustice by inferring contract provisions that reflect the parties’ silent intent.”
These doctrines apply “only in limited circumstances.”
SEPTA contends that “BNY Mellon exploited its superior knowledge of the FX rates to extract significant profits for itself from SEPTA and the Class,” and that “exploitation of [the contractual] ambiguity
The purpose of the implied covenant is to prevent a party from making an agreement and then acting in such a way as to prevent the other party from receiving its fruits. But this merely begs the question: for what did SEPTA bargain? Either best execution pricing was an express term of the contract or it was not. If it was, then SEPTA will be able to pursue its claim of an express breach and has pointed to no sense in which BNY Mellon prevented SEPTA from receiving the benefit of best execution pricing aside from simply failing to provide best execution. If, conversely, best execution was not an express term of the agreement, then SEPTA had no claim to it as a fruit of the contract.
C. Breach of Fiduciary Duty
SEPTA brings also a state law claim for breach of fiduciary duty against BNY Mellon.
1. Fiduciary Duties Under the MTA
Under Pennsylvania law, the existence of a “confidential relationship” is an essential element of a claim for breach of fiduciary duty.
The MTA unquestionably established a fiduciary relationship between BNY Mellon and SEPTA. Indeed, BNY Mellon expressly “acknowledge[d] that it assume[d] the fiduciary duties established by this Agreement.”
2. Ancillary Services
The Court next considers how the FX trading relationship fit within the MTA and the relationship between the parties.
The MTA expressly permits BNY Mellon to provide, “in addition to the services rendered” under the MTA, “such ancillary services as SEPTA and the Master Trustee may agree upon from time to time” with “[t]he compensation received by the Master Trustee for such services [to be] agreed upon by the parties in an arm’s-length manner.”
The MTA says next to nothing about FX trading at all and certainly nothing about BNY Mellon’s standing instructions service. SEPTA nevertheless argues that standing instructions FX trading still was part of BNY Mellon’s custodial duties. It points principally to the following provision in the amended MTA:’
“The Master Trustee is hereby granted any and all discretionary powers not explicitly or implicitly conferred by this Agreement which it may deem necessary or proper for the protection of the property held hereunder. This shall include the ability to take any and all actions necessary to settle transactions in futures and/or options contracts, short-selling programs, foreign exchange or foreign exchange contracts, swaps, and other derivative instruments.”152
Even in the absence of other evidence, it would be quite a leap from (1) language empowering the trustee — under an MTA that at least contemplated that the trustee would perform investment functions, although that ultimately was not the role
The FX Policies and Procedures — which SEPTA does not dispute set forth binding parameters of the program — stated that BNY Mellon would execute the standing instruction trades “on a principal basis.”
The Court thus concludes that the standing instructions trades were “additional services rendered” under the “ancillary services” provision of the MTA. BNY Mellon was entitled to be compensated for those services as determined by arm’s-length agreement. There was no fiduciary obligation to provide best execution pricing. This of course is distinct from whether it had a contractual obligation to provide best execution.
3. Overmastering Influence
Even where parties engage in a financial transaction on a principal-to-principal, arm’s-length basis, a fiduciary relationship still may be created by a sufficient degree of trust reposed by one party in the other in the circumstances.
The SAC relies on three main factors in its attempt to plead a confidential relationship in the FX trading: (1) BNY’s allegedly “superior access to confidential information about prevailing market FX rates at the time SEPTA’s FX transactions were actually executed,” (2) its allegedly “superior position over SEPTA and the Class with respect to the execution of FX transactions,” and (3) its “status as fiduciary]” under the MTA.
SEPTA’s reliance on alleged confidential information is unavailing. The SAC does not allege that BNY Mellon had any information about FX market rates that SEPTA could not readily have obtained. Indeed, the SAC directly undermines any such claim when it concedes that SEPTA or its investment managers always had the option of calling BNY Mellon and engaging in direct trading in which they could have negotiated their own prices directly.
SEPTA likewise fails to make any plausible allegation that BNY Mellon held a superior position. SEPTA’s assets were controlled by appointed investment managers, sophisticated fiduciaries, themselves charged with duties of care, to make discretionary investment decisions with regard to SEPTA’s assets.
This leaves only SEPTA’s argument that BNY Mellon’s status as fiduciary under the MTA as custodian was sufficient. It was not. Concluding otherwise would do violence to the MTA, which specifically contemplated the possibility that BNY Mellon and SEPTA negotiate, at arm’s-length, for the provision of ancillary services.
Jp. Alleged Misrepresentations and Nondisclosures
The foregoing establishes that BNY Mellon, when executing FX trades through the standing instructions program, had no fiduciary obligation to price those trades in SEPTA’s best interest.
transaction.”
Other jurisdictions also have made the point in similar contexts. In Geman v. SEC,
While the Court has concluded that BNY Mellon was not acting in its custodial fiduciary capacity in the course of providing standing instruction trades, SEPTA plausibly has alleged that the FX trading relationship was sufficiently related to BNY Mellon’s custodial business to trigger this obligation of candor with respect to those trades.
Here, SEPTA plausibly has alleged both misrepresentations and nondisclosures. First, SEPTA adequately alleges that BNY Mellon’s representation that the standing instruction trading would provide “FX execution under best execution
Similarly, SEPTA may proceed with its claim for breach of fiduciary duty regarding BNY Mellon’s disclosures about whether the standing instruction service was part of BNY Mellon’s fiduciary responsibilities. To be sure, BNY Mellon did state that it would be trading “on a principal basis,”
The Court expresses no view at this stage whether any of the May 2011 disclosures actually was necessary for BNY Mellon to comply with its fiduciary obligations. Such an inquiry may present factual questions that would benefit from a fuller record. It suffices to note only that the mere reference to “principal basis” in a document incorporated by the FX Procedure Form signed by SEPTA does not foreclose a plausible claim that the disclosures were insufficient.
D. Unjust Enrichment
Finally, SEPTA brings a claim for unjust enrichment against all defendants.
1. Claims Against BNY Mellon and Mellon Bank
The elements of unjust enrichment under Pennsylvania law are “(1) benefits conferred on defendant by plaintiff, (2) appreciation of such benefits by defendant, (3) acceptance and retention of such benefits under such circumstances that it would be inequitable for defendant to retain the benefit without payment of value.”
“[T]he doctrine of unjust enrichment is inapplicable when the relationship between parties is founded upon a written agreement or express contract.”
BNY Mellon offered its standing instruction service to SEPTA, and, by signing the FX Procedure Form, SEPTA agreed to receive that service and follow its procedures. While there is a considerable dispute about what exactly was agreed in so doing, there undoubtedly was an express contract in this case. The claim for unjust enrichment therefore will not he.
2. Claim Against BNY Mellon Corp.
Theclaim against BNY Mellon Corp. presents a different issue. The SAC does not allege that SEPTA had any relationship whatsoever with BNY Mellon Corp. Rather, it alleges that “BNY Mellon Corp. is the parent of BNY Mellon,” that Mellon Bank, N.A., is “a historical subsidiary of BNY Mellon Corp.,” and that “BNY Mellon Corp.’s principal assets and sources of income come from its principal bank subsidiaries — Defendant BNY Mellon and BNY Mellon, N.A.”
Pennsylvania law recognizes a “strong presumption against piercing the corporate veil,” as the “general rule [is] that the corporate entity should be recognized and upheld, unless specific, unusual circumstances call for an exception.”
SEPTA’s theory would eviscerate this long established respect for the corporate form. Under its view, whenever a corporation is liable for some unlawful activity, any parent of that corporation (and, presumably, any other shareholder as well) could be liable on a claim of unjust enrichment. The Fifth Circuit has rejected a nearly identical claim under Florida and California law, noting the “far-ranging implications such a theory would have on state doctrines of shareholder liability.”
E. Statutes of Limitations
BNY Mellon moves also to dismiss parts of SEPTA’s claims as barred by Pennsylvania’s statutes of limitations. “The lapse of a limitations period is an affirmative defense that a defendant must plead and prove, and dismissing claims on statute of limitations grounds at the complaint stage is appropriate only if a complaint clearly shows the claim is out of time.”
The SAC alleges breaches of contract and fiduciary duty dating as far back as 2000. The first complaint in this action was filed in March 2011. Pennsylvania has a four-year statute of limitations for breach of contract actions
“[T]he general rule [is] that a cause of action accrues, and thus the applicable period begins to run, when an injury is inflicted.”
SEPTA invokes also the doctrine of fraudulent concealment, which in Pennsylvania may toll the running of statutes of limitations where “through fraud or concealment, [a defendant] causes the plaintiff to relax his vigilance or deviate from his right of inquiry into the facts.”
The Court considers first the breach of contract claims.
First, defendants themselves argue elsewhere on this motion that even the securities industry understanding of “best execution” would entitle BNY Mellon to a certain markup and spread.
Further relevant to the inquiry are BNY Mellon’s actions in setting the prices as it did. Even assuming for present purposes that BNY Mellon believed in good faith that it was obliged only to satisfy the DSR and 3% Rule, why did it, as alleged by the SAC, consistently set the prices within the daily interbank range, but at its lower end?
Of course, whether applying the discovery rule or the fraudulent concealment doctrine, SEPTA still was obliged to employ reasonable diligence to discover the injury and its cause. For SEPTA to assert claims dating back to 2000, the statute of limitations for the breach of contract claims would appear to require seven years’ tolling. Notwithstanding BNY Mel-
The breach of fiduciary duty claims present somewhat different questions, but the result is the same. The Court considers first the claim — applicable in the alternative to a breach of contract claim — that BNY Mellon misrepresented that its indirect trading program provided best execution pricing. Certainly SEPTA might have become aware that this was a misrepresentation of the program by conducting the historical pricing analysis discussed above. It also might have reviewed the contract carefully and inquired further of BNY Mellon to the extent that the terms were not clear. Similarly, even if it ultimately were shown that BNY Mellon did not fulfill its fiduciary duties by its mere reference to “principal basis,” reasonable diligence still might have required that SEPTA take notice of the use of the term “principal” and inquire further of BNY Mellon to ascertain the precise nature of the relationship. Needless to say, the diligence required for these inquiries would have been substantially less onerous than the pricing analysis.
On the other hand, as the Third Circuit has held under Pennsylvania law, “where the wrongdoing underlying causes of action has been perpetrated by a fiduciary to the detriment of its principal, this fact militates strongly against summary judgment on the issue of whether the principal ... exercised reasonable diligence in failing to discover the fiduciary’s malfeasance within the applicable statutes of limitations.”
Thus, while the Court has reservations about whether SEPTA exhibited reasonable diligence as to the breach of fiduciary duty claims, the motion to dismiss on this ground is denied. The existence of the fiduciary relationship emphasizes the likely existence of factual questions regarding what was reasonable diligence in the circumstances. Mindful that Pennsylvania courts generally consider reasonable diligence a jury question — not one properly resolved on a motion to dismiss — and that Second Circuit law requires the limitations defense to be “clearly” established from the complaint to warrant dismissal on a
Conclusion
For the foregoing reasons, defendants’ motion [DI 40] is granted to the extent that Counts II and IV, and Count I except to the extent that it alleges claims for breach of fiduciary duty based on alleged misrepresentations and nondisclosures, are dismissed. The motion is denied in all other respects. Defendants’ request to strike references in the SAC to The Wall Street Journal is denied as moot.
SO ORDERED.
. Second Amended Complaint (“SAC”) [DI 32] ¶ 12.
. Id. ¶¶ 67, 4. The alleged Class excludes litigants bringing qui tam actions unsealed before or during the pendency of the action.
. Id. ¶ 13.
. Id. ¶ 14.
. Id. ¶ 15.
. Id. ¶¶ 13, 15.
. Id. ¶ 15.
. Id.n 79-106.
. DI 32-1; DI 32-2. (All "DI” references in this opinion are to the docket in 12 Civ. 3066).
. See MTA §§ 2.1, 2.5.
. MTA §§ 5.1(a), 5.1 (b)(i), 5.2(a).
. Id. § 5.2(a).
. Id.
. Id. § 7.2(g).
. Id. § 2.6.
. MTA Amend. ¶ 7 (amending § 6.1).
. MTA § 9.1.
.Id.
.' SAC ¶ 45.
. Id.
. Id. ¶ 21.
. Id. ¶ 24.
. Id. ¶ 25.
. Id.
. Id. ¶ 26.
. Id. ¶ 27.
. Id.. ¶ 31.
. Id. ¶ 32.
. Id.
. Id.
. DI 40-5, 40-6, 40-7.
. DI 40-5 at 3. With respect to the purchase and sale of securities election, the form indicates that the manager needed to provide FX instructions on each trade. Id. This appears to mean that while income received in foreign currency automatically would be converted to U.S. dollars under the program, Mellon Bank, N.A., expected the manager to indicate the desired conversions that would be made in connection with any purchases or sales of securities on a trade-by-trade basis.
. Id. There is a note on the document stating "See Guide to Trading Around the World for additional FX information.” Id. No document of that name is in the record.
. DI 40-6 at 2. As in the March 2000 form, the form indicates that the manager still would need to request, on a trade-by-trade basis, if and when it wanted FX conversions in connection with a securities purchase or sale.
. Id.
. Id.
. Id.
. DI 40-5 at 2; DI 40-7 at 2. These forms no longer contain any separate election regarding the purchase and sale of securities. Rather, the forms state that "FX requirements other than Income Items may be processed through Mellon GSS under the Procedures, but only if the Manager/Fiduciary specifically instructs Mellon GSS to do so on a transaction-by-transaction basis.” Id.
. Id.
. DI 40-5 at 2.
. DI 40-7 at 2.
. DI 40-7 at 4. It is not apparent from the record why this form was necessary in light of the September 2007 form. Note that attached to the February 2011 form in the record is a letter of the same date from assistant treasurer at SEPTA to BNY Mellon Asset Servicing, stating "Please use this letter as your standing instruction to convert all EUR funds to U.S. dollars.” Id. at 3.
. Id.
. Id.
. SAC ¶ 34. The SAC refers to the webpage reached from following this hyperlink as the "FX Website.”
. The SAC suggests that the manager’s other options include executing a "direct” trade with BNY Mellon on a negotiated basis or trading with a third-party. Id. ¶¶ 20, 25.
. Id.
. Id. ¶ 32.
. DI40-8.
This document is consistent with the quotations alleged by the SAC as being contained in the FX Policies and Procedures. Moreover, the Court notes that following the hyperlink alleged in the SAC as corresponding to the FX Policies and Procedures leads, as of January 23, 2013, to a document identical to that attached by defendants.
. Id.
. DI 40-3 ¶ 6.
. Id. ¶ 8; see DI 40-9; DI 40-10.
. DI 40-9 at 2; DI 40-10 at 2.
. The Court does not use the SAC's terminology for this page- — -the SAC called it the "FX Website” — in order to avoid the ambiguity that may result from the general understanding of a "website” as comprising several different web pages.
. DI 41-7 at 2; see 41-2 ¶ 3.
. SAC ¶ 32; DI 41-7 at 2.
. SAC ¶¶ 32-33.
. DI 41-7 at 2.
. Accessing the same hyperlink as of January 23, 2013 led to a new web page that does not resemble the SAC’s allegations.
. DI 40-3 ¶ 10; DI 40-12.
. DI 40-12 at 2.
. Id. (emphasis added).
The SAC does not allege when the Standing Instructions Web Page was created or when the term “best execution" first appeared on it. Counsel for the defendants represented at oral argument that the term appeared on BNY Mellon's website around 2007. See Tr. 41:19-21.
. DI 40-12 at 2.
. SAC ¶ 35.
. Id. ¶ 28.
Besides alleging that BNY Mellon assured clients that indirect FX trades were subject to "best execution” standards during the Class Period, the SAC alleges also that BNY Mellon described the trades as "free of charge.” Id. The SAC does not state how or where this "free of charge” representation was made.
. Id. ¶ 40.
. Id. (brackets and internal quotation marks omitted).
. Id. ¶ 46.
. Id. ¶¶ 46-47.
. Id. ¶ 49; DI 40-3 ¶ 11; DI 40-13.
. SAC ¶¶ 50-51.
At the same time, BNY Mellon said that the prices clients received were "significantly more favorable than the retail prices small trades would otherwise receive — which can be 200 basis points (or more) above the interbank rate on any given day.” DI 40-13 at 4. The document noted also a number of benefits of the standing instructions program for clients, including eliminating the administrative complications associated with "smaller, time-consuming, and labor- and system-intensive transactions.” Id.
. SAC ¶ 50.
. Id.
. Id. ¶ 52.
. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007).
. Ashcroft v. Iqbal, 556 U.S. 662, 663, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009).
. Allaire Corp. v. Okumus, 433 F.3d 248, 249-50 (2d Cir.2006).
. Halebian v. Berv, 644 F.3d 122, 131 n. 7 (2d Cir.2011).
Courts properly may consider also "matters of which judicial notice may be taken, or documents either in plaintiffs' possession or of which plaintiffs had knowledge and relied on in bringing suit.” Chambers v. Time Warner, Inc., 282 F.3d 147, 153 (2d Cir.2002) (alterations omitted).
. Int’l Audiotext Network, Inc. v. Am. Tel. & Tel. Co., 62 F.3d 69, 72 (2d Cir.1995) (internal quotation marks and alterations omitted).
In particular, the Court concludes that the following documents, the authenticity of which is not disputed, either are incorporated by reference in or integral to the complaint and therefore are properly considered on this motion to dismiss: the five FX Procedure Forms signed by SEPTA or its investment managers, DI 40-5; DI 40-6; DI 40-7, the most recent version of the FX Policies and Procedures, DI 40-8, the snapshot of the Daily Schedule Web Page, DI 41-7, the snapshot of the Standing Instructions Web Page, DI 40-12, and BNY Mellon's May 2, 2011 disclosures, DI 40-13. For the sake of clarity, the Court does not convert this motion into one for summary judgment. See Fed. R. Civ. P. 12(d). It has considered the documents referred to above only for the facts of their contents and not for the truth of any matters asserted. Although the Court may refer to the older versions of the FX Policies and Procedures attached by defendants, DI 40-9; DI 40-10, it does not rely on them to reach its decision.
. The claim is brought in the alternative to Counts I and II for breach of fiduciary duty and unjust enrichment. SAC ¶¶ 93-99.
. For convenience, the remainder of the opinion will refer to "best execution pricing” as the pricing mechanism that SEPTA alleges it should have received — i.e., the best price possible in the circumstances.
. Both parties agree that Pennsylvania law applies to this dispute. See, e.g., DI 40-1 at 3; DI 41 at 30 n. 27.
. Ware v. Rodale Press, Inc., 322 F.3d 218, 225 (3d Cir.2003) (alteration in original) (quoting CoreStates Bank, N.A. v. Cutillo, 723 A.2d 1053, 1058 (Pa.Super.Ct.1999)).
. Yocca v. Pittsburgh Steelers Sports, Inc., 578 Pa. 479, 497-98, 854 A.2d 425 (2004) (internal quotation marks and alterations omitted).
. The MTA was signed by both parties. DI 32-1 at 27. Versions of the FX Procedure Form were signed either by SEPTA or its investment managers acting on SEPTA’s behalf. DI 40-5, DI 40-6, DI 40-7.
. Bohler-Uddeholm Am., Inc. v. Ellwood Group, Inc., 247 F.3d 79, 92 (3d Cir.2001).
. Id. at 93 (citations, alterations, and internal quotation marks omitted; emphasis in original).
. Id. (internal quotation marks omitted).
. Id. at 94 & n. 3 (internal quotation marks omitted).
. SEPTA attempts to locate ambiguity in the 3% Rule’s reference to the "relevant” interbank rate. DI 41 at 34. Even if the Court were to agree that there may be some doubt about the precise meaning of "relevant” in
. DI 41 at 35.
. SAC ¶ 32.
. DI 40-5 at 2; DI 40-7 at 2.
. DI 40-9; see DI 40-3 ¶ 7.
. DI40-9.
. DI 40-5 at 2; DI 40-7 at 2.
It appears that the Daily Schedule Web Page at that time was available at a slightly different web address than alleged in the SAC. The record does not indicate whether that web page resembles the one described in the SAC and attached by SEPTA to its opposition.
. Similar to the August 2004 and September 2007 forms, a form signed in August 2003 stated that “Manager acknowledges receipt of Mellon Foreign Exchange (FX) Procedures and agrees to act in accordance with Procedures as indicated below.” DI 40-6 at 2. The reference to the Daily Schedule Web Page is identical in this form to the August 2004 and September 2007 forms.
. DI 40-7 at 4.
. Id.
. BNY Mellon dismissively characterizes the Standing Instructions Web Page as a "promotional page” that could not create contractual obligations. DI 40-1 at 23. That is hardly clear as a matter of law at this stage.
.DI 40-7 at 4.
This conclusion finds further support in the existence of a gap in the FX Policies and Procedures. If the FX Policies and Procedures had contained an integration clause or made clear that BNY Mellon was free to price the transactions however it wished, subject to the DSR and the 3% Rule, it would not be plausible that the FX Procedure Form was intended to incorporate any other documents that set forth BNY Mellon's pricing obligations, regardless of the language used. Thus, while the gap in the FX Policies and Procedures does not give*75 rise to a contractual ambiguity in that same document, it does support SEPTA’s position regarding ambiguity in the FX Procedure Form.
. The March 2000 form further confuses the inquiry, as it appears not to reference any applicable guidelines or procedures governing the execution of FX trades. DI 40-5 at 3.
. BNY Mellon makes much out of the fact that the SAC does not allege that “best execution” appeared on the website when SEPTA signed the forms or that SEPTA relied on this representation. But see SAC ¶ 82 (“SEPTA and the Class reasonably and foreseeably relied upon” defendants’ "best execution” representation.). It is true that the SAC does not allege when "best execution” appeared on the website; it alleges only that BNY Mellon represented during the Class Period that it would provide best execution. Id. ¶ 28. At oral argument, counsel for the defendants represented that the term first appeared around 2007, well before at least the signing of the February 2011 form. See Oral Arg. Tr., Oct. 6, 2011, DI 50 [hereinafter "Oral Arg. Tr.”] at 41:19-21.
In any event, BNY Mellon misapprehends the significance of the timing. The FX Procedure Forms do not specify that the guidelines for the program are those in place when the form was signed. Rather, the February 2011 form specifically pointed to the current website for the program’s guidelines. In fact, the most recent FX Policies and Procedures makes clear that the document was subject to change and that clients’ continued operation under the program would constitute implied consent to any such changes. DI 40-8 at 3.
Nor has BNY Mellon explained why reliance would be relevant. SEPTA has not argued that the Standing Instructions Web Page should be incorporated under a promissory estoppel theory. If SEPTA shows that the FX Procedure Form incorporates the current Standing Instructions Web Page as a matter of contract interpretation, then obligations imposed by that web page would be binding regardless of any reliance.
The Court concludes that, having stated a plausible claim that BNY Mellon’s "best execution” representation was a part of the contract for at least part of the Class Period, SEPTA is entitled to discovery in an effort to flesh out its claim.
. See Giant Food Stores, LLC v. THF Silver Spring Dev., L.P., 959 A.2d 438, 445 (Pa.Super.Ct.2008) ("[Wjhere several instruments are made as part of one transaction they will be read together, and each will be construed with reference to the other; and this is so although the instruments may have been executed at different times and do not in terms refer to each other”). The Court expresses no view here as to whether this principle would apply to documents not executed by the parties.
. Bohler-Uddeholm Am., Inc., 247 F.3d at 93.
. None of this should be read as a conclusion that SEPTA will survive summary judgment even for claims based on the February 2011 form. The Court concludes only that SEPTA has a plausible claim warranting denial of the motion to dismiss on this ground.
. SAC ¶ 37 (emphasis omitted).
. DI 40-1 at 24.
. FINRA Rule 5310.
. Id.
. Id. See Newton v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 259 F.3d 154, 170 n. 12 (3d Cir.2001) ("Defendants' duty to provide best execution remained consistent whether they were acting as agents of the trade or principals.”).
. E.g., NetCoalition v. SEC, 615 F.3d 525, 530 n. 6 (D.C.Cir.2010) (describing "duty of best execution” as requiring broker-dealer "to exercise reasonable diligence to obtain favorable order execution terms for its customers”); Kurz v. Fidelity Management & Research Co., 556 F.3d 639, 640 (7th Cir.2009) (describing "duty of best execution” as "getting the optimal combination of price, speed, and liquidity for a securities trade”); Geman v. SEC, 334 F.3d 1183, 1186 (10th Cir.2003) (holding that “duty of best execution requires that a broker-dealer seek to obtain for its customer orders the most favorable terms reasonably available under the circumstances”); Minton v. Nat’l Ass’n of Sec. Dealers, Inc., 336 F.3d 1373, 1381 n. * (Fed.Cir.2003) (noting that "best execution rule required broker to fill a client's order at the best available price”); see also e.g., Francis J. Facciolo, A Broker’s Duty of Best Execution in the Nineteenth and Early Twentieth Centuries, 26 Pace L. Rev. 155 (2005); Arthur Levitt, Best Execution, Price Transparency, and Linkages: Protecting the Investor Interest, 78 Wash. U.L.Q. 513 (2000); Jonathan R. Macey & Maureen O'Hara, The Law and Economics of Best Execution, 6 J. Fin. Intermediation 188 (1997); David A. Lipton, Best Execution: The National Market System’s Missing Ingredient, 57 Notre Dame Law. 449 (1982); Kenneth D. Garbade & William L. Silber, Best Execution in Securities Markets: An Application of Signaling and Agency Theory, 37 J. Fin. 493 (1982).
. DI 40-1 at 25.
. DI 40-1 at 17 n. 6.
. 29U.S.C. §§ 1106, 1108.
. 29U.S.C. § 1108(b)(18)(C).
. DI 40-8 at 2.
. At oral argument, counsel for plaintiff represented that this definition was added to the Standing Instruction Web Page only in late 2009, after allegations similar to those in this case were made against State Street, and that previously the term “best execution” was used without any corresponding definition. Oral Arg. Tr. 77:14-22. This allegation does not appear in the SAC or any attached papers and will not be considered by the Court here.
.The Court’s conclusion is consistent with that of Judge Alsup in Int’l Union of Oper. Eng'rs v. BNY Mellon Corp., 2012 WL 476526, *6 (N.D.Cal. Feb. 14, 2012) — a case now consolidated in the MDL before this Court— which held that the construction of a disputed term such as "best execution standards” was best left to a motion for summary judgment after discovery has been conducted.
. SAC ¶¶ 100-06.
. Somers v. Somers, 418 Pa.Super. 131, 613 A.2d 1211, 1213 (1992).
. Restatement (Second) of Contracts § 205.
. Somers, 613 A.2d at 1213.
. Id.
. Restatement (Second) of Contracts § 205; accord CMR D.N. Corp. v. City of Phila., 803 F.Supp.2d 328, 337 (E.D.Pa.2011).
. Stamerro v. Stamerro, 889 A.2d 1251, 1259 (Pa.Super.Ct.2005).
. Id.
. John B. Conomos, Inc. v. Sun Co., Inc. (R & M), 831 A.2d 696, 706 (Pa.Super.Ct.2003).
. Id.
. USX Corp. v. Prime Leasing Inc., 988 F.2d 433, 438 (3d Cir.1993).
. Conomos, 831 A.2d at 706-07.
.Id. at 707.
. DI 41 at 37.
. To be sure, as discussed below, BNY Mellon allegedly made misrepresentations suggesting that it would provide best execution pricing. But short of SEPTA relying on any such misrepresentations as bases of a contractual obligation through a theory of promissory estoppel' — and it makes no such claim — the Court concludes that the implied covenant of good faith and fair dealing creates no benefit that the contract does not already provide.
. In Operating Engineers, Judge Alsup permitted a claim for breach of the implied covenant of good faith and fair dealing to proceed under California law against BNY Mellon in similar circumstances. Judge Alsup concluded that “[t]he implied covenant can be violated by expressly permitted conduct done in bad faith.” 2012 WL 476526 at *6. This is true but incomplete, at least under Pennsylvania law. The covenant here is violated only when that expressly permitted conduct done in bad faith frustrates a party’s right to receive a bargained-for benefit in the contract. The SAC makes no such allegation here.
. See SAC ¶¶ 79-86.
. Basile v.H & R Block, Inc., 52 A.3d 1202, 1210 (2012).
. Id. (emphasis and internal quotation marks omitted).
. MTA § 12.1.
. MTA §§ 2.5, 2.6.
. MTA § 5.2 (emphasis added).
. Indeed, SEPTA conceded that investment managers were appointed for all of its assets at oral argument. Oral Arg. Tr. 55:2-8.
. BNY Mellon makes much of the MTA's use of a named term "Fiduciary” to denote appointed investment managers, contending that this demonstrates that fiduciary obligations attached to BNY Mellon only so long as it retained investment duties. Id. The Court is not persuaded that the MTA’s accurate shorthand referring to investment managers as "Fiduciaries” was meant to divest BNY Mellon of the fiduciary obligations otherwise imposed by the MTA and Pennsylvania law.
. See DI 40-1 at 29, 30 n. 17. This renders inapposite BNY Mellon's citations to cases that show that mere holders of assets are not fiduciaries under the statutory definition provided by ERISA. See, e.g., Beddall v. State Street Bank & Trust Co., 137 F.3d 12 (1st Cir.1998); Burtch v. Ganz (In re Mushroom Transp. Co., Inc.), 382 F.3d 325, 346-47 (3d Cir.2004).
. MTA § 7.1 contains “general powers” that the Master Trustee has only when investment managers have not been appointed. But MTA § 7.2 then provides “specific powers” to the Master Trustee, with no indication that these powers disappear upon the appointment of investment managers.
. MTA § 7.2 (emphasis added). The MTA specifically enumerated a number of such powers, including inter alia the ability to delegate power to other agents where needed “to facilitate the operations of the Master Trust Fund,” the power to "form corporations and to create trusts, ... to enter into agreements creating partnerships or joint ventures for any purpose or purposes determined by the Master Trustee to be in the best interests of the Master Trust Fund,” and the power “to make, execute and deliver, as trustee, any and all deeds, leases, mortgages, conveyances, waivers, releases or other instruments in writing necessary or desirable for the accomplishment of any of the foregoing powers.” Id.
Separately, the MTA granted also “any and all discretionary powers not explicitly or implicitly conferred by this Agreement which it may deem necessary or proper for the protection of the property held hereunder.” Id. § 8.1.
. See MTA Amend. ¶ 7 (amending § 6.1) ("In performing its duties under this agreement, the Master Trustee shall exercise the care, skill, prudence and diligence under the circumstances then prevailing that a prudent man acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character with like aims.”); cf. In re Lux’s Estate, 480 Pa. 256, 263, 389 A.2d 1053, 1057 (1978) (defining "duty of care” in trust context as "[t]he measure of diligence and care ... that which a man of ordinary prudence would practice in care of his own estate”).
*82 At oral argument BNY Mellon conceded that the duty of care in this provision applied to its custodial responsibilities. See Oral Arg. Tr. 14:2-5 (counsel for BNY Mellon stating that § 6.1 "provides more generally that the master trustee will exercise care, skill, prudence, and diligence acting in its capacity which is to say its capacity as custodian”).
. In reaching this conclusion, the Court emphasizes that it makes no such statement generally about BNY Mellon’s custodial clients. Its decision here is rooted in the obligations created by the MTA between SEPTA and BNY Mellon and applicable Pennsylvania law.
. See Witherow v. Weaver, 337 Pa. 488, 12 A.2d 92 (1940) (recognizing that "custodian of [tax] collections” entrusted to "insure their safekeeping” had "fiduciary obligations with respect to the fund”); In re Wilson’s Estate, 59 Pa.Super. 358 (Pa.Super.Ct.1915) (recognizing that executor of estate who was "merely a custodian of the assets” nevertheless had a "fiduciary position[]”).
. MTA §9.1.
. See Oral Arg. Tr. 74:12-14 ("[T]hey're supposed to be providing us as our fiduciary with the best rate that they could obtain at that time.”).
. MTA Amend. ¶ 30 (amending § 8.1) (emphasis added).
. SAC ¶ 34.
. See, e.g., 17 C.F.R. § 240.10b-10 (setting forth different disclosure obligations on broker-dealers who act as principal versus those who act as agent); Press v. Chemical Inv. Servs. Corp., 166 F.3d 529, 539-40 (2d Cir.1999) (concluding that defendant acted as "principal” and not "agent” when it took ownership of financial instrument and sold it from its own account to plaintiff); Sec. Indus. Ass'n v. Bd. of Governors of Fed. Reserve Sys., 716 F.2d 92, 97-98 (2d Cir.1983) (noting that bank trading for its own account "trades as principal”); United States v. Blitz, 533 F.2d 1329, 1334 n. 12 (2d Cir.1976) ("A market maker or trader purchases and sells securities as a principal for his own account.”).
. Instead, SEPTA complains only that the reference to "principal basis” was "buried in the FX Policies and Procedures,” a document that SEPTA did not sign. DI 41-1 at 18. As discussed below, BNY Mellon may have failed adequately to comply with disclosure obligations. But that is a separate issue.
. See, e.g., Lehman Bros. Comm. Corp. v. Minmetals Int’l Non-Ferrous Metals Trading Co., 179 F.Supp.2d 118, 151 (S.D.N.Y.2000).
. Basile, 52 A.3d at 1210 (internal quotation marks omitted).
Courts should not “ma[k]e too much of the use of the disjunctive in [this] formulation,” which is meant just to provide "generalized guidance.” Id. Rather, the question is whether "the circumstances make it certain the parties do not deal on equal terms.” Id. (internal quotation marks omitted).
. Id.
. eToll, Inc. v. Elias/Savion Adver., Inc., 811 A.2d 10, 23 (Pa.Super.Ct.2002)
. SAC ¶ 82.
. Id. ¶ 25.
. Id. ¶ 46.
. MTA § 5.2.
. At times, SEPTA’s brief appears to suggest that BNY Mellon would have violated its custodial fiduciary duties insofar as it breached its agreement to provide “best execution” pricing. Even if a fiduciary generally should not breach its contracts with its principal, the Court agrees with BNY Mellon that any such theory would be barred by the "gist of the action” doctrine.
This doctrine “is designed to maintain the conceptual distinction between breach of contract claims and tort claims." eToll, 811 A.2d at 14 (citation omitted). "To be construed as in tort, ... the wrong ascribed to defendant must be the gist of the action, the contract being collateral.” Bash v. Bell Tele. Co., 411 Pa.Super. 347, 601 A.2d 825, 829 (1992). But if the only reason that*85 BNY Mellon would have violated its fiduciary duties is that it breached a separate contract with SEPTA, then the contract is hardly collateral.
. See Anchel v. Shea, 762 A.2d 346, 357 (Pa.Super.Ct.2000) ("Our law prescribes that a fiduciary obligation includes both a duty of care and a duty of loyalty.”); see also Vitow v. Robinson, 823 A.2d 973, 977 (Pa.Super.Ct.2003) (describing trustee’s duty of loyalty to act in interest of beneficiaries as "perhaps the most fundamental duty”) (internal quotation marks omitted); see also MTA § 2.6 (requiring Master Trustee to hold funds for exclusive benefit of beneficiaries).
. Basile v. H & R Block, Inc., 563 Pa. 359, 368, 761 A.2d 1115, 1120 (2000).
. See, e.g., Kirschner v.K & L Gates LLP, 46 A.3d 737, 756 (Pa.Super.Ct.2012) (sustaining breach of fiduciary duty allegations when, inter alia, the fiduciary was alleged to have provided a false and misleading report); Burton v. Republic Ins. Co., 845 A.2d 889, 899 (Pa.Super.Ct.2004) (holding that fiduciary relationship between insurer and insured creates an obligation to disclose fully the coverage and any requirements under the policy); In re Shahan, 429 Pa.Super. 91, 99-100, 631 A.2d 1298, 1303 (Pa.Super.Ct.1993) (holding that fiduciary breached duties by misrepresenting value of insurance proceeds).
. In re Lerch’s Estate, 399 Pa. 59, 72, 159 A.2d 506, 513 (1960).
. Id. at 1186.
.Id. at 1187.
. Id. at 1189.
. Id. (internal quotation marks omitted; emphasis omitted).
. To the extent that Geman went one step further and required disclosure of "all other information that bears on the desirability of the transaction from the customer’s perspective,” id., that holding appears to have relied on the fiduciary’s assumption of "advisory” services, which is not alleged here.
. Put differently, there is a distinction between the capacity in which BNY Mellon was acting while actually executing the program, versus the capacity in which BNY Mellon was acting while marketing the program and seeking ongoing participation by its custodial clients.
. SAC ¶ 36 (emphasis added).
. DI 41-7 at 2.
. DI 40-8 at 2.
. In Petty v. Hospital Serv. Ass’n of Ne. Pa., 611 Pa. 119, 23 A.3d 1004, 1014 (2011), the Pennsylvania Supreme Court concluded that insurance policyholders lacked standing to sue their fiduciary, Blue Cross, for the latter’s alleged violation of nonprofit laws in accumulating excess profits. The court held, "[wjhile Blue Cross may have a fiduciary duty to appellants under its contract, that duty does not extend to Blue Cross’s business practices, and thus appellant’s breach of fiduciary duty claim cannot stand.” That is not this case.
. SAC ¶ 29.
The SAC alleges also that BNY Mellon represented that its trading was “free of charge.” Neither the SAC nor SEPTA's brief explains how BNY Mellon’s conduct involved a “charge.” Nevertheless, to the extent that SEPTA adequately has alleged that BNY Mellon made misleading statements about the nature of the program, it may seek to prove such a claim by reference to the “free of charge” representation •as well.
. The Second Circuit has upheld claims of breach of fiduciary duty under analogous circumstances in the ERISA context. In Abbruscato v. Empire Blue Cross and Blue Shield, 274 F.3d 90 (2d Cir.2001), plaintiffs contended that representations by Empire were part of their contract and guaranteed them lifetime benefits. The court rejected that claim because the representations were not part of the contract. Nevertheless, it identified a material issue of fact regarding whether Empire breached fiduciary duties in making representations at odds with the terms of the contract.
. In concluding that there is a plausible claim that the Standing Instruction Page was misleading, the Court relies in part on the contractual gap in the FX Policies and Procedures and the apparent ambiguity of the incorporation language in at least some of the FX Procedure Forms. If BNY Mellon simply had put forth a single writing that made express that it was free to charge whatever it chose subject to the DSR and the 3% Rule, it would be much less plausible that one could be misled by separate references to best execution.
. • SAC ¶ 34.
. Lerch’s Estate, 399 Pa. at 72, 159 A.2d at 513.
. SAC ¶¶ 49-52.
. The Court stresses that there are limits to what information BNY Mellon was obligated to provide. SEPTA suggests that BNY Mellon was obligated to disclose its precise profits and to provide time stamps so that SEPTA could have checked the quality of the execution. The Court disagrees with both contentions. Once BNY Mellon fairly described the program and its non-fiduciary status, BNY Mellon would have been obligated to provide time stamps or an accounting of its profits only insofar as the agreement so specified. See In re Mexico Money Transfer Litigation, 267 F.3d 743, 749 (7th Cir.2001) ("Neiman Marcus does not tell its customers what it paid for the clothes they buy, nor need an auto dealer reveal rebates and incentives it receives to sell cars. This is true in the financial markets no less than the markets for physical goods.”). SEPTA has not alleged any industry practice that might have implied a contractual obligation to provide time stamps or reveal profits.
. The Court notes that the gist of the action doctrine does not bar the claims based on misrepresentations and nondisclosures. BNY Mellon contends that any fiduciary duties arose from the MTA and that the gist of the action is breach of contract because it stems from a breach of the MTA. DI 46 at 10. The argument proves too much. Fiduciary relationships often will be established on the basis of agreements between the fiduciary and the beneficiary. Such agreements may state expressly the duties of care and loyalty that the law imposes on such fiduciaries. But such duties nevertheless are imposed as a matter of law in appropriate circumstances regardless of whether they are restated in such contracts. This is different from saying that the obligations arose only as a matter of mutual agreement. BNY Mellon's position would reduce almost any breach of fiduciary duty claim into a breach of the contract establishing the fiduciary relationship in the first place. That is not Pennsylvania law. See Bohler-Uddeholm, 247 F.3d at 105 (recognizing that claim for breach of fiduciary duties imposed on joint venturers was not barred notwithstanding fact that joint venture relationship was created by agreement).
Here, BNY Mellon's duties of full and fair disclosure are imposed under Pennsylvania law on trustees and custodians. The gist of the breach of fiduciary duty claims sounding in lack of candor is in tort, not contract.
. Durst, 52 A.3d at 360.
. Wilson Area School Dist. v. Skepton, 586 Pa. 513, 520, 895 A.2d 1250, 1254 (2006).
. Lugo v. Farmers Pride, Inc., 967 A.2d 963, 969 (Pa.Super.Ct.2009).
. Ribarchak v. Mun. Auth. of City of Monongahela, 44 A.3d 706, 708 (Pa.Cmwlth.Ct.2012).
. Ruthrauff, Inc. v. Ravin, Inc. 914 A.2d 880, 888 (Pa.Super.Ct.2006) (internal quotation marks omitted); see Porreco v. Maleno Developers, Inc., 761 A.2d 629, 632 (Pa. Cmwlth.Ct.2000) (assessing whether parties "reached a meeting of the minds as to the material terms of the agreement and [whether] the alleged ... agreement lacks essential terms necessary for the existence of a valid contract").
. SEPTA contends that it is entitled to plead unjust enrichment in the alternative to its breach of contract claim. That is true but irrelevant. Id.; Fed.R.Civ.P. 8(d)(2). The Court concludes not that SEPTA could not plead unjust enrichment, but that as a matter of substance, the claim is barred by the existence of a contract.
. In dismissing unjust enrichment as an independent cause of action, the Court does not limit any remedies SEPTA may seek regarding its surviving claims of breach of fiduciary duty.
. SAC ¶¶ 13-14.
.DI 41 at 40.
. See SAC ¶¶ 87-92.
. Durst v. Milroy Gen. Contracting, Inc., 52 A.3d 357, 360 (Pa.Super.Ct.2012) (internal quotation marks omitted).
. Commonwealth v. Ortho-McNeil-Janssen Pharm., Inc., 52 A.3d 498, 512 (Pa.Cmwlth.Ct.2012) (internal quotation marks omitted).
. Allegheny Energy Supply Co., LLC v. Wolf Run Mining Co., 53 A.3d 53, 58 n. 7 (Pa.Super.Ct.2012).
. Commonwealth ex rel. Corbett v. Snyder, 977 A.2d 28, 46 (Pa.Cmwlth.Ct.2009).
. United States v. Dean Van Lines, Inc., 531 F.2d 289, 293 (5th Cir.1976); see also Spires v. Hospital Corp. of America, 289 Fed.Appx. 269, 273 (10th Cir.2008) (unpublished disposition) (following Dean Van Lines in similar context).
. Dean Van Lines, 531 F.2d at 293 (“[0]nly when the corporation is liquidated will the shareholders or the parent corporation be un- ' justly enriched if they are allowed to retain assets of the corporation free from the debts of the corporation.”).
. SEC v. Gabelli, 653 F.3d 49, 60 (2d Cir.2011) (emphasis added; internal quotation marks omitted), cert. granted on other grounds, - U.S. -, 133 S.Ct. 97, 183 L.Ed.2d 737 (2012); see Staehr v. Hartford Fin. Servs. Grp., Inc., 547 F.3d 406, 426 (2d Cir.2008); Harris v. City of New York, 186 F.3d 243, 250 (2d Cir.1999).
SEPTA’s contention that BNY Mellon may not raise a statute of limitations defense in this pre-answer motion to dismiss is easily rejected. See Staehr, 547 F.3d at 425 (permitting such a defense where it “appears on the face of the complaint”).
. 42 Pa.C.S.A. § 5525(a); Ario v. Underwriting Members of Lloyd's of London Syndicates 33, 205, and 506, 996 A.2d 588, 598 (Pa.Cmwlth.Ct.2010).
. 42 Pa.C.S.A. § 5524(7); Commonwealth ex rel. Corbett v. Citizens Alliance for Better Neighborhoods, Inc., 983 A.2d 1274, 1278 (Pa.Cmwlth.Ct.2009).
. DI 41 at 42.
. Wilson v. El-Daief, 600 Pa. 161, 174, 964 A.2d 354, 361 (2009).
. Id. at 174, 964 A.2d at 361-62.
. Fine v. Checcio, 582 Pa. 253, 267, 870 A.2d 850, 858 (2005) (internal quotation marks omitted).
. Id.
. Id.
. Id.
. Id. at 272, 870 A.2d at 861. Courts have recognized that this holding essentially results in the merger of the discovery rule and the fraudulent concealment doctrine. See Knopick v. Connelly, 639 F.3d 600, 607 n. 10 (3d Cir.2011). After all, in applying the discovery rule on its own, a court surely would need to consider obstacles imposed by defendants in assessing whether the plaintiff could have discovered the injury with reasonable diligence.
. Id. at 271, 870 A.2d at 860.
. There may be some uncertainty about whether the discovery rule even applies to breach of contract claims under Pennsylvania law. In Crouse v. Cyclops Industries, 560 Pa. 394, 745 A.2d 606 (2000), the Pennsylvania Supreme Court applied the doctrine in the related context of a promissory estoppel action. But Justice Saylor in a concurring and dissenting opinion noted that while the rule has been adopted in certain discrete categories of contract and quasi-contract, "its use
Defendants have not argued that the discovery rule is inapplicable to breach of contract actions, however, and so the Court will assume that it applies.
. DI 40-1 at 17 n. 13.
. Id. at 13 n. 10.
. SAC ¶ 40.
. To the extent that SEPTA contends that BNY Mellon concealed the breach by failing to provide time stamps, the Court already has concluded that SEPTA fails to allege a plausible claim that BNY Mellon had any obligation to provide such time stamps. That said, the fact that the trades did not have time stamps may bear on what SEPTA could have learned through the exercise of reasonable diligence.
. Burtch v. Ganz (In re Mushroom Transp. Co.), 382 F.3d 325, 341 (3d Cir.2004).
. Id. (quoting Schwartz v. Pierucci, 60 B.R. 397, 403 (E.D.Pa.1986)).
. Id. (quoting Rubin Quinn Moss Heaney & Patterson, P.C. v. Kennel, 832 F.Supp. 922, 935 (E.D.Pa.1993)) (emphasis omitted).
.Id. at 343. To be sure, the nature of the fiduciary relationship matters. This is not a case where an attorney defrauds his client while working on matters entirely entrusted to his care.
. In addition, some of the statute of limitations issues may turn on the degree to which the breaches of duty are best characterized as single breaches early in the Class Period, numerous breaches throughout the Class Period, or a single continuous breach. This characterization may depend on factual intricacies too early to assess here.
. DI 46 at 19. The Court has not relied on any of these allegations to decide this motion.