This case arises from the 1992 sale of P.P.I. Del Monte Fresh Produce B.V. (Del Monte) to Trumpet Vine Investments, N.V. (Trumpet Vine). Trumpet Vine is a Netherlands Antilles corporation organized by Mexican investors for the purpose of acquiring Del Monte. Trumpet Vine’s bid was supported by financing from Nacional Financi-era, S.N.C. (NAFINSA), a state-owned economic development bank in Mexico. After the takeover bid was announced, Trumpet Vine - filed a declaratory judgment action against Union Capital Partners I, Inc. (UCP) seeking adjudication that UCP was not entitled to monetary damages or injunctive relief arising out of the Del Monte acquisition. UCP filed counterclaims alleging breach of fiduciary duty, fraud, conspiracy to commit fraud and breach of an implied contract. The district court determined that New York law governed each issue and, applying that law, granted summary judgment in favor of Trumpet Vine, dismissing all the counterclaims. This judgment disposed of the litigation. We affirm.
I. BACKGROUND
UCP, a Delaware corporation with its principal place of business in Florida, is a private investment corporation formed for the purpose of acquiring or investing in companies. Gregory Aziz founded and served as president of UCP. In late 1990 and early 1991, UCP began discussions to organize a deal to acquire Del Monte from its parent company, P.P.I. Holdings B.V. (PPI). PPI, in turn, is wholly owned by Polly Peck International P.L.C. (Polly Peck). Polly Peck entered bankruptcy in England in 1990. UCP characterized its role as that of a “deal sponsor,” an individual who assembles a group of inves
In August 1991, UCP, on behalf of its investor group, unsuccessfully submitted an unsolicited bid for Del Monte. UCP then attempted to aggregate another group of investors to acquire Del Monte. UCP’s efforts intensified when the bankruptcy administrator announced in June of 1992 that Del Monte would be sold at a private auction conducted by Goldman Sachs.
UCP claims that in July of 1992, representatives of Trumpet Vine and NAFINSA approached its president, Aziz, regarding their possible participation as equity partners in UCP’s bid to acquire Del Monte. On July 8, 1992, Aziz met with agents of Trumpet Vine and NAFINSA at the New York offices of Kidder Peabody, which was serving as Aziz’ financial advisor. According to Aziz, the NAFINSA representatives informed him that NAFINSA had attempted to independently enter the bidding process, but that Goldman Sachs had refused to provide them with financial information or allow them to enter the bidding.
According to UCP, the NAFINSA agents indicated that they wished to “join forces” with UCP in submitting a bid for Del Monte. 1 The agents requested that UCP share its confidential information regarding Del Monte and that they be invited to attend a due diligence presentation. 2 Aziz informed Polly Peck’s bankruptcy administrator of the discussions with NAFINSA and subsequently scheduled a due diligence meeting at Del Monte’s headquarters in Coral Gables, Florida on July 20, 1992. On July 17, UCP, NAFINSA and Del Monte entered into a nondisclosure agreement encompassing the disclosure to NAFINSA of confidential and proprietary information about Del Monte. In the agreement NAFINSA promised to hold all “proprietary information” in confidence and to only' disclose it to others “who need to know such Propriety Information for providing services to UCP.” The agreement stated “UCP and [NAFINSA] intend to enter into discussions slating to possible acquisitions, equity investments, partnerships or joint venture operations involving [Del Monte].” However, the agreement also provided “[NAFINSA] makes no express or implied representation or warranty concerning the future acquisition, partnership or joint venture involving [Del Monte].” The agreement expressly provided for application of New York law.
After the due diligence meeting, UCP’s potential financial backers, First Chicago and Kidder Peabody, decided to discontinue their involvement in the project. .NAFINSA and the other Mexican investors then announced that they would go their own way and attempt an independent bid. UCP was unable to move forward and submit a bid by the bidding deadline. Trumpet Vine subsequent ly acquired Del Monte for approximately $500,000,000. NAFINSA supported the bid by Trumpet Vine and became an equity investor in Trumpet Vine for the Del Monte acquisition. UCP was not included in the acquisition of Del Monte and received no remuneration as a result of the transaction.
Trumpet Vine and NAFINSA initiated a declaratory judgment action stating they had á bona fide dispute with UCP and seeking an adjudication that UCP was not entitled to monetary damages or injunctive relief arising out of the acquisition of Del Monte. UCP asserted counterclaims of breach of implied contract, breach of fiduciary duty, fraud and conspiracy to commit fraud. Trumpet Vine moved for summary judgment and dismissal of the counterclaims.
Trumpet Vine later moved for summary judgment on the remaining two fraud claims. In a report submitted on November 21,1994, the magistrate judge recommended granting summary judgment against UCP on the fraud claims. The magistrate judge concluded that under New York law, UCP must show a specific injury other than loss of compensation. The magistrate judge determined that UCP had not established that but for NAFINSA’s successful bid, UCP would have assembled a group of investors and acquired the company. Accordingly, UCP could not establish injury. The district court adopted the report and recommendation in its entirety.
II. DISCUSSION
As a threshold issue, this court must decide whether the district court correctly applied New York law to UCP’s substantive claims. We review conflict of laws issues de novo.
Fioretti v. Massachusetts Gen. Life Ins. Co.,
Once we have reviewed the determination of which state’s law applies, we turn our attention to the district court’s decision to grant summary • judgment in favor of Trumpet Vine.
Under Rule 56(c) of the Federal Rules of Civil Procedure, a party is entitled to summary judgment “if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” On appeal, a district court’s grant of summary judgment is entitled to de novo review, and “[w]e resolve all reasonable doubts about the facts in favor of the non-movant.”
Browning v. Peyton,
A. Breach of Fiduciary Duty
UCP argues that Trumpet Vine established a fiduciary relationship with UCP through their mutual participation in pursuing the acquisition of Del Monte and the execution of a nondisclosure agreement. UCP claims that Trumpet Vine breached this, fiduciary duty by acquiring Del Monte without any form of compensation to UCP.
1. Choice of Law
At least as to tort claims, the Florida Supreme Court has abandoned the traditional lex loci delicti
4
rule in favor of the “most significant relationship” test set forth in the
(1) The rights and liabilities of the parties with respect to an issue in tort are determined by the local law of the state which, with respect to that issue, has the most significant relationship to the occurrence and the parties under the principles stated in § 6. 5
(2) Contacts to be taken into account in applying -the principles of § 6 to determine the law applicable to an issue include:
(a) the place where the injury occurred,
(b) the place where the conduct causing the injury occurred,
(c) the domicil, residence, nationality, place of incorporation and place of business of the parties, and
(d) the place where the relationship, if any, between the parties is centered.
These contacts are to be evaluated according to their relative importance with respect to the particular issue.
The district court determined that the conduct giving rise to UCP’s injury, the alleged betrayal of UCP’s confidences and the acquisition of Del Monte without any compensation to UCP, occurred primarily in New York. New York is where the parties’ relationship was created and is the state whose law the parties chose to govern the nondisclosure agreement, the only formal agreement as to the relationship between the parties. Based upon these factors, the district court correctly determined that New York had the most significant relationship to the breach of fiduciary relationship claim.
UCP argues that Florida was the situs of UCP’s injury and thus has the most significant relationship to this cause of action. UCP asserts that under Florida law, the place of injury is presumptively controlling. In support of this position, UCP relies primarily upon cases involving personal injury or products liability suits.
See State Farm Mut. Auto. Ins. Co. v. Olsen,
the place of injury is of particular importance in the ease of personal injuries and of injuries to tangible things.... On the other hand, the place of injury is less significant in the case of fraudulent misrepresentations ... and of such unfair competition as consists of false advertising and the misappropriation of trade values.
Restatement (Second) of Conflict of Laws § 145 comment f;
see also Default Proof Credit Card Sys., Inc. v. State Street Bank & Trust Co.,
2. Application of New York Law
Under New York law, a fiduciary duty exists when a person is under a duty to act or render advice for another’s benefit.
Flickinger v. Harold C. Brown & Co.,
UCP argues that the record contains sufficient evidence to create a material issue of fact as to the existence of a fiduciary relationship. UCP asserts that it reposed trust and confidence in Trumpet Vine when it disclosed its proprietary information and arranged for Trumpet Vine’s entry into the due diligence process. New York law provides, however, that “ ‘a conventional business relationship, without more, does not become a fiduciary relationship by mere allegation.’”
Compania Sud-Americana de Vapores, S.A v. IBJ Schroder Bank & Trust Co.,
UCP relies heavily upon
Browning v. Peyton,
Browning, however, is distinguishable from the case before us. As an initial matter we note that Browning applied the law of Florida and not New York. Moreover, Browning alleged that the parties had in fact agreed to form a joint venture thus creating a special relationship between the parties. UCP has not asserted the existence of any such agreement between itself and Trumpet Vine or NAFINSA. UCP has failed to make any showing that its disclosures and assistance arose from any relationship between the parties other than a conventional business transaction.
UCP points to the existence of the nondisclosure agreement as proof of a confidential relationship. A fiduciary duty may arise out of a contractual relationship which is independent of the contract itself.
Davis v. Dime Sav. Bank of New York, FSB,
B. Fraud Claims
UCP alleges that it reasonably relied upon Trumpet Vine’s representations that Trumpet Vine was interested in joining forces with UCP. UCP argues that Trumpet Vine never intended to enter into any partnership or equity investment with UCP but intended from the outset to utilize information supplied by and through UCP strictly for its own benefit.
? Restatement (Second) of Conflict of Laws provides specific sections for particularized torts. Section 148 provides the choice of law principles for fraud and misrepresentation, and the parties agree that Florida courts would apply this section. The pertinent part of section 148 provides:
(2) When the plaintiffs action in reliance took place in whole or in part in a state other than that where the false representations were made, the forum will consider such of the following contacts, among others, as may be present in the particular case in determining the state which, with respect to the particular issue, has the most significant relationship to the occurrence and the parties:
(a) the place, or places, where the plaintiff acted in reliance upon the defendant’s representations,
(b) the place where the plaintiff received the representations,
(c) the place where the defendant made the representations,
(d) the domicil, residence, nationality, place of incorporation and place of business of the parties,
(e) the place where a tangible thing which is the subject of the transaction between the parties was situated at the time, and
(f) the place where the plaintiff is to render performance under a contract which he has been induced to enter by the false representations of the defendant.
The district court found that the alleged misrepresentations primarily occurred at the July 8th meeting in New York. Although UCP contends that Trumpet Vine and NAF-INSA subsequently repeated the misrepresentations, the district court concluded that those misrepresentations, if any, arose from the initial acts in New York. Thus the district court determined that New York was the location where Trumpet Vine made and UCP received the alleged misrepresentations.
The court found that some acts in reliance (the due diligence) occurred in Florida while others (the agreement to share information) occurred in New York. Thus neither state emerged as the place of reliance. Application of the fourth factor, the domicil, residence, nationality and place of business of the parties, implicated Florida, New York, Delaware, Mexico and the Netherlands Antilles. Finally, the district court determined that, although Del Monte was headquartered in Florida, the takeover itself was to be consummated in New York. We agree with the district court’s determination that New York had the most' significant contacts, as the place where the misrepresentations and the initial acts of reliance occurred.
2. Application of New York Law
To sustain a claim for fraud under New York law, UCP must prove by clear and convincing evidence the existence of five elements: (1) a representation of material fact, (2) falsity of the statement, (3) scienter, (4) deception, and (5) injury or detrimental reliance.
Channel Master Corp. v. Aluminium Ltd. Sales, Inc.,
Under New York law, the measure of damages for fraud is governed by the “out-of-pocket” rule which limits recovery to costs incurred in preparation or in performance or in passing up other business opportunities.
Fort Howard Paper Co. v. William D. Witter, Inc.,
In tort, ... there is no enforceable right until there is loss. It is the incurring of damage that engenders a legally cognizable right. To recognize nominal damages' element of tort claims would be to wrest the cause of action from its traditional purposes — the compensation of losses— and to use it to vindicate nonexistent or amorphous inchoate rights when unlike in trespass to property, there is no compelling reason to do so.
Id.
C. The Implied Contract Claims
UCP raised two similar claims, breach of contract implied-in-fact (quantum meruit) and breach of contract implied-in-law (unjust enrichment). 7 UCP argues that it provided Trumpet Vine with research, experience and confidential and proprietary information re- ■ garding Del Monte and arranged for Trumpet Vine’s entry into the bidding process. UCP contends that Trumpet Vine requested and accepted the services and information and should compensate UCP for the benefits received.
1. Choice of Law
Florida has traditionally applied the lex loci contractus rule for choice of law determinations regarding issues of contract law.
Fioretti,
While Florida has adopted the significant contacts approach of the Restatement (Second) of Conflict of Laws for tort actions,
see Bishop,
UCP argues that the implied contract was “made” when UCP conferred and Trumpet Vine received the benefits, i.e. participation in the due diligence meeting and access to the proprietary information, which occurred in Florida. The district court, however, determined that the last necessary act in this cause of action was the acquisition of Del Monte which took place in New York. In
Stratford,
the Florida District Court of Appeal held an oral brokerage contract unenforceable under New York law.
2. Application of New York Law
The district court concluded that because there was no written compensation agreement between the parties, New York’s statute of frauds barred the claims. New York’s statute of frauds provides:
Every agreement, promise or undertaking is void; unless it or some note or memorandum thereof be in writing, and subscribed by the party to be charged therewith, or by his lawful agent, if such agreement, promise or undertaking: ... (10) Is a contract to pay compensation for services rendered in negotiating a loan, ... or of a business opportunity,.... “Negotiating” includes procuring an introduction to a party to the transaction or assisting in the negotiation or consummation of the transaction. This provision shall apply to a contract implied in fact or in law....
N.Y.Gen.Oblig.Law § 5-701(a)(10) (McKinney 1989).
UCP argues that the statute of frauds is inapplicable because UCP is not seeking a set monetary fee, but rather seeks an equity interest in the acquired company and a role in its management. The New York statute of frauds expressly includes contracts to pay “compensation” and is not limited to monetary fees. While UCP correctly notes that section 5-701(a)(10) does not extend to agreements between parties in a joint venture,
see Dura v. Walker, Hart & Co.,
UCP further argues that even if the statute of frauds applies, there are outstanding issues of fact surrounding the “part performance” exception to the statute which preclude granting summary judgment on this basis. The district court correctly rejected this argument. “[P]art performance may only be asserted to overcome the defense of the Statute of Frauds in an action for specific performance of the contract, and may not be raised, as here, in an action to recover damages_”
Papell v. Calogero,
III. CONCLUSION
For the reasons stated above, the district court’s grant of summary judgment in favor of Trumpet Vine is AFFIRMED.
Notes
. Trumpet Vine and NAFINSA contend that the July 8th meeting was an introductory meeting to merely explore the possibility of joint participation with UCP. They claim that NAFINSA always remained ' an independent investor throughout the process, and worked together with UCP so that both could get into the due diligence process. NAFINSA argues that they never negotiated, let alone agreed to, a joint venture, exclusive bidding or compensation arrangement with UCP.
. A "due diligence” presentation gives a prospective buyer up-to-the-moment financial information and the opportunity to question management and to examine the operations of the company on site.
. The Hon. Barry L. Garber, United States Magistrate Judge for the Southern District of Florida.
. “The law of the place where the crime or wrong took place.” Black's Law Dictionary 911 (6th ed. 1990).
. Restatement (Second) of Conflict of Laws § 6 provides:
(1) A court, subject to constitutional restrictions, will follow a statutory directive of its own state on choice of law.
(2) When there is no such directive, the factors relevant to the choice of the applicable rule of law include
(a) the needs of the interstate and international systems,
(b) the relevant policies of the forum,
(c)' the relevant policies of other interested states and the relative interests of those states in the determination of the particular issue,
(d) the protection of justified expectations,
(e) the basic policies underlying the particular field of law,
(f) certainty, predictability and uniformity of result, and
(g) ease in the determination and application of the law to be applied.
. UCP argues that the district court failed to give sufficient weight to the fact that UCP’s primary place of business is in Florida. ' We disagree. Application of the “domicile” factor implicates Florida, New York, Delaware, Mexico and the Netherlands Antilles. We also note that although UCP’s president, Aziz, was himself located in Florida, the company had no offices or employees in the state.
. We treat these claims together because both would be barred if the New York statute of frauds is applicable.
. "A federal court applying state law 'is bound to adhere to decisions of the state’s intermediate appellate courts absent some persuasive indication that the state's highest court would decide the issue otherwise.”
Silverberg v. Paine, Webber, Jackson & Curtis, Inc.,
. Although the final signatures were applied in a 'ceremonial signing in Mexico City, virtually all the closing activities, including payment of the purchase price, took place in New York, and none of the closing activities occurred in Florida. New York is thus best characterized as the situs of the closing. In any event, New York has a significant interest in the application of its statute of frauds. In
Intercontinental Planning, Ltd. v. Daystrom, Inc.,