DURANTE BROS. AND SONS, INC., PLAINTIFF-APPELLANT,

v.

FLUSHING NATIONAL BANK, JACK FARBER AND RICHARD GELMAN, DEFENDANTS-APPELLEES

KEARSE, Circuit Judge:

Plaintiff Durante Bros, and Sons, Inc. (“Durante”), appeals from a final judgment of the United States District Court for the Eastern District of New York, Eugene H. Nickerson, Judge, 571 F.Supp. 489, entered after a jury trial, dismissing its complaint against defendants Flushing National Bank (“Flushing” or the “Bank”), Jack Farber, and Richard Gelman, alleging violations of, inter alia, the Racketeer Influenced Corrupt Organizations Act (“RICO”), 18 U.S.C. § 1961, et seq. (1982), and the federal banking laws, 12 U.S.C. § 1, et seq. (1982).

The district court granted summary judgment dismissing certain of the RICO and banking law claims on the grounds that they were barred by statutes of limitations; it directed a verdict as to certain other claims for lack of proof; and it set aside a jury verdict against Flushing for fraud, on the ground that that verdict was unsupportable in light of the jury’s verdict in favor of Farber on essentially the same claim of fraud.

On appeal, Durante contends principally that the district court applied the incorrect statutes of limitations and that it erred in dismissing Durante’s other claims for failure of proof and for inconsistency in the jury’s verdicts.

We find merit only in the contention that the court erred in dismissing the RICO claims on statute of limitations grounds, and we vacate the judgment dismissing counts 1, 3, and 5 of the complaint and remand for further proceedings on those claims.

I. Background

A. The Complaint

The action, commenced on May 21, 1980, centers on certain loans made by Flushing from 1974 through 1976 to (1) Durante, (2) Louis Durante, Sr. (“Louis Sr.”), father of Durante’s sole stockholder, and (3) Jerder Realty Services, Inc. (“Jerder”), a real estate development company of which Louis Sr. was a principal. As set forth in somewhat greater detail in the discussion sections below, the amended complaint (“complaint”) alleged that as the Bank’s loans to Jerder soured, the Bank, Farber (its chairman, chief executive officer, and controlling shareholder), and Gelman (its executive vice president) conspired to offset Flushing’s anticipated losses by causing the Bank to make loans to Durante at usurious rates of interest.

The complaint contained six counts (1-6) asserting federal claims and eleven counts (7-17) asserting state law claims. The federal law claims included the assertions that various actions by the defendants constituted the collection of unlawful debts, in violation of RICO, 18 U.S.C. §§ 1962(a), (c), and (d) (counts 1, 3, and 5); that defendants caused Flushing to charge unlawful rates of interest on the loans, in violation of 12 U.S.C. § 85, and to falsify its records and its reports to regulatory agencies, in violation of 12 U.S.C. § 161 and 18 U.S.C. §§ 1005 and 1014 (1982) (counts 2 and 4); and that in mailing monthly bank statements and a letter to Durante, defendants repeatedly violated the mail fraud statute, 18 U.S.C. § 1341 (1982), and thereby engaged in a pattern of racketeering activity, in violation of RICO, 18 U.S.C. §§ 1962(a), (c), and (d) (count 6).

B. The Pretrial Rulings

Prior to trial, defendants moved to dismiss the six federal counts. They contended that counts 1, 3, and 5 were barred by the one-year statute of limitations found in N.Y.Civ.Prac. Law (“CPLR”) § 215(6) (McKinney 1972 & Supp. 1983-1984) and that counts 2 and 4 either were barred by the two-year statute of limitations provided by 12 U.S.C. § 86 or were brought under provisions that gave Durante no standing to sue. They contended that count 6 failed to state a claim upon which relief may be granted under RICO because the alleged mailings were not for the purpose of furthering the alleged scheme and hence did not violate the mail fraud statute, and therefore count 6 did not allege valid predicate acts-upon which liability for “racketeering activity” could be premised.

The district court granted the motions to dismiss as to counts 1 through 5, but denied the motion as to count 6.

In a memorandum and order dated September 27, 1983, reported at 571 F.Supp. 489 (E.D.N.Y.1983), the court upheld the defendants’ statute of limitations defenses and deferred decision on the issue of standing.

With regard to RICO counts 1, 3, and 5, which asserted that defendants had engaged in the collection of unlawful debts, the court noted that RICO itself contains no statute of limitations provisions, and it therefore sought the most appropriate state statute of limitations. On the premise that an action based , on the collection of an unlawful debt was most like a state law action for usury, the court concluded that the appropriate statute of limitations was that found in CPLR § 215(6), which provides that actions to recover any overcharge of interest or to enforce a penalty for such an overcharge must be commenced within one year of the accrual of the cause of action. Since suit had been commenced some 2% years after the last alleged interest overpayment was made, the court found counts 1, 3, and 5 barred.

The court rejected defendants’ contention that count 6 of the complaint failed to state a claim under RICO. It ruled that the matter of whether or not the mailings of bank statements and letters were “for the purpose of executing” the alleged scheme was a question of fact that could not be decided on a motion for summary judgment.

As to counts 2 and 4, the court held that the portions of those counts that claimed that Durante had been charged an unlawful rate of interest in violation of 12 U.S.C. § 85 were analogous to a claim to recover damages arising out of the payment of usurious interest, and it therefore applied the one-year statute of limitations found in § 215(6).

As to the portions of counts 2 and 4 that asserted that defendants’ falsification of records and reports violated 12 U.S.C. § 161 and 18 U.S.C. §§ 1005 and 1014, the court deferred its ruling on defendants’ contention that Durante had no standing to complain of such acts, observing that the papers before it did not indicate that there was any causal connection between the alleged falsifications and the injury complained of. The court stated that it would rule on the motion to dismiss these claims after Durante had made an offer of proof as to causation.

On October 3,1983, just prior to the start of trial, the court held a hearing to permit Durante to make its offer of proof. Finding the offer insufficient, the court dismissed the remainder of counts 2 and 4. In addition, the court dismissed counts 10, 11, and 13 as state law usury claims barred by the statute of limitations, CPLR § 215(6).

C. Trial, the Directed Verdicts, and Judgment NOV

The parties proceeded to trial on the remaining counts of the complaint. At the close of the evidence, the court directed a verdict for the defendants on counts 7 (conspiracy), 12 (duress), 14 (breach of fiduciary duty), 15 (negligence), 16 (breach of contract), and 17 (negligent misrepresentation). The only counts submitted to the jury were counts 6 (RICO racketeering), 8 (fraud by Farber), and 9 (fraud by the Bank).

The jury, after deliberating for two days, returned a verdict in favor of the defendants on count 6, a verdict in favor of Far-ber on count 8, and a verdict of $175,000 in favor of Durante against the Bank on count 9. Flushing moved for judgment notwithstanding the verdict against it or for a new trial. By a memorandum and order dated January 17, 1984, the court set aside the verdict on the ground that it was unsupportable in light of the jury’s conclusion that Durante had failed to prove fraud on the part of Farber. The court declined to order a new trial, and judgment was entered in favor of defendants, dismissing the complaint in its entirety.

D. Issues on Appeal

On this appeal, Durante contends principally (1) that the court applied the wrong statutes of limitations in dismissing the RICO claims asserted in counts 1, 3, and 5 of the complaint and the banking claims under 12 U.S.C. § 93 asserted in counts 2 and 4; (2) that the court erred in dismissing the remainder of counts 2 and 4 for lack of causation; (3) that the jury’s verdict against the Bank on count 9 was not inconsistent with its verdict in favor of Farber on count 8, but that if there was an inconsistency, it did not warrant entry of judgment notwithstanding the verdict (“judgment NOV”) but only the granting of a new trial; and (4) that there was sufficient evidence supporting counts 7, 12, 16, and 17 to require their submission to the jury. In addition, Durante asserts various claims of error in the court’s evidentiary rulings and instructions to the jury. It asks that we remand for a new trial of all counts except counts 10,11, and 13, or alternatively that we reinstate the verdict against the Bank on count 9.

We find merit only in the contention that the court applied the wrong statute of limitations to the RICO claims asserted in counts 1, 3, and 5. Accordingly, the judgment dismissing those counts is vacated and the matter is remanded for further proceedings as set forth below.

II. The Banking Law Claims

In counts 2 and 4, Durante claimed that Farber and Gelman (A) violated the federal banking laws by causing Flushing to charge more than the lawful rate of interest allowed under 12 U.S.C. § 85, and (B) caused the Bank to make false reports to banking authorities in violation of 12 U.S.C. § 161 and 18 U.S.C. §§ 1005 and 1014. We conclude that insofar as these counts were grounded in the alleged violation of § 85, they were time-barred; insofar as they were based on the other claimed violations, they were properly dismissed for lack of any showing of causation between the alleged violation and the claimed injury to Durante.

A. Statute of Limitations

Section 85 of 12 U.S.C., through reference to state laws and Federal Reserve Bank rates, sets a ceiling on the rate of interest that a national bank may charge.

Section 86 of 12 U.S.C. allows an individual who has paid interest at a rate in excess of that allowed under § 85 to bring an action to recover from the bank twice the amount of interest paid. Defendants contend that § 86’s action to recover double interest is the exclusive remedy for a violation of § 85, and they point out that § 86 provides that such an action must be commenced within two years of the occurrence of the usurious transaction. Since the present action was commenced some 2lk years after Durante made its last payment of allegedly usurious interest, Durante argues that counts 2 and 4 should be deemed brought under 12 U.S.C. § 93, which provides that any person may sue the director of a national bank for damages sustained in consequence of a knowing violation of the federal banking laws. Since Title 12 contains no provision specifying a statute of limitations with respect to an action brought under § 93, Durante contends that the appropriate state statute of limitations was the three-year period provided by CPLR § 214(2) (McKinney Supp. 1983-1984) for actions brought to enforce a liability created by statute.

The district court found it unnecessary to determine whether § 86 provides the exclusive remedy for a violation of § 85, since it concluded that even if counts 2 and 4 were deemed brought under § 93, they were, to the extent that they relied on the claimed violation of § 85, time-barred because the most analogous state statute of limitations was the one-year period provided by CPLR § 215(6) for claims of usury. Though we disagree with the court’s application of the CPLR, we too find it unnecessary to determine the exclusiveness of the remedy provided by § 86, since we conclude that even in a suit brought under § 93, the time within which a claim dependent on a violation of § 85 must be brought is governed by 12 U.S.C. § 86.

Where Congress has created a private right of action but has not specifically stated the time within which the action may be brought, the court must seek out the most appropriate statute of limitations. In so doing, it should look first to federal law for a relevant limitations provision, turning to state law only if there is no relevant federal period. See Board of Regents v. Tomanio, 446 U.S. 478, 485, 100 S.Ct. 1790, 1795, 64 L.Ed.2d 440 (1980) (appropriate state period applied “since there was no specifically stated or otherwise relevant federal statute of limitations for the federal substantive claim created by Congress” (em- , . ,, v, , , r, m phasis added)); Johnson v. Railway Express Agency, 421 U.S. 454, 462, 95 S.Ct. 1716, 1721, 44 L.Ed.2d 295 (1975) (same).

In the present action, the basis for the § 93 claim is solely that the individual defendants knowingly violated § 85. While Durante s ad damnum seeks more than the amount that would be recoverable under § 86, it is nevertheless clear that its § 93 claim “aris[es] from the charging of excessive interest in violation of § 85. (Durante brief on appeal at 25.) Since Congress has specified in § 86 the period within which the actions there authorized to redress violations of § 85 may be brought, the period provided by § 86 must be considered relevant to any claim that is based solely on a violation of § 85.

We conclude, therefore, that, to the extent that counts 2 and 4 were brought under 12 U.S.C. § 93 to redress a violation of § 85, the district court should have applied the two-year limitations period found in 12 U.S.C. § 86. Since the action was not commenced within two years of the allegedly usurious transaction, those portions of counts 2 and 4 were, however, properly dismissed.

B. Causation

The other statutes relied on in counts 2 and 4 were 12 u.S.C. § 161> which requires national banks to make reports to the Comptroller of the Currency setting forfh their resources and liabilities; 18 U.S.C. § 1005, which prohibits the making 0f false entries in the books, reports, or statements of a national bank with intent to defraud; and 18 U.S.C. § 1014, which prohibits the knowing making of a false statement or report for the purpose of infhiencing action on a loan by certain federa] agencies.

Section 503 of 12 U.S.C. provides that any individual officer or director 0f a national bank who knowingly violates or permits the violation of, inter alia, 18 u.S.C. §§ 1005 and 1014 may be held personally liable to any person who sustained injuries “in consequence of such violation.” ^2 U.S.C. § 503 (1982).

_ ; ,, , . , . Durante s theory was that m 1975, Jerd- , , / , ,, , ,, _ , er needed Bank had surPafed h focusing on the question of the engagement of the defendants in “the business of usury.” If Durante cannot show that there is a genuine issue of material fact as to that question, counts 1, 3, and 5 should be dismissed. We leave for determination by the district court in the first instance the precise parameters of “the business” of usury as intended by Congress in § 1961(6).

IV. Other Contentions

We haye considered all of Durante’s other contentiong on a al and have found tbem lacM ¡n merit None of them re. . . , . .. quires extended discussion,

, _ r , _ A' The Judgment NOV on Count 9

Count 9 alleged that the Bank was liable to Durante for fraud on the basis of the false promise in October 1975 to lend Durante $100,000. Count 8 alleged that Farber was liable to Durante for fraud on the same basis.

The jury found for Farber on count 8 but against the Bank on count 9.

The district court granted judgment NOV because it concluded that (1) virtually all of Durante’s evidence of fraud attributed the alleged misrepresentations to Farber; (2) the jury plainly found that evidence to be less than “clear and convincing,” see Ajax Hardware Manufacturing Corp. v. Industrial Plants Corp., 569 F. 2d 181, 186 (2d Cir.1977) (under New York law, fraud must be proved by clear and convincing evidence), Manchel v. Kasdan, 286 A.D. 483, 484, 144 N.Y.S.2d 694, 695 (1st Dep’t 1955) (per curiam) (“the inference of fraud [must be] unequivocal”), aff'd, 1 N.Y.2d 734, 134 N.E. 2d 687, 151 N.Y.S.2d 940 (1956); and (3) absent the misrepresentations attributed to Farber, there was insufficient proof from which the jury could properly infer fraud on the part of the Bank. Durante attacks the court’s conclusion that the proof of non-Farber misrepresentations was insufficient and argues that even if the court was correct in that conclusion it should have granted only a new trial and not judgment NOV. We are unpersuaded.

Our review of the trial record convinces us that the vast bulk of the proof as to misrepresentations in connection with the alleged October 1975 promise to lend, and as to Durante’s reliance, charged those misrepresentations to Farber. The remaining evidence as to statements by other Bank officials, even viewed in the light most favorable to Durante and with all permissible inferences drawn in its favor, Saloomey v. Jeppesen & Co., 707 F. 2d 671, 677 (2d Cir.1983); Mattivi v. South African Marine Corp. “Huguenot”, 618 F. 2d 163, 167-68 (2d Cir.1980), was woefully inadequate to support a claim of fraud. The district court did not err in concluding that, given the verdict in favor of Farber on count 8, the claim of fraud against the Bank had not been proven by clear and convincing evidence.

Having determined that the verdict against the Bank on count 9 could not have been rationally arrived at, the trial judge had discretion either to order a new trial or to enter judgment NOV. See 9 C. Wright & A. Miller, Federal Practice and Procedure § 2538, at 605-06 (1971). We see no abuse of discretion in his choice of the latter action. There was no error in the conduct of the trial that could have affected the jury’s assessment of the case against Farber, and there was thus no reason to give Durante a second opportunity to prove its claim against the Bank.

B. The Directed Verdicts

Durante claims that the district court erred in not permitting counts 7 (conspiracy), 12 (duress), 16 (breach of contract), and 17 (negligent misrepresentation) to go to the jury.

We find no error. Count 7 of the complaint charged Farber and Gelman with conspiracy to commit the acts alleged in counts 1 through 6. Those counts alleged that Farber and Gelman had entered into and acted in furtherance of a conspiracy to offset the Bank’s anticipated losses on the Jerder loans by making usurious loans to Durante. Count 7 added no new allegations to those of counts 1-6 except to reiterate that Farber and Gelman had conspired to commit the acts heretofore described. Count 7 was properly dismissed, either as duplicative of counts 1-6, or as failing to state a claim on which relief may be granted since New York law does not recognize a substantive tort of conspiracy, Ahmed v. National Bank of Pakistan, 572 F.Supp. 550, 554-55 (S.D.N.Y. 1983); Powell v. Kopman, 511 F.Supp. 700, 704 (S.D.N.Y.1981); ABKCO Industries v. Lennon, 52 A.D.2d 435, 441, 384 N.Y.S.2d 781, 784 (1st Dep’t 1976).

Count 12, charging that the 1976 mortgage agreement was void because of duress, was properly dismissed as a matter of law. In order to prevail on such a claim the plaintiff must show, inter alia, that it had available no legal remedies to avoid the duress, Neuman v. Pike, 591 F. 2d 191, 194 (2d Cir.1979); First National Bank of Cincinnati v. Pepper, 454 F. 2d 626, 633-34 (2d Cir.1972), and that it acted promptly to repudiate the contract, Scientific Holding Co. v. Plessey, Inc., 510 F. 2d 15, 23 (2d Cir.1974); see also International Halliwell Mines, Ltd. v. Continental Copper & Steel Industries, 544 F. 2d 105, 108 (2d Cir.1976).

Durante showed neither. There was no basis for inferring that, if the defendants’ conduct was indeed improperly coercive, Duranté could not have resorted to legal process to enforce enforceable agreements or fend off unwarranted punitive actions by the Bank. Further, not having resorted to legal process, Durante did not promptly repudiate the 1976 mortgage agreement, but instead made payments on the mortgage until December 1977 and did not bring suit until mid-1980.

Count 16, which alleged that the Bank had breached its October 1975 promise to lend Durante $100,000, was properly dismissed for lack of proof that there existed an enforceable agreement. There is no enforceable agreement if the parties have failed to agree on all of its essential terms or if some of the terms are too indefinite to be enforceable. Interocean Shipping Co. v. National Shipping and Trading Corp., 462 F. 2d 673, 676 (2d Cir.1972); see Brookhaven Housing Coalition v. Solomon, 583 F. 2d 584, 593 (2d Cir.1978).

The proof adduced at trial was, “ ‘without weighing the credibility of the witnesses or otherwise considering the weight of the evidence,’ ” Croce v. Kurnit, 737 F. 2d 229, 237 (2d Cir.1984) (quoting Simblest v. Maynard, 427 F. 2d 1, 4 (2d Cir.1970)), insufficient to allow a reasonable juror to conclude that there was a meeting of the minds on all of the material terms of the alleged October 1975 agreement.

Finally, count 17, which alleged that employees of the Bank negligently misrepresented the Bank’s willingness to lend Durante $100,000 in the fall of 1975 was properly dismissed because Durante failed to establish a special relationship between itself and the Bank such as to give rise to a duty to avoid such negligent misrepresentations. Under New York law, a plaintiff may not recover for negligent misrepresentation unless “the author is bound by some relation of duty, arising out of contract or otherwise, to act with care if he acts at all____” White v. Guarente, 43 N.Y.2d 356, 362-63, 372 N.E. 2d 375, 319, 401 N.Y.S.2d 474, 478 (1977); accord Survey of New York Practice, 56 St. John’s L.Rev. 371, 410 (1982) (“[T]he imposition of a duty to speak carefully when the damages are limited to economic loss, requires proof of a special relationship between the parties sufficient to justify actionable reliance”).

An ordinary creditor-debtor relationship between bank and customer does not create such a duty of care. See Aaron Ferer & Sons v. Chase Manhattan Bank, 731 F. 2d 112, 122 (2d Cir.1984).

Where the alleged negligent misrepresentation was promissory rather than factual, liability has been imposed only where there was shown a special relationship or a breach of contract. See Banker’s Trust Co. of Western New York v. Steenburn, 95 Misc.2d 967, 991-93, 409 N.Y.S.2d 51, 66-67 (Sup.Ct. Chautauqua County 1978).

See also Cool-ite Corp. v. American Cyanamid Co., 52 A.D.2d 486, 488, 384 N.Y.S.2d 808, 810 (1st Dep’t 1976) (denial of motion to dismiss upheld in part on basis that misrepresentations were not promissory but factual).

In the present case, no special relationship was shown between Durante and the Bank that could support a claim for negligent misrepresentation. Rather, as Durante’s owner testified at trial, Durante was “trying to get more and more credit from the Flushing National Bank, so eventually we could work ... into a regular banking relationship with the bank.” (Emphasis added.) Further, the alleged misrepresentation here was of a promissory character; and, as discussed above, Durante failed to prove that there was a sufficient meeting of the minds to create any contractual relationship. In short, Durante failed to establish the factors that could have given rise to a duty on the part of the defendants to avoid the negligent misrepresentation it alleges.

Durante’s reliance on Mallis v. Bankers Trust Co., 615 F. 2d 68, 81-83 (2d Cir.1980), cert. denied, 449 U.S. 1123, 101 S.Ct. 938, 67 L.Ed.2d 109 (1981), for the proposition that no special relationship need be shown is misplaced. In Mallis, the misrepresentation was purely factual, relating to whether there was a restriction on the negotiability of certain unregistered stock. Durante has called to our attention no New York case, and we are aware of none, ruling that liability may be imposed on a defendant for a negligent promissory misrepresentation that could not give rise to liability for either fraud or breach of contract, where there was no special relationship between plaintiff and defendant.

C. Assertions of Trial Error

Durante contends that the court improperly excluded three lines of material evidence at trial.

We disagree. The proffered testimony of Daniel Palmieri was properly excluded because it was based on his conversations with Durante. He had no first hand knowledge of the facts sought to be introduced and hence his testimony was excludable on hearsay grounds. The exclusion of the proffered documentation and expert testimony as to the regulation of Flushing by the Comptroller of the Currency was not an abuse of the trial court’s discretion, granted by Fed.R.Evid. 403, to exclude evidence whose tendency to introduce extraneous or distracting matter, or otherwise to prejudice, outweighs its probative value.

Finally, the evidence proffered as to profits allegedly lost by Durante years after the Bank’s alleged breach of its agreement to lend Durante $100,000, and as to Durante’s legal expenses in the intervening years, principally in connection with matters not involving the Bank, was properly excluded on the ground that the claimed items of damage were too remote to be recoverable.

Nor do 'we find any error in the trial court’s instructions to the jury. The court gave all required instructions and, taken as a whole, the charge was unlikely to have misled the jury as to the applicable law, or Durante’s contentions, or the interrelation between the two. See Evans v. Transportacion Maritime Mexicana SS “Campeche”, 639 F. 2d 848, 860 (2d Cir.1981).

Conclusion

The judgment of the district court is vacated insofar as it dismissed counts 1, 3, and 5 of the complaint, and the matter is remanded for further proceedings on those counts. In all other respects, the judgment is affirmed. Each party shall bear his or its costs on this appeal.

Jurisdiction is retained in the Court of Appeals