Date: 02-07-2014

Case Style: HSBC Realty Credit Corporation (USA) v. J.Brian O'Neill

Case Number: 13-1214

Judge: Thompson

Court: United States Court of Appeals for the First Circuit on appeal from the District of Massachusetts (Suffolk County)

Plaintiff's Attorney: David J. McNamara, with whom Peter C. Obersheimer and Phillips Lytle LLP were on brief, for appellee.

Defendant's Attorney: John J. Jacko III, with whom Alan S. Fellheimer and Fellheimer & Eichen LLP were on brief, for appellant.

Description: Today's case — a diversity suit governed, the parties agree, by Massachusetts substantive law — arises from the efforts of plaintiff HSBC Realty Credit Corporation (USA) to recover $8.1 million from defendant J. Brian O'Neill under a guaranty. A district judge struck O'Neill's defenses, dismissed his counterclaims, denied him leave to replead, and granted HSBC judgment on the pleadings. O'Neill appeals. But after saying what needs to be said, we affirm.

HOW THE CASE GOT HERE

Given the litigation's present posture, we describe the facts alleged in the pleadings — discussing too the documents fairly incorporated within them — in the light most agreeable to O'Neill, drawing every reasonable inference in his favor. See, e.g., Grajales v. P.R. Ports Auth., 682 F.3d 40, 44 (1st Cir. 2012).

The Players and the Project

HSBC is a Delaware corporation with its principal place of business in New York. O'Neill is a Pennsylvania resident who is a principal of a company called Brandywine Partners, LLC. Footnote Back in the mid-2000s, Brandywine wanted to buy a particular piece of industrial property in Delaware and redevelop it for residential use. Because of some fairly serious environmental problems with the Delaware site, Brandywine concluded — after an extensive investigation — that the best course of action was to raze the existing buildings and start from scratch. Eventually Brandywine turned to HSBC for a loan. And HSBC agreed to dole out $15.9 million pursuant to a project-loan agreement between them.

The Project-Loan Agreement

Among other things, the project-loan agreement requires Brandywine to pay for an appraisal of the property. And the agreement says that this appraisal has to yield a loan-to-value ratio of no more than 60%. That condition, the document continues, is for HSBC's "sole benefit," meaning "no other person" has "the right to rely on" its "satisfaction." Footnote Using that ratio, the property's appraised value had to be at least $26.5 million to support the $15.9 million loan — or so O'Neill alleges. Footnote Also relevant, Brandywine expressly "acknowledges" in the project-loan agreement that HSBC was "rel[ying] on the experience of [Brandywine] and its general partners, members, [and] principals . . . in owning and operating" properties like this and that HSBC "ha[s] a valid interest in maintaining" the property's "value . . . to ensure that, should [Brandywine] default in the repayment and performance of the obligations under the project loan documents, [HSBC] can recover the obligations" by selling the property. Footnote Of note too, Brandywine signed a promissory note and gave HSBC a mortgage on the Delaware property (among other things).

The Guaranty

Because, as he acknowledged, HSBC would not lend Brandywine a cent unless he "unconditionally" guaranteed the loan's repayment, O'Neill signed an "absolut[e]" personal guaranty for the loan, agreeing that he had a "direct or indirect interest" in Brandywine (and so would "directly benefit" from the loan) and that he occupied the status of "primary obligor" of the "guaranteed obligations" (defined as the "prompt and unconditional payment by [Brandywine] of the loan and interest thereon"). Footnote The guaranty's limitations-on-guaranteed-obligations clause caps O'Neill's liability at $8.1 million, however. Footnote

Pertinently too, the guaranty lists a bunch of representations and warranties that O'Neill made to HSBC. For example, he affirmed both that he was "familiar with, and ha[d] independently reviewed books and records regarding," Brandywine's "financial condition" and also that he was "familiar with the value" of the property offered as collateral. He confirmed that neither Brandywine's condition nor the pledge of collateral induced him to sign the guaranty. And he declared that HSBC said nothing to induce him to execute that document, either. Footnote

The guaranty also has a "no duty to pursue others" clause, which stresses that HSBC need not enforce its rights or exhaust its remedies against Brandywine or the property and that O'Neill gives up whatever rights he "may have" to force HSBC to do either of these things. Footnote But there is more. O'Neill's guaranty declares that he "waives any common law, equitable, statutory or other rights" that he may have because of "[a]ny action . . . taken" regarding the loan or the collateral that "increases the likelihood that [he] will be required to pay the guaranteed obligations." Footnote Topping things off, the guaranty has an integration clause saying that this document is the "final and complete" expression of its terms, that there are "no oral agreements" between the parties, and that no one can use extrinsic evidence of any kind to "contradict" or "modify" any term. Footnote

The Default and the Lawsuit

Brandywine defaulted on its repayment obligations, so HSBC demanded that O'Neill make good on his $8.1 million guaranty. But he turned a deaf ear, causing HSBC to file suit on the guaranty agreement. O'Neill returned fire with 18 defenses and 8 counterclaims. Some of his defenses defy simple labels. Others do not, like his defenses of mitigation, promissory estoppel, breach of fiduciary duty, breach of an implied covenant of good-faith dealing, fraudulent inducement, duress and undue influence, unconscionable contract of adhesion, no meeting of the minds, and failure to state a claim for which relief may be granted. As for his counterclaims, they were for fraudulent inducement, promissory estoppel, negligent misrepresentation, unfair and deceptive business practices under Mass. Gen. Laws Ch. 93A, breach of an implied covenant of good-faith dealing, breach of duty to mitigate damages, declaratory and injunctive relief, and breach of contract.

Convinced that there were no material facts in dispute and that judgment should enter enforcing the guaranty's express terms, HSBC moved the judge to strike O'Neill's defenses and to grant it judgment on the pleadings under Fed. R. Civ. P. 12(c). O'Neill resisted by saying that his defenses and counterclaims barred the guaranty's enforcement. Footnote In the alternative, he asked the judge for leave to replead his defenses and counterclaims under Fed. R. Civ. P. 15(a). Footnote

Taking up HSBC's motion, the judge said that a common theme pervaded O'Neill's defenses and counterclaims: "that HSBC must seek to recover any amount owed by Brandywine by proceeding against the [Delaware] property before turning to O'Neill's personal [g]uaranty," since "HSBC allegedly represented to him that it would in the first instance seek recourse against the collateral property in the event of a default." And when all was said and done, the judge concluded that the guaranty's unambiguous language wiped out that theory. So the judge rejected O'Neill's defenses and counterclaims and granted HSBC judgment on the pleadings too. Concluding that any attempt to amend would be an exercise in futility, the judge also denied O'Neill's plea to replead.

Which gets us to the here and now.OUR VIEW OF THE MATTER

O'Neill hurls a barrage of arguments our way, challenging the grant of judgment on the pleadings and the denial of his request to replead. We review a Rule 12(c) dismissal like we would a Rule 12(b)(6) dismissal: de novo, taking as true the losing party's well-pleaded facts and seeing if they add up to a plausible claim for relief. See, e.g., Grajales 682 F.3d at 44. And as a general rule, we review a decision regarding amendments of pleadings for abuse of discretion, though when — as is the case here — futility is the linchpin for the judge's ruling and the leave-to-replead request came before the closing of discovery and the filing of any summary-judgment motion, the correctness of the "futility" tag is tested under the Rule 12(b)(6) standard. See, e.g., Hatch v. Dep't for Children, Youth & Their Families, 274 F.3d 12, 19 (1st Cir. 2001). Ultimately, however, none of O'Neill's arguments persuades.

Judgment on the Pleadings

(a)

Fraudulent Inducement

O'Neill loudly protests that his fraudulent-inducement claim should have been enough to defeat HSBC's dismissal efforts. His theory rises or falls on his belief that two provisions in the project-loan agreement constitute false statements of material fact made to induce him to sign the guaranty and that he reasonably relied on those false statements to his detriment. See, e.g., Hogan v. Riemer, 619 N.E.2d 984, 988 (Mass. App. Ct. 1993) (laying out the elements of a fraudulent-inducement claim). His theory falls, as we now explain.

The first provision he points to involves the 60% loan-to-value ratio, which he alleges put the collateral property's value at $26.5 million and is an HSBC representation that the chance of its having to call the $8.1 million guaranty was basically zero. HSBC made that representation, he adds, even though HSBC — and not he — knew that this was not the property's real value. He does not say what the property's actual value was, but he intimates that it had to have been less when he signed the guaranty and that HSBC had to have known it was less. This theory, however, flies in the face of the guaranty — the very document where (the reader will recall) he expressly confirmed that he was familiar with the property's value, that he was not relying on the property as an inducement to sign the guaranty, and that HSBC made no representations to induce him to execute that document.

The second project-loan-agreement provision he harps on provides (emphasis ours) that if Brandywine defaults, HSBC "can recover the obligations" by selling the property. He reads this contract language as an HSBC representation that it would move against the property before turning to his guaranty — a representation (he continues) made even though HSBC intended all along to collect only against the guaranty. We are unmoved. Merely to state the obvious, that proviso says that HSBC "can" proceed first against the property, not that it must do so. Anyway, what drives a stake through the heart of this part of his inducement theory is his agreeing in the guaranty that HSBC said nothing to induce him to make the guaranty. And do not forget that his guaranty specifically proclaims that it is the "entire agreement" between the parties, superseding all prior "understandings," and explicitly provides that HSBC may enforce its rights against him (the primary obligor) without first trying to recover the debt from any pledged collateral.

Ultimately — and unhappily for O'Neill — we must enforce the guaranty according to its terms, with the parties' rights "ascertained" from the written text. See First Nat'l Bank of Boston v. Ibarra, 716 N.E.2d 647, 649 (Mass. App. Ct. 1999) (citing Merrimack Valley Nat'l Bank v. Baird, 363 N.E.2d 688 (Mass. 1977), and Shawmut Bank, N.A. v. Wayman, 606 N.E.2d 925 (Mass. App. Ct. 1993)). But hang on a minute, says O'Neill, a Massachusetts rule holds that one cannot induce a contract by fraud and then use contractual contrivances to duck liability. See, e.g., Starr v. Fordham, 648 N.E.2d 1261, 1268 (Mass. 1995) (citing Bates v. Southgate, 31 N.E.2d 551 (Mass. 1941), and noting, for example, that "[a]n integration clause in a contract does not insulate automatically a party from liability where he induced another person to enter into a contract by misrepresentation"). True enough. But another rule — the one that holds sway here, for reasons we will discuss in a minute — declares that reliance on supposed misrepresentations that contradict the terms of the parties' agreement is unreasonable as a matter of law and so cannot support a fraudulent-inducement claim. Id. (quoting Turner v. Johnson & Johnson, 809 F.2d 90, 97 (1st Cir. 1986)); accord Masingill v. EMC Corp., 870 N.E.2d 81, 89 (Mass. 2007) (calling this second rule "a rule of long standing"). And as we have just shown, the contract-inducing misrepresentations that O'Neill trumpets are irreconcilably at odds with the guaranty's express terms. To repeat (and we apologize for the monotony of our analysis): O'Neill specifically warranted in the guaranty that he was familiar with the collateral property's value, that the property did not operate as an inducement for him to make the uaranty, and that HSBC said nothing to induce him to execute the guaranty — all of which destroys his fraudulent-inducement thesis centered on the project-loan agreement's loan-to-value-ratio provision. Footnote See Starr, 648 N.E.2d at 1268. He also agreed with the guaranty's tagging him as the primary obligor and with its allowing HSBC to go after him first to recoup the debt — provisions that put the kibosh on his other suggestion that HSBC must first seek recourse against the property. See id.

Our case bears a striking resemblance to Turner — an opinion mentioned in a case parenthetical above. Applying Massachusetts law, there we affirmed a lower court's decision rejecting plaintiffs' fraudulent-inducement claims. See Turner, 809 F.2d at 95-98. Turner's key facts may be swiftly summarized.

The Turner plaintiffs sold an electronic-thermometer business to defendant for cash considerations and royalties based on future sales. Id. at 93. Plaintiffs later claimed that defendant had induced them to sell by misstating various things during negotiations, including that it would promote the thermometer's sale. Id. at 94. Importantly, however, the contract's final version stated that defendant had no obligation to market the thermometer. Id. at 93. Canvassing the cases, we found that "the give-and-take of negotiations would become meaningless if, after making concessions in order to obtain contractual protections, a knowledgeable party" can later "reclaim what it had given away by alleging that it had, in fact, relied not on the writing but on the prior oral statements." Id. at 96. So we said that Massachusetts's Supreme Judicial Court ("SJC," for short) "undoubtedly would find that the threat to contractual certainty usually would outweigh the possible injustice of denying a claim of fraud." Id. We added:

[T]he [SJC] would reject as a matter of law plaintiffs' fraud claim based on [defendant's] alleged promise to aggressively market [the thermometer]. Certainly in this case, where both parties were experienced in business and the contract was fully negotiated and voluntarily signed, plaintiffs may not raise as fraudulent any prior oral assertion inconsistent with a contract provision that specifically addressed the particular point at issue.

Id. at 97. And we concluded:

While we do not condone misrepresentations in contract negotiations, we also reject the notion that courts or juries should rewrite a fully negotiated contractual agreement that so precisely sets out the rights and obligations of two sophisticated parties. We do not believe this rule of law awards undue protection against fraud claims. It means only that a knowledgeable buyer should not sign a contract that conflicts with his or her understanding of the agreement.

Id. at 97-98. Turner stands on all fours with this case, given that the misrepresentations here are at odds with the guaranty's terms.

Desperate for a way around this reality, O'Neill spends a lot of time trying to convince us that the SJC rejected Turner in McEvoy Travel Bureau, Inc. v. Norton Co., 563 N.E.2d 188 (Mass. 1990). He also believes that the facts of his case fit snugly within McEvoy, which, he adds, obliges us to follow McEvoy anyway. He is wrong on both scores.

The McEvoy defendant, Norton Company, was a huge international conglomerate. 563 N.E.2d at 191. The plaintiff, McEvoy Travel Bureau, Inc., was a small travel agency in Worcester, Massachusetts. Id. For decades McEvoy had provided travel services to Norton, always without a written contract. Id. Eventually the two reached an oral agreement calling for McEvoy to become Norton's exclusive travel agent for all of Norton's Worcester-area business. Id. This would be a "long-term" arrangement, they agreed. Id. Based on this understanding, McEvoy moved into Norton's building and hired extra personnel and bought extra equipment necessary to handle the extra business. Id.

McEvoy had been fully performing under the agreement for two months when Norton sent over a written version of the contract. Id. McEvoy at first refused to sign it, complaining that the document stated that Norton could terminate it on 60 days' notice and that it was renewable yearly. Id. Norton replied that the termination clause was "inoperative" and "meaningless," a mere technicality added to make its lawyers happy — though at that very time, Norton was secretly considering an "in-house" option that could make McEvoy expendable. Id. at 191-92. An obviously in-the-dark McEvoy signed the contract. Id. at 191.

Three years later, Norton invoked the termination clause that it had previously pooh-poohed as pointless. Id. at 192. Unwilling to let its duper off the hook, McEvoy sued Norton in state court for (among other things) fraud in inducing the contract. Id. at 190. A jury found for McEvoy. Id. And the SJC affirmed, saying, most relevantly, first, that "statements of present intention as to future conduct" — like a fraudulent promise not to use the termination clause — "may be the basis for a fraud action if . . . the statements misrepresent the actual intention of the speaker and were relied upon by the recipient to his damage," id. at 192; and second, that McEvoy's reliance was reasonable, because "the long existing relationship between the parties" entitled it to take Norton's "statements at face value and credit them," id. at 194.

Now back to O'Neill's McEvoy-based arguments. Sure, in reaching its result, the SJC reaffirmed that contracting parties, "whether experienced in business or not, should deal with each other honestly," and that no one should "be permitted to engage in fraud to induce the contract" — meaning the SJC saw "no reason to create, as Turner suggests, a new rule or an exception" for cases where the players are considered "sophisticated business enterprises." Id. But McEvoy did not brush off Turner's core holding. And cases after McEvoy have embraced it, agreeing with Turner that "if 'the contract was fully negotiated and voluntarily signed, [then] plaintiffs may not raise as fraudulent any prior oral assertion inconsistent with a contract provision that specifically addressed the particular point at issue.'" Starr, 648 N.E.2d at 1267 (quoting Turner, 809 F.2d at 97); see also Masingill, 870 N.E.2d at 89 (same). And despite what he says, our facts look nothing like McEvoy's. For one thing, he identifies no specific statement signifying HSBC's then-present intention that it in the future would treat a contract provision as so much hot air. Cf. McEvoy, 563 N.E.2d at 191. For another, he alleges no history of performance with HSBC that could make his reliance on the complained-of duping conduct reasonable. Cf. id. Given all this, McEvoy offers him no help.

O'Neill, however, has another Massachusetts fraudulent-inducement decision up his sleeve that he says supports his position, this one penned by a state-court trial justice — Linear Retail Danvers #1, LLC v. Casatova, LLC, No. 07-3147, 2008 WL 2415402 (Mass. Super. Ct. June 11, 2008). Linear arose from an alleged default on a commercial lease by defendants-lessees. Id. at *1. When defendants signed the lease, they also signed a personal guaranty of the lease. Id. Claiming that defendants breached the lease by not paying rent as required, plaintiff-lessor sued them in Massachusetts state court, arguing that they, as guarantors of the rent obligation under the lease, were absolutely liable for the rent owed. Id. at *1-2. To fend off plaintiff's summary-judgment motion, defendants argued that plaintiff had drawn them into the lease by falsely representing that it would improve the leased premises in certain ways. Id. at *3. The court denied the motion, concluding that "[w]hether these representations were made, and whether, if made, they misrepresented [plaintiff's] actual intentions, are factual issues ripe for determination" by a factfinder. Id. But there is a distinction between that case and O'Neill's that makes all the difference: Linear never says whether the pertinent contract there (the lease) had any provision directly contradictory to the complained-of misrepresentations. Contrastingly, the pertinent contract here (the guaranty) has plenty of those. Clearly, then, Linear cannot turn the tide for O'Neill.

The net result of all this is that O'Neill's inducement-based arguments fail. So we press on.

(b)

Ambiguity

O'Neill also believes that judgment on the pleadings was a no-no because, he says, the guaranty's limitations-on-guaranteed-obligations clause is ambiguous on its face. As a refresher, we note again that this provision (so far as relevant) provides that "[n]otwithstanding anything in this guaranty or any of the loan documents to the contrary," O'Neill's liability under the guaranty "shall be limited to . . . the guaranteed amount," defined as "an amount equal to $8,100,000." O'Neill sees ambiguity because he thinks that this proviso can either mean that he is responsible for the "first" $8.1 million of the $15.9 million loan (which is HSBC's preferred reading, he says) or the "last" $8.1 million (which is his preferred reading, naturally).

Unfortunately for O'Neill, ambiguity does not arise simply because contracting parties bicker over a provision's meaning, see, e.g., Suffolk Const. Co. v. Lanco Scaffolding Co., 716 N.E.2d 130, 133 (Mass. App. Ct. 1999) — if it did then reducing a contract to writing would give parties "little or no protection," see Fed. Deposit Ins. Corp. v. W.R. Grace & Co., 877 F.2d 614, 621 (7th Cir. 1989) (Posner, J.), making contract drafting a real time-waster. Instead, ambiguity arises only if a reasonable person could read the provision more than one way. See, e.g., Brigade Leveraged Capital Structures Fund Ltd. v. PIMCO Income Strategy Fund, 995 N.E.2d 64, 69 (Mass. 2013). Of course, whether a provision is ambiguous is a question of law that we must answer ourselves, see, e.g., Eigerman v. Putnam Invs., Inc., 877 N.E.2d 1258, 1263 (Mass. 2007), mindful of this: that we must read the provision "in the context of the entire contract rather than in isolation," because the interplay between different provisions may cast some light on their meaning, see Gen. Convention of the New Jerusalem in the U.S.A. v. Mackenzie, 874 N.E.2d 1084, 1087 (Mass. 2007), and that a dose of "'[c]ommon sense is as much a part of contract interpretation as is the dictionary or the arsenal of canons,'" see Roberts v. Enter. Rent-A-Car Co. of Boston, 779 N.E.2d 623, 629 (Mass. 2002) (quoting Fishman v. LaSalle Nat. Bank, 247 F.3d 300, 302 (1st Cir. 2001)).

These basic principles spell doom for O'Neill's ambiguity claim. Nothing in the contested provision — or elsewhere in the guaranty, for that matter — limits his guaranty obligation as primary obligor on the note to the "last" $8.1 million of the $15.9 million loan. The clause's language is crystal clear, putting an $8.1 million ceiling on his liability without providing even the faintest whisper of a suggestion that he is responsible only for the loan's final $8.1 million. What O'Neill has done is pull his reading of the provision out of thin air, relying on mental gymnastics inconsistent with the guaranty's actual words (and with common sense). That his interpretation is not plausible wipes out his ambiguity theory. See, e.g., Citation Ins. Co. v. Gomez, 688 N.E.2d 951, 952-53 (Mass. 1998); Mitcheson v. Izdepski, 585 N.E.2d 743, 745 (Mass. App. Ct. 1992).

(c)

Chapter 93A

and

Good-Faith Dealing

We can make quick work of O'Neill's charge that his pleadings alleged enough to push his chapter-93A and good-faith-dealing claims across the plausibility line. For those not in the know, we point out that chapter 93A prohibits "[u]nfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce," see Mass. Gen. Laws ch. 93A, § 2(a), and that courts read a duty of good-faith dealing into every Massachusetts contract, see, e.g., Harrison v. NetCentric Corp., 744 N.E.2d 622, 629 (Mass. 2001); Anthony's Pier Four, Inc. v. HBC Assocs., 583 N.E.2d 806, 820 (Mass. 1991). Now, as argued on appeal, O'Neill premises these claims on his already-rejected fraud theory, which we state again runs like this: first, that the 60% loan-to-value ratio in the project-loan agreement is an HSBC representation that it would not need to collect on his guaranty — an entirely false representation, he alleges; and second, that the project-loan agreement's saying that HSBC "can recover" against the collateral property if Brandywine defaults is an HSBC representation that it would proceed against the property rather than against him as guarantor — another entirely false representation, he posits. But because — as we have explained — his fraud theory fails, so too does his chapter-93A claim. See, e.g., Macoviak v. Chase Home Mortg. Corp., 667 N.E.2d 900, 903 (Mass. App. Ct. 1996) (holding that a litigant cannot succeed on a chapter-93A theory based on a fraud claim that is insufficient as a matter of law). And because he is not a party to the project-loan agreement between HSBC and Brandywine, his good-faith-dealing claim necessarily fails as well. See, e.g., Ayash v. Dana-Farber Cancer Inst., 822 N.E.2d 667, 684 (Mass. 2005) (stressing that "[t]his implied covenant" of good-faith dealing "may not be 'invoked to create rights and duties not otherwise provided for in the existing contractual relationship'" (quoting Uno Rests., Inc. v. Boston Kenmore Realty Corp., 805 N.E.2d 957, 964 (Mass. 2004))).

Looking to deflect attention from this powerful body of Massachusetts caselaw, O'Neill talks up sections 37 and 51 of the Restatement (Third) of Suretyship and Guaranty, which we will simply call the "Restatement" to save some keystrokes. As he tells it, both sections bolster his chapter-93A and good-faith-dealing claims. Not so, we conclude.

Reader alert: When perusing the next two paragraphs, keep in mind that HSBC here is the "obligee," Brandywine is the "principal obligor," and O'Neill is the "secondary obligor" — at least that is how he sees things.

Broadly speaking, section 37 provides that if an "obligee acts to increase the secondary obligor's risk of loss by increasing its potential cost of performance or decreasing its potential ability to cause the principal obligor to bear the cost of performance, the secondary obligor is discharged as described in subsections (2) and (3)." See Restatement § 37(1). Subsection (2) allows a discharge if the obligee "releas[es] the principal obligor from a duty other than the payment of money" or "agree[s]" to modify "the duties of the principal obligor that either amounts to a substituted contract or imposes a risk on the secondary obligor fundamentally different" than those imposed before the modification. Id. § 37(2). Subsection (3) provides a list of acts that allow a discharge, but the gist of this subsection is that a discharge is in order if the "obligee" committed "any . . . act or omission that impairs the principal obligor's duty of performance, the principal obligor's duty to reimburse, or the secondary obligor's right of restitution or subrogation." Id. § 37(3). O'Neill is adamant that his case fits section 37 to a T. But he makes no attempt to explain why this is so, alleging nothing showing how HSBC's conduct comes within the ambit of subsections (2) or (3). His argument therefore goes nowhere. Footnote See, e.g., Ruiz-Sánchez v. Goodyear Tire & Rubber Co., 717 F.3d 249, 253 (1st Cir. 2013) (stressing that claims "woven entirely out flimsy strands of speculation and surmise" do not satisfy the plausibility standard); Morales-Cruz v. Univ. of P.R., 676 F.3d 220, 225 (1st Cir. 2012) (explaining that "speculation, unaccompanied by any factual predicate, is not sufficient to confer plausibility").

As for section 51, it provides that an "obligee" may be required to liquidate collateral to satisfy a debt when to do otherwise would "result in unusual hardship to the secondary obligor and enforcing the security interest [would] not materially prejudice or burden the obligee or other beneficiaries of the secondary obligation." Footnote See Restatement § 51(2)(b). And, building to the ultimate crescendo, he theorizes that "hardship" and "prejudice"/"burden" issues are questions of fact for a jury, not for a judge on a Rule 12(c) motion. Now admittedly, he does say in his pleadings (emphasis ours) that he "will face unusual hardship" if required to pony up the $8.1 million and that HSBC will "not face any hardship, nor be materially prejudiced or burdened" if forced "to first look to" the property "for repayment" of any money owing on the loan. But these are conclusory allegations, simply parroting the legalese of the Restatement without providing any factual support that might give them plausibility. Consequently, we need not credit them. Footnote See, e.g., A.G. v. Elsevier, Inc., 732 F.3d 77, 81 (1st Cir. 2013) (holding that "[w]hen allegations, though disguised as factual, are so threadbare that they omit any meaningful factual content, we will treat them as what they are: naked conclusions" that cannot help a party pass the plausibility test); Shay v. Walters, 702 F.3d 76, 82-83 (1st Cir. 2012) (emphasizing that in deciding "whether allegations cross the plausibility threshold, an inquiring court need not give weight to bare conclusions, unembellished by pertinent facts").

(d)

Undue Influence

and

Unconscionable Contract of Adhesion

The judge rejected O'Neill's undue-influence and unconscionable-contract-of-adhesion claims, concluding that both theories were undone by "O'Neill's sophistication in real estate matters and by the language of the [g]uaranty itself." O'Neill's only complaint about this on appeal is with the "sophistication" comment. To his way of thinking, this remark shows that the judge, when addressing these two claims, considered matters "outside the pleadings" and resolved "credibility" issues against him. See generally Fed. R. Civ. P. 12(d) (declaring that "[i]f, on a motion under . . . Rule 12(c), matters outside the pleadings are presented to and not excluded by the court, the motion must be treated as one for summary judgment under Rule 56," and adding that "[a]ll parties must be given a reasonable opportunity to present all material that is pertinent to the motion"). The problem for O'Neill is that his pleadings and the undisputed documents he attached to them showed his real-estate "sophistication." His counterclaims, for example, played up the "legal[ly] and technical[ly] complex[]" environmental problems that Brandywine navigated in its quest to convert the property to residential use. And of course he acknowledged in his guaranty that he held an ownership interest in Brandywine. He also acknowledged there that he had "independently reviewed" Brandywine's financial records and was familiar with the collateral property's value. If more were needed, Brandywine acknowledged in the project-loan agreement that HSBC had "examined and relied on the experience of [Brandywine] and its general partners, members, [and] principals . . . in owning and operating properties" like the property at issue. Additionally, O'Neill never tried to support his unconscionability and undue-influence theories by claiming that he was a real-estate unsophisticate. The bottom line is that we see nothing resembling reversible error here.

(e)

Post-Briefing Letter

By way of a post-briefing letter, see Fed. R. App. 28(j), O'Neill spotlights a lawyer's comment in an article that "[w]hen dealing with a guarantee limited to an amount," a lender "[g]enerally" intends "that the last 'x' dollars be guaranteed" and that the guarantor "may . . . make the argument that his guarantee doesn't kick in until the lender has liquidated its collateral from its primary obligor." See William Barnett, Limited Guarantees: Variations, Limitations, and Lamentations, 104 Banking L.J. 244, 251 (1987). But he cites us no case showing that Massachusetts buys into any of this. Also, "generally" is not the same as "always," see Newman v. Krintzman, 723 F.3d 308, 314 (1st Cir. 2013), and even the article that he clings to stresses that "[t]he parties can, of course, create their own arrangements regarding the order in which the lender will proceed against guarantors or collateral," see Barnett, supra, at 258. Again, that is precisely what the parties did here, with the guaranty's crystalline words declaring that HSBC is in no way required to move first against the collateral, Brandywine, or others to collect what it is owed. So the article does nothing to help him.

O'Neill's post-briefing letter also intimates for the first time on appeal that HSBC may have breached some "fiduciary duties" to him. But the general rule — applicable here — is that issues not developed in a party's opening brief are waived. See, e.g., N. Ins. Co. of N.Y. v. Point Judith Marina, LLC, 579 F.3d 61, 71 n.7 (1st Cir. 2009). We say no more about that subject.

(f)

Summing Up

O'Neill floats an array of reasons why the judge stumbled in granting HSBC judgment on the pleadings. But not one can carry the day for him, which is the short of this very long section of our analysis. That leaves his last category of argument — that the judge slipped in denying him leave to replead his defenses and counterclaims — an argument to which we now turn.

Leave to Replead

A judge "should freely give leave [to replead] when justice so requires," as O'Neill notes at some length. See Fed. R. Civ. P. 15(a)(2). But a judge may deny leave if amending the pleading would be futile — that is, if the pined-for amendment does not plead enough to make out a plausible claim for relief. See Hatch, 274 F.3d at 19; see also Foman v. Davis, 371 U.S. 178, 182 (1962) (noting that in addition to futility, undue delay, bad faith, and the absence of due diligence on the movant's part may justify denying leave to amend). O'Neill never tells us what further facts he could plead to get around the problems highlighted above. He simply believes that his pleadings as currently fashioned do the trick — a belief that is blown away by the unambiguous guaranty, for the reasons recorded in these pages. In other words, he has not provided (below or here) any additional facts which, if repled, would permit him to cross the plausibility threshold when matched up against the guaranty's express language. Consequently, the judge's ruling on this issue stands. See, e.g., Gray v. Evercore Restructuring L.L.C., 544 F.3d 320, 327 (1st Cir. 2008) (finding futility where the party could not allege anything that could repair the problem in its case).

FINAL WORDS

Concluding, as we do, that the district judge committed no reversible error, we uphold the judgment that entered below.

Outcome: Affirmed, with HSBC awarded its costs on appeal.

Plaintiff's Experts:

Defendant's Experts:

Comments: