Full opinion text
OPINION ON MOTION FOR REHEARING HUDSON, Justice. On consideration of appellant’s motion for rehearing, we withdraw the majority and concurring opinions of June 26, 1997, and substitute the following opinion. Appellants, Bank One, Texas, N.A., Bonnet Resources Corporation, Trendmaker, Inc., and Weyerhaeuser Real Estate Company appeal from a $17,000,000 judgment arising out of the sale of a defaulted note to a maker of a collateral note securing the defaulted note, and the subsequent foreclosure of the collateral note. In eighteen points of error, Bank One, Texas, N.A. and Bonnet Resources (collectively “Bank One”) assert the trial court erred in submitting jury questions and granting judgment regarding an alleged breach of a bailment agreement, breach of the duty of good faith and fair dealing, conspiracy to commit fraud, and failure to comply with Section 9.207(a) of the Texas Business and Commerce Code. Bank One also challenges the legal and factual sufficiency of the evidence to support the judgment and to award actual and exemplary damages as well as attorney fees. In addition, Bank One asserts the trial court made errors in the submission of the jury charge. In eight points of error, Trendmaker asserts the trial court erred in submitting jury questions and entering judgment on claims of breach of a bailment agreement, tortious interference with a contract, breach of the duty of good faith and fair dealing, conversion, civil conspiracy to commit fraud and commercial unreasonableness, and in awarding actual and punitive damages and attorney fees. In twenty-nine points of error, Weyerhaeu-ser Real Estate Company (Weyerhaeuser) asserts the trial court erred in submitting jury questions and entering judgment on findings that it committed fraud, engaged in a civil conspiracy to commit fraud, tortiously interfered in a business relationship, and acted with malice. Weyerhaeuser also challenges the legal and factual sufficiency of the evidence to support the judgment related to these claims and asserts error in the submission of erroneous instructions and questions related to corporate identity, damages, attorney fees, and prejudgment interest. In addition, Weyerhaeuser contends the trial court erred in refusing its proposed instructions, entering judgment on the basis of jury findings against Trendmaker and Bank One, excluding evidence, and admitting the testimony of an undisclosed expert witness. Appellee Maco Stewart (Stewart) brings two cross-points complaining of the award of attorney fees and asking for recovery under the theory providing the greatest relief. Ap-pellee Leisure Resorts, Inc. (LRI) brings three cross-points complaining of the award of attorney fees, the calculation of prejudgment and postjudgment interest and the trial court’s refusal to rescind the Trendmaker foreclosure sale. We reverse and render. I. Background A. Stewart Sells Bay Colony to LRI In 1984, Stewart sold two large tracts of an 890 acre tract of real estate known as Bay Colony to two companies owned by Tyler Todd (Todd), namely, Todd Development Company (TDC) and TDT Development Company. TDT Development Company, which later became LRI, purchased the northern tract and TDC purchased the southern tract of Bay Colony. Stewart retained a purchase money lien on the northern tract to secure repayment of $1,500,000 of financing that he provided to LRI. Stewart’s interest in Bay Colony was subordinate to a first lien held by Ameriway Savings Association (Ameriway) securing a $1,650,000 loan to LRI. B. LRI Sells Bay Colony to the Midlands Associates On March 25,1985, LRI sold its interest in Bay Colony to the Midlands Associates, a joint venture consisting of Trendmaker and Commonwealth Realty Development Company (Commonwealth Realty). As partial payment of the purchase price, the Midlands Associates executed a promissory note for $9,031,214 (the Midland Note) in favor of LRI, secured by the northern tract of Bay Colony. At the same time, LRI endorsed and collaterally assigned the Midland Note to Ameriway, which advanced additional money to LRI and TDC (the Ameriway Note). The joint venturers to the Midlands Associates and their parent corporations executed a letter to LRI, TDC and Ameriway guaranteeing each joint venturer’s obligation to make capital contributions to the Midlands Associates. On the same day, LRI restructured its prior debt to Stewart by executing another promissory note in favor of Stewart for $1,450,000 (the Stewart Note), secured by a second lien in the Midland Note. By letter, Ameriway, Stewart, and LRI acknowledged Stewart’s status as a subordinate secured party in the Ameriway Note and agreed that Ameriway would act as bailee for Stewart. C.Trendmaker and Commonwealth Restructure their Joint Venture Relationship The Midlands Associates began to develop Bay Colony. Trendmaker provided the expertise in development and Commonwealth provided the financing. Nevertheless, on May 18, 1988, Trendmaker and Commonwealth Realty terminated their joint venture relationship in the Midlands Associates and in another joint venture entity. In exchange for Commonwealth’s interest in the other joint venture entity, Trendmaker assigned its interest in the Midlands Associates and its assets to Commonwealth Realty. Thus, Commonwealth Realty and another Commonwealth entity became the sole owner of the Midlands Associates and its assets, including the northern tract of Bay Colony. As consideration for the assignment, Commonwealth Realty “assumed full payment of all of the debts and obligations of Midlands Associates.” Commonwealth also agreed to indemnify Trendmaker for its liabilities relating to the Midland Note. D.MBank Replaces Ameriway and LRI Restructures Debt with MBank A short time later, Ameriway resigned as lead agent on the Ameriway Note. On June 3, 1988 Ameriway assigned to MBank an interest in the Ameriway Note and its collateral, the Midlands Note. Consequently, MBank, Houston, N.A. became the lead lender and Commonwealth Savings a participant lender on the LRI Note. LRI restructured its debt and executed a commercial revolving credit note in favor of MBank for $5,719,769 (the LRI Note). At this time Todd became aware that Trendmaker was no longer a partner in the Midlands Associates. By letter agreement, MBank acknowledged Stewart’s status as a subordinate secured party in the Midland Note under the terms governing LRI’s assignment of the Midland Note to Ameriway on March 25, 1985. In the same letter, Stewart agreed his interest in the Midland Note would remain subordinate to MBank’s interest even if the Stewart loan was renewed, extended or rearranged. Subject to those terms, MBank agreed to act as bailee for the Stewart Note solely for the purpose of perfecting Stewart’s security interest in the Midland Note (the Bailment Agreement). On June 1,1988, LRI directed MBank by letter to disburse the proceeds remaining after payment of the LRI Note, from the funds MBank received from the Midlands Associates, to Stewart for payment due on the Stewart Note (the Collection Letter). E.Bank One Acquires the LRI Note In 1989, MBank failed and Bank One was formed to purchase MBank’s assets. Pursuant to a Purchase and Assumption Agreement effective March 28, 1989, Bank One acquired MBank’s seventy percent interest in the LRI Note. Bank One’s subsidiary and agent, Bonnet Resources, handled the LRI Note and its collateral, the Midland Note, on behalf of Bank One. Bonnet collected payment on the Midland Note from Commonwealth Savings and distributed funds remaining after payment of the LRI Note according to Todd’s instructions in the Collection Letter to MBank. F. The Midlands Associates Default on the Midland Note Also in 1989, Todd filed for personal bankruptcy and his other company, TDC, filed for corporate bankruptcy. Commonwealth Savings Association, the parent corporation of Commonwealth Realty, failed and came under control of the Resolution Trust Corporation (the RTC). The Midlands Associates, comprised of Commonwealth Realty and other Commonwealth entities but controlled by the RTC, defaulted on its December 1989 payment on the Midland Note. As a result of the Midland default, LRI defaulted on both the LRI Note and the Stewart Note. In early 1990, Bank One initiated collection of the LRI Note through its agent and affiliate, Bonnet Resources. After meeting with Todd, Bank One agreed to forego adverse action against LRI for sixty days while LRI pursued collection of the Midland Note. Instead of pursuing Trendmaker, Todd unsuccessfully directed his efforts primarily to marketing Bay Colony to potential buyers. During the moratorium, both Stewart and Trendmaker approached Bank One about purchasing the LRI Note. Stewart declined to make an offer on the LRI Note because he was unable to obtain financing, but invited Bank One to join him in suing Trendmaker and Weyerhaeuser to recover on the Midland Note. Bank One rejected Trendmaker’s initial offer but informed Trendmaker that it would seriously entertain “a proposal encompassing a discount of 5% to 10% of the outstanding balance” due on the LRI Note. In the meantime, Stewart filed suit against Trendmaker, Weyerhaeuser, the Commonwealth entities, and the Midlands Associates, and joined LRI, Bank One and Bonnet Resources as involuntary plaintiffs and defendants. At the close of the sixty-day moratorium, Bank One extended an offer to sell the LRI Note to Trendmaker for $2,850,000. Negotiations continued but to no avail. Bank One’s offer expired. Soon thereafter, Stewart’s suit was removed to federal court. After attempting for many months to restructure the LRI obligation and to sell Bay Colony, Bank One scheduled a foreclosure sale of the Midland Note for February 8, 1991. On the eve of the foreclosure, LRI, financed by Trendmaker, filed for bankruptcy protection, which stayed the foreclosure sale. The bankruptcy plan proved unsuccessful and the stay was lifted. In the spring of 1991, Trendmaker approached Bank One about purchasing the LRI Note. In July 1991, Bank One sold its interest in the LRI Note and assigned its interest in the Midland Note to Trendmaker for $2,750,000. In August 1991, Trendmaker purchased the Midland Note at foreclosure sale and subsequently foreclosed on and purchased, Bay Colony. A few weeks later, the federal court remanded Stewart’s suit to state court. In early 1992, Trendmaker and the RTC, as receiver for Commonwealth Savings Association and other Commonwealth entities, executed a marketing agreement to sell Bay Colony. In early 1992, Stewart filed his First Amended Original Petition against Bank One, Trendmaker and Weyerhaeuser in state court and LRI filed an original cross-action against Trendmaker and Weyerhaeuser and the Midlands Associates. In September 1992, Stewart filed a Second Amended Original Petition asserting Bank One and Trend-maker breached (1) the Bailment Agreement, (2) the duty of good faith and fair dealing, and (3) engaged in conversion and conspiracy to defraud. Stewart also asserted that (4) Bank One violated Section 9.207 of the Texas Business and Commerce Code, and (5) Trendmaker wrongfully foreclosed on the Midland Note and (6) tortiously interfered in his relationship with Bank One. Stewart further asserted Weyerhaeuser engaged in conspiracy and tortious interference with a business relationship. Although LRI asserted no claims against Bank One, it claimed Trendmaker and Weyerhaeuser engaged in conspiracy, tortious interference, and fraud. In addition, LRI claimed Trendmaker converted and wrongfully foreclosed on the Midland Note. The jury found in favor of Stewart and LRI on all claims except Stewart’s claim of conversion against Bank One. The trial court awarded Stewart actual damages of $1,326,145.20, including prejudgment interest, exemplary damages of $3,000,000, attorney fees of $464,150.82, and postjudgment interest. The trial court also awarded LRI actual damages of $3,874,600.11, including prejudgment interest, exemplary damages of $6,000,000, attorney fees of $1,356,110.04, and postjudgment interest. II. Pleading Defects In its third point of error Bank One asserts trial error in the submission of jury questions regarding conspiracy to commit fraud and the entry of judgment on the jury’s findings because Stewart did not plead a conspiracy cause of action. Likewise, in its first two points of error, Weyerhaeuser alleges error because neither Stewart nor LRI pled a cause of action for conspiracy to commit fraud and because Stewart did not plead a cause of action for tortious interference with a contract. In a case tried to a jury, the judgment must conform to the issues raised by the pleadings, the nature of the case proved, and the verdict. Tex.R.Civ.P. 301; Texaco, Inc. v. Wolfe, 601 S.W.2d 737, 741 (Tex.Civ.App. — Houston [1st Dist.] 1980, writ ref'd n.r.e.). Pleadings are to be liberally construed in favor of the pleader when the complaining party has not filed special exceptions to the pleadings. Crockett v. Bell, 909 S.W.2d 70, 72 (Tex.App. — Houston [14th Dist.], 1995, no writ). Pleadings shall give fair notice of the claim or defense asserted to provide the opposing party with enough information to enable him to prepare a defense or answer to the defense asserted. Id. (citing Paramount Pipe & Supply Co. v. Mukr, 749 S.W.2d 491, 494 (Tex.1988) and Roark v. Allen, 633 S.W.2d 804, 810 (Tex.1982)); Tex.R.Civ.P. 45(b), 47(a). A petition is sufficient if a cause of action or defense may be reasonably inferred from what is specifically stated. Id.; (citing Boyles v. Kerr, 855 S.W.2d 593, 601 (Tex.1993)). Among other allegations, Stewart’s petition alleged that while Bank One was publicly telling LRI to pressure Trendmaker and Weyerhaeuser to pay the Midland Note, it was encouraging Trendmaker in secret and clandestine meetings not to cure the default on the Midland Note, but suggesting that it simply purchase the LRI Note. Stewart also alleged that Bank One disseminated information “in such a manner as to favor a purchase of the LRI Note by Trendmaker” instead of Stewart. Relying upon Bank One’s suggestion, Trendmaker ignored LRI’s demands for payment. Stewart’s petition also asserted that Wey-erhaeuser committed actual or constructive fraud because it knew and approved of Trendmaker’s scheme to avoid liability on the Midland Note and loaned Trendmaker the funds to purchase the LRI Note. He further claimed that Weyerhaeuser’s liability was derivative of Trendmaker’s tortious acts because Trendmaker is a wholly owned subsidiary of Weyerhaeuser. Among other allegations, Stewart claimed Trendmaker committed malicious and tortious interference in his business affairs. Likewise, LRI asserted in its First Amended Cross-Action that Trendmaker and Weyerhaeuser committed actual and constructive fraud. The petition also alleged that Weyerhaeuser knowingly participated in, and agreed to, Trendmaker’s sham, scheme, device and/or subterfuge to avoid Trendmaker’s and Weyerhaeuser’s obligations under the Midland Note and to prevent the enforcement of those obligations by advancing Trendmaker the funds to purchase the Midland Note. Although the allegations are broad, both petitions raise a reasonable inference that Bank One and Weyerhaeuser participated in a conspiracy to defraud LRI by inducing Trendmaker to avoid liability on the Midland Note. Stewart’s pleading also gives fair notice of his claim concerning Weyerhaeuser’s derivative liability for Trendmaker’s tortious conduct, including tortious interference with a business contact. We, therefore, overrule Weyerhaeuser’s first and second points of error and Bank One’s third point of error. III. Breach of the Bailment Agreement In its first point of error, Bank One contends the trial court erred in submitting jury questions 1, 2, and 4 regarding breach of the Bailment Agreement and in granting judgment in favor of Stewart on that basis because the Bailment Agreement does not impose any of the duties Stewart alleged, and Bank One did not assume any of the duties Stewart alleged. Further, Bank One challenges the legal and factual sufficiency of the evidence to support the jury’s findings that Bank One did not comply with the Bailment Agreement. Bank One also contends the Bailment Agreement is not enforceable because, as a matter of law, it does not satisfy the requirements of the D’Oench, Duhme & Co. v. F.D.I.C., 315 U.S. 447, 62 S.Ct. 676, 86 L.Ed. 956 (1942). Moreover, Bank One claims the Bailment Agreement is not supported by consideration. In its first point of error, Trendmaker asserts the trial court erred in submitting jury questions 1 through 9 concerning the Bailment Agreement and in granting judgment in favor of Stewart and LRI on that basis because (1) Trendmaker did not assume the Bailment Agreement as a matter of law; (2) the Bailment Agreement did not satisfy the requirements of the D’Oench, Duhme doctrine and its statutory counterparts; (3) Trendmaker was not charged with any of the duties alleged; and (4) the evidence was insufficient to support the submission of these questions to the jury or the jury’s findings thereon. Similarly, Weyerhaeuser asserts in its twenty-seventh point of error that the trial court erred in entering judgment against Weyerhaeuser on the jury’s findings to questions 3, 4, 6, and 8 that Trendmaker breached the Bailment Agreement. Weyer-haeuser adopts Trendmaker’s arguments in support of its first point of error. A Submission of Jury Question Regarding Breach of Bailment Agreement An appellate court reviews allegations of error in the jury charge under an abuse of discretion standard. Tex.R.Civ.P. 277; Howell Crude Oil Co. v. Donna Refinery, 928 S.W.2d 100, 110 (Tex.App. — Houston [14th Dist.] 1996, writ denied.). The trial court has wide discretion in submitting jury questions as well as instructions and definitions. Howell, 928 S.W.2d at 110. “This discretion is subject to the requirement that the questions submitted must control the disposition of the case, be raised by the pleadings and evidence, and properly submit the disputed issues for the jury’s deliberation.” Texas Dep’t of Transp. v. Ramming, 861 S.W.2d 460, 463 (Tex.App. — Houston [14th Dist.] 1993, writ denied). Upon finding error in the charge, an appellate court reviews the pleadings, evidence, and the entire charge to determine if the error is harmful. Island Recreational Dev. Corp. v. Republic of Texas Sav. Ass’n, 710 S.W.2d 551, 555 (Tex.1986); Insurance Co. of N.A. v. Morris, 928 S.W.2d 133, 143 (Tex.App. — Houston [14th Dist.] 1996, writ granted). Error in the jury charge is reversible if, viewed in the light of all the circumstances, it amounts to such denial of the rights of the complaining party as was reasonably calculated to cause and probably did cause the rendition of an improper judgment. Island Recreational, 710 S.W.2d at 555; Gilbert v. Pettiette, 838 S.W.2d 890, 893 (Tex.App. — Houston [1st Dist.] 1992, no writ); Tex.R.App.P. 81(b)(1). Bank One and Trendmaker contend the trial court erred in submitting jury question 4 regarding their compliance with the Bailment Agreement because the interpretation of the terms of the Bailment Agreement and the existence of a breach are questions of law for the court and not issues of fact for the jury. The meaning given to the language in a contract is, of course, a question of law for the court. Snyder v. Eanes Ind. Sch. Dist., 860 S.W.2d 692, 696 (Tex.App. — Austin 1993, writ denied). Likewise, whether a party has breached a contract is a question of law for the court and not a question of fact for the jury. Meek v. Bishop Peterson & Sharp, P.C., 919 S.W.2d 805, 808 (Tex.App.— Houston [14th Dist.] 1996, writ denied). The court submits disputed fact questions to the jury only as far as a dispute exists concerning a party’s failure to perform the contract. Id. Conversely, when the parties do not dispute the facts or conclusively establish facts regarding performance of the contract, the trial court need not submit those issues to the jury. Id. Here, the parties did not dispute the existence of an express bailment contract or the actions of Bank One and Trendmaker. Instead, the parties disputed the terms of the Bailment Agreement and whether the actions of Bank One and Trendmaker constituted a breach of the Bailment Agreement. Both issues are questions of law. Thus, the trial court abused its discretion by submitting question 4 to the jury. B. Terms of the Bailment Agreement Stewart’s Second Amended Original Petition reflects that many of Stewart’s claims flow from Bank One’s and Trendmaker’s alleged breach of the express and implied terms of the Bailment Agreement. In fact, the first nine jury questions concern some aspect of the Bailment Agreement. Moreover, the jury found Bank One and Trend-maker breached express and implied duties in the Bailment Agreement. Therefore, to decide whether the submission of Question No. 4 amounted to such a denial of Bank One’s and Trendmaker’s rights to render an improper judgment, we review the evidence to determine the duties created by the Bailment Agreement and whether the evidence is sufficient to support the jury’s findings that Bank One and Trendmaker did not comply with the agreement. Generally, bailment relationships are governed by common law principles of negligence. See Anchor Cas. Co. v. Robertson Transport Co., 389 S.W.2d 135, 138 (Tex.Civ.App. — Corpus Christi 1965, writ refd n.r.e.). Parties to a bailment relationship, however, may abrogate the law of bailment by making their own express contract that may “enlarge, abridge, qualify or supersede the obligations which otherwise would arise from the bailment by implication of law.” Id. In such cases, the express agreement of the parties determines the rights and liabilities arising from a bailment. Fowler v. One Seguin Art Center, 617 S.W.2d 763, 765 (Tex.Civ.App. — Houston [14 Dist.] 1981, writ ref'd n.r.e.). Nevertheless, “while the bailee may enlarge or restrict his liability, he may not do so by words of doubtful meaning. The intent to vary the liability imposed by law must clearly appear.” Id. Stewart does not assert, nor do we find, that the language of the Bailment Agreement is ambiguous. MBank’s letter specifying the terms of the Bailment Agreement required Stewart to acknowledge, confirm, and agree that he held a subordinate and inferior lien in the Midland Note. Stewart further agreed that the provisions and agreements set forth in the first two paragraphs of the letter, which acknowledged the security agreements between LRI and Stewart, and between LRI and Ameriway, and his inferi- or interest in the Midland Note, were binding upon him, his heirs and assigns, and inured to the benefit of MBank. The security agreement between Stewart and LRI gave Stewart a junior security interest in the Midland Note and permitted him to collect on the Midland Note. The security agreement between LRI and Ameriway, however, gave Ameriway the senior security interest in the Midland Note and all the rights of a secured party under the Uniform Commercial Code, as well as all “other rights, powers, and remedies of the holder and owner of the Collateral Note and the liens and securities easting in connection therewith and securing the payment thereof.” Stewart also agreed, subject to the foregoing, that MBank held the Midlands Note solely for the purpose of perfecting his junior interest in the note, and that besides acting in its own behalf, MBank would return the Midland Note if the LRI Note was paid in full. Despite the unambiguous language, Stewart contends the Bailment Agreement imposed extraordinary duties that Bank One breached by assigning the Midland Note to Trendmaker. Stewart first contends Bank One breached the Bailment Agreement by ceasing to act as his bailee because the express language of the Bailment Agreement does not state under what conditions the bank may cease to act as the bailee of the Midland Note. Stewart, however, never pled that Bank One breached the Bailment Agreement by ceasing to act as his bailee or raised this argument in the court below. Therefore, we decline to address this issue on appeal. See Tex.R.App.P. 74(f). Next, Stewart contends Bank One held the Midland Note under the Bailment Agreement as his agent, representative, and fiduciary because he subordinated his security interest in the Midland Note in consideration for the bank taking physical possession of the note. Because Bank One possessed the Midland Note, Stewart claims he could only collect the note with Bank One’s cooperation. Therefore, he maintains Bank One, and later Trendmaker, had a duty to collect the note for his benefit rather than foreclosing on its senior lien or transferring the Midland Note when it sold the LRI Note to Trendmaker. Stewart asserts Bank One did not cooperate in, and in fact, hindered his efforts to collect the Midland Note because Bank One never made a serious attempt to collect the Midland Note, refused to permit LRI to sue to collect the Midland Note, offered to sell the Midland Note to Trend-maker during the sixty-day moratorium with LRI, and refused to join or cooperate with Stewart’s suit against Trendmaker and Wey-erhaeuser. A duty to cooperate is implied in every contract in which cooperation is necessary for performance of a contract. See Citizens Nat’l Bank of Orlando v. Vitt, 367 F.2d 541, 545 (5th Cir.1966); see also Keener v. Sizzler Family Steak Houses, 424 F.Supp. 482, 484 (N.D.Tex.1977), aff'd in part, 597 F.2d 453, 458 (5th Cir.1979). Stewart, however, cites no Texas authority, and we have found no authority, to support an implied duty of cooperation in a bailment agreement. Moreover, Texas law does not favor implied covenants. Nalle v. Taco Bell Corp., 914 S.W.2d 685, 687 (Tex.App. — Austin 1996 writ denied). Generally, the court looks beyond the written agreement to imply a covenant only if necessary to effectuate the intention of the parties as disclosed by the contract as a whole, but not to make the contract fair, wise, or just. Id. An implied covenant is necessary to effectuate the parties’ intentions only if the obligation is “so clearly within the contemplation of the parties that they deemed it unnecessary to express it.” Id. (citing Danciger Oil & Ref. Co. v. Powell, 137 Tex. 484, 154 S.W.2d 632, 635 (Tex.1941)). In this case, the Bailment Agreement does not mention the bank’s duty to collect money on Stewart’s behalf, cooperate with Stewart in collecting payment on the Midland Note, or forebear from foreclosing or assigning the note. Stewart argues a reasonable loan officer would read the Bailment Agreement, along with LRI’s letter directing the bank to disburse funds remaining after payment of the LRI Note to Stewart, and conclude the bank had the duty to collect the Midland Note on his behalf. Nevertheless, the Collection Letter directing MBank to disburse proceeds was executed several months after the Bailment Agreement and merely authorized the bank, upon the receipt of payment, to disburse excess proceeds to junior lien-holders. “There can be no implied covenant as to a matter specifically covered by the written terms of the contract.” Texstar N. A., Inc. v. Ladd Petroleum Corp., 809 S.W.2d 672, 678 (Tex.App. — Corpus Christi, writ denied). Here, the Bailment Agreement expressly states the sole purpose of the bailment is to perfect Stewart’s subordinate and inferior security interest in the Midlands Note. The term “perfection” describes a security interest in personal property that cannot be defeated in insolvency proceedings or in general by creditors. Tex.Bus. & Com. Code Ann. § 9.301 cmt. 1 (Vernon 1991). A creditor perfects a security interest in an instrument when he or his agent takes possession of the instrument. Id. § 9.306. By possessing the instrument, the creditor or his agent provides notice that the instrument is encumbered. Bray v. Cadle Co., 880 S.W.2d 813, 817 (Tex.App. — Houston [14th Dist.] 1994, writ denied). A secured party takes priority over an unperfected security interest and may take priority over other secured parties depending upon when the parties perfected their interest. TexJBus. & Com.Code Ann. §§ 9.301 & 9.312 (Vernon 1991 & Supp.1997). Upon a debtor’s default, a creditor with a perfected security interest has statutory rights and remedies with respect to collateral, as well as rights and remedies provided in the security agreement. Id. § 9.501(a). Here, the bank’s possession of the Midland Note provided no protection by law or by agreement to Stewart’s junior interest in the note, other than to provide notice that the note was encumbered and to give him priority over other junior lienholders or unperfected parties. Because the parties specifically contracted the extent of their bailment relationship, we decline to imply additional duties. Even if a duty to cooperate could be implied, case law makes it clear that an implied duty to cooperate requires that a promisee may not hinder, prevent, or interfere with the promisor’s ability to perform his duties under an agreement. Bagwell Coatings, Inc. v. Middle South Energy, Inc., 797 F.2d 1298, 1305 n. 6 (5th Cir.1986). Here, Bank One did not hinder or interfere with Stewart’s ability to perform under the Bailment Agreement because the Bailment Agreement did not require Bank One to collect, or to assist Stewart in collecting the Midland Note. In the alternative, Stewart claims that both the express and implied terms of the Bailment Agreement required Bank One, and later Trendmaker, to deliver the Midland Note to him when Bank One’s interest in the note was satisfied. As to the express provision in the Bailment Agreement that the bank would deliver the Midland Note to Stewart if the LRI Note was fully paid, Stewart claims Bank One waived full payment because, on an internal document entitled the “Notification of Settled Credit,” it forgave $449,200 in principal owed on the LRI obligation. The Notification of Settled Credit stated that “[t]he sale resulted in principal forgiveness of $449,200. This sum will not be pursued as this transaction was conducted as a third party sale.” Stewart argues that Bank One’s waiver of full payment of the LRI Note and its acceptance of $2,750,000 as partial satisfaction of the LRI Note triggered its obligation as bailee to deliver the Midland Note to Stewart. Furthermore, Stewart maintains Bank One did not object to the definition of waiver submitted with question 4, and therefore waives any objection on appeal. Notwithstanding the term “principal forgiveness,” neither the Notification of Settled Credit nor the parties’ conduct indicate Bank One voluntarily intended to discharge LRI’s obligation, in whole or in part. A person entitled to enforce an instrument may discharge the obligation of the party to pay the instrument by an intentional voluntary act such as (1) surrender of the instrument to the party; (2) destruction, mutilation, or cancellation of the instrument; (3) cancellation or striking out of the party’s signature; (4) the addition of words to the instrument indicating discharge; or (5) by agreeing not to sue or otherwise renouncing rights against the party by a signed writing. Tex.Bus. & Com.Code Ann. § 3.604 (Vernon Supp.1997). The record reflects Bank One did not discharge LRI’s obligation by any of these means. The Notification of Settled Credit was an internal document within Bank One’s files, the terms of which were never communicated to LRI, Stewart, or Trendmaker. Although initialed by a Bonnet loan manager, neither a Bank One nor a Bonnet representative signed the document. Moreover, a plain reading of the document reveals the term “principal forgiveness” refers to the net loss of principal owed on the LRI Note as noted in the columns entitled “Principal Legal Amount” and “Principal Amount Forgiven.” Although the phrase “principal forgiveness” suggests forgiveness of the debt, the narrative entitled “Summary of Settlement” makes it clear Bank One declined to pursue its net loss because it sold the note to Trendmaker. By selling its interest in the note, Bank One transferred its right to enforce the note to Trendmaker. “Transfer of an instrument, whether or not the transfer is a negotiation, vests in the transferee any right of the trans-feror to enforce the instrument, including any right as a holder in due course.” Id. § 3.203(b). The conduct of the parties further supports Bank One’s position that it did not forgive or accept a partial satisfaction of the debt. The record reflects, and the parties do not dispute, that neither Stewart, LRI, nor anyone else paid the note in full. The record further reflects Trendmaker, as transferee, demanded payment from LRI and then foreclosed on the Midland Note. LRI’s and Stewart’s representatives attended the foreclosure sale. Although Stewart complained of the unreasonableness of the foreclosure sale, neither Stewart nor LRI asserted that Bank One had forgiven the LRI debt at the time of the LRI sale or the Midland foreclosure. Consequently, throughout the transaction, Stewart remained a subordinate secured party with no right to possession of the Midland Note. See Mark Products U.S. v. Interfirst Bank Houston, N.A., 737 S.W.2d 389, 396 (Tex.App. — Houston [14th Dist.] 1987, writ denied). Neither the Notification of Settled Credit nor the parties’ conduct, indicate that Bank One voluntarily excused the debt and discharged LRI’s indebtedness. Therefore, because the LRI Note was not paid in full, Bank One had no obligation under the terms of the Bailment Agreement to deliver the Midland Note to Stewart. The trial court should have decided question 4 in favor of Bank One and Trendmaker as a matter of law because the Bailment Agreement did not impose express or implied duties on Bank One or Trendmaker to protect Stewart’s interest in the Midland Note. Therefore, the trial court committed reversible error by submitting question 4 to the jury. Trendmaker further contends the trial court erred in submitting jury questions 6, 6, and 8, which were conditioned upon a favorable finding to question 4. Jury questions 5 and 6 asked whether the failure of Bank One and Trendmaker, respectively, to comply with the Bailment Agreement was a proximate cause of damages to Stewart. Jury question 8 asked if Trendmaker’s failure to comply with the Bailment Agreement was excused. A jury question is immaterial when it should not have been submitted, or when it was properly submitted but has been rendered immaterial by other findings. Spencer v. Eagle Star Ins. Co. of America, 876 S.W.2d 154, 157 (Tex.1994). Because we find the trial court committed reversible error by submitting question 4 to the jury, the jury’s answers to questions 5, 6, and 8 are immaterial. Moreover, we need not address Bank One’s and Trendmaker’s evidentiary challenge regarding a breach of the Bailment Agreement. C. D’Oench, Duhme Bank One and Trendmaker further contend the trial court erred in submitting jury questions 1, 2, and 3 because the Bailment Agreement does not satisfy the requirements of D’Oench, Duhme and its statutory counterparts and, therefore, is unenforceable. Question 1 asked whether the Bailment Agreement satisfied the requirements of D’Oench, Duhme & Co. v. F.D.I.C., 315 U.S. 447, 62 S.Ct. 676, 86 L.Ed. 956 (1942) and Sections 1821(n)(4)(I) and 1823(e) of 12 U.S.C. Questions 2 and 3 asked if Bank One and Trendmaker, respectively, agreed to assume MBank’s obligations under the Bailment Agreement. D’Oench, Duhme and its statutory counterparts prohibit the enforcement of any agreement that tends to defeat or diminish the rights of a bridge bank in an asset acquired by the bridge bank from the receiver for a failed bank, unless the agreement (1) is in writing; (2) was executed by the failed bank, contemporaneously with the acquisition of the asset; (3) was approved by the board of directors or loan committee of the failed bank and the approval is reflected in the minutes of the board or committee; and (4) the agreement has been continuously, from its execution, an official record of the failed bank. Bell & Murphy & Assoc. v. Interfirst Bank Gateway, N.A., 894 F.2d 750, 754-55 (5th Cir.), cert. denied, 498 U.S. 895, 111 S.Ct. 244, 112 L.Ed.2d 203 (1990); 12 U.S.C.A. § 1821(n)(4)(I) (West 1989); see also 12 U.S.C.A. § 1823(e) (West Supp.1996) (enumerating same requirements for a financial institution in a corporate capacity). To satisfy D’Oench, Duhme, the record must reflect “more than a writing indicating that there is some type of agreement. The specific term a party seeks to enforce against the receiver must be in writing in the bank’s file.” Bluebonnet Sav. Bank v. Jones Country, Inc., 920 S.W.2d 670, 671 (Tex.1996). In this instance, whether enforcement of the Bailment Agreement violates D’Oench, Duhme is immaterial because, as discussed supra, the Bailment Agreement did not defeat or diminish the rights of Bank One or Trendmaker as to their respective interest in the Midland Note. Even if D’Oench, Duhme were applicable, there is no evidence that MBank’s loan committee approved the specific terms of the agreement. The record reflects that members of MBank’s executive loan committee inscribed their initials on LRI’s loan application to indicate their approval of the LRI loan. Attached to the loan application was an internal memorandum from a loan officer recommending, among other things, that MBank require an estoppel and subordination agreement from Stewart consenting “to the renewal and continued subordination of the $1,450 M debt.” Assuming the notations on the loan application constitute “minutes” of the loan committee, the minutes do not reflect the loan committee’s approval of the specific terms of the Bailment Agreement. Viewing the jury charge in light of the totality of circumstances, we find the submission of jury question 4 amounted to a denial of Bank One’s and Trendmaker’s rights and caused the rendition of an improper judgment. The trial court further abused its discretion in submitting jury questions 1, 2, 3, 5, 6 and 8 because these questions were rendered immaterial by this court’s finding to jury question 4. Therefore, we sustain Bank One’s and Trendmaker’s first points of error and Weyerhaeuser’s twenty-seventh point of error. IV. Duty of Reasonable Care of Collateral in Secured Party’s Possession In its fourth point of error, Bank One contends the trial court erred in submitting jury question 18(A), which inquired whether Bank One failed to use reasonable care to preserve the rights on the Midland Note while it was in Bank One’s custody, and in granting judgment on the jury’s finding. Section 9.207(a) of the business and commerce code provides that “[a] secured party must use reasonable care in the custody and preservation of collateral in his possession. In the case of an instrument or chattel paper reasonable care includes taking necessary steps to preserve rights against prior parties unless otherwise agreed.” TexBus. & Com. Code Ann. § 9.207(a) (Vernon 1991). Bank One contends it owed no duty to Stewart under Section 9.207(a) because LRI had “otherwise agreed” that MBank would not be liable for any neglect or failure to take action with reference to the Midland Note and because Section 9.207 applies only to parties to the transaction, namely, the debtor and the secured party. Bank One also challenges the legal and factual sufficiency of the evidence to support the jury’s finding that Bank One failed to exercise reasonable care to preserve Stewart’s rights against Trendmaker under the Midland Note. To address Bank One’s contentions, we must first construe the language of Section 9.207. An appellate court construes a statute to give effect to its legislative intent. City of Wilmer v. Laidlaw Waste Systems (Dallas), Inc., 890 S.W.2d 459, 465 (Tex. App. — Dallas 1994), aff'd, 904 S.W.2d 656 (Tex.1995). Moreover, an appellate court construes a uniform act included in a code to give effect to its general purpose to make uniform the law of those states that enact it. Tex. Gov’t Code Ann. § 311.028 (Vernon 1988). An appellate court first reviews the language of the statute. City of Wilmer, 890 S.W.2d at 465. If the language of the statute is ambiguous, the appellate court consults statutory construction rules and related legislative history. Id. The appellate court reviews an act as a whole. Id. It does not give a statute meaning that conflicts with other provisions if it can reasonably harmonize the provisions. Id. Moreover, the appellate court gives full effect to the statute’s language, not just to one word or phrase. Id. When the legislature does not expressly define statutory terms, the court gives the words ordinary meaning. Id. If the statute refers to a person, thing, or consequence, it excludes all others. Id. Finally, the appellate court does not construe a statute in a manner that will lead to a foolish or absurd result if another alternative is available. Id.; see Tex. Gov’t Code Ann. §§ 311.001-.032, 312.001-.013 (Vernon 1988 & Supp.1997). Section 9.207 is not ambiguous, and it does not permit the parties to a security agreement to “otherwise agree” to waive the negligent handling and loss of collateral in the secured party’s possession. By utilizing the word “must,” the legislature intended that there be a mandatory duty to use reasonable care. The statute does, however, authorize the parties to agree as to what constitutes reasonable care. This construction is consistent with the legislative intent as noted by Comment 1 of Section 9.207. Here, the parties disclaimed the duty of reasonable care by providing that the bank “shall not be liable for any neglect or failure to take action with reference to the [Midland] Note.” We find such waiver to be contrary to Section 9.207(a). Nevertheless, Stewart’s claim fails because Stewart was not a debtor as to the bank. Section 9.207 provides a right of action to debtors only with respect to the specific debt secured. Walther v. Bank of New York, 772 F.Supp. 754, 765-66 (S.D.N.Y.1991). Section 9.207(c) provides that “[a] secured party is liable for any loss caused by his failure to meet any obligation imposed by the preceding subsections but does not lose his security interest.” Tex.Bus. & Com.Code Ann. § 9.207(d) (Vernon 1991). Section 9.207 falls within Subchapter B of Article 9 of the Uniform Commercial Code entitled “Validity of Security Agreement and Rights of Parties Thereto.” Id. § 1.109 cmt. 1 (stating that the section captions are part of the text and not mere surplusage). Although not defined by Article 9, the business and commerce code defines a party as a “person who has engaged in a transaction or made an agreement within this title.” Id. § 1.201(29). “The parties to the security agreement are the ‘debtor’ and the ‘secured party.’ ” Id. § 9.105 cmt. 2. A debtor is “the person who owes payment or other performance of the obligation secured, whether or not he owns or has rights in the collateral.” Id. § 9.105(a)(4). A secured party is the “lender, seller, or other person in whose favor there is a security interest.” Id. § 9.105(a)(13). Although the legislature’s definition of a secured party does not directly address who may sue a secured party under Section 9.207(c), subsection (b) of the statute identifies some of the risks and responsibilities attributable to the secured party and to the debtor while the collateral is in the possession of the secured party. Id. § 9.207(b). For example, Subsection (b)(1) provides that reasonable expenses incurred in the “custody, preservation, use or operation of the collateral are chargeable to the debtor and secured by the collateral,” while Subsection (b)(2) places the “risk of accidental loss or damage” on the debtor to the extent of deficient insurance coverage. Id. § 9.207(b)(1) & (2). On the other hand, Subsection (b)(5) provides that “the secured party may re-pledge the collateral upon terms which do not impair the debtor’s rights to redeem it.” Id. § 9.207(b)(5). Such references to debtors strongly suggest that only debtors have a cause of action under Section 9.207(c). Walther, 772 F.Supp. at 766. Stewart argues that a third party who holds a subordinate secured interest in the collateral possessed by the senior secured party may also bring suit against the secured party because Section 9.207 applies to collateral possessed by the secured party after default. Therefore, he asserts, a debtor or any person entitled to notice or whose security interest was known to the secured party may recover from the secured party any loss caused by the secured party’s failure to comply with default procedures under Subchap-ter E Default. See Tex.Bus. & Com.Code Ann. § 9.507(a) (Vernon 1991). Section 9.207 applies not only when the secured party has possession of the collateral before default, as a pledgee, but also when he has taken possession of the collateral after default. Id. §§ 9.207 cmt. 4, 9.501 cmt. 3. Because a default changes the relationship of the parties, Section 9.207 as it applies after default must be read together with Subehap-ter E Default. Id. § 9.501 cmt. 3. Section 9.501, however, does not extend the rights, remedies and duties of a secured party or a debtor to third party lienholders before disposition of the collateral. Instead, Section 9.501 expressly limits the rights, remedies and duties of Section 9.207 to the secured party and the debtor. Section 9.501(a) provides after the debtor is in default, a secured party has the rights and remedies provided in Subchapter E except as limited by those provided in the security agreement and the rights, remedies and duties provided in Section 9.207. Id. § 9.501(a). Likewise, after default the debtor has the rights and remedies provided in Subchapter E, those provided in the security agreement, and those provided in Section 9.207. Id. Although the parties may by agreement determine the standards by which their rights and duties are measured under certain provisions of Subchapter E, they may not waive or vary specific subsections of Subchapter E, including Subsection 9.507(a), to the extent it gives rights to the debtor and imposes duties on the secured party. Id. § 9.501(c). Although Section 9.207 provides for the rights, remedies, and duties assigned to a secured party and a debtor while the secured party is in possession of the collateral before and after default, Subsection 9.507(a) permits a debtor or any person to recover for any loss related to the secured party’s failure to comply with the default procedures of Sub-chapter E after the secured party has disposed of the collateral. Id. § 9.507(a). Bank One, however, did not dispose of the collateral. A disposition occurs when the secured party sells, leases, or otherwise disposes of any or all of the collateral. Id. § 9.504(a). In this case, Bank One sold the LRI Note and assigned its collateral, the Midland Note to Trendmaker. The assignment of rights in the collateral supporting a loan pursuant to a sale of the loan is not a disposition of collateral under Section 9.504. Hairgrove v. Cramer Financial Group, Inc., 895 S.W.2d 874 (Tex.App. — Fort Worth 1995, writ denied). Because no disposition of collateral occurred, we decline to address the merits of Stewart’s argument that a third party secured creditor may sue the secured creditor after disposition of the collateral for its failure to preserve the collateral while in the secured party’s possession. Because Section 9.207(c) provides a cause of action to debtors only, Stewart, as a third party holding a subordinate secured interest in the Midland Note, has no cause of action against Bank One for its alleged failure to use reasonable care while in possession of the Midland Note. The trial court abused its discretion, therefore, in submitting question 18(A) to the jury and in granting judgment on the jury’s finding. Moreover, because the trial court granted judgment on the jury’s finding, we find the action to be reversible error. We sustain Bank One’s fourth point of error. V. Tort Claims In its third point of error, Trend-maker contends the trial court erred in submitting jury questions 9 through 22B and in entering judgment on those questions because Stewart’s and LRI’s claims sound in contract and not in tort. “A party to a contract is free to pursue its own interests, even if it results in a breach of that contract, without incurring tort liability.” Stewart Title Guaranty Co. v. Aiello, 941 S.W.2d 68, 71 (Tex.1997) (citing Crim Truck & Tractor Co. v. Navistar Int’l Transp. Corp., 823 S.W.2d 591, 594 (Tex.1992)). Nevertheless, “[t]he acts of a party may breach duties in tort or contract alone or simultaneously in both.” Jim Walter Homes, Inc. v. Reed, 711 S.W.2d 617, 618 (Tex.1986). If the only loss or damage is the economic loss to the subject matter of the contract, the plaintiff’s action is ordinarily in contract. Southwestern Bell Tel. Co. v. DeLanney, 809 S.W.2d 493, 494 (Tex.1991). When the obligation is one imposed by law rather than by promises of the parties, the action is ordinarily in tort. Id. A plaintiff may assert both tort and contract claims if the defendant’s conduct would give rise to liability independent of the existence of a contract. Id. The jury found that Bank One and Trend-maker breached the duty of good faith and fair dealing, and Bank One, Trendmaker, and Weyerhaeuser committed fraud and conspiracy to commit fraud. The jury also found Trendmaker converted the Midland Note, and tortiously interfered in Stewart’s and LRI’s business relationships with Bank One. Bank One, Trendmaker, and Weyerhaeuser, however, contend the evidence is legally and factually insufficient to support the jury’s findings of tortious conduct and the trial court’s judgment based on those findings. Consequently, in each point of error related to the jury’s findings of tortious conduct, Bank One, Trendmaker, and Weyerhaeuser raise sufficiency challenges to the jury’s findings and trial court’s judgment. When both legal and factual sufficiency points are raised on appeal, the appellate court first addresses the “no evidence” or legal sufficiency point to decide if there is any evidence of probative value to support the trial court’s findings. Glover v. Texas Gen. Indem. Co., 619 S.W.2d 400, 401 (Tex.1981). In deciding a no evidence claim, an appellate court considers the evidence and inferences tending to support the jury’s findings, and disregards all contrary evidence and inferences. Havner v. E-Z Mart Stores, Inc., 825 S.W.2d 456, 458 (Tex.1992). The appellate court will uphold the jury’s verdict if there is any evidence of probative force supporting the jury’s findings. ACS Investors, Inc. v. McLaughlin, 943 S.W.2d 426, 430 (Tex.1997); Holt Atherton Indust., Inc. v. Heine, 835 S.W.2d 80, 84 (Tex.1992) (if there is more than a scintilla of evidence to support the finding, the point must be overruled and the finding upheld). There is more than a scintilla when the evidence creates more than a mere surmise or suspicion of its existence. See Kindred v. Con/Chem, Inc., 650 S.W.2d 61, 63 (Tex.1983). Using these guidelines, we examine the conduct of Bank One, Trendmaker, and Weyerhaeuser concerning Stewart’s and LRI’s tort claims. A Good Faith and Fair Dealing In its second point of error, Bank One asserts error in the submission of questions 9 and 15(A), and the entry of judgment based on the jury’s findings to these questions. Bank One contends that, as a matter of law, the Bailment Agreement did not create a special relationship between Bank One and Stewart giving rise to a duty of good faith and fair dealing. In its fourth point of error, Trendmaker maintains the trial court erred in entering judgment based on jury findings to questions 15(A) through 18, related to Trendmaker’s alleged breach of the duty of good faith and fair dealing. It argues no special relationship existed between Trend-maker and Stewart or LRI, and the jury was improperly instructed on this issue. Both Bank One and Trendmaker challenge the sufficiency of the evidence to support the jury’s liability findings on the breach of the duty of good faith and fair dealing. In response to question 15(A), the jury found Bank One and Trendmaker failed to act with good faith and fair dealing toward Stewart. The trial court defined good faith and fair dealing as “honesty in fact in the conduct or transaction concerned.” See Tex. Bus. & Com.Code Ann. § 1.201(19) (Vernon 1994). Every contract or duty governed by the business and commerce code imposes an obligation of good faith in its performance or enforcement. Id. § 1.203. The failure to act in good faith under Section 1.203, however, does not state an independent tort action. Hallmark v. Hand, 885 S.W.2d 471, 480 (Tex. App.-El Paso 1994, writ denied). “A breach of this implied duty under the code gives rise only to a cause of action for breach of contract.” Id. Here, neither Bank One nor Trendmaker were parties with Stewart to any contract that would give rise to the duty of good faith and fair dealing. Even if the Bailment Agreement fell within the parameters of the business and commerce code, neither Bank One nor Trendmaker breached the agreement or acted in bad faith in implementing the agreement. The trial court abused its discretion in submitting question 15(A) because, as a matter of law, neither Bank One nor Trendmaker owed Stewart the duty of good faith and fair dealing under the Texas Business and Commerce Code. In response to question 17, the jury found Trendmaker failed to act in good faith and fair dealing toward LRI. Here, the trial court defined good faith and fair dealing according to the standard of a fiduciary, as “that degree of care and diligence which a person of ordinary care and prudence would exercise in the management in his own business.” See Arnold v. National County Mut. Fire Ins. Co., 725 S.W.2d 165, 167 (Tex.1987). In response to question 9, the jury found the Bailment Agreement created a special relationship between Stewart and Bank One giving rise to the duty of good faith and fair dealing. The trial court instructed the jury that good faith and fair dealing “arises as a result of a special relationship between the parties governed or created by a contract. This duty arises from the nature of the parties’ relationship rather than from purely legal obligations arising from the contract.” A claim for breach of the duty of good faith and fair dealing is a tort action that arises from an underlying contract. Cole v. Hall, 864 S.W.2d 563, 568 (Tex.App.-Dallas 1993, writ dism’d w.o.j.). Texas law, however, does not recognize an implied duty of good faith and fair dealing in every contract or business transaction. English v. Fischer, 660 S.W.2d 521, 522 (Tex.1983). “The nature of the relationship between the parties, not merely the existence of the contract alone, is the essential factor in determining whether such a duty exists.” Aiello, 941 S.W.2d at 71. Texas courts recognize at least two types of special relationships in contract, a fiduciary relationship arising from an element of trust necessary to accomplish the goals of the contract and a special relationship based on extracontractual duties arising from an imbalance of bargaining power. Farah v. Mafrige & Kormanik, P.C., 927 S.W.2d 663, 675 (Tex.App.-Houston [1st Dist.] 1996, no writ). There are two types of fiduciary relationships — a formal fiduciary relationship such as that of an agent and principal that arise as a matter of law and an informal or confidential relationship that arise “where one person trusts in and relies upon another, whether the relation is moral, social, domestic or merely personal.” Crim Truck, 823 S.W.2d at 594; Hallmark v. Port/Cooper, 907 S.W.2d 586, 592 (Tex.App.-Corpus Christi 1995, no writ). A confidential relationship exists where influence has been acquired and abused, and confidence has been reposed and betrayed. Crim Truck, 823 S.W.2d at 594 (citing Texas Bank & Trust Co. v. Moore, 595 S.W.2d 502, 507 (Tex.1980)). The second type of special relationship, an extracontractual special relationship, exists where there is an unequal bargaining position between parties to a contract. See Arnold, 725 S.W.2d at 167 (Tex.1987). Absent an “Arnold” special relationship, the duty to act in good faith is contractual in nature and its breach does not amount to an independent tort. Central Sav. & Loan Ass’n v. Stemmons N.W. Bank, N.A., 848 S.W.2d 232, 239 (Tex.App.-Dallas 1992, no writ). While both fiduciary and extra-contractual special relationships establish a duty of good faith and fair dealing from which tort damages result, the two duties have a different standard of care. A fiduciary duty requires the fiduciary to place the interest of the other party before his own, if necessary, whereas the common law duty of good faith and fair dealing merely requires the parties to deal fairly with one another. Grim Truck, 823 S.W.2d at 594. Whether a duty exists between the parties is initially a question of law. H.W. Mitchell v. Missouri-Kansas-Texas R.R., 786 S.W.2d 659, 661 (Tex.), cert, denied, 498 U.S. 896, 111 S.Ct. 247, 112 L.Ed.2d 205 (1990). Whether a confidential relationship exists is usually a question of fact. Crim Truck, 823 S.W.2d at 595. When the existence of a confidential relationship is challenged on the basis of no evidence, it becomes a question of law. Id. Here, there is no probative evidence that a fiduciary relationship existed between LRI and Trendmaker giving rise to a fiduciary duty of good faith. A special relationship does not usually exist between a borrower and lender, and when Texas courts have found one, the findings have rested on extraneous facts and conduct, such as excessive lender control or influence in the borrower’s business activities. Farah, 927 S.W.2d at 675. See also Thigpen v. Locke, 363 S.W.2d 247, 253 (Tex.1962) (debtor-creditor relationship did not create fiduciary relationship). Moreover, subjective trust is not enough to transform an arms-length transaction between debtor and creditor into a fiduciary relationship. Greater Southwest Office Park, Ltd. v. Texas Commerce Bank Nat'l Ass’n, 786 S.W.2d 386, 391 (Tex.App.-Houston [1st Dist.] 1990, writ denied). The initial relationship between LRI and Trendmaker was that of lender to borrower on the Midland Note. As LRI’s debtor, Trendmaker owed no fiduciary duty to its creditor LRI. The relationship between LRI and Trendmaker changed when Trendmaker purchased the LRI Note from Bank One. At that time, Trendmaker became LRI’s creditor on the LRI Note, while Trendmaker remained LRI’s debtor on the Midland Note. Despite this awkward business relationship, there is no evidence that Trendmaker exerted excessive control or influence over LRI’s business activities that would give rise to a fiduciary duty. LRI, however, contends that Trendmaker owed it a duty of good faith under Section 1.203 of the business and commerce code with regard to Trendmaker’s performance on the Midland Note and in its subsequent purchase of the note at the foreclosure sale. As we have already stated, the failure to act in good faith under Section 1.203 does not state an independent tort action, but a cause of action for breach of contract. Hand, 885 S.W.2d at 480. In question 17, the trial court asked the jury to find a breach of duty based on an independent tort, not the breach of a duty based on a contract. Because Trend-maker did not have a formal or informal fiduciary relationship with LRI, it did not owe LRI a fiduciary duty of good faith and fair dealing as defined in jury question 17. The trial court abused its discretion in submitting question 17 to the jury and in entering judgment against LRI on the jury’s finding. The trial c