On January 19, 2023, the Wyoming Supreme Court declined to recognize causes of action for negligent lending or negligent advising and declined to impose a duty on lenders to render sound advice to borrowers. The case stems from a series of loans, and requested loans, by Security State Bank to a rancher for the purchase and maintenance of cattle. The bank allegedly allowed the rancher to overdraw her checking account while a loan application was in process. After the bank chose not to extend the loans’ maturity, the rancher could not obtain loans elsewhere and filed for bankruptcy. The bank liquidated the cattle herd, and the rancher sued the bank for, among other things, negligently making unsustainable loans and negligently advising the rancher in her business.

The district court granted summary judgment in favor of the bank. In deciding, as a matter of first impression whether Wyoming law recognizes negligent lending and negligent advising, the Wyoming Supreme Court affirmed. The court explained that the rancher assumed financial risk by entering into the loans and should not be able to shift that risk to the bank. The court further held that recognizing a cause of action for negligent advising and imposing a duty on lenders to use reasonable care when advising a borrower would create a negative ripple effect that “would be better addressed by the legislature.”

The case is Wilcox v. Security State Bank, No. S-22-0062 (Wyo. Jan. 19, 2023). Kelly Wilcox is represented by Mark D. Sullivan, P.C. Security State Bank is represented by Pence and Macmillan, LLC. The opinion is available here.