NOT TO BE PUBLISHED

OPINION

CLAYTON, Judge.

Khurshid Khan and his wife, Dr. Amtullah Khan, appeal the jury verdict of the Pulaski Circuit Court, which held for Forcht Bank, N.A., successor-in-interest to Somerset National Bank (hereinafter "Forcht Bank") in a breach of contract case. After careful consideration, we affirm.

FACTS

Khurshid Kahn and his wife, Dr. Amtullah Khan (hereinafter the "Khans") entered into a residential loan construction agreement with Forcht Bank, which was executed on April 25, 2006. The agreement made available a loan in the principal amount of $1,313,325.00 under certain terms and conditions. Later, the Khans filed a breach of contract action against Forcht Bank, claiming that the bank breached the agreement by refusing to make the final disbursement of $313,325.00. When the Khans requested the remaining funds, $1,000,000.00 had already been disbursed.

Forcht Bank declined to disburse the remaining balance of the loan because, according to it, the remaining balance on the loan ($313,325.00) exceeded the cost to complete the residence. The Bank based their refusal on the following provision in the loan agreement:

Relying on the above-cited provision in the loan agreement, Forcht Bank ascertained that the cost of the house exceeded the projected total of the costs to finish the construction under the Plan and, as such, it was not obligated to extend any additional loan funds. Further, it called for the Khans to inject cash from their own funds. The Khans claimed that they had already paid approximately $400,000.00 into the project.

Testimony at trial was that the construction of the 23,000-square-foot home was originally estimated at $2,075,975.00. However, because of numerous changes in the construction plans plus upgrades of material, at trial it was indicated that the final estimated cost was $2,728,614.61. Hence, Forcht Bank argues that even with the Khans' injection of $400,000.00 and the previously loaned $1,000,000.00, the remaining loan funds ($313,325.00) were not enough to complete the home. Thus, the Bank, based on the aforementioned language in the parties' agreement, deemed that it was under no obligation to extend the amount of the remaining loan.

Nevertheless, the Khans believe that Forcht Bank reneged on its representations to them and left them in the lurch during the construction of the home. For instance, using the loan presentation sheet proffered during the loan application process, the Khans argue that the Bank was aware at the outset that its loan amount would not cover the construction of the home since both parties were aware that the loan amount was based on an estimate of costs. Consequently, the Khans believed that it was understood and agreed that they could provide additional funds to complete the construction in the event of "cost overruns." Furthermore, they believed that when this occurred, they were still entitled to the remaining loan amount.

Forcht Bank responded that at a critical juncture, the Khans failed to notify the Bank of a change in the submitted house plans. The house plans, prior to the change, had been approved by the bank when the loan originated. Therefore, since it was not informed about the recent change in the house plans, Forcht Bank decided under the terms of the construction loan agreement, it was not obligated to disburse the remaining amount of funds for the loan even though the Khans provided additional money for the project. The Bank considers the language of the loan agreement to support this decision.

Another disputed issue was the Khans' understanding that the agreement required that the borrowed funds be used first on the cost of construction. But it was discovered after a title search that a prior lender, BB&T Bank, had a lien on the site of the construction in the amount of $171,434.11. Forcht Bank paid off the lien from the loan funds. The Khans contend that was a violation of the loan agreement since it did not articulate that the loan was to be used to pay off any other costs, including the BB&T mortgage. Nonetheless, the Khans do not dispute the lien or the need for it to be paid.

In the Khans' complaint, they assert various claims including violations of Real Estate Settlement Procedures Act (hereinafter "RESPA"), breach of agreement, breach of fiduciary duties, and breach of Truth In Lending Act ("TILA"). The Khans acknowledge that claims for damages under RESPA and TILA are governed by a one-year statute of limitations and also that RESPA does not typically pertain to a construction loan. Still, the Khans proffer that their expert witness would have testified to the potential for RESPA involvement.

Further, the Khans allege that at the inception of the construction loan, permanent financing of the project with the bank was contemplated. But the Khans contend that the bank's refusal to loan them the remaining loan amount was really to penalize them for repaying the construction loan without financing the permanent loan with the bank.

The trial was held on January 28, 29, and 30, 2013. At the close of the Khans' case, the trial court ruled on Forcht Bank's motions for directed verdict. All motions were denied except for the motions for directed verdict to dismiss the Khans' claims under RESPA, Home Owner's Equity Protection Act (hereinafter "HOEPA"), and the Fair Credit Reporting Act. These motions were granted and, in essence, dismissed the Khans' claim that Forcht Bank violated a fiduciary duty to the Khans. Further, Forcht Bank's motion to dismiss the Khans' claims under the TILA was also granted since it was barred by the statute of limitations.

When Forcht Bank completed its case, the Khans offered no rebuttal evidence. Forcht Bank then renewed its motions for a directed verdict to dismiss the Khans' claims for breach of contract and fraud. The trial court denied the motions. Following the jury deliberations, the jury unanimously denied the Khans' claims and found for Forcht Bank. The Khans now appeal the February 11, 2013 Judgment on the Jury Verdict and Order of Dismissal.

On appeal, the Khans argue that the trial court erred by not allowing their expert witness to testify completely about her opinions regarding Forcht Bank's alleged failure to comply with various federal banking statutes and regulations. Further, the Khans maintain that the trial court erred in dismissing the claim for a breach of fiduciary duty by Forcht Bank.

In response, Forcht Bank states that the Khans' expert did not qualify as an expert witness, and therefore, the trial court's ruling limiting some of her testimony was proper. Additionally, the trial court did not err when it dismissed the Khans' breach of fiduciary duty claim.

STANDARD OF REVIEW

We review trial court decisions under Daubert1 regarding the admissibility of expert witness testimony under an abuse of discretion standard. Miller v. Eldridge, 146 S.W.3d 909, 914 (Ky. 2004). Decisions regarding expert testimony are generally entitled to deference on appeal since the trial court is in the best position to evaluate the proposed evidence. "The test for abuse of discretion is whether the trial judge's decision was arbitrary, unreasonable, unfair, or unsupported by sound legal principles." Goodyear Tire and Rubber Co. v. Thompson, 11 S.W.3d 575, 581 (Ky. 2000).

In addition, questions of law are reviewed de novo and without deference to the interpretation afforded by the trial court. Cinelli v. Ward, 997 S.W.2d 474, 476 (Ky. App. 1998). Keeping these standards in mind, we address the issues herein.

Expert Witness

The Khans provided an expert witness, Kimberly Walter, to testify regarding certain issues including the loan presentation sheet, the credit memo, and the builders' estimates in the loan documents. On January 28, 2013, before the trial, a Daubert hearing was held concerning her testimony. Walter explained that she had twenty years experience in preparing loan documents, managing employees at mortgage companies, and training brokers in the proper preparation of loan documents. She also discussed her educational background in the mortgage lending procedures.

However, following the Daubert hearing, the trial court judge concluded that Walter was not qualified as an expert and restricted her testimony. On appeal, the Khans claim that the trial court improperly limited the testimony of their expert.

To support their position, the Khans argue that the trial court's criticism concerning Walter's inability to cite specific statutory and regulatory references was not only unfair but also not grounds for limiting her expert testimony. They highlight that she had eighteen years of practical experience as a loan document processor, manager, and trainer, which demonstrates the expertise to testify regarding the necessary information for a loan form.

Moreover, the Khans contend that her lack of experience as a loan officer in Kentucky was not relevant since the pertinent statutes and regulations were federal. And they proffer that her lack of extensive formal education should not be an excluding factor, either. Thus, the Khans maintain that substantial evidence was provided that the expert testimony of Walter would be reliable and relevant given her years of experience.

Lastly, they assert that the failure to allow Walter to testify beyond merely commenting on the documents' appearance and without explaining the relevance of alleged improprieties was not harmless error. According to the Khans, without Walter's opinion testimony, they were unable to effectively communicate to the jury about Forcht Bank's departure from applicable standards.

Forcht Bank responds that Walter had very little knowledge, skill, experience, training, or education in bank loan procedures, and as such, the trial court correctly determined that she did not qualify as an expert under Kentucky Rules of Evidence (KRE) 702. The Bank points out that she had a two-year applied science degree in health information management from a community college. At the community college, Walter took one general business class and no banking classes.

Walter's only training in mortgage lending practices involved participation in two online courses about mortgage loan procedures. The online courses reviewed Illinois, Missouri, and federal regulations. Walter's testimony about the length of these courses was vague but apparently they encompassed no more than nine to fourteen days of online classes. It was also pointed out that she had no educational training about Kentucky mortgage lending law. Further, Walter was unable to tell the trial court the governmental or industry group that accredited the online courses or whether these courses met any governmental or industry standards or guidelines.

Forcht Bank highlighted the facts that Walter was unable to provide any type of license, never closed a loan in Kentucky, and never testified as an expert in any other case. After receiving a two-year community college degree, Walter worked until 2010 in the mortgage lending field for eleven different employers. Thus, besides frequent changes in employment, she had not worked in the mortgage lending field for over three years at the time she was to testify as an expert.

Walter testified that differences exist between rules and regulations for banks and mortgage companies but was unable to tell the trial court the particular citations governing the federal statutes for lending practices. Also, she was not able to provide the citation for RESPA or acknowledge that she was familiar with its terms. Forcht Bank provides all these reasons in support of the trial court's decision to limit Walter's testimony because she did not qualify as an expert witness.

The admissibility of expert testimony is governed by KRE 702, which states:

Moreover, before an expert may give an opinion at trial, the offering party must satisfy the Daubert test. The trial court judge serves as the gatekeeper in the determination of whether a witness may testify as an expert and ascertaining what testimony is admissible. KRE 702; Goodyear Tire and Rubber Co. v. Thompson, 11 S.W.3d 575, 578 (Ky. 2000). To serve as an expert, the trial court judge must decide whether the specialized knowledge of the proffered witness will assist the trier of fact to understand the evidence or determine a fact in issue. In the case at bar, the trial court judge never reached whether the specialized knowledge would assist the trier of fact. Instead, it determined that Walter did not have specialized knowledge.

Initially, we observe that the Khans' claim that the trial court should have allowed their expert witness to testify on issues for which the statute of limitations had run is incorrect. Clearly, the Khans do not contest the legitimacy of the trial court's decision that the statute of limitations barred the consideration of the issue under TILA. And once an issue is barred by the statute of limitations, the trial court has no obligation to permit an ostensible expert witness to testify about it.

Additionally, the Khans suggested the trial court was unreasonable in expecting Walter to provide citations for pertinent law. We disagree. Expert witnesses are permitted to give opinions based on their specialized knowledge, that is, expertise, in a particular area. Here, Walter made herself out to be an expert, and it was not unreasonable to expect her to provide the specific laws and their citations since she claimed specialized knowledge.

Accordingly, we agree with the trial court's decision limiting the testimony of Walter since she had little knowledge, skill, experience, training, or education in bank mortgage loan procedure, and thus, did not qualify as an expert under KRE 702. Furthermore, we are not persuaded that had Walter been allowed to testify about these matters the jury's decision would have been different. Consequently, the trial court fulfilled its role as gatekeeper by restricting Walter's testimony. To summarize, after listening to and observing Walter's testimony, the trial court's ruling was not "arbitrary, unreasonable, unfair or unsupported by sound legal principles." Miller v. Eldridge, 146 S.W.3d 909, 914 (Ky. 2004).

Fiduciary Duty

A fiduciary duty is defined as "a special confidence reposed in one who in equity and good conscience is bound to act in good faith and with due regard to the interests of the one reposing confidence." Steelvest, Inc. v. Scansteel Service Center, Inc, 807 S.W.2d 476, 485 (Ky. 1991)(citations omitted). Generally, banks do not owe a fiduciary duty to their customers. de Jong v. Leitchfield Deposit Bank, 254 S.W.3d 817, 822 (Ky. App. 2007).

The Khans contend that the trial court dismissed the breach of fiduciary duty because of a lack of expert testimony. However, we conclude that the trial court dismissed the claim because the Khans provided no evidence supporting the legal rationale for such a claim. In fact, a fiduciary duty requires more than the generalized business obligation of good faith and fair dealing. Ballard v. 1400 Willow Council of Co-Owners, Inc., 430 S.W.3d 229, 242 (Ky. 2013).

In 2002, the U.S. Court of Appeals for the Sixth Circuit noted that there were only two published cases in Kentucky where courts found a fiduciary relationship between a bank and a borrower: Steelvest, Inc. v. Scansteel and Henkin, Inc. v. Berea Bank and Trust Co. In re Sallee v. Fort Knox Nat'l Bank, N.A., 286 F.3d 878, 893 (6th Cir. 2002), citing Steelvest, supra; Henkin, Inc. v. Berea Bank and Trust Co., 566 S.W.2d 420 (Ky. App. 1978). Both cases involved situations where the bank profited from confidential information received through the borrower. Id.

The Khans have not alleged that Forcht Bank profited from any confidence it gained from them. Hence, no fiduciary relationship was created based on this factor. Instead, they contend that a fiduciary duty was created because Forcht Bank had complete knowledge of the facts and failed to extend the remaining loan to the Khans. This claim is meritless. As observed, the Khans and Forcht Bank included language in the construction loan agreement permitting the bank to decline to extend loan funds to the Khans when certain financial conditions were triggered, including when the remaining loan amount was insufficient to complete the construction project. That occurred and the Bank declined to extend the remaining money on the loan. It exercised its authority under the contract.

In their reply brief, the Khans maintain that the Sixth Circuit failed to mention Ranier v. Mt. Sterling Nat. Bank, 812 S.W.2d 154 (Ky. 1991), and Lillard v. Farm Credit Services of Mid-America, ACA, 831 S.W.2d 626 (Ky. App. 1991), in the In re Sallee case. Keeping in mind that In re Sallee addressed the fact that there were only two published cases in Kentucky where courts found a fiduciary relationship between a bank and a borrower, we see nothing in these two cases introduced by the Khans which indicates that a fiduciary duty exists between a bank and a borrower. Ranier concerns the implied covenant of good faith and fair dealing where payments were applied to a second loan, which a second lien holder did not know about. And Lillard references the lack of good faith on the part of a mortgagor in a foreclosure action involving the Farm Credit Act. The facts are different in both cases, and neither case discusses fiduciary duty.

The trial court appropriately determined that the Khans provided no evidence of a fiduciary duty between Forcht Bank (the bank) and the Khans (the borrowers). We concur with its legal decision that no fiduciary duty existed under the law, and therefore, the trial court properly dismissed the claim of breach of fiduciary duty.

CONCLUSION

The decision of the Pulaski Circuit Court is affirmed.

ALL CONCUR.