FIRST UNION NATIONAL BANK v. STEELE SOFTWARE SYSTEMS CORPORATION, 154 Md. App. 97

ADKINS, Judge. In this high stakes business dispute, we are asked to review evidence of a lengthy business negotiation between a large bank and one of its vendors that culminated in a written contract, and the bank’s deliberate breach of that contract. We must determine whether the evidence was sufficient to support the vendor’s claim that the bank, never intending to perform, fraudulently induced the vendor to enter the contract.

In doing so, we differentiate between actionable fraudulent misrepresentations and indefinite generalities that do not support fraud in the context of discussions between two sophisticated businesses. We also analyze whether an ambiguous “best efforts” clause is enforceable in contract, and explore the limits of predicating a fraud claim on the bank’s intentions with respect to performance of that clause.

We shall reverse a $39 million jury verdict for compensatory damages and a $200 million verdict for punitive damages, both entered against appellant First Union National Bank (“First Union”) in favor of Steele Software Systems Corporation (“3S”) on a fraud theory. 3S’s theory was that First Union fraudulently induced 3S to enter into a written Service Agreement dated November 29, 1997 (“SA”), under which 3S would provide certain appraisal and title services in connection with residential real estate loans made by First Union to its customers without intending to perform thereunder.

We shall affirm a judgment for approximately $37 million against First Union for breach of contract. The recovery by 3S is based on First Union’s failure to fulfill its contractual obligation to purchase these real estate settlement services from 3S as called for under the SA. We answer the following questions presented by First Union: I. Whether First Union was entitled to judgment on 3S’s fraud claim because 3S failed to prove the elements of fraud. II. Whether First Union is entitled to judgment with respect to 3S’s claim that it breached the “best efforts” clause of the SA. HI.

Whether the compensatory damages award must be set aside because the circuit court impermissibly limited the cross-examination of 8S’s damages expert. IV. Whether the compensatory damage award must be set aside because it encompassed transactions outside the geographic scope of the SA. We answer yes to question I, and no to questions II, III, and IV. We do not reach First Union’s questions regarding the amount of damages in the fraud claim, or the amount of punitive damages, because of our rejection of 3S’s fraud claim.

Nor do we reach First Union’s contention that 3S’s fraud claim was improperly predicated on alleged theft of its business methods and is therefore preempted by the Maryland Uniform Trade Secrets Act. FACTS AND LEGAL PROCEEDINGS 3S Provides Settlement Services To First Union 3S is a settlement service company, founded in 1987, that introduced First Union to a new, centralized and automated system for obtaining title searches and appraisals for home equity loans. First Union, a large bank with multiple branches in the eastern United States, makes a high volume of residential home equity loans.

The new system introduced by 3S enabled First Union to move away from a paper-based title search and appraisal system that was individual to each branch, to a computer-based, centralized system. 3S first made a presentation about an automated title and appraisal processing system known as “ATAPS” to Glenn Kinard, manager of First Union’s consumer lending business in Washington, D.C., in the fall of 1994. Kinard retained 3S to conduct a pilot program at a few First Union branches in the D.C. region.

During the pilot, an email sent by First Union to the branches participating in the pilot said, “You are the pilot group testing this method of processing for the entire company, so your active participation in the use and evaluation of 3S is the cornerstone for our future efforts.” 3S later began serving 15 to 20 branches in that area. First Union also retained 3S to automate and centralize a pilot direct mail campaign for home equity loans in Roanoke, Virginia. 3S then performed the title searches and appraisals associated with the transactions generated by the campaign.

Scott Steele advised Kinard that 3S could bring centralized, automation technology and standardization to First Union. Kinard was “very excited” about this program. Kinard told Steele that “this is such a unique opportunity, I want to get you to [First Union’s headquarters in] Charlotte sooner [rather] than later.” At First Union’s request, Steele and another 3S officer flew to Charlotte and made a presentation to First Union officers Tom Muse, Parkes Dibble, Trent Thompson, and Doug Crisp.

Parkes Dibble, wee president of Risk Management, told Steele at the meeting “that if everything I had presented, at a high level again, was real, and they had an opportunity to do due diligence and inspect what I had, that they would see this as being a long-term mutually beneficial relationship.” According to Steele, Dibble also told him that “if we delivered on our promise to deliver the concept of centralization and automation, executed what we were supposed to do, and helped them in their endeavor, that we would be their long-term partner....

We could be the beneficiary of all the transactions that they could send to us.” At that same meeting Crisp, First Union’s senior officer in charge of the Consumer Credit Division, asked Steele whether his firm “could handle 12,000 transactions on a monthly basis.” Steele told Crisp that he “could not” at that time, but that he “could put together and implement a staged process where [3S] could build to that level.” Crisp later told him that Steele’s honesty “made [Crisp] feel really good, and he figured he would leave it to Parkes [Dibble] to work out the rest.” In his testimony, Dibble confirmed that he and Steele discussed a potential ten-year relationship, adding, “my term of relationship goes on for a long time.” Dibble explained that First Union would attempt to give 3S all the transactions it could handle within First Union’s “2,000 approximate branch blueprint”: “I would put him in a position to where he could get that.

That is correct.” “It was not an exclusive, it was not meant to be everything, but that he could handle a significant portion of volume, yes.” Dibble considered that a contract between the bank and 3S would be the “first step to a long road partnership.” Dibble thought that 3S’s system provided a “big competitive advantage to the bank.” Doug Crisp, a senior vice president and Dibble’s boss, acknowledged that he was aware that Dibble was “discussing a long-term relationship” with 3S. On January 23, 1995, Dibble brought Muse, Thompson, and other officers of the bank to Baltimore to inspect 3S.

Steele told them that the presentation “was confidential in nature and [he] expected them to treat it as such.” Muse responded, “Don’t worry about that. We won’t go into this business. We’ll just buy the damn thing.” Dibble left First Union in June 1996, and Bill Clewis took over contract negotiations with Steele. Steele testified that when Clewis took over, he told Steele “not to worry.

Nothing’s changed and he was aware of what I had discussed with Parkes [Dibble] and we were the company and so I trusted these people.” Dibble confirmed that, although he never explicitly told Clewis what he said to Steele, “Bill knew pretty much what was going on. It wasn’t a one-way communication.” Clewis acknowledged that he told Steele, “As we grow, you’ll grow.” He “expected once we revved up our business, that he would be a vendor, his business would grow with ours.” Clewis’ supervisor, Crisp, conveyed the same message.

As part of Steele’s presentation at the December 8, 1994 and January 23, 1995 meetings, Steele proposed a long term service contract that would have a five-year term with an option for a five-year renewal. According to Dibble, he refused to commit to that term, but said that if 3S delivered on its promises and achieved centralization and automation of home equity loans, 3S would be First Union’s “long-term partner.” Dibble said that he believed the competitive advantage that Steele was offering the bank was his electronic method of performing appraisals, “his ability to do on-line appraisals.

That was — the bank’s attempt was to shorten the home equity cycle by essentially integrating Scott into — from 3S into our application handling] system!.]” In May 1995, 3S made another presentation to First Union, seeking to sell the bank a range of automated and centralized loan settlement services for all of its offices nationwide. It again proposed that the bank enter into some kind of formal, long-term relationship with it, suggesting that they create a joint venture or that First Union purchase 3S debentures that would give the bank a right of first refusal to acquire the company.

Steele explained what a joint venture would mean: It [was] more of a control business arrangement, where First Union has a volume of transactions that it [is] passing out to third parties today, and not capturing any of that revenue, because they are sending it out to independent third party providers. Early on, we thought of the concept of taking the business that it [was] passing out, and trying to capture that, and dtiving it through one entity, thereby sharing the revenue that they are now not participating in....

According to Steele, Dibble responded that there were regulatory barriers to such transactions, but that it was “a great idea and interesting.” Dibble later introduced 3S to First Union’s Capital Markets division with the idea that First Union might make a capital investment in, or a loan to, 3S, but negotiations broke down because the parties were far apart on a valuation for the company. Development Of The Parties’ Relationship And Negotiations Leading To The SA Three years after their first discussions, First Union and 3S entered the SA.

Negotiations over the exact terms of this agreement spanned two and a half years, during which 3S provided extensive appraisal and title services for First Union. During this process, 3S’s request that the SA explicitly give 3S the right to supply 75% of First Union’s needs for appraisal and title services for a five to ten year period was negotiated out. The course of the negotiations, which is important to resolution of this appeal, was reflected in draft agreements, which are outlined below.

Initial Contract Negotiations Between Steele And Parkes Dibble The first draft of the SA was a “letter of intent,” which Steele sent to Dibble June 10, 1995.

It purportedly addressed the “understanding between [the parties] ... concerning First Union’s engagement of 3S as First Union’s provider of real estate settlement services and other related services .... ” It called for 3S to be, after a defined transition period, “the exclusive provider to First Union of Real Estate Services for all Home Equity residential and/or consumer mortgages.” It also required First Union to purchase from 3S a minimum number of such transactions, although the exact number was left blank.

The term of the proposed agreement was five years, “with an automatic renewal period of [five] years provided there are no uncured or incurable defaults at that time.” First Union was to have the right to terminate the agreement if 3S increased its price for the services “at a rate higher than 10% annually.” First Union did not accept this proposal.

Steele’s second draft, in September 1995, proposed, inter alia, that • 3S receive the greater of: 70% of First Union’s transactions, or an average of 2,500 transactions per month for the first year, and 7,500 transactions per month thereafter. • The agreement would be in effect for five years, “and will automatically renew for a like period, unless notice is given by one party to the other at least 30 days prior to any Agreement expiration date.” First Union did not agree to these terms, either. In March 1996, First Union circulated a draft that had no minimum volume requirement and no exclusivity provision.

It simply would have given 3S a non-exclusive right to provide settlement services and direct mail promotions as requested by First Union.

Steele responded to this draft by letter dated March 21, 1996, describing the “changes/ideas that I believe need to be made to the contract.” Steele asked for: • The exclusive right to provide Services and Reports “that are generated by a First Union Mail Promotion,” except those for which a bank customer requested to use a settlement attorney of its choice. • “For all other Services and Reports as required by First Union, [the right to have] First Union ... use its best efforts to direct these transactions to Steele, however this will not be an exclusive right except for the [minimum volume guarantee].” (Emphasis added.) • A minimum volume equal to the greater of 2,000 transactions per month, or 75% of “new loans generated” after March 31,1997. • A term of five years, which would “automatically renew for an additional term” of five years. • A provision that the agreement “may only be Terminated by First Union for a Material Breach of this Agreement by [3S].” Around this time, Steele and Dibble discussed that “best efforts” meant “[t]hat they could send all the transactions that he could and that I could handle.” First Union did not accept either this proposal, or an April 1996 draft sent by Steele that was similar, but allowed First Union to opt out after five years.

Crisp left First Union, and Dibble’s departure followed shortly in June 1996. On June 10, 1996, Steele wrote to Morgan Smith, a First Union officer, saying that “I spoke with Parkes [Dibble] last week and this should finalize the issues to wrap up the Agreement.” This time he sought a three year term that would “automatically renew” for an additional three years, and a minimum guarantee of 2,000 packages per month.

He requested that the bank “expedite the approvals of these final changes through any channels necessary.” A June 19, 1996 draft agreement set forth these requests, including a minimum volume guarantee equal to the greater of 2,000 packages per month or 75% of the bank’s new loans generated. This agreement was not signed, and there was a break in negotiations about a contract. Business Relationship During Negotiations Throughout the negotiation period described above, 3S handled “a tremendous amount of work” for First Union and received compensation for it.

He testified that by June 1996, 3S’s projects for the bank included a two-million-piece direct mail campaign, centralization projects in Roanoke and Washington, D.C., and participation in First Union’s “Future Bank Initiative,” a long-term project designed to modernize and improve First Union’s products and services. Steele testified that, based on First Union’s commitment to be 3S’s long-term partner, he taught First Union how to centralize and automate its direct mail campaigns for home equity loans. This project was very appealing to First Union.

Steele described the reaction of First Union officials when they first heard about his direct mail campaign proposal: The people in the room were blown away. I think Parkes [Dibble] understood it more ... because he was more technology driven, but the rest of the people in the room were just, I think their jaws dropped, ... and certainly you could hear the response from Mrs. Clariss [from First Union’s Roanoke office] and the rest of the people in the room.

That was the start of our database direct mail project. 3S Actions In Anticipation Of Ongoing Relationship With First Union 3S did many things for which it was not compensated because Steele believed that is what a partner should do. In 1995, at Dibble’s request, Steele flew to Charlotte to advise First Union about whether an automated teller loan machine, unrelated to 3S business with First Union, would be beneficial to the bank.

Crisp told Steele that he “appreciated my immediate response and support of their efforts,” that he “looked forward to being our partner,” and that he “appreciated everything we were doing.” During 3S’s implementation of the database direct mail project, Steele discovered that First Union had a “big problem” that prevented automating the direct mail project — the lack of a way to electronically enter customer data into its loan application handling database.

Steele offered to help First Union to solve this problem, and did not charge First Union any extra for the five to six weeks of work it took to write and test the program “because I was doing what a partner should do in helping them support their efforts and doing whatever they asked me to do.” In the fall of 1996, about a year before executing the SA, 3S also substantially increased its transaction capacity, upgrading its computers, adding staff, and moving to a larger facility, all in anticipation of its ongoing relationship with First Union. 1997 Resumption Of Negotiations Among Steele, Clewis, And Thompson In the fall of 1996, Dibble was replaced by Bill Clewis, who was assisted by one of Dibble’s previous subordinates, Trent Thompson.

Although there was a break in the contract negotiations, Steele said he wasn’t worried because Clewis told me not to worry. Nothing’s changed and he was aware of what I had discussed with Parkes [Dibble] and we were the company and so I trusted these people.... Bill was just kind of new in the position so, I mean, I was doing what I was supposed to be doing and we brought the issue of the contract up and Bill said he would get to it in a little bit, which was fine with us.... They were still, you know, requesting us to do things.

Clewis told Steele that he was aware of Steele’s discussions with Dibble, and 3S remained First Union’s vendor of choice— “nothing’s changed.” On several occasions, Clewis said to Steele, “As we grow, you’ll grow.” Although the two men did not discuss the specifics of the earlier contract negotiations, Steele testified that Clewis “knew pretty much what was going on” regarding them. In January 1997, Thompson met with Steele in Baltimore regarding 3S’s proposals for centralization and automation of First Union’s branches.

Steele wrote a follow-up letter the next day, seeking confirmation that it had been agreed that 3S would be the bank’s “preferred provider of appraisal, title and settlement services” in the limited categories of direct mail and high-risk consumer loan products.

Thompson did not respond to the letter in writing, but did send a copy to Clewis with a note: “Bill, Reference our trip to [Baltimore] — we didn’t make any promises but would entertain their proposals — Trent.” At trial, Clewis denied previously seeing that letter, but Thompson testified that he placed the letter on Clewis’ desk and talked with Clewis about it. On May 21, 1997, 3S sent what it characterized as a “draft of a performance based service agreement” to Thompson, with a cover letter from 3S Chief Operating Officer Carl D. Gent.

The proposed agreement included the following clauses: • “ ‘First Union National Bank hereby grants to Steele, for residential real estate secured loans, the right to perform the Traditional Services and Reports (in a minimum amount of 2,000 packages per month provided such volume exists and is not more than 50% of First Union’s total volume) as listed in Exhibit A as attached hereto’.... [First Union] further agrees to permit Steele to bid on providing to [First Union] any of the Non-traditional Services and Reports, as defined in Appendix A, or any other Non-traditional Service or Report, as defined, developed or required by [First Union] during the term of this Agreement, or any renewal thereof.” • “This Agreement shall continue ... for a period of three (3) years, or until terminated in accordance with its provisions.” • “This Agreement will be automatically renewed for an additional three (3) years ... unless either party notifies the other in writing of its intent not to renew.” • The agreement could only be terminated “For Cause.” This draft did not include the “best efforts language” from Steele’s March 21,1996 letter.

Clewis responded by crossing out the minimum volume level of “2000 packages,” and replacing it with “1,000 transactions.” Steele testified that he was concerned about the minimum because, you know, I had stepped out there and, you know, moved, had a lot of people, lot of mouths to feed, you know, with the employees. I had taken on debt to facilitate doing this. And I said, you know, we can negotiate the minimum transactions but I still, you know, and then we put back in the best efforts because that’s what had been committed and agreed to before....

Steele explained that he was disappointed that Clewis changed the minimum because “I ... went into debt, expand[ed][and] hired people[.]” He explained the purpose of the minimum: The concern about the minimum was that they had changed the tax law or something. You do this process for like home improvements and pools and so forth as well. So, if they changed the tax law, the purpose of the minimum was to make sure that I got transactions____ [B]ut in no way was it ever imagined that a thousand units would only be First Union volume unless they drastically changed the tax law.

Steele also said that he was unaware of the amount of First Union’s total volume at the time of these negotiations. According to Steele, the parties discussed the reduction of the transactional volume to a thousand transactions monthly: [Thompson and Clewis told me] that since Doug Crisp was no longer there pushing the bank or the consumer credit division that Mr.

Pruitt was now involved and they didn’t think that they would be able to achieve the transaction levels that we previously in concept agreed to but the intent and commitment was still there with us, don’t worry, ... we’re there for you, et cetera, but they didn’t think they would be able to get the document signed with a large amount of transactions in it. Clewis also crossed out the three-year term, and replaced it with a one-year term.

Steele objected to this and told Clewis that this was not acceptable and I wasn’t happy and that, you know, we needed to go back to what the original commitment and promise had been and that was a long-term relationship and a partnership. Steele also objected to the removal of the “best efforts” language.

Steele thought that the “best efforts” language meant that, “as long as we performed, produced, continued doing the things that we were going to do, then they would send us all the transactions that we could handle and all that they could send to us and there would be a minimum that would allow for our protection!.]” Steele thought this meant that First Union would send 3S approximately 85% of First Union’s equity mortgage loan transactions. He and Dibble talked about doing business at that volume during their discussions prior to Dibble leaving the bank in June 1996.

He did not tell Clewis or Thompson, however, that he thought “best efforts” meant 85% of the bank’s transactions. He figured that they knew about his discussions with Dibble: Mr. Clewis reaffirmed that he was very aware of what Mr. Dibble and I had discussed ... What I’m trying to explain to you, sir, is Mr. Clewis said he was aware of what Mr. Dibble had committed, promised, and represented to me. And Mr. Dibble and I, we threw some various numbers around, 70, 75%. Dibble did not testify that he and Steele discussed a specific percentage of First Union’s business.

The agreement Scott and I worked on was that with the technology Scott would have the ability to get all the transactions. It was not an exclusive, it was not meant to be everything, but that he could handle a significant portion of volume, yes. Dibble did not communicate to Clewis that he “had made commitments to Scott Steele that [he] expected Mr. Clewis to live up to.” He thought, however, that “Bill knew pretty much what was going on.” According to Steele, he and Clewis never discussed what the best efforts clause meant: Q: Do you have a memory sitting here today, Mr.

Steele, of discussing best efforts and what it meant and it going back in the contract with Bill Clewis? A: Sir, I never discussed what best efforts meant with Bill Clewis. I discussed the language in the service agreement .... I’ve never had a conversation asking Mr. Clewis, Mr. Clewis, do you know what best efforts means, sir. Q: I want to know, sir, if in fact when you discussed with Mr. Clewis putting best efforts language in this contract, if it is in fact your testimony that at that time you had no discussion with him about what the language meant.

A: The two words “best efforts,” sir, I never had that discussion, what that meant. I did have discussion with Mr. Clewis with the commitment and promise that Mr. Dibble had made in the fact that the best efforts language was in the contract. Bill acknowledged that yes, that was in fact true and to put it back in there and that’s exactly what I did, sir, and I didn’t think any more about it because he reaffirmed what was supposed to happen all along. Final Version Of SA The final version of the SA, signed on November 29, 1997, defined the partes’ undertakings as follows: 2. RIGHT TO PERFORM SERVICES 2.1 Services.

First Union hereby grants to [3S], for real estate secured loans, the right to perform the Services and Reports as listed in Exhibit A as attached hereto, as needed by First Union, for the duration of, and in accordance with this Agreement. As used herein this Agreement, “Exhibit A” refers to “Exhibit A.1” attached. Subsequent revisions to Exhibit A will bear a numerical decimal sequence and date, and the most current subsequent revision will replace any prior revision.

First Union further agrees to permit [3S] to bid on providing to First Union any of the NonTraditional Services and Reports, as defined, developed or required by First Union, during the term of this agreement. Also, [3S] shall agree to manage other Direct Mail database information for First Union, at a price per name or for the exclusive rights to perform services which shall be added to and be included in Exhibit A, provided the database information is not related to [3S’s] traditional Services and Reports.

For all of the Services and Reports, as required by First Union for Residential Real Estate secured loans, First Union will use its best efforts to direct these transactions to [3S], and while this will be a non-exclusive right First Union agrees to be subject to the provisions in

Section 2.1.1 of this Agreement. 2.1.1. Minimum Volume. First Union will guarantee to [3S], beginning May 1, 1998, the right to perform at least One Thousand (1,000) Transactions per calendar month for the duration of this Agreement.

If One Thousand (1,000) Transactions a calendar month on average are not delivered to [3S] to perform, for any calendar year during the Term of this Agreement, First Union will carry forward the deficit and if not made up during the Term of this Agreement, will extend the Term of this Agreement and Renewal period until the Transactional commitments are fulfilled. (Emphasis added.) The SA also provided for the possibility that First Union might elect to give significantly more than the minimum required volume of transactions.

It stated: In the event that [First Union] wishes to increase its transaction volume above the minimum transaction levels, [3S] will be obligated to perform an additional amount of Thirty percent (30%) of the minimum transactions within the stated delivery times within this Agreement.

If First Union wishes to increase the volume significantly above the Minimum Volume stated in 2.1.1 of this Agreement with the anticipation of [3S] maintaining its delivery schedules, then First Union shall notify [3S] in writing of such increase sixty days prior to such increase. [3S] upon receiving notice, will consider but not be obligated to re-negotiate the above pricing schedule. Regarding the term of the SA, the final version of the SA provided: 4. TERM AND TERMINATION 4.1 Term.

This Agreement .... shall continue in full force and effect for a period of two (2) years commencing after the Ramp Up Period [defined as a period ending May 1, 1998], or until terminated in accordance with its provisions. 4.2 Renewal. This Agreement will be automatically renewable for one year terms. 4.3 Termination.... First Union may terminate this Agreement without cause after May 1, 2000, provided however, First Union provides [3S] with a one year notice of cancellation. Said notice shall not be delivered to [3S] prior to May 1, 2000.

Steele testified that the SA was the first step to the long-term relationship and partnership, which was something the parties discussed early on. Implementation Of SA After execution of the SA, 3S’s volume of business from First Union increased from 1,500 transactions in the month before the SA was signed to an average exceeding 3,500 transactions per month in the spring of 1998. During the “Ramp Up Period,” defined in the SA as the time from November 29, 1997 until May 1, 1998, transactions increased dramatically, without the bank giving Steele any advance notice of the increases.

Steele said that he could not tell whether he was getting most of the bank’s business because he had no access to their volume or transaction list. Steele was aware that there were other vendors providing similar services to First Union. Regarding exclusivity, Steele said, “we would have loved to have that happen but it wasn’t reality.... [I]t would not be unreasonable to have a backup vendor to support First Union in case we imploded for some reason.” Clewis told Steele that one of these vendors, ATM, was just a backup vendor. The SA was profitable for 3S in the first year.

The revenue from First Union was approximately $4 million, about 40-50% of 3S’s gross revenue in 1998, which was about $8 million. In 1996, the year prior to the contract, 3S lost $300,000 on gross revenues of $3.8 million. In 1998, the first full year of the SA, it had a net income of $544,000 on revenues of $8.2 million. In 1999, 3S had $862,000 of profit on revenues of 8.3 million. On February 11, 1998, Thompson, in connection with First Union’s “Supplier Partnership Conference,” nominated 3S for an award, writing that “3S has proven to be a true partner with First Union.

Their dedication to serve our external customer is exemplified each day as they drive to exceed our expectation.” He explained in the nomination form that 3S “offers a fully automated statistical property evaluation that eliminates our customers having to take time away from work to meet with an independent appraiser.

This product costs less than 75% of the traditional property evaluation products[.]” Although the SA did not limit 3S to providing its services only to First Union, there were comments made by Clewis and one other bank officer that 3S should not “go across the street.” Steele interpreted these comments to mean that First Union did not want 3S providing services to their fiercest competitor, NationsBank. Although Steele told First Union, “we’re focused on your organization, we have no reason to go anywhere else,” he did have discussions with both SunTrust and Wells Fargo about joint ventures with them.

Changes At First Union And Pricing Problems In late 1998, Clewis was transferred to a new position and was relieved of his vendor management responsibilities. Thompson had been relieved of his vendor management responsibilities earlier that year. By March 1999, First Union’s three consumer credit operations had been consolidated in North Brunswick, New Jersey, under the direction of Jim Keenan and Jennifer Buzzi, who had previously managed First Fidelity’s credit services, using between 20 and 25 vendors.

Buzzi soon discovered that the Charlotte vendors were charging substantially higher rates than the bank was paying in New Jersey — up to $30 more per transaction. “Appalled” at the disparity, Buzzi arranged to meet with 3S and three other vendors in Charlotte on March 3, 1999. At this meeting, Buzzi asked the vendors to decrease their prices to a reasonable level. Steele agreed to review his pricing and get back to her.

On April 16, 3S responded that it would lower its pricing for property and judgment reports to $98 in specified counties, but the pricing was “contingent upon 3S maintaining our current volume levels of a minimum of 3,000 property and judgment reports per month[.]” Buzzi did not accept this proposal, because “not only did they not drop [prices] low enough[,] they wanted more volume.” She indicated there was still a $20 per transaction difference in the pricing, which “would have cost the bank ... $60,000 a month.” On April 29, Steele offered the same price on “fully underwritten Property and Judgment reports,” and offered to “make available our automated valuation product” for $30, without the new minimum volume.

By letter of May 4, Gent notified First Union that 3S was officially dropping to these prices. 3S, however, reserved the right to go back to its higher price of $113 “should we see a significant drop in volume.” The volume for the month of April 1999 was 4,432 transactions. Buzzi told 3S that these terms were unacceptable. First Union’s Election Not To Renew SA On April 28, 1999, Buzzi sent a letter to Steele outlining her

interpretation of the Minimum Volume requirement under the SA: Under

Section 2.1.1 of the Agreement, First Union agreed to provide [3S] the opportunity to perform Services ... on a minimum of one thousand (1000) loans per month during the twenty-four month term of the Agreement. It is First Union’s position that

Section 2.1.1 contemplates that the 1000 loans per month volume is an average---- According to First Union’s records, under the terms of the Agreement, [3S] has to date provided Services on at least 29,000 First Union loans. Having met its minimum obligation under terms of the Agreement, First Union will no longer be providing [3S] with the opportunity to provide Services on any additional First Union loans.

While this action does not constitute a termination of the Agreement, should [3S] desire to continue to provide Services to First Union, First Union is willing to negotiate an early termination of the Agreement and the execution of a new agreement which will provide for new performance levels and price criteria. Finally, in the event that no new agreement is executed between First Union and [3S], this letter shall serve as First Union’s notice pursuant to

Section 4.3 of the Agreement that First Union will allow this Agreement to expire on May 1, 2000 and that no renewal of said Agreement will be honored. Buzzi’s letter was drafted by Christopher Tucci, Esq., an officer of First Union, and a corporate lawyer for First Union Corporation. Buzzi sought Tucci’s advice on First Union’s “specific obligations” under the SA. Tucci and Buzzi conversed about once a week regarding 3S between April 1999 and March 2000. At the time Tucci drafted the April 1999 letter, he knew that First Union was planning to co-own a settlement services company.

Steele responded to Buzzi’s letter on May 3, 1999, expressing his “shock[ ]” upon receiving it. He pointed out that the SA called for “ ‘a minimum of 1,000 transactions per month’ ” and rejected her

interpretation that an average of 1,000 over the entire term was sufficient. He continued: Without getting into the details of our extensive and lengthy negotiations with the Senior management at that time, the language was mutually negotiated as a compromise to provide First Union with what it determined to be the products and services it needed as well to ensure our volumes and work levels until May 1, 2001.... We also understand your directive in your attempt to lower your fees.

However, we would like First Union to state in writing that they want us to change or eliminate our current standard of underwriting as you have stated to us verbally. We have sent you a proposed pricing structure for our existing title product. We will attempt to push this down even further as we get more response from the field.... In closing, Jennifer, I do not think it is necessary to take a “hardball” approach in attempting to negotiate. We value the First Union relationship and have serviced First Union by delivering the highest quality products and services.

We look forward to continuing our relationship and hope that First Union realizes the value that we provide. Although you may not agree with the existing Terms and Conditions of the [SA] ..., we expect First Union to honor its current contractual obligations. We are open for further discussions to attempt to come to a mutually acceptable resolution. Although Gent and Buzzi had a conversation on May 4 about the new pricing levels adopted by 3S, they did not discuss the April 28 letter of non-renewal.

There is no evidence that Steele or anyone representing 3S said anything to Buzzi or other bank officials to suggest that 3S was entitled to 85-90% of the bank’s transactions. Overdue Invoices The discussions about price and volume paralleled ongoing communications about certain invoices that 3S claimed had not been paid by First Union. In October 1998, 3S submitted to First Union several hundred outstanding invoices, many of which pre-dated the SA. These totaled $375,227.

First Union officials told Steele that they had not seen the invoices before and that it would take considerable time to “sort through” them and verify that they were validly connected with a loan. First Union paid $72,630 in February 1999. Although the invoices pre-dated Buzzi’s tenure in vendor management, when the invoices were only partially paid by April 1999, 3S forwarded them to Buzzi, asking her to get involved.

Responding to this request, Buzzi wrote to 3S on April 24, 1999: I would suggest to [3S] that you identify the First Union Department and contact person that was responsible for placing these orders with 3S. The Consumer Credit Division is not going to pay for another Division’s expenses. I will try [to] assist Steele in any way I can, but considering the age of the invoices this will take considerable time and research.

Please be advised that Consumer Credit will not submit any invoice for payment unless we have both verified that our Division is responsible, backed up with sufficient 3S documentation, and also verify payment has not previously been issued. As Buzzi suggested, 3S provided First Union again with the unpaid invoices, and the parties discussed them.

By letter dated June 30, 1999, First Union offered to pay 3S $150,000 “to be applied against First Union’s outstanding balance with Steele[.]” The letter said that the payment was being made solely for the purposes of preventing Steele from incurring undue financial hardship and in no way constitutes an agreement or admission that any such invoices or charges made by [3S] under the terms of the [SA] are valid or enforceable.

The letter also asked that 3S, upon written demand of First Union, immediately refund the payment, and if it did not, the bank would have the option to “exercise any rights and remedies granted [under the SA], including, but not limited to immediate termination of said Agreement.” 3S did not accept the terms of this offer. The parties finally agreed to a mechanism for resolution of their dispute.

By letter agreement dated July 9, 1999, the bank agreed to pay $150,000 immediately “as a good faith gesture toward a final disposition of the total balance outstanding,” reserving the right to “research the validity of the Invoices.” The bank also agreed to conclude its research [on the validity of the invoices] and remit payment to [3S] on all verified invoices no later than August 31, 1999.

Should First Union determine that any of the Invoices are not valid or that any of said Invoices had been previously paid, and therefore are not due and owing to [3S], First Union will pay all undisputed invoices and provide [3S], with a written notice of its determination regarding disputed invoices, together with supporting documentation, no later than August 31, 1999.[3S] shall have fifteen days from the date of such notice to present additional information in support of any such challenged invoices, to which First Union will respond within fifteen days.

Any unresolved dispute concerning the validity of any such invoices shall be resolved by binding arbitration[.] Although First Union paid the $150,000 due on July 1, it did not live up to its agreement to determine and pay the balance of the undisputed invoices by August 31, 1999. In October, First Union made an offer to settle for an additional $120,000, provided 3S released First Union from any obligations under the SA. This offer was not accepted by 3S.

Final resolution of this dispute was not made until November 5, 1999, when the parties entered an “Agreement and Release,” in which First Union agreed to pay $245,000 within one day, and 3S released First Union from claims relating to the disputed invoices. This sum was paid. Declining Volume For 3S Although the number of transactions First Union sent to 3S exceeded 2,000 per month from March 1998 through July 1999, they started to decline in August 1999 and fell below the agreed Minimum Volume in October 1999.

Steele’s expert witness introduced a chart showing the actual volume of transactions referred to 3S from First Union, the bank’s actual volume, and the amount 3S could have handled from January 1998 — February 2003. This chart is set forth in relevant part below: Steele’s Actual Title and Appraisal Countvs. Steele’s Projected Capacity with growth at 1000 per month (Jan-May 98), 1500 per month initially (Jun-Oct 98) and 1250 per month until capacity caps off at 60,000 Steele wrote to Buzzi on September 22,1999: We continue to see a dramatic decrease in transaction volume during the last 90 days.

Given this fact, and pursuant to Carl Gent’s letter of May 4, 1999, please be advised that unless we begin to receive a flow of transactions similar to levels of earlier this year, we will return to a rate of $120.00 for title reports, per the service agreement.... When transaction volume returns to the previous levels we would welcome the opportunity to re-visit this issue with you. During late fall 1999 and January 2000, Steele attempted to coordinate further discussions with First Union about the decrease in volume, without success.

On February 8, 2000, Steele wrote a long letter to First Union summarizing the history of the relationship, including the problems with payment of invoices and the declining volume of business. [ 3S] has historically enjoyed the highest approval from First Union processors in matters of quality, promptness, and customer support. The only issue appears to be price.... My goal has always been to convene a meeting at which we could find a positive business solution. In March 2000, First Union scheduled a meeting with Steele to see what could be worked out about the SA.

In anticipation of this meeting, Steele prepared a presentation for First Union.

In this presentation, Steele characterized the 3S/First Union relationship as “[t]remendous until consolidation in New Jersey where unpaid invoices, service agreement and pricing seems to have created a relationship issue.” Under the heading, “Summary of Current Issues,” Steele wrote: Current contract provides for: • Minimum 1000 orders per month (we are currently receiving less). • Pricing at $120 per P & J: we agreed to lower our pricing per our May, 1999 letter — instead volume dramatically decreased; subsequently we notified [First Union] of our intentions with no response.

Until an alternative agreement is reached, our original contract must be honored. • Payment terms are net 15 days from date of invoice ( [First Union] AP currently holds invoices from date they receive approved invoice even if invoice is 11 months overdue). We suggest that we agree to disagree at this point and talk about alternative arrangements. In none of his correspondence with First Union did Steele ever mention that First Union was obligated to send any specific percentage of its loan business to 3S, or assert any volume requirement under the SA except the Minimum Volume.

Four First Union vice presidents and Tucci attended the March 13, 2000 meeting with Steele. According to Steele, First Union Senior Vice President Kirk Bare, who was by then heading the Consumer Credit Division, told him that “he would pay the differential.... He also stated that, you know, that for us to continue doing business, we would have to tear up the agreement[.]” When Steele responded that Bare’s approach was “an extremely heavy-handed way of doing business,” Bare asserted: “ T can be heavy-handed.

I’m First Union.’ ” Buzzi’s notes from the meeting confirmed that Bare agreed to pay all outstanding invoices only if Steele would “send a letter terminating the contract.” After the meeting, on April 19, 2000, 3S sent a letter to First Union indicating that “we construe the agreement to provide for at least 12,000 more orders, plus the makeup of any monthly volume shortages before it has been satisfied.” 3S also proposed that it “substantively alter its product mix and pricing for First Union in such a way that we can operate on a working basis that would enable us to shelve the written agreement, and let it expire according to its own terms.” The parties failed to reach agreement on continuing their relationship, and referrals of business to 3S ceased altogether after June 2000.

First Union’s Plans For Its Own Settlement Services Company In 1993 or 1994, prior to 3S’s first presentation to First Union, First Union internally discussed creating its own settlement services company to address the problem that its thousands of individual branches were decentralized and that “the branches performed all the functions of acquiring title, appraisal at the branch level. They followed up, tracked it, and did everything necessary to make that happen.

And ... it was a nightmare and mess.” The branches were “drowning in paper.” Margaret England, a regulatory compliance attorney working for First Union Mortgage Company (FUMC) Senior Vice President Jim Maynor, was tracking legislation that might affect First Union’s plan to establish its own settlement service business. During these same years, First Union also considered the alternative of buying a settlement services company. As indicated earlier, the bank’s early discussions with Steele included plans for First Union to purchase an equity interest in 3S.

Although Steele included some proposals for such purchase in some of his written proposals to First Union, they were not part of the final SA. Three years later, on November 14, 1997, a date two weeks before it signed the SA, First Union issued a strategic plan in which it continued the goal of centralizing and automating the home equity loan process.

In June 1998, the Comptroller of the Currency issued a letter to Mellon Bank, N.A. advising that it was permitted to enter into a joint venture with a national vendor to provide centralized services for Mellon’s residential loans — the same service that 3S provided for First Union. Two months later, England distributed a memorandum suggesting that FUMC, a First Union subsidiary that made home mortgage loans, work with two other First Union subsidiaries, First Union Home Equity Bank and The Money Store, to explore the possibility of forming a joint venture with an outside company to manage settlement services.

The August 12, 1998 memo noted that FUMC’s “major mortgage banking competitors” were setting up similar ventures. In the fall of 1998, First Union issued a Request For Proposals (“RFP”) to a number of vendors, seeking assistance in establishing a subsidiary and providing automation and management services. Eight companies bid on the project, including ValuAmeriea, which projected a “five-year aggregate revenue of approximately $2.4 billion and a five-year aggregate profit of $1.1 billion.” Although 3S responded to the RFP, it was not selected as a finalist.

When Steele learned that 8S was not selected, he called England on March 16 and reminded her that 3S had the SA. The next day he wrote to her offering ways in which 3S could address the problems First Union had with its proposal. First Union chose ValuAmerica, and entered an agreement for ValuAmerica to provide services, and allowing First Union to buy out ValuAmerica for approximately $30 million. The new settlement services company, known as “GreenLink,” began doing business on June 1, 2000.

Within a year, First Union bought out ValuAmerica and became the sole owner of a hugely profitable settlement services company. July Verdict At the end of the trial, the jury found that First Union breached the SA, that it did not give proper notice of non-renewal or termination, and that the SA ended on May 1, 2001. It awarded 3S $21,240,614 in damages for breach for the period from January 1, 1998 to April 30, 2000. It awarded an additional $16,235,728 in damages for the period May 1, 2000 to April 30, 2001.

It also found that First Union fraudulently induced 3S to enter the SA, and awarded compensatory damages of $39,476,342. In a separate verdict the following day, it awarded punitive damages for the fraud in the amount of $200,000,000. Finding that the $37,476,342 compensatory damages for breach of contract duplicated the $39,476,342 compensatory damages for fraudulent inducement, the trial court entered judgment against First Union for compensatory damages in the amount of $39,476,342. It entered judgment against First Union for $200,000,000 in punitive damages.

First Union filed motions for a new trial, for judgment notwithstanding the verdict, and for remittitur, all of which were denied by the trial court. First Union filed a timely appeal from these verdicts. DISCUSSION I. The Facts Proven Were Not Sufficient To Establish Fraud The elements for a fraud action in Maryland were clearly summarized in a leading fraud case, Martens Chevrolet, Inc. v.

Seney, 292 Md. 328, 439 A.2d 534 (1982): The requirements for a successful deceit suit, as they have evolved in Maryland, were stated by this court ... over fifty years ago, and they remain the same to this day: To entitle the plaintiff to recover it must be shown: (1) that the representation made is false; (2) that its falsity was either known to the speaker, or the misrepresentation was made with such a reckless indifference to truth as to be equivalent to actual knowledge; (3) that it was made for the purpose of defrauding the person claiming to be injured thereby; (4) that such person not only relied upon the misrepresentation, but had a right to rely upon it in the full belief of its truth, and that he would not have done the thing from which the injury resulted had not such misrepresentation been made; and (5) that he actually suffered damage directly resulting from such fraudulent misrepresentation.

Id. at 333, 439 A.2d 534 (citation omitted). The plaintiff must prove these elements by “clear and convincing evidence.” VF Corp. v. Wrexham Aviation Corp., 350 Md. 693, 704, 715 A.2d 188 (1998). Although a cause of action for fraud may not rest on a statement about future events, a person may commit fraud if he or she enters an agreement to do something, without the present intention of performing: [Wjhere one person induces another to part with his money or property by means of a promise which he makes with the intention of not performing it, he is guilty of actionable fraud.

In such a case fraud is committed by false pretense and deliberate deception. There is a prima facie presumption of honesty and fairness in the dealings of mankind, and hence when one person makes a promise to another as an inducement for a change of position, the promisee has the right to assume that the promisor has an existing intention to fulfill his promise. The existing intention of a party at the time of contracting is a matter of fact, and may be material to the validity of the contract. Appel v. Hupfield, 198 Md. 374, 382, 84 A.2d 94 (1951). It is this type of fraud that 3S asserted against First Union.

In this appeal, we are called upon to decide whether “evidence when viewed in its entirety does not establish, clearly and convincingly, a prima facie case of fraud on the part of’ First Union. See Wrexham, 350 Md. at 715, 715 A.2d 188 (reversing jury verdict finding fraudulent inducement on grounds that circumstantial evidence shown was not sufficient to establish fraudulent intent). In doing so, we must “assume the truth of all credible evidence and all inferences of fact reasonably [deducible] from the evidence supporting [3S].” Nationwide Mut. Fire Ins. Co. v. Tufts, 118 Md.App. 180, 190, 702 A.2d 422 (1997).

We resolve all conflicts in evidence in favor of 3S. See Jacobs v. Flynn, 131 Md.App. 342, 353, 749 A.2d 174, cert. denied sub nom. Kishel v. Jacobs, 359 Md. 669, 755 A.2d 1140 (2000). “If the record discloses any legally relevant and competent evidence, however slight, from which the jury could rationally find as it did, we must affirm the denial of the motion [for judgment notwithstanding the verdict].” Id. at 353, 749 A.2d 174.

Although 3S proved hard-nosed business dealings on the part of First Union, leading up to a deliberate and substantial breach of contract, we conclude that the evidence, when viewed in its entirety, falls short of proving fraud in the inducement. In examining the First Union representations that 3S relies upon to prove fraud, we classify them in three categories. The first category consists of the written promise of First Union contained in the SA that we referred to as the “best efforts” clause.

As we explain further below, First Union’s intentions regarding the “best efforts” clause were not sufficient to show the scienter necessary to prove fraudulent intent not to perform, largely because this clause was ambiguous, and the parties did not discuss what it meant. The second category consists of representations that could not be reasonably relied on in this commercial transaction because they contradict the express terms of the SA.

The third category includes representations that are so broad and vague that they are not actionable misrepresentations, and fall within the category of “puffing.” As shall be shown in the discussion that follows, sometimes these categories overlap. The “Best Efforts” Clause 3S argues that the “best efforts” clause meant that First Union was promising to give it 75-85% of the title and appraisal work needed for all home equity loans made by the bank. The trial court found that the “best efforts” clause at least meant that First Union promised to give 3S the settlement services on more than 50% of their loans.

In support of their view that the necessary fraudulent intent was proven, both 3S and the trial court point to a statement made by Clewis at trial that he never intended to give 3S more than 50% of First Union’s business because it was not prudent for the bank to “put all our eggs in one basket.” “Maryland has adopted the overwhelming majority rule of the American courts in holding that fraud may be predicated on promises made with a present intention not to perform them.” Tufts v. Poore, 219 Md. 1, 11,147 A.2d 717 (1959).

To establish a claim for fraudulent inducement based on First Union’s failure to intend to give 50% or more of its business to 3S, however, requires a showing first that First Union knew that the SA clearly required that level of performance by First Union. Fraudulent intent not to fulfill a performance requirement that First Union never undertook, does not support a cause of action for fraudulent inducement. It must be remembered, moreover, that 3S’s fraud claim was based on fraudulent inducement to enter the SA. That is what Steele stated.

He said that Clewis never told him the SA was a two-year agreement limited to 1,000 transactions per month, and that if he had, Steele would not have signed the contract. Rather, he “would have asked [Clewis] to honor the commitments that he and his predecessors had made to me.” Most importantly, that is what the jury was asked to find, and did find, in answer to written interrogatories on the verdict sheet. On the verdict sheet, with respect to the fraud count, the jury was asked and answered the following: 2.

Do you find by clear and convincing evidence that [First Union] fraudulently induced [3S] to enter into the [SA]? [Yes] If you answered “Yes” to Question 2, please answer Question 2(a).... 2(

a) Based on a preponderance of the evidence, how much, if any, do you award to [3S] for compensatory damages for Fraud in the Inducement? $39,476,342.00 Therefore, 3S needed to prove fraudulent intent with respect to the obligations undertaken in the SA Our analysis of the whether First Union committed fraud by signing the SA and its “best efforts” clause without intending to perform its obligations thereunder starts with close examination of the clause itself, and how it fits within the entire contract. Referring to the language of

section 2.1 that we quoted previously, we observe that First Union promised that, “[flor all the of Services and Reports, as required by First Union for Residential Real Estate secured loans, First Union will use its best efforts to direct these transactions to [8S], and while this will be a non-exclusive right First Union agrees to be subject to the provisions in

Section 2.1.1 of this Agreement.”

Section 2.1.1 establishes a Minimum Volume of transactions that First Union guaranteed to 3S. The language in sections 2.1 and 2.1.1 is internally inconsistent. The isolated phrase, “best efforts to direct these transactions to [3S],” could be interpreted to mean that the parties intend that, unless there are laws or circumstances precluding First Union from sending all such transactions to 3S, the bank will do so.

But the parties also agreed that this is a “nonexclusive right[.]” Significantly, this language removes any doubt about whether First Union could make referrals to other vendors, and even suggests that there may be other vendors who can share the right to receive First Union’s “best efforts” to refer them business. Thus, one reasonable reading is that 3S had a right to receive referrals on at least as favorable a basis as offered to comparable vendors. Alternatively, it may be read to mean that there are other vendors to whom First Union may refer business, without necessarily making “best efforts” toward them.

There is no definition of “best efforts” in the SA. Nor have we found a definitive meaning under statute or case law. Rather, “best efforts” is a term “which necessarily takes its meaning from the circumstances.” Bloor v. Falstaff Brewing Corp., 454 F.Supp. 258, 266 (S.D.N.Y.1978), aff'd, 601 F.2d 609 (2d Cir.1979); see also Triple-A Baseball Club Assocs. v.

Northeastern Baseball, Inc., 832 F.2d 214, 225 (1st Cir.1987), cert. denied, 485 U.S. 935, 108 S.Ct. 1111, 99 L.Ed.2d 272 (1988)(best efforts “cannot be defined in terms of a fixed formula ... [but] varies with the facts and the field of law involved”); Trimed, Inc. v. Sherwood Med. Co., 772 F.Supp. 879, 885 (D.Md.1991)(quoting Bloor); Polyglycoat Corp. v. C.P.C. Distrib., Inc., 534 F.Supp. 200, 203 (S.D.N.Y.1982)(quoting Bloor); Victor P. Goldberg, Great Contracts Cases: In Search of Best Efforts: Reinterpreting Bloor v. Falstaff, 4 St.

Louis L.J. 1465, 1465 (2000)(“best efforts” can only be defined contextually). Thus, although contract

interpretation is generally a question of law, a factual determination may be required as to what is deemed to be “best efforts.” See Mor-Cor Packaging Prod., Inc. v. Innovative Packaging Corp., 328 F.3d 331, 335-36, 2003 U.S.App. LEXIS 8288, *11-12 (7th Cir.2003)(treating as question of fact issue of whether exclusive product distributor’s acquisition of company competing with potential purchasers of product constituted breach of promise to use “best efforts” to sell manufacturer’s product); Trimed, 772 F.Supp. at 885 (“Although contract

interpretation is generally a question of law, this contract required a factual determination as to what is deemed to be ‘best efforts’ ”). In a 1984 law review article, On Trying To Keep One’s Promises: The Duty of Best Efforts In Contract Law, Professor Farnsworth observed: Best efforts is infrequently mentioned in the [Uniform Commercial] Code and the Restatement (Second) of Contracts and ... has been generally neglected in the law reviews.... Because courts sometimes confuse the standard of best efforts with that of good faith, it will be well ... to make plain the distinction between the two standards.

Good faith is a standard that has honesty and fairness at its core and that is imposed on every party to a contract. Best efforts is a standard that has diligence as its essence and is imposed only on those contracting parties that have undertaken such performance. E. Allan Farnsworth, on Trying to Keep One’s Promises: The Duty of Best Efforts in Contract Law, 46 U. Pitt. L.Rev. 1, 7-8 (1984)(footnotes omitted). Farnsworth answered the question, “how is this standard of diligence to be set?” Courts have generally responded in two ways.

The first is to imagine the promisor and the promisee united in a single person and to ask what efforts a reasonable person in that situation would exert on his or her own behalf. The second is to imagine a third person to be in the promisor’s place to ask what efforts a reasonable person in that situation would exert. Id. at 8 (footnotes omitted). See also E. Allan Farnsworth, Farnsworth on Contracts § 7.17, at 350-53; § 7.17c, at 381-88 (2d ed.l998)(addressing various

interpretations of best efforts clauses). The Seventh Circuit has held that “best efforts” can mean the efforts the promisor has used in similar contracts where the adequacy of its efforts was not questioned. See Olympia Hotels Corp. v. Johnson Wax Dev. Corp., 908 F.2d 1363, 1373 (7th Cir.1990). The First Circuit has held that “best efforts” in a contract “to promote worldwide licensing and use” of the contracting party’s product required “active exploitation in good faith.” Western Geophysical Co. of Am., Inc. v. Bolt Assocs., Inc., 584 F.2d 1164, 1171 (2d Cir.1978).

A promise to use “best efforts” does not necessarily mean that the promisor is required to give all of its efforts toward assisting or promoting the promisee’s interests or product, or that the promisor is prohibited from promoting competing products. See Van Valkenburgh, Nooger & Neville, Inc. v. Hayden Publ’g Co., 30 N.Y.2d 34, 330 N.Y.S.2d 329, 281 N.E.2d 142, 144-45 (1972), cert. denied, 409 U.S. 875, 93 S.Ct. 125, 34 L.Ed.2d 128 (1972)(licensees who agree to make “best efforts” to promote licensor’s product are not restricted in promoting competing products).

See also Bloor, 601 F.2d at 614 (Falstaff Brewing could market its own beers and still fulfill promise to make best efforts to promote and market Ballentine beer); Farnsworth on Contracts, Supra, § 7.17c, at 388 (“courts agree ... that a duty of best efforts does not of itself impose a duty of exclusive dealing, although it should be open to the promisee to show that the parties understood the term to include such a duty”).

We are not persuaded that merely signing the best efforts clause necessarily means that First Union officials knew that they were contractually obligated to make more than 50% of their referrals to 3S. Although the clause uses the term “For all of the Services and Reports, as required by First Union for Residential Real Estate secured loans,” it explicitly states that 3S’s “right” shall be “non-exclusive.” Thus, First Union could reasonably expect that it would be referring a meaningful amount of business to other vendors.

Furthermore, the term “Services” itself creates an ambiguity as to what was intended. “Services” is defined elsewhere in the SA as “those functions, documents, or other data provided by Steele to First Union National Bank in response to a request for information on a particular real property.” (Emphasis added.) If “all Services and Reports as required by First Union” means simply those services given “in response to a request” from the bank, then the bank would have nothing more than an obligation to act in good faith in requesting some services. Thus, incorporating the definition of “Services” into

section 2.1, 3S reasonably could believe that it was within its discretion how much volume it requested. In interpreting a contract, courts will review the contract “as a whole to determine the parties’ intentions.” Sullins v. Allstate Ins. Co., 340 Md. 503, 508, 667 A.2d 617 (1995). Other clauses in the SA, and the history of the negotiations suggest that the parties did not intend that First Union give more than 50% of its business to 3S. The titling of

section 2.1.1, “Minimum Volume,” indicates that the only specific guarantee as to volume is contained therein. That

section provides only that “First Union will guarantee to [3S], beginning May 1, 1998, the right to perform at least One Thousand (1,000) Transactions per calendar month for the duration of this Agreement.” Exhibit A.1, expressly incorporated into

section 2.1, also indicates that, so long as First Union remained above the

section 2.1 Minimum Volume levels, it was within First Union’s discretion to decide what any additional volume would be: In the event that [First Union] wishes to increase its transaction volume above the minimum transaction levels, [3S] will be obligated to perform an additional amount of Thirty percent (30%) of the minimum transactions within the stated delivery times within this Agreement.

If First Union wishes to increase the volume significantly above the Minimum Volume stated in 2.1.1 of this Agreement with the anticipation of [3S] maintaining its delivery schedules [as specified in the SA], then First Union shall notify [3S] in writing of such increase sixty days prior to such increase. [3S], upon receiving notice, will consider but not be obligated to re-negotiate the above pricing schedule. (Emphasis added.) We shall refer to this clause as the “130% Clause.” In short, the SA was not at all clear that, in exerting its “best efforts,” First Union was required to give 3S 50%, 75%, or any other specific percentage of business.

Although the best efforts clause referred to “all of the Services and Reports,” the term “Services” was ambiguous, the clause was qualified as non-exclusive, and the 130% Clause suggested that, above the Minimum Volume, First Union had the discretion to decide how much business to refer. Moreover, there is no evidence that Clewis or Thompson made representations to Steele to suggest that the “best efforts” clause was intended to guarantee more than 50% of the bank’s volume. Steele admitted that he never discussed with Clewis or Thompson the meaning of the “best efforts” clause.

He never told either Clewis or Thompson that he thought that it meant 3S would receive 75-85% of the bank’s business, 50% of the bank’s business, or any other specific percentage of business. Reviewing the language of the SA, and in the absence of any discussion indicating that the “best efforts” clause meant that 50% was required, we cannot sustain a finding that Clewis fraudulently intended not to perform, simply because he never intended to refer more than 50% of the bank’s business. 3S does not contend that Dibble possessed fraudulent intent.

Rather, 3S argues that Steele and Dibble had conversations that would support his

interpretation that the SA meant he would get 50% or more of First Union’s business, that Dibble informed Clewis about these conversations, and that Clewis never intended to give more than 50% of the bank’s business. Clewis had told Steele that he “was aware of what Mr. Dibble had committed, promised, and represented to me[,]” and that 3S remained First Union’s vendor of choice— “nothing had changed.” The conversations Steele said he had with Dibble were far from concrete, however.

Steele testified that Dibble said that if Steele delivered on his promises, 8S “could be the beneficiary of all the transactions that they could send to us.” Similarly, Steele said that he and Dibble discussed that “best efforts” meant “that he could send all the transactions that he could and that I could handle.” This statement is vague in itself.

All the transactions First Union “could” send might easily mean those that it could send after taking into account First Union’s need, as Clewis explained, to maintain multiple vendors to get good service, to maintain competitive pricing, and to safeguard against natural and technological disasters. A promise to use best efforts does not require that a party disregard its own interests. See NCNB Nat’l Bank of N.C. v.

Bridgewater Steam Power Co., 740 F.Supp. 1140, 1152 (W.D.N.C. 1990)(“The requirement that a party use its best efforts necessarily does not prevent the party from giving reasonable consideration to its own interests”)(citing Bloor, 454 F.Supp. at 267). The only thing Steele said about a specific percentage was that he and Dibble, well over a year before the SA was signed, had “thr[own] some various numbers around, 70, 75%.” But in March 1996, even before Dibble’s departure from First Union, Dibble had rejected 3S’s September 1995 proposal that the bank guarantee 70%.

To the contrary, in March 1996, First Union circulated a draft that had no minimum volume requirement and no exclusivity clause. Moreover, Steele did not testify that he and Dibble ever agreed that 75% or any particular percentage of the bank’s business would be guaranteed in the contract. He also acknowledged that Thompson and Clewis told him, with respect to the Minimum Volume being reduced, that since Doug Crisp was no longer there pushing the bank or the consumer credit division that Mr.

Pruitt was now involved and they didn’t think that they would be able to achieve the transaction levels that we previously in concept agreed to but the intent and commitment was still there with us, don’t worry ... we’re there for you, et cetera, but they didn’t think they would be able to get the document signed with a large amount of transactions in it. Nor did Dibble say the bank had promised at least 50% of their transactions. Dibble testified that he wanted to put Steele into the position where his computerized appraisal and title service could be directly accessed by all the branches.

We examine that testimony below. Dibble first explained that when he was working with Steele to prepare to perform title and appraisal services for the direct mail project, it was necessary for a significant number of users to access the computer system at one time because the bank had 2,000 branches, with one to three lenders in a branch. This meant that the computers needed to have the capacity to handle up to 5,000 or 6,000 users at one time. He indicated that at the completion of the ATAPS pilot project, this goal was accomplished, and approximately 2,000 branches could log onto 3S.

When asked about the “best efforts” clause, Dibble said nothing about guaranteeing 50% or more: Q: Was it your intent, Mr. Dibble, to in any way limit the amount of transactions that were to go to 3S other than limitations by law? A: Limitations by law and stuff that was beyond my authority. I couldn’t commit branches to it, but I wasn’t intentionally trying to limit. Q: Was it your intent to send 3S all that 3S could handle and all that FU could generate except by limitations by law?

A: It was my intent to create a mechanism to where Scott — we could access Scott’s system, get to appraisals, [Sjcott could — and with certain ramp ups in service levels, Scott could handle the volume that was coming through those branches, whatever that would look like. (Emphasis added.) Dibble also was asked about his intent with respect to the “best efforts” clause in the April 16, 1996 draft of the SA. Q: What did you intend the term “best efforts” to mean with respect to this relationship?

A: That once we had a connection between Scott and First Union, that would be the best efforts to direct the transactions believing that the branches would take advantage of an ability to close loans faster and/or gain appraisals. And for those that chose not to because they have somebody down the street to do business, obviously this would give them the ability to do that. Q: But you meant “best efforts” to include sending as many transactions within the entire 2,000 branch [First Union] footprint as possible or that Scott could handle?

A: I couldn’t direct them, but my belief was that Scott could reasonably assume to get a significant portion of the volume. And my intent was not to limit him.... The functionality would be there for him to get that. (Emphasis added.) Dibble also said, when asked about his conceptual agreement with Steele: [T]he agreement Scott and I worked on was that with the technology Scott would have the ability to get all the transactions. It was not an exclusive, it was not meant to be everything, but that he could handle a significant portion of volume, yes.

Thus, although Dibble thought that 3S might get more than 50% of the transactions because of his technology, nowhere did Dibble say that he agreed to commit the bank to this amount. Nor did Dibble say that he told Steele that he had authority to commit the bank to such an amount.

Even if the testimony of Steele and Dibble was sufficient to allow the jury to infer that Clewis knew that Steele and Dibble had discussed 3S getting 75% of the bank’s business, we do not think that the SA was sufficiently clear to establish that Clewis, in entering the SA on behalf of First Union, knew that he was making this kind of commitment on the part of the bank. Yet proof that Clewis understood that he was committing to give more than 50% of the bank’s business to 3S is essential if proof of his fraudulent intent is predicated on his trial testimony, that he never intended to give more than 50%.

Let us be clear. We are not saying that, as a contractual matter, the “best efforts” clause had no meaning, and that the only enforceable promise by First Union was the Minimum Volume. As we suggested above, and we expand on in

section II, we think, in assessing 3S’s contract claim, the jury could have decided that the best efforts clause imposed some requirement on First Union to diligently refer a significant amount of business to 3S, even if it did not require First Union to refer a specifically agreed upon percentage of its business. A cause of action for fraud, however, has a strict requirement of scienter. “ ‘[R]ecovery in a tort action for fraud or deceit in Maryland is based upon a defendant’s deliberate intent to deceive.’ ” Wrexham, 350 Md. at 704, 715 A.2d 188 (quoting Ellerin v.

Fairfax Sav., 337 Md. 216, 230, 652 A.2d 1117 (1995)). See also Miller v. Fairchild Indus., Inc., 97 Md.App. 324, 342, 629 A.2d 1293, cert. denied, 333 Md. 172, 634 A.2d 46 (1993)(“Proof of scienter is critical to a successful deceit action”). As with the other elements of fraud, scienter must be proven by “clear and convincing evidence.” See Wrexham, 350 Md. at 704, 715 A.2d 188.

Because there was no discussion between the parties that “best efforts” required First Union to send 3S more than 50% of its business, and because one reasonable reading of the contract is that no specific transaction volume, other than the Minimum Volume, was guaranteed, the jury could not reasonably infer this fraudulent intent simply from Clewis’ saying that he never intended to refer 3S more than 50%. So we must examine whether there is other evidence of fraudulent intent.

Motive For Fraud First, we look at 3S’s evidence regarding First Union’s possible motives for getting 3S to enter the SA, even though First Union had no intent to perform its obligations under that agreement. 3S quotes the trial court’s Memorandum accompanying its order denying a new trial and JNOV. “ ‘[First Union] wanted and needed [3S] to centralize and automate its home equity loan settlement services;’that in order to induce [3S] to assist [First Union] in [doing so] ... [First Union] represented to [3S] that [3S] would be its long term partner for all of the transactions that [First Union] could send to [8S] and that [3S] could handle, with a written contract being the first step in the relationship ...; ‘that [First Union’s] ... motivation in its scheme was to own its own settlement services companyf.]’ ” 3S contends that there is evidence that this “scheme” was in place because a First Union affiliate had discussions in 1993-1994 about forming its own settlement services company, and because First Union thereafter continued to track regulatory developments regarding the legality of such a venture.

A possible motive for committing a fraud, however, does not prove fraudulent intent. Cf Travel Comm., Inc. v. Pan Am. Airways, Inc., 91 Md.App. 123, 178-79, 603 A.2d 1301, cert. denied, 327 Md. 525, 610 A.2d 797 (1992)(general plan to change corporate direction in manner potentially inconsistent with contractual commitment did not suffice to show fraudulent intent not to abide by contract at time of execution). In Miller v.

Fairchild Indus., we held that a speech by the chief executive of an aircraft manufacturing company to plant employees indicating that the company was not planning to close the plant, and they could continue to make major purchases without fear of job loss, was not fraud, absent proof that the executive knew, at the time of the speech, that the plant was going to lose its major contract with Boeing. See Miller, 97 Md.App. at 343-45, 629 A.2d 1293.

We held that no fraud was shown, even though, two months before the speech, the executive knew that the Boeing contract was in jeopardy, and had made a speech to a local Chamber of Commerce that the future of the plant was uncertain. See id.

We see the evidence of First Union’s discussions of acquiring a settlement services company in 1993-1994, three to four years before it contracted with 3S, as no more incriminating than the evidence that Fairchild knew a plant closing was likely. 3S Does Not Claim Misappropriation Of Its Trade Secrets It is crucial to remember, in this context, that, as 3S acknowledged in its brief and several times at trial, its claim against First Union was not a claim for misappropriation of trade secrets.

The strategic decision to disclaim any claim for misappropriation of trade secrets apparently was made by 3S to avoid First Union’s contention that its claim for fraud was pre-empted by the Maryland Uniform Trade Secrets Act. Other Evidence Of Fraudulent Intent Not To Perform The Best Efforts Clause 3S also urges that we can find fraudulent intent in First Union’s immediate breach of the contract, without a change in circumstances, together with its subsequent conduct.

The Court of Appeals has educated us on the limits on such an exercise: A fraudulent pre-existing intent not to perform a promise made cannot be inferred from the failure to perform the promise alone. But, it may be considered with the subsequent conduct of the promisor and the other circumstances surrounding the transaction in sustaining such an inference.

And it has been stated that under certain conditions, a failure or refusal to perform is strong evidence of an intent not to perform the promise at the time it was made, as where only a short period of time elapses between the making of the promise and the failure or refusal to perform it, and there is no change in the circumstances. Tuft

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