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DELAWARE VALLEY FACTORS, INC. v. COMA EXPORT

January 19, 1982

DELAWARE VALLEY FACTORS, INC.
v.
COMA EXPORT, INC., et al.



The opinion of the court was delivered by: GILES

MEMORANDUM

The questions before the court are whether to grant summary judgment for plaintiff and whether to vacate default judgments entered against fourth-party defendant. For the reasons which follow, summary judgment will be granted, the default judgments will be vacated, and the fourth-party defendant will be dismissed for lack of personal jurisdiction.

 I. BACKGROUND

 A. Underlying Agreements

 Two agreements underlie this action. The first is an international sales agreement, which can be divided into two transactions: a transaction in goods, and a transaction in documents. The second agreement involves a financial transaction between the seller and its bank. *fn1"

 1. Sales Agreement

 a. Goods

 The basic goods transaction was a sale of frozen chickens by Coma Exports, Inc., ("seller") a Florida corporation, to Corporacion de Mercadeo Agricola ("buyer") in Venezuela. *fn2" Seller engaged Shulman Air Freight, Inc., ("forwarder") *fn3" a New Jersey corporation, to ship the goods to Venezuela. *fn4"

 b. Documents

 Payment for the goods was arranged through an international letter of credit issued by buyer's Venezuelan bank, Banco de Desarrollo Agropecuario ("issuer"). The letter of credit provided for payment to seller against sight drafts for up to 90% of the invoice price, upon presentation of the drafts and other documents. The letter of credit transmitted to the Bank of America ("confirming bank") in New York, which confirmed the letter to seller. *fn5"

 2. Additional Financial Agreements

 a. Domestic Letter of Credit

 In connection with the sale and letter of credit, seller made two additional financial arrangements. First, in order to pay the supplier of the chickens, seller engaged the Continental Bank ("seller's bank") to issue a domestic "back-to-back" letter of credit to the supplier. *fn6" Seller's bank allegedly also was to advise seller concerning the documents necessary to obtain payment of the international letter of credit.

 b. Loan

 Second, seller took a loan from Delaware Valley Factors, Inc., ("lender") a Pennsylvania corporation. The amount of the loan was the face value of the international letter of credit. Seller assigned the letter of credit to lender as collateral for the loan. In addition, the loan was guaranteed to lender by three ...


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