The opinion of the court was delivered by: MENCER
Plaintiff, Banco Nacional De Desarrolla (hereinafter Banco), is a Nicaraguan bank with its principal office in Managua, Nicaragua. Defendant, Mellon Bank, N.A. (hereinafter Mellon), is an American bank with its principal office in Pittsburgh, Pennsylvania.
Banco seeks to recover from Mellon the sum of $43,387.50, which represents the face amount of a draft that Mellon refuses to honor.
Mellon contends that it does not owe any money to Banco. This case is ripe for decision as a result of cross-motions for summary judgment. Upon these motions the Court must decide the effect, if any, of a provision in an amended letter of credit requiring the issuer to receive written notice that certain goods had arrived in the United States prior to issuing payment.
The background to this dispute is as follows: On August 6, 1980, I.B.P. Corporation (hereinafter I.B.P.), applied to Mellon for a letter of credit in favor of Empressa Nicaraguensa de la Carne, Encar (hereinafter Encar).
Mellon agreed and on August 7, 1980 issued an irrevocable letter of credit Number 47728 for the amount of about $98,000. Banco was named as the advising bank and Encar was named as the beneficiary.
The letter of credit purported to cover "fresh frozen boneless beef packed in polylined fiber carton solid packed in even weight 60# cartons. Approx 1200 carton min 90% C.L. chucks at 1.18 FOB and approx. 124 ctns. 100% lean product at 1.75 FOB Nicaragua."
Evidently the parties to the underlying transaction, Encar and I.B.P., continued to do business regarding Nicaraguan meat between August 1980 and January of 1981. Throughout this time frame, Mellon issued 14 Amendments to the Letter of Credit 47728.
These amendments generally extended the date of credit, increased the amount of credit available, covered other beef shipments and made other changes. There is no dispute regarding any of these amendments.
Letter of Amendment number 15 was issued on February 17, 1981. In addition to including several terms concerning amount available, etc., this amendment ended with the following condition: "For product covered by this amendment only payment will only be effected upon Mellon Bank's receipt from IBP Corporation of written notice that product has arrived in the United States."
The product covered in Amendment number 15 corresponded to invoice drafts 0146-IG and 0148-IG. It is alleged that on February 16, 1981, Encar sent both invoices to Banco for payment. (See para. 11 of Banco's complaint.) The product was actually sent to I.B.P. on or about February 10, 1981. On February 18, 1981, Banco paid Encar for 10 drafts, including 0148-IG. Banco, in turn, remitted those drafts to Mellon with the supporting documents. Mellon reimbursed Banco for all of the invoices with the exception of 0148-IG.
Mellon claims that it never received written notice from I.B.P. that the goods covered under that invoice arrived in the United States. Therefore, its refusal to honor that draft was fully within its rights.
Banco filed a complaint in this district on May 26, 1982. An appropriate answer was interposed on June 17, 1982. Following the close of discovery, Banco submitted the instant motion for summary judgment and Mellon cross-moved for similar relief. Both sides have submitted briefs.
Initially, the Court notes that suits involving letters of credit are readily appropriate for resolution by summary judgment, Bossier Bank & Trust Co. v. Union Planters National Bank, 550 F.2d 1077 (6th Cir. 1977); Venizelos, S.A. v. Chase Manhattan Bank, 425 F.2d 461 (2d Cir. 1970) (both cited cases involving cross motions for summary judgment).
Nonetheless, pursuant to Federal Rule of Civil Procedure 56(c), a federal court will grant summary judgment only "if the pleadings, depositions, answers to interrogation, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." In considering a motion for summary judgment, a court must view the facts in the light most favorable to the non-moving party. Goclowski v. Penn Central Transportation Company, 571 F.2d 747 (3d Cir. 1977). When cross-motions for summary judgment are submitted, as is the case at hand, the court is not to assume that there are no issues of material fact, but must make an independent determination based on the proof submitted by the parties. 10 Wright and Miller, Federal Practice and Procedure § 2720 (1973). See also McDougall v. Donovan, 552 F. Supp. 1206 (N.D.Ill. 1982).
With all of the above considerations in mind, and after careful consideration, we hold that there are no genuine issues of material fact, and that summary judgment in ...