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FULL-BRIGHT INDUS. CO. v. LERNER STORES

April 6, 1993

FULL-BRIGHT INDUSTRIAL CO., LTD., Plaintiff,
v.
LERNER STORES, INC. and HUNTINGTON NATIONAL BANK, Defendants.



The opinion of the court was delivered by: CHARLES S. HAIGHT, JR.

 HAIGHT, District Judge:

 This diversity case is before the Court on plaintiff's motion for summary judgment against defendant Huntington National Bank. A separate summary judgment motion against Lerner Stores will be addressed in a separate opinion.

 BACKGROUND

 The plaintiff Full-Bright Industrial Co. ("Full-Bright") is a manufacturer of ladies' wearing apparel, and is a citizen of the Republic of Korea. The defendant Huntington National Bank ("HNB") is a citizen of the state of Ohio, having its principal place of business in Columbus, Ohio. The defendant Lerner Stores ("Lerner") is a retail chain of stores that buys and sells ladies' wearing apparel, and is a citizen of the state of New York, having its principal place of business in New York City.

 This dispute arises out of a commercial transaction for the sale of goods between Full-Bright and Lerner. Pursuant to that transaction, defendant Lerner agreed to open letters of credit ("L/C's") covering the purchase price of the garments ordered from the plaintiff. Defendant HNB issued two letters of credit with the plaintiff as the beneficiary. The second letter of credit, No. L/C 113139, was for $ 263,340.00, which represented payment for the 39,600 garments, that were to be delivered to Lerner's freight forwarder in Korea by August 30, 1989. L/C 113139, by its terms, was to expire on September 15, 1989.

 On or about September 4, 1989, plaintiff, through its bank, sent HNB the required documentation for 18,000 of the 39,600 garments. HNB received the documentation on September 8, 1989, and determined that same day that there were discrepancies on the face of the documents. HNB sent notice of the discrepancies to Lerner, along with the message, "please advise".

 On or about September 9, 1989, plaintiff, through its bank, sent HNB the required documentation for the remaining 21,600 garments. HNB received the documentation on September 13, 1989, and determined on that same day that there were discrepancies on the face of the documents. HNB sent notice of the discrepancies to Lerner, along with the message, "please advise".

 On September 18, 1989, HNB decided to reject the first set of documents, which it had possessed for ten (10) days, six of which were business days. It notified plaintiff's bank of its decision by telex.

 On September 20, 1989, HNB decided to reject the second set of documents, which it had possessed for seven (7) days, four of which were business days. It notified plaintiff's bank of its decision by telex.

 On October 17, 1989, plaintiff, through its bank, sent a complete set of revised documents which purportedly corrected the alleged discrepancies. HNB received those documents on October 19, 1989. From the record, however, it appears HNB took no action on the revised documents.

 Plaintiff's bank sent a number of telexes to HNB, demanding payment on the L/C, or an explanation for the delay. HNB responded on October 26 that the documents would not be returned, and that the matter was now being handled by defendant Lerner and plaintiff Full-Bright directly. See Telex, October 26, 1989.

 HNB did not return plaintiff's documents to plaintiff's bank until November 17, 1989.

 HNB claims that it is not obligated to pay out on the L/C because plaintiff's documents did not strictly comply with the terms of L/C 113139. *fn1" Full-Bright contends that HNB is estopped from asserting ...


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