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November 10, 1994



The opinion of the court was delivered by: LEONARD B. SAND


 Plaintiff Logan & Kanawha Coal Company, Inc. ("L&K") asserts several claims against defendant Banque Francaise du Commerce Exterieur (the "Bank"), stemming from certain transactions involving defendant Bank and former defendant CTC-Minemet, Inc. ("CTC"). *fn1" Defendant Bank now moves to dismiss plaintiff's complaint pursuant to Rule 12(b)(6), or in the alternative, for summary judgment under Rule 56 of the Federal Rules of Civil Procedure. Plaintiff also moves for summary judgment. For the reasons set forth below, defendant's motion is denied in part and granted in part. Plaintiff's cross motion for summary judgment is denied.


 Plaintiff L&K is an Ohio corporation in the business of selling coal to both domestic and foreign markets. Complaint P 1. Defendant Bank is a French corporation licensed to engage in the banking business within the State of New York. Def.'s Mem. Dated Apr. 15, 1994. This action centers around a sum of $ 1,255,452 that was pledged to defendant Bank by former defendant CTC and consequently paid to the Bank by a French purchasing organization known as Association Technique de l'Importation Charbonniere ("ATIC"). Plaintiff claims that CTC had no right to pledge this money to the Bank and that $ 1,242,641 of this amount should instead have been paid to plaintiff.

 From 1989 to 1993, plaintiff had a business relationship with former defendant CTC, the nature of which is a subject of dispute. Plaintiff asserts that CTC acted from 1989 to 1993 as an "agent and broker" for plaintiff, finding French purchasers such as ATIC for plaintiff's coal. Plaintiff's Mem. Dated June 8, 1994 at 1; Meyer Aff. PP 2-5. Plaintiff maintains that title to the coal never passed from plaintiff to CTC and that CTC remained merely plaintiff's agent throughout. Complaint PP 11-13; Meyer Affidavit PP 2-5. Defendant Bank, by contrast, characterizes the arrangement between L&K and CTC as one in which L&K sold its coal to CTC, which then resold it to French purchasers like ATIC. Bank's Mem. Dated Apr. 15, 1994 at 1.

 Although the parties disagree as to whether CTC acted as an agent or a buyer/seller, they do not dispute that in March 1993, CTC arranged and carried out the transfer of a shipment of coal from L&K to ATIC. Pl.'s Mem. at 1; LaCourte Aff. Dated June 23, 1994 PP 4-5. This transfer of coal involved a dual set of invoices; the first from L&K to CTC was in the sum of $ 1,242,641 and the second from CTC to ATIC (the "ATIC invoice") was in the sum of $ 1,255,452. Pl.'s Mem. at 1. The difference between these two sums, alleges plaintiff, was intended to represent CTC's commission on the sale of coal from L&K to ATIC. Pl.'s Mem. at 1.

 In December 1991, CTC had entered into a Revolving Credit Agreement with defendant Bank, pursuant to which the Bank loaned money to CTC. Ex. A to LaCourte Aff. Dated June 23, 1994. The Parties do not dispute that, in March 1993, CTC assigned the "ATIC invoice" to defendant Bank as collateral under the 1991 Revolving Credit Agreement. Pl's Mem. at 2; LaCourte Aff. Dated June 23, 1994 P 5. After receiving its shipment of coal, ATIC paid this sum of $ 1,255,452 directly to defendant Bank, which applied this payment to the outstanding debt of CTC to the Bank. Pl.'s Mem. at 2; Def.'s Rule 3(g) Statement at 5. CTC, which had financial problems and eventually became insolvent, failed to pay plaintiff the sum of $ 1,242,642 allegedly owed for the coal shipped from plaintiff to ATIC. Certif. at P 5; Pl's Mem. at 2,3. Plaintiff consequently brought this action against the Bank, CTC, and the other named defendants in July 1993. As discussed above, the Bank is the only remaining defendant in this litigation. See supra note 1.


 A. UCC Article 9

 Plaintiff alleges that when CTC assigned to defendant Bank the ATIC invoice for $ 1,255,452, CTC had no more than a minimal interest in the ATIC invoice. This assignment of collateral, argues plaintiff, was therefore invalid under article 9 of the Uniform Commercial Code. See Complaint PP 40, 44 ("Second Cause of Action"). Defendant moves for summary judgment as to this claim. Because we find that there is a genuine issue of material fact as to whether CTC had rights in the ATIC invoice, we deny defendant's motion.

 Summary judgment may not be granted unless "the pleadings, depositions, answers to interrogatories, 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 a judgment as a matter of law." Fed. R. Civ. P. 56(c). The burden is upon the moving party to demonstrate that no genuine issue respecting any material fact exists. See Heyman v. Commerce & Indus. Ins. Co., 524 F.2d 1317, 1320 (2d Cir. 1975). All ambiguities must be resolved and all inferences drawn in favor of the party against whom summary judgment is sought. See Eastway Constr. Corp. v. City of New York, 762 F.2d 243, 249 (2d Cir. 1985), cert. denied, 484 U.S. 918, 98 L. Ed. 2d 226, 108 S. Ct. 269 (1987). The moving party may obtain summary judgment by showing that little or no evidence may be found in support of the non-moving party's case. See Celotex Corp. v. Catrett, 477 U.S. 317, 325, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986); DiCola v. SwissRe Holding (North America), Inc., 996 F.2d 30, 32 (2d Cir. 1993). When no rational jury could find in favor of the non-moving party because the evidence to support its case is so slight, there is no genuine issue of material fact and a grant of summary judgment is proper. See Dister v. Continental Group, Inc., 859 F.2d 1108, 1114 (2d Cir. 1988).

 Article 9 of the Uniform Commercial Code sets forth the law of secured transactions. Pursuant to section 9-203 of the code, a security interest does not attach unless: (a) the collateral is in the possession of the secured party, or the debtor has signed a security agreement which describes the collateral; (b) the secured party has given value to the debtor; and (c) the debtor has rights in the collateral. N.Y. U.C.C. § 9-203(1) (McKinney 1990) (emphasis added). See In re Emergency Beacon Corp., 665 F.2d 36, 40 (2nd Cir. 1981) ("Notwithstanding any agreement between the debtor and the creditor, if the debtor has no rights in the collateral, no security interest in that collateral comes into existence."). The question presented by plaintiff's claim is whether CTC had rights in the ATIC invoice to which the Bank's security interest could attach. See, e.g., Cantor v. Anderson, 639 F. Supp. 364, 368 (S.D.N.Y.) (art dealer entrusted with painting did not have "rights in the collateral" and could not pledge the painting to a third party), aff'd., 833 F.2d 1002 (2nd Cir. 1986).

 Plaintiff argues that CTC had no rights in the ATIC invoice because CTC was only plaintiff's "agent and broker," whose role was to arrange the sale of coal from CTC to ATIC in return for a one percent commission. See Lincoln First Commercial Corp. v. New York State Tax Comm'n, 136 Misc. 2d 478, 518 N.Y.S.2d 904, 906 (N.Y. Sup. Ct. 1987) (wholesale distributor of cigarettes was agent of government for purposes of collection of cigarette tax, and as such, did not possess type of rights in cigarette tax stamps which could be pledged as security interest for a loan). In support of this claim, plaintiff offers the affidavit of L&K's president, as well as several pieces of correspondence between L&K and CTC, referring to CTC as an "agent" and its compensation as a "commission" rather than a profit. See Meyer ...

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