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United States District Court, Southern District of New York

April 28, 1999


The opinion of the court was delivered by: Kaplan, District Judge.


(Second Corrected)

Kookmin Bank ("Kookmin"), which is organized in the Republic of Korea ("Korea"),*fn1 presented a draft for payment under a letter of credit (the "L/C") issued by Hamilton Bank, N.A. ("Hamilton"), a national bank with its principal office in Florida.*fn2 Hamilton refused to pay because a required document was missing. Hamilton, however, failed to notify Kookmin by telecommunication of the reason for its refusal as required by the Uniform Customs and Practice for Documentary Credits (1993 Revision), ICC Pub. No. 500 (the "UCP"), which governed the L/C. Hamilton brought this action for a declaratory judgment and for damages for libel by a letter Kookmin sent to the Office of the Comptroller of the Currency ("OCC"). Kookmin has counterclaimed to recover the $1.5 million allegedly due on the L/C and now seeks summary judgment.


The Letter of Credit

The material facts are not in dispute. On June 11, 1996, Hamilton issued a letter of credit in the amount of $1,500,000 on behalf of Sky Industries Corporation ("Sky") for the benefit of Sung-Jin Trading Co. ("Sung-Jin") in connection with a proposed transaction in which Sky would purchase leather sport shoes from Sung-Jin.*fn3 By the original terms of the L/C, payment would be made on a draft upon presentation of (1) a bill of lading, (2) a commercial invoice, (3) a packing list, and (4) a "copy of authaenticated [sic] telex from issuing bank to advising bank, indicating quantity to be shipped, destination, and nominating transporting company" (the "Authenticated Telex").*fn4 The purpose of the Authenticated Telex was to protect Hamilton. No draft would be honored until Sky first deposited and pledged funds backing the total amount of the L/C.*fn5

The L/C was amended three times,*fn6 the only relevant amendment being the third which stated in pertinent part "on additional conditions add: No further Amendments of this L/C will be issued by applicant. Any other condition should be in accordance with `Option Contract' signed by applicant and beneficiary dated May 31, 1996. All other terms remain unchanged."*fn7 The L/C and each of its amendments stated it was governed by the UCP.*fn8

Sung-Jin Trading's Negotiation of the L/C

J.G. Kim, the president of Sung-Jin, attempted to negotiate a draft drawn on the unamended L/C to Kookmin's Pusan branch in June 1996. Taek Su Jun, a Kookmin manager, refused to negotiate the draft because the Authenticated Telex was not included among the documents presented.*fn9 According to Jun, Kim told him that "it [was] in the process of being taken care of."*fn10

On July 12, Kim allegedly attempted to negotiate a draft drawn on the amended L/C at Pusan Bank.*fn11 That same day, Pusan Bank sent a message to Hamilton through SWIFT*fn12 seeking approval to negotiate the draft without the Authenticated Telex.*fn13 On July 17, Hamilton responded via SWIFT notifying Pusan Bank that it was not permitted to do so.*fn14

On July 13, prior to obtaining a response from Pusan Bank, Kim attempted once again to negotiate his draft to Kookmin.*fn15 This time, in response to Jun's request for the Authenticated Telex, Kim presented to Kookmin two documents: one entitled "special instructions," purportedly from Sky Industries to Sung-Jin, dated July 2, 1996,*fn16 and the other a copy of an option contract dated May 31, 1996 between Sung-Jin and Sky Industries*fn17 which contained a reference to the special instructions.*fn18

Although the option contract presented to Kookmin referred to the Authenticated Telex requirement,*fn19 according to Jun, Kim explained that the combination of the option contract and the special instructions obviated the need for it.*fn20 Kookmin did not verify this with Hamilton.*fn21 Nor did it inquire of Dong Nam Bank, Hamilton's advising bank in Korea, whether the Authenticated Telex had been received or into the significance of the special instructions.*fn22 Evidently assuming that the L/C requirements had been satisfied, Kookmin negotiated the draft and remitted $1.5 million to Sung-Jin.*fn23

Kookmin's Presentation of the Documents to Hamilton

Kookmin sent to Hamilton the documents it obtained from Kim along with a request for payment of $1.5 million. Hamilton received the documents on July 22, 1996*fn24 and returned them to Kookmin via courier on July 24 with an accompanying letter stating that they were being returned because presentment was "not in compliance with the terms and conditions of the credit."*fn25 On August 2, Kookmin again presented the documents to Hamilton.*fn26 Four days later, Hamilton again returned the documents to Kookmin*fn27 and sent a message through SWIFT the same day stating that Hamilton was returning them because Kookmin had not presented the Authenticated Telex as required by the L/C.*fn28

Kookmin's Letter to the OCC

Over the course of the next year, Kookmin and Hamilton exchanged correspondence regarding the L/C with no amicable resolution. On October 14, 1997, Kookmin sent a letter by facsimile to the Office of the Comptroller of the Currency ("OCC") in both Florida and Georgia.*fn29 Kookmin there stated that it believed that Hamilton issued the L/C with the intent not to honor it; that it had evidence that similar L/C's had been issued previously; that it believed that Hamilton had committed fraud; and that Kookmin was preparing a lawsuit in Korea. Kookmin asked, moreover, for certain factual information about Hamilton.*fn30 In response to this letter, the OCC requested information from Kookmin regarding its evidence of the alleged fraud.*fn31 Kookmin provided details pertaining to Hamilton's failure to make payment on the L/C and of its issuance of at least one other letter of credit with an authenticated telex requirement.*fn32 The OCC sent Hamilton a copy of Kookmin's initial letter and inquired about the allegations it contained.*fn33

Procedural History and Claims Asserted

Kookmin brought an action in Korea on or about December 5, 1997 to recover damages for Hamilton's refusal to honor the L/C. Hamilton subsequently brought this action seeking an injunction barring prosecution of Kookmin's Korean action, a declaratory judgment and damages for libel against Kookmin. It also sued Sky Industries, claiming that Sky must indemnify it if Hamilton is found liable to Kookmin. Kookmin counterclaimed against Hamilton for Hamilton's dishonoring the L/C. This Court denied Hamilton's motion to enjoin the Korea suit,*fn34 which since has been decided in Kookmin's favor. Kookmin moves now for summary judgment dismissing the complaint. It argues that (1) Hamilton's failure to follow precisely the procedures of the UCP precludes Hamilton from relying on the lack of the Authenticated Telex to justify dishonoring Kookmin's draft drawn on the L/C; (2) Hamilton is estopped from claiming that Kookmin failed to obtain the Authenticated Telex because Hamilton itself was responsible for its issuance;*fn35 and (3) Hamilton has no claim for libel.


Choice of Law

A threshold issue concerns the law that governs resolution of this dispute. It is well settled that when subject matter jurisdiction is based on diversity, federal courts look to the choice of law rules of the forum state.*fn36 Under New York conflicts principles, the law of the issuing bank's locus governs with respect to liability for the nonpayment of a draft under a letter of credit,*fn37 and claims for libel generally are governed by the law of the plaintiff's domicile.*fn38 As Hamilton is based in Florida, both claims are governed by Florida law.

UCP Article 14

It is undisputed that Kookmin never presented an Authenticated Telex and that the conditions to payment on the L/C therefore were not satisfied fully. Kookmin nevertheless claims that Hamilton is precluded under the UCP*fn39 from relying on this deficiency because it did not (a) notify Kookmin via telecommunication of the specific reason for its refusal to pay; and (b) state all discrepancies in respect of which the bank refused the documents.

UCP Article 14, "Discrepant Documents and Notice,"*fn40 provides that an issuing bank may refuse documents presented to it for the purpose of drawing on a letter of credit if it "determines that the documents appear on their face not to be in compliance with the terms and conditions of the Credit."*fn41 If the issuing bank does so, "it must give notice to that effect by telecommunication . . . no later than the close of the seventh banking day following the day of receipt of the documents."*fn42 Moreover, "[s]uch notice must state all discrepancies in respect of which the bank refuses the documents . . ."*fn43 Failure to act in accordance with these provisions "preclude[s the issuing bank] from claiming that the documents are not in compliance with the terms and conditions of the Credit."*fn44 This preclusion, furthermore, is strict. Under Florida law, "a bank will be estopped from subsequent reliance on a ground for dishonor if it did not specify that ground in its initial dishonor."*fn45 The provisions of Article 14 thus "have been interpreted to incorporate a penalty against an issuing bank that does not assert the noncompliance of documents in a timely fashion."*fn46

It is undisputed that Hamilton did not communicate its rejection via telecommunications. It replied via DHL courier.*fn47 Nor did Hamilton's initial rejection of Kookmin's tender state specific reasons for its action, asserting only that the documents were "not in compliance with the terms and conditions of the Credit."*fn48 This was not sufficiently specific for purposes of Article 14(d), which requires, inter alia, that the issuing bank "must state all discrepancies" for rejecting the documents.*fn49

Hamilton argues that it fulfilled the requirements of Article 14 despite these lapses. It contends first that Kookmin had notice of its rejection of the discrepant documents when Hamilton rejected Pusan Bank's attempted presentation. Even assuming, without deciding, that notice of a previous rejection is enough to meet Article 14's required statement of reasons for rejection, this claim is unsupported. First, Hamilton did not send notice to Pusan Bank of its rejection until July 17 — four days after Kim negotiated his draft to Kookmin. Second, there is no allegation that Kookmin actually was aware of that rejection or that there was any privity between the two banks giving rise to constructive notice.*fn50

Hamilton next asserts that its second rejection on August 6 via SWIFT fulfilled the Article 14 requirements. But it is mistaken. Not only was this rejection beyond the seven day limit prescribed by Article 14, but the Eleventh Circuit has held that "a bank will be estopped from subsequent reliance on a ground for dishonor if it did not specify that ground in its initial dishonor."*fn51 In consequence, Hamilton did not meet the requirements of Article 14.

Hamilton rejoins that the strict preclusion of Article 14 nonetheless is inapplicable because (a) the transaction was tainted by fraud; (b) Kookmin knowingly presented insufficient documents; and (c) the ICC Uniform Rules for Collections, and not the UCP, apply.

Effect of the Alleged Fraud

Hamilton argues first that the special instructions and option contract were forgeries*fn52 and, accordingly, that it is not precluded from claiming that the documents were not in compliance with the L/C.*fn53 This argument, however, is misdirected.

According to the cases Hamilton cites, Article 14(e)'s rule of strict preclusion does not apply where fraud on the issuing bank prevents it from giving sufficient notice of dishonor. The principle prevents the issuing bank from being whipsawed — sanctioned for not uncovering latent defects in documents presented while trying to comply with the prompt notification requirements of Article 14(d).*fn54 This rationale, however, does not advance plaintiff's case because the alleged fraud concerning the special instructions and the option contract had nothing to do with Hamilton's failure to give timely and sufficient notice of the reason for its refusal to honor Kookmin's draft. That is, Hamilton does not allege that it was gulled into believing that the instructions and option were genuine, only to discover later they were not. To the contrary, the relevant defect in the documents presented was patent, and Hamilton was acutely aware of it. The authenticity of the allegedly fraudulent documents had no bearing on Hamilton's actions. In consequence, the alleged fraud to which Hamilton refers is immaterial.

Also unavailing is Hamilton's claim that its dishonor of Kookmin's draft was justified because the transaction was fraudulent. Fraud "authorizes dishonor only where `a drawdown would amount to an outright fraudulent practice by the beneficiary.'"*fn55 The fraud must infect the underlying contract.*fn56 Here, the fraud alleged has nothing to do with the contract — there is no allegation that the items shipped were so completely and obviously defective as to render worthless any claim of performance.*fn57 Rather, the alleged fraud went to the authenticity of certain of the documents presented by Sung-Jin. The Circuit, however, has noted specifically that presentation of fraudulent documents under the letter of credit does not amount to fraud in the transaction and thus does not authorize dishonor.*fn58 Accordingly, Hamilton's claim of fraud has no bearing on the application of Article 14.

Alleged Presentation of Discrepant Documents

Hamilton claims next that Kookmin is not entitled to the benefits of the UCP preclusion rule because it knowingly presenting discrepant documents under the L/C.*fn59 It contends that UCP Article 13(a) — which states that "[b]anks must examine all documents stipulated in the Credit with reasonable care, to ascertain whether or not they appear, on their face, to be in compliance with the terms and conditions of the Credit" — imposed an obligation on Kookmin to present only documents that appeared on their face to be in compliance with the L/C. By failing to do so, Hamilton alleges, Kookmin did not negotiate properly Sung-Jin's draft and therefore is not protected by Article 14.

Hamilton relies on the decision of a divided Fifth Circuit panel, Philadelphia Gear Corp. v. Central Bank,*fn60 and Brenntag Int'l Chemicals Inc. v. Norddeutsche Landesbank GZ for this proposition.*fn61 In Brenntag, Judge Sweet held that documents "negotiated . . . [which] were false on their face . . . are not valid for presentment . . . for collection on the [letter of credit]."*fn62 Similarly, Philadelphia Gear held that the issuing bank's notice of rejection was not deficient — notwithstanding its lack of specificity — because the negotiating bank was aware of the defects in the draft drawn on the letter of credit.*fn63 Important to the court's decision was its finding that "[i]t would be a strange rule indeed under which a party could tender drafts containing defects of which it knew and yet attain recovery on the ground that it was not advised of them."*fn64

While Philadelphia Gear and Brenntag support Hamilton, they are neither the only view of the issue nor controlling here. The dissent in Philadelphia Gear, for example, concluded that the conduct of the negotiating bank was immaterial. It focused instead exclusively on the procedure of the issuing bank's rejection of the documents presented under the letter of credit, asserting that "[n]owhere is the issuing bank excused from its obligations by the state of mind of the beneficiary."*fn65 This was the focus also in Bank of Cochin, Ltd. v. Manufacturers Hanover Trust Co.,*fn66 where the Second Circuit held that an issuing bank's failure to notify the negotiating bank of the specific discrepancies in the documents and to do so within the time limits prescribed by the UCP "precludes [the issuing bank] from asserting [the negotiating bank's] noncompliance with the terms of the letter of credit."*fn67

As the foregoing shows, there is case law on both sides of the issue. But the Florida District Court of Appeals squarely rejected Philadelphia Gear in Banco do Brasil v. City National Bank of Miami,*fn68 stating that "Bank of Cochin and the Philadelphia Gear dissent represent the better reasoned and more widely accepted view."*fn69 This Court of course is obliged to apply the law of Florida in this diversity case. Absent compelling indications that the Florida Supreme Court would decide the issue differently — and there are none — it is bound to follow Banco do Brasil.*fn70

Even if the Florida courts had not taken this position, this Court notes that Philadelphia Gear and Brenntag are distinguishable from this case. Here, the notice was not merely insufficiently specific, it was untimely as well — a circumstance absent in those cases. There is nothing in Philadelphia Gear or Brenntag that suggests that an untimely response would be overlooked in these circumstances. To the contrary, the majority in Philadelphia Gear noted that "[b]ecause it is undisputed that Philadelphia received timely notice of nonpayment . . . our inquiry must focus upon the sufficiency of [the issuing bank's] notice,"*fn71 thus implying that the result might well have changed had the notice been untimely.

Moreover, the position Hamilton advocates is untenable. Under the plain language of the UCP, Article 14 applies when the documents "appear on their face not to be in compliance."*fn72 Thus the UCP contemplate, even expect, the tender of documents which are noncompliant on their face. Refusal of the documents is the only sanction. There is no exception to the preclusive rule of Article 14. Nor is one warranted. While the fraud exception affords an issuing bank necessary protection against latent defects, the same cannot be said where the defects are patent.*fn73

Finally, the approach advanced by Hamilton would undermine the simplicity and certainty that are the hallmarks of the letter of credit.*fn74 Letters of credit enhance the fluidity of commerce — a goal furthered by Article 14. To inquire into the subjective element of whether the negotiating bank knew it was presenting discrepant documents each time an issuing bank fails to adhere to the Article 14 requirements would contravene the very purpose of this very exacting system. Judge Goldberg, dissenting in Philadelphia Gear, summed up this point as follows:

  "An inherent advantage of letters of credit is that
  questions regarding dishonorment are easily answered
  — a court or potential litigant need merely look to
  the choreography and see if the dancers took the
  proper steps. This usually poses an objective
  question, with the answer obvious from the face of
  the documents and the terms of the letter of credit.
  The rule [Hamilton wants this Court] to apply . . .
  injects into the otherwise mechanical and simple
  inquiry that most subjective issue of the knowledge
  of the beneficiary."*fn75

In the last analysis the question regarding the interplay of UCP Articles 13 and 14 is who should bear the risk of loss — the bank attempting to present discrepant documents or the issuing bank which fails to adhere to the prescribed notification requirements. In Bank of Cochin, our Circuit reasoned that

  "[i]n this era of near instantaneous international
  communications, we can find no rationale to justify
  [the issuer's] delay in informing [the beneficiary]
  of the specific defects. . . . Had this information
  been imparted in a timely fashion, some part or all
  of the funds might have been recovered. . . . [The
  issuer] was at all times in the best position to
  learn of the fraudulent nature of [the]

Similarly, Hamilton here was in the best position to know that it had not waived the Authenticated Telex requirement*fn77 and it could have minimized the risk of loss at the least cost. It should have done so.

Alleged Applicability of the ICC Uniform Rules of Collection

Hamilton argues next that Kookmin presented the documents on a collection basis and that the ICC Uniform Rules of Collection therefore apply instead of the UCP. Hamilton relies on Alaska Textile Co. v. Chase Manhattan Bank, N.A.*fn78 for this contention, but overstates its applicability.

In Alaska Textile, the collecting bank*fn79 presented documents for payment notwithstanding its knowledge that they were not in compliance with the letter of credit. On the form collection letter, the collecting bank typed "Documents are presented on an approval basis."*fn80 The Second Circuit reasoned that this phrase was analogous to the phrase "on a collection basis" which could, "[d]epending on the circumstances . . . indicate that the documents are being sent on a basis independent of the letter of credit, i.e., for simple collection under the Uniform Rules for Collections."*fn81 This was so because "[s]uch phrases are themselves ambiguous, and their meaning must be obtained from the context. . . . [If, however,] the correspondence shows that the presentation is being made under the credit" the UCP rules will apply.*fn82 Ultimately the court, despite the known discrepancies in the documents and the accompanying "approval basis" request, found that the submission was made under the letter of credit.

Here, no such phrase implicating the Rules of Collection was used. Nor is there any other basis for supposing that Kookmin acted for collection.*fn83 Accordingly, the UCP and not the Rules of Collection apply.*fn84 There is therefore no reason to entertain whether Hamilton's response was proper under the latter criteria.

For the reasons discussed above, Hamilton's efforts to get out from under Article 14 are unsuccessful. In consequence, Hamilton is precluded from relying on Kookmin's failure to present an Authenticated Telex in dishonoring the L/C.

Failure to Mitigate

Hamilton argues that Kookmin failed to mitigate its damages and is therefore not entitled to the full amount of the L/C even if it prevails on liability. Hamilton, however, is unable to demonstrate the existence of any duty to mitigate in these circumstances.

Although there might be a choice of law issue here, neither party contends that Korean law applies, and the end result would be the same under either New York or Florida law. Pursuant to New York law, actual damages under a letter of credit need not be proved.*fn85 And while Florida law reduces the award on a dishonored letter of credit by the amount for which any goods are resold, it imposes no duty to resell the goods. The reasoning of the Fifth Circuit is instructive:

  "The measure of damages used in ordinary contract
  cases is inapplicable because a letter of credit
  simply is not an ordinary contract. The letter of
  credit is a unique device developed to meet specific
  needs of the marketplace. If the letter of credit is
  to retain its utility as a commercial instrument, the
  rights and duties of the issuer, the beneficiary, and
  the procurer must remain clear.

  Parties to commercial transactions must be able to
  rely on the fact that as soon as the conditions
  contained in a particular letter are satisfied,
  payment is due."*fn86

Although Hamilton cites Hyosung America, Inc. v. Sumagh Textile Co. Ltd.,*fn87 and Wichita Eagle and Beacon Publishing Co. v. Pacific National Bank of San Francisco,*fn88 for its proposition, those cases are not helpful to it. Wichita Eagle merely stated the general rule of mitigation applicable to contracts for the sale of goods. It did not address whether a duty to mitigate arises in the letter of credit context.*fn89 Hyosung involved an action for fraud and mitigation of tort damages, not wrongful dishonor of a letter of credit.*fn90

In light of Hamilton's failure to establish either that there was any duty to mitigate damages on a dishonored letter of credit, or that Kookmin actually resold any of the goods, Hamilton's mitigation of damages defense is baseless.

Alleged Libel

The final issue this Court must address is whether Kookmin's letter to the OCC was libelous. Kookmin claims: (1) the letter merely stated an opinion, (2) it was truthful, (3) Hamilton failed to follow the requirements of the Florida pre-suit notice statute, and (4) the statements were privileged.

While a statement of pure opinion will not support an action for libel, such is not the case for a statement of mixed opinion and fact.*fn91 The Florida District Court of Appeals distinguished pure opinion from mixed opinion as follows:

  "Pure opinion is based upon facts that the
  communicator sets forth in a publication, or that are
  otherwise known or available to the reader or the
  listener as a member of the public. Mixed opinion is
  based upon facts regarding a person or his conduct
  that are neither stated in the publication nor
  assumed to exist by a party exposed to the
  communication. Rather the communicator implies that a
  concealed or undisclosed set of defamatory facts
  would confirm his opinion."*fn92

Kookmin's statement in its letter — "[w]e have evidence that Hamilton . . . has issued similar documents with same results"*fn93 — referenced undisclosed facts that were not known or available to, or assumed to exist by, the OCC. The statement also was arguably defamatory. The reference to "similar documents" was to letters of credit on which Hamilton allegedly had no intention of honoring. In consequence, the statement was one of mixed opinion which is actionable for fraud.

Kookmin's claim that its statements were true fares no better. Its contention that Hamilton issued the L/C with the intent to dishonor it is highly dubious. Kookmin reaches this conclusion from the fact that "Hamilton agreed with Sky from the outset that any letters of credit issued . . . would be `inoperative' and that Hamilton would never issue the telexes necessary to make them operative."*fn94 This is at best a parochial reading of the L/C application and Hamilton's internal memoranda concerning its issuance. At the very least, there is a question of fact whether Hamilton had no intention of honoring the L/C.

Kookmin claims next that Hamilton's libel claim must be dismissed because it failed to follow the procedures prescribed by the Florida pre-suit notice statute*fn95 prior to filing this action. The plain text of the statute indicates that it is limited to media defendants, and the Florida courts agree.*fn96 The one case supporting the application of this statute to non-media defendants, Laney v. Knight-Ridder Newspapers, Inc.,*fn97 has not been followed by the Florida state courts.*fn98 This Court therefore follows the reasoning of the Florida courts and holds that Hamilton had no obligation to follow the requirements of the pre-suit notice statute.

Finally, Kookmin asserts that its letter to the OCC was privileged. To be qualifiedly privileged, the statement must have been made (1) in good faith, (2) by one who had a duty or interest in the subject matter, (3) to someone who had a corresponding duty or interest, (4) on a proper occasion, and (5) in a proper manner.*fn99 Application of the privilege is a question of law, so long as "there is no dispute as to the circumstances surrounding the publication."*fn100 There is no dispute here surrounding the circumstances of publication. Kookmin published its statement to one entity, the OCC,*fn101 expressing its concern that it had been defrauded by Hamilton. Thus, whether privilege exists is for the Court to decide.

The Court holds that the single publication by Kookmin was qualifiedly privileged and the privilege was not abused in this particular instance. Kookmin's statements were made in good faith in response to Hamilton's failure to make payment on Kookmin's draft presented under the L/C. Its publication was limited in scope, and the information was not disclosed to persons other than the OCC. Furthermore, this was a statement to "a political authority regarding matters of public concern," a recognized legal ground for privilege.*fn102

Hamilton asserts, notwithstanding, that the statement was made with express malice which obviates the privilege.*fn103 So long as there is sufficient evidence of the presence of express malice, a jury question is created.*fn104 Express malice, however, is "a very high standard for a plaintiff to meet."*fn105 It exists "[w]here a person speaks upon a privileged occasion, but the speaker is motivated more by a desire to harm the person defamed than by a purpose to protect the person or social interest giving rise to the privilege."*fn106 But there simply is no evidence of its presence here.

Construing the statement in the light most favorable to Hamilton, Kookmin (a) had no basis for its accusation of fraud, and (b) did not perform any reasonable investigation prior to sending the letter.*fn107 That notwithstanding, Kookmin attempted to work out a favorable resolution to the matter with Hamilton for over a year, Kookmin made its statements only to one entity — the chief regulating body of the banking industry, and most of its statements — including the accusation of fraud — were couched as opinion.

In these circumstances, the letter and other evidence of record cannot support an inference that Kookmin wrote it to "gratify its malevolence" or simply to harm Hamilton.*fn108 In addition, the words in Kookmin's letter clearly "were not so extreme as to demonstrate express malice."*fn109 In consequence, a jury could not reasonably find that Kookmin's statement was made with express malice. At most, the evidence would allow a finding of recklessness, but that is insufficient to support express malice.


For the foregoing reasons, defendant's motion for summary judgment dismissing the complaint as against Kookmin and for summary judgment on its counterclaim is granted. The action is dismissed as to Kookmin. Kookmin shall have judgment against Hamilton for $1.5 million plus interest thereon at the rate of 9 percent from July 22, 1996 to the date of judgment.*fn110


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