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ACR Systems, Inc. v. Woori Bank

United States District Court, Southern District of New York

March 25, 2015

ACR SYSTEMS, INC., Plaintiff,
v.
WOORI BANK, Defendant

For Plaintiff ACR Systems, Inc.: JOHN E. CONE JR.

For Defendant Woori Bank: LOVE LAW FIRM P.C. By: Gregory P. Love

OPINION & ORDER

JOHN F. KEENAN, UNITED STATES DISTRICT JUDGE:

Before the Court is Defendant Woori Bank’s motion to dismiss Plaintiff ACR Systems Inc.’s (“ACR Systems”) complaint for lack of standing under Fed.R.Civ.P. 12(b)(1) and failure to state a claim under Fed.R.Civ.P. 12(b)(6). For the reasons that follow, Woori Bank’s motion is denied in part and granted in part.

I. Background

A. Facts

Unless otherwise noted, the following facts are drawn from the complaint.[1] ACR Systems is a corporation with a principal place of business in Texas. It sells and ships military defense goods. It conducts business in Westchester County, New York through its affiliate Costal Mechanics Co. Inc. Woori Bank is a citizen of South Korea and maintains a branch in New York.[2]

On December 28, 2010, Woori Bank issued a letter of credit on behalf of Woong Kook Co. Ltd. (“Woong Kook”), a South Korean company, to be paid to ACR Systems upon shipment of certain military defense goods as specified in a contract between ACR Systems and Woong Kook. Although Plaintiff does not have complete copy of the letter of credit, it attaches what it describes as “[a] copy of the advice of the said irrevocable Letter of Credit” as Exhibit A to its complaint. (Compl. ¶ 5.) While it is unclear to the Court what exactly the document is, it appears to indicate that a letter of credit has issued or will soon issue. The exhibit lists Woong Kook as the applicant, ACR Systems, Inc.[3] as the beneficiary, and Woori Bank, New York as the “Drawee.” Exhibit A also indicates that the “Applicable Rules” for the letter of credit would be the latest version of the International Chamber of Commerce’s Uniform Customs and Practice for Documentary Credits, also known as UCP 600. Additionally, the document attached as Exhibit A has a “Description of Goods and/or Services” as well as “Documents Required” and “Additional Conditions.”

In January 2011, ACR Systems entered into a contract with Woong Kook to supply the South Korean Defense Acquisition Program Administration with military defense goods that were authorized by the U.S. Government for a purchase price of $85, 862.00. Although Plaintiff does not provide them, Purchase Order Sheets dated January 10, 2011 and January 11, 2011 allegedly referenced the letter of credit as the method of payment.

In February 2012, the military defense goods were shipped to Korea where they were accepted by Woong Kook. ACR Systems avers that it timely complied with the letter of credit’s “terms, preconditions and requirements.” (Compl. ¶ 9.) Despite the alleged compliance, Woori Bank only paid ACR Systems $28, 099.11, leaving $57, 762.89 unpaid. ACR Systems also alleges that Woori Bank never gave ACR Systems a complete copy of the letter of credit despite repeated requests.

ACR Systems also alleges that it incurred additional expenses because of Woori Bank’s failure to pay the balance and ACR System’s subsequent efforts to negotiate full payment. These include $4, 500 in travel expenses to South Korea; $5, 500 in legal fees; $4, 200 in storage costs for the military defense goods; and $57, 762.89 for Woori Bank’s failure to return the military defense goods.

B. Procedural History

Plaintiff originally brought this action in the Westchester County Supreme Court of New York. Defendant removed the action, on the basis of diversity, to the White Plains courthouse of the Southern District of New York. The case was assigned to Judge Vincent L. Briccetti. Judge Briccetti reassigned this case to the Manhattan courthouse of the Southern District of New York after it became clear that neither party resided in any of the Northern Counties and the claims did not arise out of activity in the Northern Counties. See ECF No. 19; see also Rule 18(a) of the SDNY Rules for the Division of Business Among District Judges.

Before the case was transferred, Woori Bank had moved to dismiss the complaint but later withdraw a portion of its motion that related to Plaintiff’s identity. At the same time the case was transferred, Defendant’s entire motion was denied without prejudice because it was unclear what arguments remained after withdrawal of the identity argument. Judge Briccetti also extended Defendant’s time to respond to the complaint so that Defendant would have an opportunity to refile its motion to dismiss ...


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