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Copyright © International Chamber of Commerce (ICC). All rights reserved. ( Source of the document: ICC Digital Library )
2007 LC CASE SUMMARIES 514 F.Supp.2d 1334 (S.D. Fl. 2007) [USA]
Topics: Tortious Interference; Breach of Third-Party Beneficiary Contract
Type of Lawsuit: Beneficiary sued Applicant for tortious interference with a business relationship, breach of contract, and breach of a third-party beneficiary contract.
Parties: Plaintiff/ Beneficiary- Romika-USA Inc. (Counsel: Kevin Crow Kaplan, Coffey Burlington, Miami, FL; Mark Adrian Dienstag, Brenner & Dienstag, Miami, FL)
Defendant/ Applicant- Columbia Sportswear Co. (Counsel: Jeremy D. Sacks, Stoel Rives LLP, Portland, OR; Richard E. Douglas, Richard E. Douglas, P.A., Weston, FL; Stephen A. Redshaw, Stoel Rives LLP, Portland, OR)
Defendant/ Issuer- HSBC Bank, USA, NA (Counsel: Jerel Charles Dawson, Stephen Bernard Gilman, Shutts & Bowen, Miami, FL)
Underlying Transaction: Footwear supply agreement.
LC: Commercial LC. Silent as to governing rules.
Decision: The United States District Court of the Southern District of Florida, McAliley, Magistrate Judge., applying Florida common law, granted Beneficiary's motion for summary judgment and dismissed the claim.
Rationale: An instruction by the Applicant to the LC Issuer not to waive discrepancies does not constitute tortious interference with a business relationship.
Article
Factual Summary: In connection with the revision of a contract to manufacture footwear, Buyer, provided a LC issued by Bank in favor of US agent of Seller/Beneficiary. The LC required presentation of various documents, including "signed invoices referring to particular purchase order numbers, copies of trucking, ocean or air bills of lading, copies of packing lists, and original certificates of inspection signed by [Applicant]." It also contained a provision in the event that discrepant documents were presented "by reserving to the bank the right to make payments to [Beneficiary] if the bank received a waiver of the discrepancies from [Applicant]." When Beneficiary presented non-conforming documents, in various presentations, Applicant/Buyer waived discrepancies on some presentations and refused to do so on others. Claiming breach of contract, tortious interference with a business relationship, and breach of a third party beneficiary contract, Beneficiary sued Buyer/ Applicant which moved for summary judgment. The trial court granted the motion and dismissed the claim.
Legal Analysis:
1. Tortious Interference: Beneficiary claimed that Applicant/Buyer tortiously interfered by "instructing the bank to not honor [Beneficiary's] drafts." Applying Florida law, the court ruled that Buyer/Applicant was not liable for tortious interference. The court reasoned that a company has not tortuously interfered when it is a party in the transaction and it is protecting its own business interests. The court found that there can not be "the intent to damage the business relationship and lack of justification for doing so" if the Buyer/Applicant was reducing its own risk of loss.
2. Breach of Third-Party Beneficiary Contract: Beneficiary argued that it was a third-party beneficiary to the LC contract. The court disagreed with this argument and noted that "[i]n short, a third party beneficiary is not a party to a contract." The agreement clearly listed Beneficiary as a party; therefore the court denied Beneficiary's argument.
[JEB/jlb]
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