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Copyright © International Chamber of Commerce (ICC). All rights reserved. ( Source of the document: ICC Digital Library )
2013 LC CASE SUMMARIES No. 10 C 6142, 2013 WL 3388865 (N.D. Ill. July 8, 2013) [USA]
Topics: Reimbursement Agreement; Guaranty
Article
Prior History: Lincoln Nat'l Life Ins. Co v. TCF Nat'l Bank, 875 F. Supp. 2d 817 (N.D. Ill. 2012) [USA], summarized in 2013 ANNUAL REVIEW OF INTERNATIONAL BANKING LAW & PRACTICE at 435 (summary judgment granted in favor of beneficiary on grounds that consent to an amendment could not be implied from prior dealings); Lincoln Nat'l Life Ins. Co v. TCF Nat'l Bank, No. 10 C 6142, 2011 WL 824618 (N.D. Ill. Mar. 7, 2011), summarized at 2012 ANNUAL REVIEW OF INTERNATIONAL BANKING LAW & PRACTICE at 453 (Issuer and Beneficiary's motions for judgment on the pleadings denied because the court could not determine whether there was implied consent to amendment as a matter of law. Issuer's motion to join Third Party Guarantor granted.).
Note: At the request of Sunset Village Limited Partnership (Applicant/Borrower), TCF National Bank (Issuer) issued a standby LC to ensure repayment of a loan to Lincoln National Life Insurance Co. (Beneficiary/Lender). Applicant/ Borrower signed a reimbursement agreement with Issuer, explicitly agreeing to reimburse Issuer for the full amount of any drawing under the LC within one business day after notice to Applicant/Borrower. The agreement provided that Applicant/Borrower was in default if it failed immediately to reimburse Issuer for the full amount of a drawing.
In addition, Klarcheck Family Trust (Guarantor) signed a suretyship guaranty in favor of Issuer to guaranty reimbursement should Applicant/Borrower default. The suretyship guaranty states that Guarantor unconditionally guarantee full payment of all obligations by the Applicant/Borrower under the reimbursement agreement.
When Applicant/Borrower defaulted on the loan, Lender drew on the LC and was paid. When Applicant/Borrower failed to reimburse Issuer, Issuer sued Applicant/Borrower and Guarantor and moved for summary judgment. The United States District Court, N.D. Illinois, Eastern Division, Kendall, J. granted summary judgment against Applicant/ Borrower and Guarantor.
The Judge noted that Issuer had established a prima facie case under both the reimbursement agreement and guaranty.
[EST]
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