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Note: Planet Earth TV, LLC (Retailer/Applicant), a North Carolina company, contracted with Level 3 Communications, LLC (Provider/Beneficiary), a Delaware telecommunications company, whereby Provider/Beneficiary promised data services and access to its servers for Retailer/Applicant to in turn “provide on-demand television content via the internet” to its customers. To secure monthly payments, BB & T (Issuer) issued a letter of credit at the request of Retailer/Applicant in favor of Provider/Beneficiary. The opinion is silent as to whether the LC was subject to practice rules.

Subsequently, a dispute arose as to whether Provider/Beneficiary issued a necessary access code in order for Retailer/Applicant to utilize Provider/Beneficiary’s servers. Claiming that Retailer/Applicant breached the agreement, Provider/Beneficiary drew on the LC for USD 67,500, which Issuer honored. Thereafter, Retailer/Applicant sued Provider/Beneficiary for breach of contract; conversion; declaratory judgment; rescission; and unjust enrichment. Provider/Beneficiary counterclaimed for breach of contract and both parties moved for summary judgment. The United States District Court for the Western District of North Carolina, Reidinger, J., denied summary judgment as to the competing breach of contract claims and dismissed each of Retailer/Applicant’s remaining claims with prejudice.

That each party offered conflicting evidence as to “whether [Provider/Beneficiary] materially breached its contractual obligation” to provide Retailer/Applicant with the necessary access code to use Provider/Beneficiary’s network and servers rendered summary judgment on the issue of breach premature.

The Judge dismissed Retailer/Applicant’s conversion and declaratory judgment claims on similar grounds stating that the conversion claim was “coterminous with [Retailer/Applicant]’s breach of contract claim while the declaratory judgment claim was “simply duplicative” as Retailer/Applicant merely sought to resolve the breach of contract issue through a declaratory judgment.

As to Retailer/Applicant’s final claims of rescission and unjust enrichment, the Judge first noted that both claims were equitable remedies and that to prevail on either, Retailer/Applicant had to demonstrate its lack of an adequate legal remedy. The Judge dismissed these claims noting that “damages available at law would wholly compensate [Retailer/Applicant] for any loss” were Retailer/Applicant to prove a breach of contract by Provider/Beneficiary.

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