Forgot your password?
Please enter your email & we will send your password to you:
My Account:
Copyright © International Chamber of Commerce (ICC). All rights reserved. ( Source of the document: ICC Digital Library )
1996 LC CASE SUMMARIES 82 F.3d 334 (10th Cir. 1996)
Topics:
Attorney's Fees (for prevailing party in injunction).
Type of Lawsuit:
Appeal from denial of request for attorney's fees.
Principals:
Defendant/Issuer: First National Bank of Boston, Ltd.;
Defendant/Issuer of standbys: Sunwest Bank of Albuquerque;
Plaintiff/Applicant: Lueker.
Underlying Transaction:
Two letters of credit obtained as security in order to become a member of a Lloyd's of London insurance syndicate.
LC:
Two standby letters of credit backing up two L/C's.
Procedural History:
The U.S. District Court for the District of New Mexico denied the issuer's request for attorney's fees. The U.S. Court of Appeals for the Tenth Circuit, McKay, J., reversed and remanded.
Rule:
Issuer awarded attorneys fees based on a New Mexico law which allows such an award where a wrongful preliminary injunction is dissolved.
Article
Factual Summary: In order to become a member of a Lloyd's of London insurance syndicate, applicant obtained two letters of credit to assure payment of any obligations from first bank. Applicant then had second bank issue two counter-standby letters of credit to back up first ones.
Years later, believing that he had been defrauded by Lloyd's, the applicant devised a scheme that would cause Lloyd's to initiate suit against him in New Mexico, being himself prohibited from bringing suit there by a forum selection clause. He sought to enjoin the issuer of the counter-standbys in New Mexico and obtained a Temporary Restraining Order against payment under the standbys. This TRO was then converted into a preliminary injunction. The applicant thought that his suit would cause the first bank to also dishonor the original L/Cs, thus causing Lloyd's to bring suit against him in New Mexico.
After receiving the preliminary injunction, the applicant joined the issuer of the first L/Cs (which was the beneficiary of the counter-standbys) as a defendant in the suit. The first bank removed the case to federal district court. That court dismissed the suit and dissolved the injunction for lack of personal jurisdiction over the first bank and a failure to join Lloyd's in the suit.
The first bank then sought to take advantage of a New Mexico law which allows attorney's fees for dissolution of a wrongful preliminary injunction. The district court found the first bank acted inequitably by not intervening in the original proceedings, and, thus denied the award. On appeal, reversed.
Legal Analysis:
1. Attorneys Fees: The court found that, under New Mexico law, the first bank did have standing to recover attorney's fees even though it was not a party to the original injunction proceedings. Moreover, the court found that the first bank had not acted inequitably by not intervening in those proceedings. Accordingly, the court awarded the attorney's fees and remanded the case for a determination of reasonable fees.
©1997 INSTITUTE OF INTERNATIONAL BANKING LAW & PRACTICE
COPYRIGHT OF THE INSTITUTE OF INTERNATIONAL BANKING LAW & PRACTICE
The views expressed in this Case Summary are those of the Institute of International Banking Law and Practice and not necessarily those of ICC or the other partners in DC-PRO.