The HONORABLE RICHARD H. KYLE, United States District Judge for the * District of Minnesota, sitting by designation.

United States Court of Appeals FOR THE EIGHTH CIRCUIT

___________ No. 96-4071

___________ Global Network Technologies, Inc., * * Plaintiff - Appellant, * * Appeal from the United States v. * District Court for the * Western District of Missouri. Regional Airport Authority of * Louisville and Jefferson County, * * Defendant - Appellee. *

___________ Submitted: May 19, 1997 Filed: September 4, 1997

___________ Before BEAM and LOKEN, Circuit Judges, and KYLE, District Judge. *

___________
LOKEN, Circuit Judge.

The Regi onal Airport Authority for Louisville, Kentucky (“RAA”), issued a n Invitation to Bid on a fiber optics network project at Sta ndiford Field. Global Network Technologies, Inc. (“Global”), submitted a bid accompanied by a bid guaranty , consisting of an irrevocable standby letter o f credit in the amount of $85,000 issued byThe

HONORABLE FERNANDO J. GAITAN, JR., United States District Judg e 1 for the Western District of Missouri. -2- Commerce Bank of Kansas City and payable to RAA as beneficiary. When Global was
aw arded the contract but could not obtain the requisite bonding, RAA drew on th e letter of credit, a

nd Commerce Bank honored the draw. Global reimbursed the Bank, as it was obligated to do, and then sued RAA for breach of warranty, fra ud, conversion, and money had and

received, alleging that RAA submitted a false signed statement in making the draw. The district court agreed that the statement was inaccurate bu t 1 dismis sed Global’s claims on various grounds. Global appeals. We conclude tha t RAA’s statement was not inaccurate and therefore affirm.

RAA’s Invitat

ion to Bid included a package of Contract Documents relating to the technologically complex fiber optics network contract, including a lengthy Bi d For m and written “General Conditions” governing the award and execution of th e contract. The Bid Form contained two terms that the successful bidder must satisf y after acceptance of its bid but before execution of the final contract:

Inthe event that this Bid is accepted by [RAA], the undersigned agrees to furnish all required bonds, insurance certificates and other documents, w ithin ten (10) Calendar Days after the date a Notice of Award is given by [RAA]. Furthermore, if it is the successful bidder, the undersigne d agrees t o enter into a contract in the form contained in these Contrac t Documents within Thirt

y (30) Calendar Days after the date that a Notice of Award is given to such successful Bidder.

Consistent

with this term, General Condition 30-05 required the successful bidder to furnish executed performance and p ayment bonds “[w]ithin ten (10) Calendar Days of receipt of the Notice of Award.”-3-

Th e Contract Documents contained overlapping provisions calling for a bi d guaranty to enforce these pre-contract terms. The Invitation to Bid provided:

Each sealed Bid shall be accompanied by an irrevocable Ban k Letter of Credit . . . to guarantee that if the Bidder’s offer results in a n Award, the Bidder will enter into the Contract within thirty(30) days after Notice of Award is given.

Pa ragraph 2 of the Bid Form required that a letter of credit accompany the Bid an d provided:

The letter of credit is to be forfeited if, in the event the Bid is accepted, th e undersigned Bidder shall fail to execute the Contract and furnis h sa tisfactory evidence of insurance and/or Performance and Materia l Payment Bonds under the conditions and within the time specifie d hereinafter . . . .
And General Condition 30-07 provided:

Failure of the successful Bidder to provide acceptable bonds an d insur ance certificates and execute the Contract in accordance with th e requirements outlined [above] shall be just cause for cancellation of the Award and forfeiture of the Bid Guaranty.

Read together, these Contract Documents unambiguously required each bidder t o submit a letter of credit to guarantee both submission of the required bonds within ten days and execution of a final contract within thirty days.

Global submitted a Bid on RAA’s Bid Form and accompanied the Bid with Commerce Bank’s letter of credit, which provided that it was payable upon RAA’ s timely submission of a signed statement certifying that “Global Network Technologies, Inc. has failed to comply with the terms and conditions of the Invitation to Bid.” OnAn irr evocable letter of credit creates an independent obligation of the issuing 2 bank to pay the beneficiary upon timely presentment of the documents specified in the credit. A standby letter of credit typically calls for a docum ent reciting that the issuer’s account party has defaulted on a contractual obligation. See S tate ex rel. Mo. Highway & Transp. Comm’n v. Morga nstein , 703 S.W.2d 894, 898-99 (Mo. banc 1986); J OHN F. D OLAN , T HE LAW OF L ETTERS OF C REDIT ¶ 1.04, at 1-16 (rev. ed. 1996).

-4- June 6 , 1995, RAA issued a Notice of Award accepting Global’s Bid. However , Global could not obtain the required bonds within ten days. After further discussions,
on June 29, RAA drew on the $85,000 letter of credit. Because RAA submitted th e sig ned statement and other documents specified in the letter of credit before it s expiration date, Commerce Bank honored the draw. 2

In th e district court and on appeal, Global acknowledges that it breached th e General Conditions and the terms of its Bid by not providing the required bonds in ten d ays. Nevertheless, Global argues, RAA’s draw on the letter of credit was wrongful because it falselycertified that Global had failed to comply with the Invitation to Bid. That docu ment, Global explains, required a letter of credit payable if the successfu l bidder failed to sign the final contract within thirty days after receiving the Notice of A w ard. Because RAA drew on the letter of credit within thirty days after the Notice of Award, Glo bal had not yet failed to comply with this condition. RAA’s signe d statement was therefore knowingly false.

We conclude that this interpretation of the letter of credit is far too cramped

. Global would have us co nstrue the credit as though it required a signed statement that Global had no t signed the final contract within thirty days. But the term used in th e credit was broader -- failure to comply “w ith the terms and conditions of the Invitation to Bid.” The Invitation to Bid explicitly required that a letter of credit “accompany” Global’s “sealed Bid.” Paragraph 2 of the Bid required submission of a letter of credit paya ble upon either of two contingencies, failure to submit bonds within ten days o r failure to sign a final contract within thirty days. In our view, the most natural-5-

construction of the language used in the letter of credit is that its reference to “terms and conditions of the Invitation to Bid” included both of the bid guaranty requirements contained in the “sealed Bid.”

It is obvi ously true that RAA’s Contract Documents could have been drafte d
more precis ely in this regard, since the Bid Form required a letter of credit coverin g two con tingencies, whereas the Invitation to Bid specifically referred to a letter o f credit covering one contingency. Bu t even taking Global’s view of the letter of credit, that its reference to the Invitation to Bid is a clear and unambiguous reference to only that one contingency, we are left un der Missouri law with a case of latent ambiguity -- “where a writing on its face appears clear and unambigu ous, but some collateral matter makes the meaning uncertain.” A court must then consider parol evidence such a s “sub sidiary agreements, the relationship of the parties, the subject matter of th e contract, the facts and circumstances surrounding the execution of the contract, th e practical con struction the parties themselves have placed on the contract by their acts and deeds, and other external circumstances that cast light on the intent of the parties.” Royal Banks of Missouri v. Fridkin , 819 S.W.2d 359, 362 (Mo. banc 1991).
Citing the independence of a letter of credit, Global argues that we may not look beyond the four corners of that instrument. Because of the issuing bank’s independent commitment to honor i ts letter of credit, courts require that documents submitted with
a draw comply precisely with the literal terms of the credit. See Anchor Centr e Partners, Ltd. v. Mercantile Bank, N.A. , 803 S.W.2d 23, 34-35 ( Mo. banc 1991). That reduc es the issuer’s task to comparing the documents against its credit. But we ar e deali ng here with a contract dispute between the letter of credit applicant an d benefici ary after the issuing bank has honored its independent obligations under th e credit. This dispute is between the parties to the underlying contract. The letter o f credit’s “independence” is less significant than the broader relation ship between Global and RAA in resolving this disput e. Therefore, “the court should be able to look to theIn addition, we are here construing the letter of credit to determine whethe r 3 RAA submitte d a false statement. This is different than the question considered i n Holmberg v. Morrisette , 800 F.2d 205, 211 (8th Cir. 1986), cert. denied , 481 U.S. 1028 (1987), where we held that ambiguity in a letter of credit “could not p rovide a sufficient justification for submitting falsified documents.” Even if the certification had been inaccurate, we agree with the district cour t 4 that it was no t fraudulent because, “[b]y drawing on the letter of credit with use of an inaccura te statement, the beneficiary did exactly what the applicant intended eve n though the beneficiar

y had to make an inaccurate statement to draw. Thus, we would arg ue that the draw is not ‘materially fraudulent.’” W HITE & S UMMERS , U NIFOR M C OMMERCIAL C ODE

§ 26-10 (4 th ed. Supp. 1996), commenting on WKB Enters., Inc. v. Ruan Leasing Co. , 838 F. Supp. 529, 533 (D. Utah 1993).
-6- underlying transaction to determine whether the beneficiary has performed the terms of the credit.” D OLAN , supra , ¶ 2.09[6], at 2-55. 3

Inthis case, all the parol evidence -- from the underlying Contract Documents to the parties’ conduct following the Notice of Award to the depositi on testimony in the summary judgment record -- demon strate beyond doubt that RAA intended to require, and Global intended to submit with its Bid, a letter of credit meeting the tw o contingency requirements of paragrap h 2 of the Bid. Therefore, when Global failed to
su bmit the required bonds in ten days, RAA did not submit a false or inaccurat e statement when it certified to Commerce Bank that Global “has failed to comply with the terms and conditions of the Invitation to Bid.” Because all of Global’s claims are 4 premis ed on RAA’s statement being false or inaccurate, the district court correctl y granted summary judgment dismissing those claims. Finally, Global arg ues that the district court erred in denying its Fed. R. Civ. P. 59(e) motion to alter or amend the judg ment. In that motion, Global argued either that RAA had waived the bonding requirement, or that Global was entitled to a refund of a portion of the letter of credit because it exceeded the minimum bid guar anty that RAA had required. “A district court has broad discretion in determining whether to grant a-7-

motion to alter or amend judgment, and this court will not reverse absent a clear abuse of discretion.” Hagerman v. Yukon Energy Corp. , 839 F.2d 407, 413 (8th Cir.), cert. denied , 488 U.S. 820 (1988). The district court did no t abuse its discretion in this case because a Rule 59(e) motion may not be used “to introduce new evidence that could have been introduced during pendency of the summary judgment motion,” or to “serve as the occasion to tender new legal theories.” Concor dia College Corp. v. W.R. Grace & Co. , 999 F.2d 326, 330 (8th Cir. 1993), cert. denied , 510 U.S. 1093 (1994). The judgment of the district court is affirmed.
A true copy.

Attest:
CLERK, U. S. COURT OF APPEALS, EIGHTH CIRCUIT.