Opinion ID: 1906890
Heading Depth: 1
Heading Rank: 5

Heading: and/or letter of credit # 10910

Text: With respect to my draft today on the above referenced letter of credit, and the sight draft in the amount of $30,000.00 submitted therewith: `I hereby certify that monies are due on the lease on the Gulf Gate Lodge, with the said lease being dated the 21st day of May, 1984.' `I hereby certify that the amount drawn represents unpaid lease payments on the lease between Joe McCarron of Gulf Gate Lodge and Frank Martin, Peter Blalock and Clark Harris.' This the 18th day of November, 1985. /s/ Joe McCarron Finally, McKerall prepared a cover letter for McCarron to deliver to AmSouth, listing the documents that were being presented, and explaining that he referred to two different expiration dates and two different letter of credit numbers in the documents because the original letter of credit drafted by AmSouth referred to the different expiration dates and numbers. The cover letter contained an acknowledgement of receipt, and spaces were provided for the time of receipt and the bank officer's signature. McCarron presented to AmSouth the draft and the documents McKerall had prepared. AmSouth paid McCarron $30,000 in the form of a cashier's check dated November 25, 1985. The cashier's check referred to letter of credit number 10918(10). AmSouth apparently was unable to obtain reimbursement from any of the lessees for the monies it paid to McCarron. On September 2, 1986, AmSouth filed suit against Martin and Harris. Blalock was not named as a defendant. AmSouth alleged that it had paid $30,000 in accordance with the terms of the agreement, and that the defendants had refused to reimburse AmSouth and were in violation of their agreement. AmSouth demanded a judgment in the amount of $30,000, plus interest and attorney fees. The defendants counterclaimed, alleging that AmSouth had negligently or wantonly paid McCarron when it knew or should have known that the conditions of the letter of credit had not been satisfied and that the sum was not due to be paid. They further alleged that as a proximate result of AmSouth's actions, their livelihoods were destroyed, that their credit and reputation in the community were impaired, and that they suffered mental anguish. Each defendant sought $3.5 million in compensatory and punitive damages. The case was tried before a jury. McCarron testified that on November 18, 1985, the earlier of the two expiration dates listed in the letter of credit, he took the documents needed to draw on the letter of credit to AmSouth in the morning, immediately after he left McKerall's office, and arrived at the bank approximately when it opened. He acknowledged that no one from AmSouth signed the form indicating when the documents were received. McKerall testified that he prepared the documents after McCarron arrived at his office at approximately 7:00 a.m., and that the documents were presented to AmSouth before 2:00 p.m. on November 18. Blalock, Harris, and Martin testified that after McCarron delivered the November 15 letter terminating the lease, each of them told representatives of AmSouth that McCarron's allegations of default were not true and instructed AmSouth not to pay on the letter of credit. The lessees also testified that they lost substantial sums of money after the Gulf Gate Lodge closed and that the losses occurred as a result of the events detailed above. AmSouth moved for summary judgment, which was denied, and then at trial moved for a directed verdict after all of the evidence was presented. The trial court also denied the directed verdict. The case was submitted to the jury in a bifurcated manner. In the first stage, the jury was presented with two interrogatories: QUESTION: Were the documents submitted by McCarron when compared to the requirements as set out in the letter of credit sufficient to cover each of the requirements contained in the letter of credit? QUESTION: Were the documents presented to the Bank on or before 2:00 o'clock p.m. on the 18th day of November, 1985? After deliberating, the jury answered each of the interrogatories No, and the cause continued into the second stage. During the second stage of deliberations, the jury was instructed to determine whether the lease assignment placed a greater duty on AmSouth than AmSouth had under the letter of credit, and, if so, whether the bank met the duty. The court charged the jury that if it determined that AmSouth did not act reasonably in paying the letter of credit, it should return a verdict for the defendants and assess damages. The jury returned verdicts in favor of defendants Harris and Martin and assessed compensatory damages for each defendant in the amount of $45,000. AmSouth's motion for JNOV or a new trial was denied, and this appeal followed. AmSouth's primary argument is that the trial court erred in denying its motions for a directed verdict or JNOV because, it argues, the issues should have been decided in its favor as a matter of law. The standard of review applicable to a motion for a JNOV is the same standard initially used by a trial court in determining whether to grant or deny a motion for a directed verdict. Alpine Bay Resorts, Inc. v. Wyatt, 539 So.2d 160 (Ala.1988). A JNOV motion is properly granted only when there is an absence of proof on a material issue or when there are no controverted questions of fact on which reasonable people could differ and the moving party is entitled to a judgment as a matter of law. Id. AmSouth contends that the trial court should not have submitted the interrogatories to the jury because, it argues, neither of the issues presented controverted questions of fact.