Court Opinion

ID: 4277920
Source: CourtListenerOpinion
Date Created: 2018-05-24 00:00:20.91584+00
Date Added: 2024-06-11T14:07:15.011320
License: Public Domain

Case: 17-40838      Document: 00514485446         Page: 1    Date Filed: 05/23/2018

           IN THE UNITED STATES COURT OF APPEALS
                    FOR THE FIFTH CIRCUIT
                                                                         United States Court of Appeals
                                                                                  Fifth Circuit

                                    No. 17-40838                                FILED
                                  Summary Calendar
                                                                            May 23, 2018
                                                                           Lyle W. Cayce
                                                                                Clerk
FRANKLIN GLOBAL RESOURCES,

              Plaintiff - Appellant

v.

INDUSTRIAL BANK OF KOREA,

              Defendant - Appellee

                   Appeal from the United States District Court
                        for the Southern District of Texas
                               USDC No. 1:13-CV-4

Before CLEMENT, COSTA, and WILLETT, Circuit Judges.
PER CURIAM:*
       Appellant Franklin Global Resources contracted with Shinjeong Steel &
Trading Co., to sell 3,000 metric tons of scrap metal for $1,185,000. This
contract depended upon securing credit from Appellee Industrial Bank of
Korea (IBK) to fund the purchase. Franklin and Shinjeong approached IBK
and procured a documentary letter of credit (LC), which memorialized IBK’s

       * Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH
CIR. R. 47.5.4.
    Case: 17-40838         Document: 00514485446          Page: 2       Date Filed: 05/23/2018

                                        No. 17-40838
obligation to provide the funds after certain conditions were satisfied,
including presentment of documents such as the commercial invoice, the bill of
lading, and the insurance policy certificate.
      Shortly thereafter, Shinjeong and Franklin entered an amendment to
their sales contract stating:
      The Seller has requested that the Buyer instruct their bank to
      issue a Cancelation/Termination of the existing Documentary
      Letter of Credit No: M0493208NS00185 immediately and upon
      notification of the SWIFT Cancellation/Termination the Seller
      [Franklin] will issue new bank coordinates within 72 hours or less
      for the DLC to be re-issued to.

In accordance with this language, IBK cancelled the LC. IBK did not, however,
issue a new LC, and it never provided the $1,185,000. Franklin did not present
the documents under the original LC, and the 3,000 metric tons of steel were
never shipped.
      Franklin sent a letter to IBK stating: “[P]lease accept this letter as
presentment under the existing Letter of Credit, and if such was cancelled,
then under the re-issued Letter of Credit. If the Letter of Credit is not re-
issued this letter constitutes a demand to make presentment pursuant to the
Application of Shinjeong for the Letter of Credit anticipated in the underlying
contract for transaction between Franklin and Shinjeong. . . . If IBK is
anticipating not issuing the Letter of Credit pursuant to the applications and
instructions of Shinjeong, then Franklin is hereby requesting deposit of
$1,185,000.00 into my Trust Account, by wire transfer.” IBK did not respond
to this letter.
      Franklin brought suit against IBK, 1 and asserted claims of tortious
interference with prospective contract; breach of contract and tortious

      1   Franklin also sued other entities not party to this appeal.
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                                       No. 17-40838
interference with contract; conspiracy to interfere with contract; and wrongful
dishonor of contract. The district court granted summary judgment to IBK,
concluding that—among other things—there was no material issue of fact
regarding whether the parties canceled the original LC or whether Franklin
failed to adequately present the requisite documents under the original LC to
receive the funds. On appeal, in its original brief, Franklin challenged only the
district court’s findings as to these two issues. 2
       “This court reviews a grant of summary judgment de novo, applying the
same standard as the district court.” Romero v. City of Grapevine, 17-10083,
2018 WL 1885545, at *3 (5th Cir. Apr. 20, 2018). We find no error in either of
the district court’s findings at issue on appeal. Although Franklin’s letter to
IBK purported to be a presentation, it did not include or even reference any of
the documents required by the LC. Franklin cites a district court opinion that
relies on the Uniform Customs and Practices for Documentary Credit (UCP or
UCP 600) 3 for the proposition that the issuer of a letter of credit must give
notice of its decision to refuse letters of presentment and state any
discrepancies with the presentment and the LC. Agri Exp. Coop. v. Universal
Sav. Ass’n, 767 F. Supp. 824, 828 (S.D. Tex. 1991). But here Franklin never
presented any of the required documents. See UCP 600 art. 2. The UCP places
no obligation on IBK to explain discrepancies or its decision to refuse the
purported letter of presentment under these circumstances.
       Franklin sought to introduce parol evidence that Franklin argues shows
that the parties did not intend to cancel the LC. The court may not consider
parol evidence when the agreement is unambiguous. See Bailey v. Kliebert

       2  In its reply brief, Franklin further raised other issues the district court rejected
below when granting summary judgment for IBK. “This Court will not consider a claim raised
for the first time in a reply brief.” Yohey v. Collins, 985 F.2d 222, 225 (5th Cir. 1993). We do
not address these issues.
        3 The parties’ application for the LC states it is subject to the UCP.

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                                 No. 17-40838
Dev., LLC, No. 14-15-00984-CV, 2017 WL 924484, at *6 (Tex. App. Mar. 7,
2017) (“When a contract is unambiguous, we must enforce it as written without
considering parol evidence. . . .”). The district court correctly concluded that
the language of the amendment canceling the LC is unambiguous. And once
the bank cancelled the LC, it had no duty to subsequently issue a new LC. See
UCP 600 art. 10.
      Granting summary judgment for IBK was appropriate. We AFFIRM the
district court.

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