Court Opinion

ID: 9767153
Source: CourtListenerOpinion
Date Created: 2023-08-29 05:11:29.568669+00
Date Added: 2024-06-11T07:30:29.042262
License: Public Domain

OLSZEWSKI, Judge,
concurring:
We are constrained to concur with the majority that Mr. Rappaport cannot avail himself of the letter of credit. The letter required that Mr. Orleans, as landlord, sign a certificate that his tenants had defaulted on their rent payments. Orleans died and Rappaport bought the property, assuming all of Orleans’s rights. When the same tenants defaulted, Rappaport signed the certification of default as landlord, explaining that he was Orleans’s lawful assignee under the lease.
While common sense would dictate that Rappaport stood in Orleans’s shoes as landlord, the law of letters of credit does not follow the dictates of common sense. Rather, it follows a rule of strict compliance. The letter required Orleans’s signature, and once he died, the letter of credit became worthless. It was Rappaport’s burden to discover this, and because he did not, he cannot blame the Bank for refusing to honor the letter. Such a departure from reasonable expectations might be unconscionable in the realm of consumer transactions. In *208the sophisticated area of high finance, it is a valid risk-shifting device.
We therefore concur in the result reached, despite its harsh and counter-intuitive appearance.