Senior Partner Patrick McCormick with support from associate Meagan Nolan argued the dismissal of a complex breach of contract claim regarding a letter of credit in the United States District Court before the distinguished Hon. Jed S. Rakoff, Senior Judge of the Southern District of New York.

CMM successfully represented an issuer of a letter of credit in a suit commenced by an insurance company after CMM’s client refused to honor the insurer’s attempt to draw upon the letter of credit. The insurance company claimed that CMM’s client had issued a letter of credit to secure a trucking company’s payment obligations to the insurer and that CMM’s client had wrongfully dishonored the insurer’s attempt to draw down upon it seven years later. The parties filed competing summary judgment motions late last year. The insurance company argued the letter of credit was “evergreen” and automatically renewed on an annual basis.

CMM argued that the insurer rejected the letter of credit and therefore it was not properly issued or enforceable and that even if the letter of credit had been issued, the specific language of the line of credit confirmed it was not evergreen and had terminated years before the attempted draw.

The Court adopted CMM’s arguments and found that the insurance company had rejected the letter of credit and also that it was not evergreen and had expired years prior to the insurer’s attempt to draw upon it. Having determined that there was no enforceable letter of credit, the Court granted CMM’s motion for summary judgment, denied the insurer’s motion and dismissed the case against CMM’s client.

The Court’s decision represented a major victory for CMM and its client. It is a reminder that the success or failure of a lawsuit can turn on the meaning of only a few words.