Opinion
March 31, 1998
Appeal from the Supreme Court, New York County (Ira Gammerman, J.).
We agree with the IAS Court that the allegations of defendant bank and the intervenor contractors of fraudulent representations by plaintiff in its certificate of drawing failed to raise a triable issue of fact with respect to the propriety of the bank's dishonor of the subject letter of credit ( see, UCC 5-114). Indeed, the record indicates that plaintiff's right to call the letter of credit was at least "colorable" ( see, Ground Air Transfer v. Westates Airlines, 899 F.2d 1269, 1272-1273) and that the bank's dishonor was, accordingly, wrongful as a matter of law. This is not a case where the plaintiff caused the default relied upon and then attempted to reap its benefit ( see, Recon/Optical, Inc. v. Government of Israel, 816 F.2d 854, 858); the default noted in the certificate of drawing related to the contractors' insolvency and not to any default in performance of the underlying construction contract. Additionally, the record supports the LAS Court's finding that plaintiff did not misrepresent in its certificate of drawing whether it owed the contractors undisputed amounts. We note that the controversy between the parties concerning the underlying contract is currently in arbitration.
Defendants' requests for expedited disclosure and to compel arbitration were properly denied since they related to recovery under the underlying contract and not to the independent letter of credit ( see, Mennen v. J. P. Morgan Co., 91 N.Y.2d 13, 20).
Concur — Sullivan, J. P., Rosenberger, Nardelli, Rubin and Saxe, JJ.