Beyene v. Irving Trust Co.

Dessaleng Beyene and Jean Hanson (collectively, Beyene) (plaintiffs) sold two prefabricated homes to Mohammed Sofan. The homes were to be shipped from the United States to Yemen. Sofan paid for the homes with a letter of credit issued by the Yemen Bank for Reconstruction and Development (YBRD). YBRD designated the Irving Trust Company (Irving) (defendant) as the letter of credit’s confirming bank; Beyene designated the National Bank of Washington (NBW) to be his collecting bank. The letter of credit specified the documents that Beyene would have to submit in order to be paid. These documents included a bill of lading identifying Mohammad Sofan as the person to be notified by the shipping company. Upon the arrival of the homes in Yemen (about which Sofan did not receive prompt notice), NBW sent a bill of lading along with other documents to Irving. Irving notified NBW about several discrepancies in the documents NBW submitted. Most importantly, Irving noted that the bill of lading stated that the recipient to be notified was Mohammad Soran, not Mohammad Sofan. Irving requested but did not receive consent from YBRD to pay the letter of credit despite the discrepancy, and Irving never waived the spelling discrepancy. Irving ultimately refused to pay on the letter of credit, leading Beyene to sue Irving. The district court granted summary judgment to Irving, ruling that the name misspelling was a material discrepancy that justified Irving’s refusal to pay. Beyene appealed.