Blonder & Co., Inc. v. Citibank, N.A.

Citibank, N.A. (defendant) issued a letter of credit at the behest of Blonder & Company, Inc. (Blonder) (plaintiff). The letter of credit stated that it was governed by the Uniform Customs and Practice for Documentary Credits (UCP) and that it was to be interpreted under New York and federal law as to matters not addressed by the UCP. Among other things, the letter of credit required the beneficiary to provide Citibank with a bill of lading identifying Corinto Port, Nicaragua, as the port of lading in order to be paid. Blonder sued Citibank, alleging that Citibank wrongfully paid the letter of credit’s beneficiary. Per Blonder, the bill of lading that the beneficiary submitted was deficient because it (1) did not include a cosignee; (2) included a typed signature of January 11, 2001, and a stamp with the date January 11, 2000; and (3) possibly referred to both Corinto Port and another Nicaraguan port as the ports of lading. Blonder supported its position with an expert witness in international banking, who opined that the beneficiary’s supporting documents were deficient under the letter of credit. Citibank moved to dismiss the complaint. The trial court granted Citibank’s motion. Per the trial court, the letter of credit did not require that the bill of lading include a cosignee; rather, the lack of a cosignee was relevant only to the bill of lading’s negotiability. The trial court further ruled that the date discrepancy (2000 vs. 2001) was attributable to an understandable beginning-of-the-year mistake and that the 2001 stamp complied with the UCP. Finally, the trial court concluded that the bill of lading’s reference to Corinto Port as the port of lading was sufficient and that the reference to the second port was not explained by the parties and could not be assumed to refer to a second or different port of lading. Blonder appealed.