Carter Petroleum Products, Inc. v. Brotherhood Bank & Trust Co.

Carter Petroleum Products, Inc. (Carter) (plaintiff) sold fuel products to Highway 210, LLC (Highway 210), which operated a gas station. Brotherhood Bank & Trust Co. (Bank) (defendant) issued a letter of credit for the benefit of Carter on the account of Highway 210. The letter of credit provided that Carter could draw on the Bank at sight when it also submitted a statement signed by Carter stating that Highway 210 failed to pay outstanding invoices. The letter of credit required that each draft state that it is “Drawn under [Bank]’s Letter of Credit #2001-270 dated July 26, 2001.” The date of July 26, 2001 was a typographical error that should have been October 19, 2001. Finally, the letter of credit could be drawn upon if presented at the Bank no later than June 26, 2002. Carter attempted to draw upon the letter of credit by presenting documentation on June 26, 2002. The documentation correctly noted the October 19, 2001 date of the letter of credit and was presented at 5:05 p.m. An employee of the Bank had locked the doors of the lobby, but the employee opened the doors and allowed the representative from Carter to come in. Although the lobby closed at 5:00 p.m. on June 26, 2002, the drive-through window was open until 7:00 p.m. The Bank dishonored the draft request by Carter, because the draft was presented after regular banking hours, and the request did not contain the July 26, 2001 date. Carter sued the Bank, and the trial court granted summary judgment to Carter. The Bank appealed to the Court of Appeals of Kansas.