From our private database of 28,500+ case briefs...
CRM Collateral II, Inc. v. Tri-County Metropolitan Transportation District
United States Court of Appeals for the Ninth Circuit
669 F.3d 963 (9th Cir. 2012)
Tri-County Metropolitan Transportation District (TriMet) (defendant) contracted with Colorado Railcar Manufacturing, LLC for the manufacture and delivery of light railcars and a trailer. The contract required Colorado Railcar to secure an irrevocable $3 million standby letter of credit. Pursuant to a separate investment agreement with Colorado Railcar, CRM Collateral II, Inc. (Collateral II) (plaintiff) purchased a $3 million letter of credit from KeyBank for TriMet’s benefit. The letter of credit stated that TriMet could draw on the letter by presenting, among other things, certification that the applicant for the letter of credit was in default. Because Collateral II was the applicant and not Colorado Railcar, the parties added Collateral II as a party to the underlying contract so that a default under that contract by Colorado Railcar would constitute a default by Collateral II for purposes of drawing on the letter of credit. TriMet and Colorado Railcar subsequently agreed that TriMet would make special additional payments to Colorado Railcar to support Colorado Railcar financially while Colorado Railcar finished making the railcars. The special-payment agreement allowed TriMet to draw on the letter of credit to reimburse itself for the special payments if Colorado Railcar failed to repay. Colorado Railcar and TriMet did not obtain Collateral II’s consent to this arrangement. TriMet eventually made over $5.5 million in special payments and tried to draw on the letter of credit for reimbursement. Collateral II alleged that TriMet’s draw was fraudulent and sought to enjoin KeyBank from paying. The district court found that Collateral II was a surety and could assert the suretyship defense of discharge because the special-payment agreement between TriMet and Colorado Railcar had materially increased Collateral II’s risk as surety without Collateral II’s consent. The court granted summary judgment for Collateral II, and TriMet appealed to the United States Court of Appeals for the Ninth Circuit.
Rule of Law
Holding and Reasoning (Tallman, J.)
What to do next…
Unlock this case brief with a free (no-commitment) trial membership of Quimbee.
You’ll be in good company: Quimbee is one of the most widely used and trusted sites for law students, serving more than 545,000 law students since 2011. Some law schools—such as Yale, Berkeley, and Northwestern—even subscribe directly to Quimbee for all their law students.Unlock this case briefRead our student testimonials
Learn more about Quimbee’s unique (and proven) approach to achieving great grades at law school.
Quimbee is a company hell-bent on one thing: helping you get an “A” in every course you take in law school, so you can graduate at the top of your class and get a high-paying law job. We’re not just a study aid for law students; we’re the study aid for law students.Learn about our approachRead more about Quimbee
Here's why 545,000 law students have relied on our case briefs:
- Written by law professors and practitioners, not other law students. 28,500 briefs, keyed to 983 casebooks. Top-notch customer support.
- The right amount of information, includes the facts, issues, rule of law, holding and reasoning, and any concurrences and dissents.
- Access in your classes, works on your mobile and tablet. Massive library of related video lessons and high quality multiple-choice questions.
- Easy to use, uniform format for every case brief. Written in plain English, not in legalese. Our briefs summarize and simplify; they don’t just repeat the court’s language.