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Kirchhoff-Consigli Construction Management, LLC v. Deluxe Building Systems

United States District Court for the Middle District of Pennsylvania

2017 WL 3601981 (2017)

Facts

Kirchhoff-Consigli Construction Management, LLC (KCCM) (defendant) was the general contractor and Deluxe Building Systems, Inc. (Deluxe) (plaintiff) was the subcontractor for building a university expansion. As part of the subcontract between KCCM and Deluxe, Deluxe was required to obtain an irrevocable standby letter of credit in the amount of $1 million for the benefit of KCCM. The letter was silent regarding when KCCM could draw on the letter of credit, and the underlying subcontract only mentioned that Deluxe was obligated to get the letter. KCCM sued Deluxe for breach of contract, and Deluxe counterclaimed for breach of contract and unjust enrichment, alleging KCCM failed to pay Deluxe for work performed. While the matter was pending, KCCM sent a letter to the issuer of the letter of credit and withdrew the entire $1 million. After the draw, Deluxe sought to amend its counterclaim to allege the draw was a breach of contract, it resulted in unjust enrichment, and it was a breach of the Uniform Commercial Code’s (UCC) letter-of-credit warranty.

Rule of Law

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Issue

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Holding and Reasoning (Brann, J.)

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