90 F.3d 1382 (8th Cir. 1996), 95-2959, Moog World Trade Corp. v. Bancomer, S.A.

Docket Nº:95-2959.
Citation:90 F.3d 1382
Party Name:MOOG WORLD TRADE CORPORATION, Plaintiff--Appellant, v. BANCOMER, S.A.; Boatmen's National Bank of St. Louis, Defendants--Appellees.
Case Date:July 30, 1996
Court:United States Courts of Appeals, Court of Appeals for the Eighth Circuit
 
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Page 1382

90 F.3d 1382 (8th Cir. 1996)

MOOG WORLD TRADE CORPORATION, Plaintiff--Appellant,

v.

BANCOMER, S.A.; Boatmen's National Bank of St. Louis,

Defendants--Appellees.

No. 95-2959.

United States Court of Appeals, Eighth Circuit

July 30, 1996

Submitted Feb. 16, 1996.

Page 1383

Adrian Philipp Sulser, St. Louis, MO, argued (Stefan J. Glynias, on the brief), for appellant.

Kevin M. Fong, San Francisco, CA, argued (Robert A. Gutkin, San Francisco, CA, and Steven Schwartz, St. Louis, MO, on the brief), for appellee.

Before LOKEN, BRIGHT, and MORRIS SHEPPARD ARNOLD, Circuit Judges.

LOKEN, Circuit Judge.

This case requires us to apply the familiar due process limitation on personal jurisdiction to the rather unfamiliar realities of financing international trade. Moog World Trade Corp. ("Moog") agreed to sell automobile parts to its customer in Mexico, Commercializadora de Refacciones en Generales S.A. ("CRG"). To finance this purchase, CRG had its Mexican bank, Bancomer, S.A., issue an irrevocable commercial letter of credit naming Moog as beneficiary. When Moog's draw under the letter of credit was dishonored by Boatmen's National Bank, the Missouri confirming bank, Moog sued Boatmen's and Bancomer. The district court 1 dismissed Bancomer for lack of personal jurisdiction, and Moog appeals that ruling. We affirm.

I.

Bancomer issued the letter of credit in August 1992 at the request of its customer, CRG. The letter of credit promised that Moog as beneficiary would be paid $383,636 at Boatmen's offices in St. Louis upon Moog's timely presentation of a sixty-day time draft accompanied by specified documents confirming that Moog had shipped the auto parts to CRG. Bancomer issued the letter of credit by a tested telex to Boatmen's. Boatmen's then sent the letter of credit to Moog, with a cover letter explaining:

We enclose herewith an authenticated irrevocable letter of credit opened in your favor by [Bancomer].

* * * * * *

Drafts are to be drawn on the Boatmen's National Bank of St. Louis, St. Louis, Missouri.

* * * * * *

We [Boatmen's] add our confirmation to the issuing bank's letter of credit and engage with you that draft(s) and/or documents drawn under and in compliance with the terms of this credit will be duly honored. 2

Two weeks before the letter of credit expired, Moog presented a draft and supporting documents to Boatmen's, which dishonored the draw, noting discrepancies between the shipping documents and the letter of credit's specifications. Moog had time to cure these discrepancies by submitting amended documents to Boatmen's. Instead, Moog instructed Boatmen's to present the dishonored documents to Bancomer in Mexico.

Page 1384

When Bancomer refused to honor the draw, citing six alleged documentary discrepancies, a Moog representative and its attorney visited Bancomer's office in Guadalajara, Mexico, requesting an explanation of the dishonor. Bancomer responded that Moog should contact Boatmen's.

With the letter of credit now expired, Moog brought this diversity action, claiming wrongful dishonor and untimely notice of dishonor by both banks. The district court dismissed Bancomer for lack of personal jurisdiction and dismissed the untimely-notice-of-dishonor claim against Boatmen's on the merits. Moog dismissed its wrongful dishonor claim against Boatmen's without prejudice and appealed the district court's rulings. Moog later dismissed its appeal against Boatmen's, leaving for us only the question whether the district court has personal jurisdiction over Bancomer.

"Once a defendant has challenged a federal court's jurisdiction, the plaintiff bears the burden of proving that jurisdiction exists." Falkirk Mining Co. v. Japan Steel Works, Ltd., 906 F.2d 369, 373 (8th Cir.1990). Bancomer challenged the district court's jurisdiction, submitting uncontroverted evidence that it has no office, employee, or property in Missouri; is not qualified to do business in Missouri; pays no Missouri taxes; and transacts no other business in Missouri. Moog responded by submitting uncontroverted evidence that, in the two years prior to August 1992, Bancomer issued thirty-six letters of credit in favor of Missouri beneficiaries, in the total amount of $4.7 million, including four prior letters of credit at the request of CRG for the benefit of Moog in amounts of $100,000, $200,000, $250,000, and $389,000. Because the record does not reflect the status of the transaction between Moog and CRG underlying the letter of credit, and because the letter of credit is independent of that underlying transaction, the personal jurisdiction issue turns entirely upon the letter of credit facts of record. We review this jurisdiction issue de novo. See General Elec. Capital Corp. v. Grossman, 991 F.2d 1376, 1387 (8th Cir.1993).

II.

The federal court in a diversity case must determine whether defendant is subject to the court's jurisdiction under the state long arm statute, and if so, whether exercise of that jurisdiction comports with due process. As pertinent here, the Missouri long arm statute confers jurisdiction over "any cause of action arising from ... (1) [t]he transaction of any business within this state [or] (2) [t]he making of any contract within...

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