North American Airlines, Inc. v. Wilmington Trust Co.

Note:

North American Airlines, Inc. (Lessee) leased a Boeing 767 airliner from Wilmington Trust Company (Lessor/Owner Trustee). During the course of its use, the airliner experienced blade failure and required repairs. One provision of the lease provided that Lessor/Owner Trustee would reimburse Lessee for repairs related to “full performance restoration”, meaning those involving restoration of engine performance (referred to in the opinion as “EGT”).

When Lessor/Owner Trustee refused to reimburse Lessee for repairs while also drawing down a letter of credit provided by Lessee in the event of Lessee’s breach of contract, Lessee sued Lessor/Owner Trustee for breach of contract and conversion. The trial court granted summary judgment in favor of Lessee on both claims. Lessor/Owner Trustee appealed. The New York Supreme Court, Appellate Division, Friedman, Gische, Kapnick, Kahn and Oing, JJ., affirmed.