July 2026
DCW Monthly: July 2026
Courts have been circling the same idea since 1765: the bank pays unless there is fraud. What they have never
DCW Litigation Digest
North American Airlines, Inc. v. Wilmington Trust Co.
Lessee sued Lessor/Owner Trustee for breach of contract and conversion.
North American Airlines, Inc. v. Wilmington Trust Co.
171 A.D.3d 616 (N.Y. App. Div. 2019) [USA]
Topics: Breach of Contract; Conversion of LC Proceeds; Reimbursement
Parties:
• Plaintiff/Lessee – North American Airlines, Inc.
• Defendant/Lessor/Owner Trustee – Wilmington Trust Co.
171 A.D.3d 616 (N.Y. App. Div. 2019) [USA]
Topics: Breach of Contract; Conversion of LC Proceeds; Reimbursement
Parties:
• Plaintiff/Lessee – North American Airlines, Inc.
• Defendant/Lessor/Owner Trustee – 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.