Wichita Eagle and Beacon Publishing Co., Inc. v. Pacific National Bank of San Francisco

Wichita Eagle and Beacon Publishing (plaintiff) leased property to Circular Ramp Garages (CRG), which was to build a parking garage, and obtained a document from Pacific National Bank (defendant) titled Letter of Credit No. 17084 obligating the Bank to pay $250,000 once WEB showed (1) CRG had breached the lease, (2) WEB had given CRG notice of the breach, and (3) the breach continued 30 days after notice. When CRG defaulted and WEB tried to draw on the document, the Bank refused, and the trial court found the document was a true letter of credit; WEB sued and the case reached the Ninth Circuit.

Whether a document that requires proof of an actual default under a separate agreement before triggering payment is a guaranty contract rather than a letter of credit under the UCC.