OPINION AND ORDER

DENISE COTE, United States District Judge

Plaintiff S S Textiles International ("S S"), a Pakistani fabric manufacturer, has brought suit against Steve Weave, Inc. ("Steve Weave"), a Delaware corporation, and Kleen-Tex Industries, Inc. ("Kleen-Tex"), a Georgia corporation, for claims arising out of a contract for the shipment of fabric from Pakistan to Steve Weave for the benefit of Kleen-Tex. Plaintiff and defendants have cross-moved for summary judgment. For the reasons that follow, plaintiff's motion for summary judgment is granted as to its third claim for breach of contract against Steve Weave, its sixth claim for interest incurred as a result of such breach, and Steve Weave's counterclaim. Defendants' motion is granted as to plaintiff's first and second claims for payment on accepted unpaid drafts, its fourth claim of unjust enrichment, and its seventh and eighth claims for incidental damages.

Plaintiff is ordered to show cause why its fifth claim against Kleen-Tex for breach of contract should not be dismissed in light of this Opinion.

BACKGROUND

In December 1997, Steve Weave and S S signed a contract that provided for three shipments of fabric from S S in Pakistan to Kleen-Tex in Georgia, payable to S S's bank, Schon Bank, under a letter of credit from Kleen-Tex. The instant dispute concerns the extent of the parties' respective liability for the second and third shipments of fabric after payment for those shipments was refused. The following facts are undisputed or as alleged by the nonmoving party unless otherwise noted.

On December 7, 1997, Alltex Trading Company ("Alltex") informed Kleen-Tex that it had "the following to offer for shipment from Pakistan[:] 200,000 linear yards each December, January 1998, and 300,000 yards each February, March, April, May and June 1998." Payment was to be by "[l]etter of credit at sight."

On December 11, 1997, S S and Steve Weave signed a contract for the sale of that fabric. S S is identified as the "seller" and Steve Weave as the "buyer" in the contract. The contract provided for the sale of 270,000 yards of carded cotton sheeting, "C F Atlanta, GA." The material was to be shipped in three shipments of 90,000 yards each, on January 10, February 10 and March 10, 1998. Payment was to be by "letter of credit 30 days at sight."

In 1997, S S applied for and was given a loan from Schon Bank to finance the manufacture of the fabric. On December 22, 1997, Kleen-Tex applied for a letter of credit ("LOC") in the amount of $39,375 through Nationsbank. The LOC named S S as the beneficiary, expired January 30, 1998, and was payable "30 days after sight" upon the presentation of documents. The LOC provided that it was "subject to the Uniform Customs and Practice for Documentary Credits (1993 revision)." S S sent the first shipment of fabric on February 10, 1998.

On that same day, S S sent Nationsbank a bill of exchange requesting that $37,668.75 be paid to Schon Bank in Falisalabad under the LOC issued to S S by Kleen-Tex. On March 20, 1998, Nationsbank informed Kleen-Tex that it had accepted S S's draft drawn under the LOC for $37,668.75.

On February 13, 1998, Kleen-Tex amended the letter of credit, increasing the amount to $78,750 and extending the expiration date to March 2, 1998. On February 25, 1998, S S shipped the second batch of fabric and sent Nationsbank a second bill of exchange for $38,000 payable to Schon Bank under Kleen-Tex's LOC. On April 3, 1998, Nationsbank informed Kleen-Tex of discrepancies in the documents presented. Kleen-Tex instructed Nationsbank to refuse payment based on those discrepancies. Nationsbank informed Schon Bank that payment of its draft had been refused on April 17, 1998.

S S sent the third shipment on March 10, 1998. On that same date, S S sent Nationsbank a third bill of exchange for $40,700 payable to Schon Bank under Kleen-Tex's LOC. On April 6, 1998, Nationsbank notified Kleen-Tex that documents had been presented for payment of the draft to Schon Bank under the LOC. On April 21, 1998, Nationsbank informed Schon Bank that payment of the draft for the third shipment under the LOC had been refused because "as per customer, goods were defective and returned."

Meanwhile, Kleen-Tex decided that it would reject the first shipment of fabric. Steve Weave repurchased that shipment from Kleen-Tex and resold the fabric at a loss.

After payment for the second and third shipments under the LOC had been refused, S S revised the second and third bills of exchange ("the Drafts") to be drawn directly on Steve Weave, rather than on Nationsbank under Kleen-Tex's LOC. Steve Weave subsequently "accepted" the Drafts: the March 10 Draft was stamped "accepted" by Steve Weave's bank, Fleet Bank, and signed by a representative of Steve Weave on June 10, 1998; the February 25 Draft was stamped "accepted" by Fleet Bank and signed, but not dated, by a representative of Steve Weave. Steve Weave subsequently took possession of and resold the second and third shipments of fabric. On August 10, 1998, the Drafts were presented for payment to Steve Weave. Fleet Bank requested one or more extensions of the payment date on these Drafts. On November 18, 1999, Fleet Bank returned the "accepted unpaid [D]rafts" to Schon Bank.

S S has brought suit against Steve Weave for failure to pay on the two accepted Drafts, breach of contract for failure to pay for the two shipments of fabric, and unjust enrichment for retention of the shipped goods. S S has brought suit against Kleen-Tex for breach of contract for refusing the third shipment as nonconforming and for instructing its bank to refuse payment under the LOC for that shipment on grounds other than document discrepancies. The plaintiff has moved for summary judgment on all claims against Steve Weave and on Steve Weave's counterclaim, and for partial summary judgment on its claim against Kleen-Tex.

Defendants have cross-moved for summary judgment on all claims except for the breach of contract claim against Steve Weave, and have moved to strike two of the plaintiff's affidavits submitted in support of its motion for summary judgment.

DISCUSSION

The substantive law governing the case will identify those issues that are material, and "[o]nly disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). "A dispute regarding a material fact is genuine if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Mount Vernon Fire Ins. Co. v. Belize NY, Inc., 277 F.3d 232, 236 (2d Cir. 2002) (citation omitted). The moving party bears the burden of demonstrating the absence of a material factual question, and in making this determination, the Court must view all evidence in the light most favorable to the nonmoving party. Abdu-Brisson v. Delta Air Lines, Inc., 239 F.3d 456, 465-66 (2d Cir.), cert. denied, 122 S.Ct. 460 (2001). When the moving party has asserted facts showing that the nonmovant's claims cannot be sustained, the opposing party must "set forth specific facts showing that there is a genuine issue for trial," and cannot rest on the "mere allegations or denials" of his pleadings. Fed.R.Civ.P. 56(e); see also Goenaga v. March of Dimes Birth Defects Found., 51 F.3d 14, 18 (2d Cir. 1995). In deciding whether to grant summary judgment, this Court must, therefore, determine (1) whether a genuine factual dispute exists based on the evidence in the record, and (2) whether the facts in dispute are material based on the substantive law at issue.

1. Affidavits

The defendants have moved to strike affidavits from Muhammad Saeed Ahmad ("Ahmad") and Mian Muhammad Iqbal ("Iqbal") on the ground that Ahmad and Iqbal do not speak English and the affidavits are not accompanied by a translator's affirmation.

Ahmad is an officer of the plaintiff. The defendants have submitted no evidence of Iqbal's inability to speak English. To the extent that Ahmad is not fluent in English, the plaintiff has submitted a translator's certificate for Ahmad's affidavits with its reply papers; Ahmad has also submitted an affidavit stating that all affidavits were translated into Urdu and that he understood each before signing.

In a footnote, the defendants also object to the affidavits on the ground that Ahmad and Iqbal were "not subject to cross-examination by Defendants because they have not appeared for deposition." In his affidavits, Ahmad denies, among other things, the existence of the oral agreement pursuant to which Steve Weave argues it is entitled to offset certain amounts against amounts due S S, as well as Sheikh's authority to enter into such an agreement on S S's behalf. Ahmad asserts that he was repeatedly assured by Sheikh, who held himself out as a representative of Alltex or Steve Weave, that Steve Weave would make full payment on the Drafts. Ahmad also states that S S had had no dealings with Sheikh prior to the transactions at issue in this case, that S S never received any money Steve Weave paid to Sheikh, and that he does not know Sheikh's current location.

Magistrate Judge Dolinger ordered that the plaintiff produce its principals for deposition or allow the defendants to depose them by telephone or in person at the plaintiff's expense. S S was unable to obtain visas for its principals to travel to the United States. Defendants state without explanation that they "determined that it would not be feasible" to conduct a telephonic deposition; they also assert that it became impossible to travel to Pakistan after September 11, and that they accordingly have been unable to depose S S's principals. Given that the plaintiff's principals have not been deposed, the Court has not considered the substance of the affidavits submitted by the plaintiff in deciding this motion, although the documents attached to the affidavits, which are the records of these transactions, have been considered along with any arguments the defendants have made regarding the documents.

2. Failure to Pay on Accepted Drafts

S S cannot sue to enforce payment of the accepted Drafts. While S S has suffered an injury-in-fact from Steve Weave's non-payment on the Drafts, it cannot enforce the Drafts because it is not a holder, owner or payee. See, e.g., N.Y. U.C.C. § 3-301 (2002); Xanthopoulos v. Thomas Cook, Inc., 629 F. Supp. 164, 172 (S.D.N.Y. 1985); Palmer v. Brook, 239 N.Y.S. 511, 512 (1st Dep't), aff'd, 255 N.Y. 572 (1930); Farjeon v. Fulton Sec. Co., 233 N.Y.S. 577, 580 (1st Dep't 1929). Schon Bank is the undisputed holder, owner and payee of the Drafts. While the plaintiff has submitted an affidavit indicating the bank's willingness to be joined as a plaintiff, such joinder has not yet occurred. Plaintiff's first and second causes of action for non-payment on the accepted Drafts are dismissed.

3. Steve Weave's Breach of Contract

A. Modification of the Contract

Steve Weave maintains that it accepted the Drafts subject to an agreement with S S that Steve Weave would not be obligated to repay S S to the extent of any losses incurred in reselling the first shipment repurchased from Kleen-Tex, in selling the second and third shipments, and by Alltex in a prior, unrelated transaction with S S and another buyer, Paris Accessories. As evidence of this alleged agreement, Steve Weave has presented an affidavit of Steve Borowka, President of Steve Weave ("Borowka").

This affidavit is inadequate to create a question of fact as to the existence of this alleged agreement. Borowka's affidavit does not contain a sufficiently detailed description of the circumstances in which the agreement was allegedly made, the individuals who reached this agreement, or when these conversations occurred — although it does contain a relatively detailed description of the losses Steve Weave allegedly was to offset from amounts owed to S S. Nor does the affidavit indicate how Borowka learned any of the information he describes regarding this agreement.

The only written evidence of the existence of the alleged agreement are two exhibits offered by Steve Weave. The first of these is a July 16, 1998 email that appears to have been from Ahmad to Sheikh that contains the statement, "and also agree/confirm concession as per tel talk with you. Please pay the Bill Nos. 0701/98/036, 0701/98/047 and 0701/98/049 today."

Steve Weave has not shown any correlation between the bill numbers listed in the email and the shipments at issue here.

The defendants argue that Ahmad's "agree/confirm concession as per" his conversation with Sheikh refers to the alleged agreement between S S and Steve Weave pursuant to which Steve Weave was entitled to offset certain losses from the amounts due. Any inference that could be drawn from the mention of the word "concessions" is too slight to create a question of fact with regard to the existence of the highly detailed agreement on which Steve Weave relies. Further, any inference that may be drawn from that word is undercut by the fact that nothing else in the email appears to refer to the instant transaction.

The second document is a July 30, 1998 email from Sheikh to Ahmad, in which Sheikh states:

The payment for the 45" and 50" fabrics were made today (July 30th)[.] For the first container of 54" fabric, released to Steve Weave Inc. I will try to have a full account of the charge-backs and the balance ready for you by Friday, July 31st. If I am unable to get all the information ready by tomorrow, I will fax it to you by Monday, August 3rd.

The width of the fabric involved in each of the three shipments at issue in this case was 54 inches. The defendant argues that this document is relevant because it notes that the first container had been released to Steve Weave, and that Sheikh would attempt to get an accounting of chargebacks relating to that container. The plaintiff objects to this email on the ground that it appears on its face not to have been sent and is unauthenticated inadmissible hearsay. This document — which appears to refer to several unrelated transactions — is insufficient to create a question of fact as to the existence of the detailed oral agreement that Steve Weave asserts it reached with S S regarding the second and third shipments.

Even if, however, these documents were sufficient to raise a question of fact with regard to the existence of the alleged oral modification of the written contracts embodied in the accepted Drafts, evidence of such modification would be barred by the parol evidence rule. Under New York law, "where the parties have reduced their agreement to writing, evidence of prior or contemporaneous [oral] agreements may not be offered to contradict, vary, or subtract from the terms of the writing." Wallace Steel, Inc. v. Ingersoll-Rand Co., 739 F.2d 112, 115 (2d Cir. 1984); see also Inv. Ins. Co. of Am. v. Dorinco Reinsurance Co., 917 F.2d 100, 104 (2d Cir. 1990) (parol evidence rule precludes party from "introducing extrinsic evidence . . . in order to vary the plain meaning of the writing"); Elec. Switching Indus., Inc. v. Faradyne Elec. Corp., 833 F.2d 418, 422 (2d Cir. 1987). If the documents in question "are clear and unambiguous on their face, the [defendant] may not resort to parol evidence to contradict, vary, or explain them." Blumenreich v. N. Shore Health Sys., Inc., 731 N.Y.S.2d 638, 639 (2d Dep't 2001); see also Fleet Bank v. Rozanski, 629 N.Y.S.2d 560, 561 (4th Dep't 1995). Any prior or contemporaneous oral agreement between Steve Weave and Sheikh cannot be used to contradict Steve Weave's clear and unambiguous agreement embodied in the accepted Drafts to pay $79,012.50 to Schon Bank for the second and third fabric shipments.

Steve Weave has not explained when the alleged oral agreement was reached. To the extent that the alleged modification may have occurred subsequent to Steve Weave's acceptance of the Drafts on or about June 10, 1998, such modification would be unenforceable under the Statute of Frauds.

Under New York's Uniform Commercial Code, a modification of a contract that is required by the Statute of Frauds to be in writing must likewise be in writing. N.Y. U.C.C. § 2-209(3); see also Edward C. Flaherty Corp. v. State, 423 N.Y.S.2d 439, 442 (N.Y. Ct. Cl. 1980). The instant contract, for the sale of goods for $500 or more, fell within the scope of the Statute of Frauds and was required to be in writing. N.Y. U.C.C. § 2-201(1); Rosenfeld v. Basquiat, 78 F.3d 84, 93 (2d Cir. 1996). To the extent that after the execution of the Drafts, Steve Weave and S S entered into an agreement modifying the provisions of the Drafts, such agreement was similarly required to be in writing. Absent a writing evidencing this modification, it cannot be enforced.

B. Sheikh's Authority to Accept Payment

Steve Weave also maintains that it paid Sheikh $26,175.74 of the $79,012.50 owed to S S, and that any recovery by S S should be reduced by this amount. Steve Weave asserts Sheikh's actual, implied and apparent authority to accept payment as S S's agent. Under New York law, "an agency relationship results from a manifestation of consent by one person to another that the other shall act on his behalf and subject to his control, and the consent by the other to act." N.Y. Marine Gen. Ins. Co. v. Tradeline (L.L.C.), 266 F.3d 112, 122 (2d Cir. 2001) (citation omitted). Actual authority "is created by direct manifestations from the principal to the agent." Reiss v. Societe Centrale du Groupe des Assurances Nationales, 235 F.3d 738, 748 (2d Cir. 2000) (citation omitted). Whether actual authority exists "depends on the actual interaction between the putative principal and agent, not on any perception a third party may have of the relationship." Itel Containers Int'l Corp. v. Atlanttrafik Express Serv. Ltd., 909 F.2d 698, 702 (2d Cir. 1990). The "facts leading to [a] conclusion [of actual authority] must emanate from the principal and not from the agent." Brookfield Clothes, Inc. v. Tandler Textiles, Inc., 433 N.Y.S.2d 161, 162 (1st Dep't 1980); see also Inter Business Mktg., Inc. v. Kronengold, 522 N.Y.S.2d 154, 155 (1st Dep't 1987).

The consent for actual authority may be either express or implied from "the parties' words and conduct as construed in light of the surrounding circumstances." Riverside Research Inst. v. KMGA, Inc., 489 N.Y.S.2d 220, 223 (1st Dep't 1985), aff'd, 68 N.Y.2d 689 (1986). "[I]mplied actual authority . . . is dependent on verbal or other acts by a principal which reasonably give an appearance of authority" in a manner that is "brought home to the agent." Greene v. Hellman, 51 N.Y.2d 197, 204 (1980). Implied authority is thus a "kind of authority arising solely from the designation of the principal of a kind of agent who ordinarily possesses certain powers." Marfia v. T.C. Ziraat Bankasi, 100 F.3d 243, 251 (2d Cir. 1996) (citation omitted). To determine the extent of an authorization, courts must

look to the accompanying circumstances, including the situation of the parties, their relations to one another, and the business in which they are engaged; the general usages of the business in question and the purported principal's business methods; the nature of the subject matter and the circumstances under which the business is done.

Columbia Broad. Sys., Inc. v. Stokely-Van Camp, Inc., 522 F.2d 369, 375-76 (2d Cir. 1975). An "agent's power to bind his principal is coextensive with the principal's grant of authority.

One who deals with an agent does so at his peril, and must make the necessary effort to discover the actual scope of authority." Fed. Ins. Co v. Diamond Kamvakis Co., 536 N.Y.S.2d 760, 761 (1st Dep't 1989) (citation omitted); see also Ford v. Unity Hosp., 32 N.Y.2d 464, 472 (1973).

For apparent authority to exist, there must be "words or conduct of the principal, communicated to a third party, that give rise to the appearance and belief that the agent possesses authority to enter into a transaction" on behalf of the principal. Standard Funding Corp. v. Lewitt, 89 N.Y.2d 546, 551 (1997) (citation omitted) (emphasis in original). Apparent authority therefore requires proof of two facts: "(1) the principal was responsible for the appearance of authority in the agent to conduct the transaction in question, and (2) the third party reasonably relied on the representations of the agent." Herbert Constr. Co. v. Cont'l Ins. Co., 931 F.2d 989, 993-94 (2d Cir. 1991) (citations omitted); see also Reiss, 235 F.3d at 748; Hallock v. New York, 64 N.Y.2d 224, 231 (1984). An agent thus "cannot by his own acts imbue himself with apparent authority." Fleet Bank v. Consola, Riccitelli, Squadere Post No. 17, Inc., 701 N.Y.S.2d 182, 185 (3d Dep't 2000) (citation omitted); see also Fletcher v. Atex, Inc., 68 F.3d 1451, 1462 (2d Cir. 1995) (citation omitted); Network Mgmt. Serv. Group, Inc. v. Rosenkrantz Lyon Ross, Inc., 622 N.Y.S.2d 511, 512 (1st Dep't 1995). Although a third party is not generally required to inquire into the scope of the agent's authority, Herbert, 931 F.2d at 995-96, a duty of inquiry arises when "(1) the facts and circumstances are such as to put the third party on inquiry, (2) the transaction is extraordinary, or (3) the novelty of the transaction alerts the third party to a danger of fraud." FDIC v. Providence Coll., 115 F.3d 136, 141 (2d Cir. 1997) (citation omitted). Essentially, this duty of inquiry "amounts to an alternative way of asking whether the third party reasonably relied on the representations of the agent that he possessed authority to bind the principal." Id. (citation omitted).

In support of its contention that Sheikh had actual, implied or apparent authority to receive payments due to S S, Steve Weave relies on four pieces of evidence. Taken singly or together, the evidence relied on by Steve Weave is insufficient to raise a question of fact as to the existence of Sheikh's authority to receive the money Steve Weave owed to S S for the fabric at issue here.

The first document on which Steve Weave relies is a letter from Borowka, the President of Steve Weave, to Alltex, dated July 29, 1997, stating that in exchange for accepting goods that had been rejected by the buyer, Paris Accessories, S S had agreed to reimburse Alltex for losses in reselling the goods and demurrage, and noting that Sheikh had "pre-reimbursed" Alltex for the demurrage costs. To the extent that the letter may give rise to the inference that S S had authorized Sheikh to pay demurrage charges on its behalf in connection with an unrelated transaction, it is not evidence of actual authority for Sheikh to receive payments due to S S for the two shipments at issue here. Nor is the letter evidence of Sheikh's implied authority to accept payment of over $26,000 due for these two shipments.

Sheikh's advance of demurrage charges on an unrelated transaction is also not a basis for finding apparent authority. The acceptance of a payment of $26,000 due to S S was sufficiently extraordinary as to have triggered Steve Weave's duty to inquire, and Stephen McIntyre, Vice-President of Steve Weave, admitted that he did not do anything to determine that Sheikh had authority to accept payments due to S S. Indeed, the plaintiff has submitted substantial evidence that Steve Weave understood that Sheikh was an agent of Alltex, including the fact that Sheikh conducted his business out of Steve Weave's offices and used Alltex letterhead for his correspondence. Finally, Steve Weave has described no prior incident where a payment due to S S was made instead to Sheikh. In light of these circumstances, the July 29, 1997 letter does not raise an issue of fact that it was reasonable for Steve Weave to rely on S S's authorization of Sheikh to pay demurrage charges in a separate transaction as evidence of Sheikh's apparent authority to receive payments due to S S.

Steve Weave next relies on Borowka's testimony that Sheikh "always presented himself to me as an agent of S S (as well as other textile mills in Pakistan)," and that Sheikh represented "that he was in the United States as an agent for a Pakistani company, S S, which had particular fabrications that it was offering for sale." Evidence of both actual and apparent authority must originate with the principal, not the agent.

Steve Weave relies on S S's admission that it paid Sheikh's commission in connection with the transaction that is the subject of the instant dispute. Authorization to undertake certain actions in exchange for a commission does not constitute an actual or implied grant of authority to accept payment due the principal. Nor does the payment of a commission raise a question of fact regarding Sheikh's apparent authority to receive money belonging to S S and any reliance on this act by Steve Weave was unreasonable.

Finally, Steve Weave relies on a check Sheikh wrote to Alltex on October 20, 1998, one day after Steve Weave allegedly paid Sheikh on the instant contracts, for amounts allegedly owed by S S to Alltex in connection with a previous transaction. Acts occurring after payment was made to Sheikh are not probative of Sheikh's apparent authority to receive payment, and are insufficient to raise a question of fact with regard to his actual or implied authority to do so.

Taken singly or together, these four pieces of evidence do not raise a question of fact as to Sheikh's actual or apparent authority to receive payment on behalf of S S. For this reason, Steve Weave is not entitled to offset its debt to S S by any payment it made to Sheikh.

4. Incidental Damages

S S has claimed incidental damages, including damage to its reputation, interest payments on the loan from Schon Bank, and costs incurred in defending the suit brought by the Pakistani government for failure to repatriate funds. A seller, on the buyer's breach, is entitled to incidental damages, including "any commercially reasonable charges, expenses or commissions incurred in stopping delivery, in the transportation, care and custody of goods after the buyer's breach, in connection with return or resale of the goods or otherwise resulting from the breach." N.Y. U.C.C. § 2-710 (emphasis supplied). Interest payments may be recoverable if they were "reasonable and foreseeable" and "directly attributable to [the buyer's] breach." Bulk Oil (U.S.A.), Inc. v. Sun Oil Trading Co., 697 F.2d 481, 484 (2d Cir. 1983); see also Ernst Steel Corp. v. Horn Constr. Div., 481 N.Y.S.2d 833, 839 (4th Dep't 1984), amended by 486 N.Y.S.2d 1022 (4th Dep't 1985). Because the plaintiff has not submitted evidence regarding the existence and extent of any incidental damages it has suffered, its claim for such incidental damages must be dismissed with the exception of the claim for interest payments.

5. Unjust Enrichment

Plaintiff's fourth cause of action for unjust enrichment must also be dismissed. "[T]he existence of a valid and enforceable written contract governing a particular subject matter ordinarily precludes recovery in quasi contract . . . for events arising out of the same subject matter." MacDraw, Inc. v. CIT Group Equip. Fin., Inc., 157 F.3d 956, 964 (2d Cir. 1998) (citation omitted); see also Clark-Fitzpatrick, Inc. v. Long Is. R.R. Co., 521 N.Y.S.2d 653, 656 (2d Dep't 1987). Both the initial written contract and the Drafts are writings that govern the parties' contractual relationships with regard to the fabric shipments.

6. Kleen-Tex's Breach of Contract

S S claims that its demand on the LOC for the third shipment was wrongfully dishonored because Kleen-Tex had no right to refuse payment on the ground of nonconforming goods. While S S may well be able to sue Kleen-Tex for breach of the underlying contract, to the extent that it seeks recovery for wrongful dishonor of the LOC (i.e., dishonor for grounds not allowed by the LOC), this claim is properly brought against the issuing bank, not Kleen-Tex.

The contract between beneficiary (S S) and issuer (Nationsbank) is independent of both the contract between customer (Kleen-Tex) and beneficiary (S S), O'Grady v. First Union Nat. Bank, 250 S.E.2d 587, 232 (N.C. 1978), as well as the contract between issuer (Nationsbank) and customer (Kleen-Tex). Sunset Inv., Ltd. v. Sargent, 278 S.E.2d 558, 561 (N.C.Ct.App. 1981). Under North Carolina law and the Uniform Customs and Practices for Documentary Credits ("UCP"), the issuing bank's "involvement is altogether separate and apart from the transaction between the buyer and seller; its duties and liability are governed exclusively by the terms of the letter, not the terms of the parties' contract with each other." Courtaulds N. Am., Inc. v. N.C. Nat. Bank, 528 F.2d 802, 805 (4th Cir. 1975). Thus, to the extent that S S's claim is based on dishonor of the third Draft, this is at most a breach of the issuing bank's obligation to the beneficiary, not of the customer's obligation to the beneficiary.

Although S S has not moved for summary judgment on its breach of contract claim against Kleen-Tex, its claim for summary judgment against Steve Weave has been granted. Because a party may not recover twice on the same obligation, Stochastic Decisions, 995 F.2d at 1172, it would appear that S S's claim against Kleen-Tex for breach of contract must be dismissed.

CONCLUSION

For the foregoing reasons, plaintiff's motion for summary judgment is granted as to its third claim for breach of contract against Steve Weave and Steve Weave's counterclaim. Defendants' motion is granted as to plaintiff's first and second claims for payment on accepted unpaid drafts, on its fourth claim of unjust enrichment, and on its seventh and eighth claims for incidental damages.

Plaintiff's motion is also granted as to its sixth claim for interest incurred as a result of Steve Weave's breach. Plaintiff shall provide a proposed judgment against all defendants, including defaulting defendant Sheikh, with an interest calculation within ten days and show cause why its breach of contract claim against Kleen-Tex should not also be dismissed. The defendants shall have five days to respond to the proposed judgment.

SO ORDERED.