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BANCO DEL ESTADO v. NAVISTAR INT'L TRANSP. CORP.

September 24, 1996

BANCO DEL ESTADO, Plaintiff,
v.
NAVISTAR INTERNATIONAL TRANSPORTATION CORP. and NAVISTAR INTERNATIONAL EXPORT CORP., Defendants.



The opinion of the court was delivered by: DUFF

 Defendants, Navistar International Transportation Corporation and Navistar International Export Corporation (collectively "Navistar"), have moved this court to dismiss the Complaint of the plaintiff, Banco del Estado (the "Bank") pursuant to Federal Rule of Civil Procedure 12(b)(6).

 Under Federal Rule of Civil Procedure 12(b)(6), this court must presume that all of the facts alleged in the Complaint are true, and must examine them in the light most favorable to the plaintiff. Ellsworth v. City of Racine, 774 F.2d 182, 184 (7th Cir. 1985), cert. denied, 475 U.S. 1047, 89 L. Ed. 2d 574, 106 S. Ct. 1265 (1986). A Rule 12(b)(6) motion to dismiss is granted if the plaintiff is unable to prove any set of facts that would entitle it to relief. Conley v. Gibson, 355 U.S. 41, 45-46, 78 S. Ct. 99, 102, 2 L. Ed. 2d 80 (1957). For the reasons explained below, this court grants the motion to dismiss in part and denies the motion to dismiss in part.

 I. Background

 The Complaint alleges that in 1993 the Bank issued two letters of credit to finance Sidauto S.A.'s ("Sidauto") purchase of eighty buses to be imported into Columbia for use in public transportation. The letters of credit were issued in favor of the seller of the eighty buses, Navistar, for the total amount of $ 1,722,000. In order to collect the amount pledged in its favor in the letters of credit, Navistar presented documents (the "Presentment Documents") to the Bank which stated that Navistar had shipped "new 1993 buses" for import into Columbia. The Presentment Documents also contained vehicle identification numbers ("VIN numbers") which identified the buses as 1990 model year buses. However, the Bank did not know the meaning of the VIN numbers at the time that Navistar presented the documents. Prior to the arrival of the buses in Columbia, the Bank paid Navistar the purchase price of the buses based on the Presentment Documents.

 Colombian law prohibits the importation of vehicles that are not newly manufactured. The Colombian customs authority, Impuestos y Aduanas Nacionales, seized the 1990 model year buses upon their arrival in Columbia.

 Based on these facts, the Complaint asserts seven causes of action: (1) Breach of Warranty under Uniform Commercial Code Section 5-111; (2) Fraud; (3) Negligent Misrepresentation; (4) Breach of Sales Contract; (5) Breach of the Implied Warranty of Fitness for a Particular Purpose; (6) Breach of the Implied Covenant of Good Faith; and (7) Violation of the Illinois Consumer Fraud Act.

 II. Language Translation

 Navistar claims that one error pervades the Complaint. Navistar states that the Bank's Complaint erroneously alleges that Navistar warranted or represented in the Presentment Documents that the buses were "new 1993 buses," "1993 model year buses," or "new 1993 model year buses." The "PRODUCT DESCRIPTION" section of the Presentment Documents provides as follows:

 
[Quantity omitted] unidades buses nuevos vendidos ano de 1993, carroceria nueva marca Wayne chasis International serie 3700 con motor diesel 7.31, anticontaminante.

 The Bank translated this section as follows:

 
[Quantity Omitted] units newly sold buses year of 1993, new body brand Wayne International chassis series 3700 with 7.3L anti-contaminant diesel motor.

 According to Navistar, the Bank is bound to the English translation of the relevant portion of the Presentment Documents. We disagree.

 Navistar correctly suggests that factual assertions in pleadings constitute judicial admissions, which bind the party who makes them. Brunswick Leasing Corporation v. ITSI Management Services Corporation, 1990 U.S. Dist. LEXIS 16824, 1990 WL 103648 (N.D. Ill. 1990); American Title Insurance Co. v. Lacelaw Corp., 861 F.2d 224, 226 (9th Cir. 1988). Based on such judicial admissions, a party may plead itself out of court. Where, as in this case, a copy of a written instrument is attached to the complaint as an exhibit, the written instrument is a part of the complaint and its factual assertions constitute judicial admissions. See Fed.R. Civ.P. 10(c). When such an exhibit contradicts an assertion in the complaint and reveals information which prohibits recovery as a matter of law, the information provided in the exhibit trumps the assertion in the complaint. Whirlpool Financial Corp. v. GN Holdings, Inc., 873 F. Supp. 111, 123 n.18 (N.D. Ill.), aff'd., 67 F.3d 605 (7th Cir. 1993).

 Here, however, the attachments to the Complaint include copies of both the original Spanish versions of the Presentment Documents and English translations of the Presentment Documents. The Bank admits that the English translations which are attached to the Complaint are somewhat flawed. The proper English translation of the relevant language in the Presentment Documents, attached to the Bank's response to this motion and undisputed by Navistar, reads "new 1993 buses sold." Because the original Spanish versions of the Presentment Documents were attached to the complaint, this court finds that the Bank did not make a "judicial admission" of the erroneous English translation. The copies of the original Presentment Documents, which ...


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