Hemker Gale, PC St Louis O?ice' 12 Wolf Creek Dr., Ste. 100 16 South Broadivay, Ste. 2000 Bellewllc, IL 62226 St. Louis, MO 63102 ATTORNEYS AT LAW T: 618-257-7308 F: 618-257-7353 Chicago Of?ce: 200 West Madison St., Ste. 2700 Chicago, IL 60606 T: 312-419-9090 Laura C. Oberkfell E-mail: ch@greensfelder.com Direct Dial: (618) 239-3604 September 16, 2013 State of Illinois Court of Claims Delores J. Martin, Deputy Clerk 630 South College Spring?eld, IL 62758 Re: 05CC3350 Union Planters Bank, NA. Dear Ms. Martin: Enclosed for ?ling please ?nd the original and six (6) copies of our Reply Memorandum in Support of Claimant?s Motion for Summary Judgment regarding the above-referenced matter. Please return a ?le-stamped copy in the self-addressed stamped envelope, which I have enclosed for your convenience. Thank you very much for your cooperation and assistance in this matter. Very truly yours, GREENSFELDER, HEMKER GALE . ra C. Oberkfell LCO/ble Enclosures cc: James Rammelkamp/ Lee Ann Petty .L Ill MERITAS LAW FIRMS WORLDWIDE IN THE COURT OF CLAIMS OF THE STATE OF ILLINOS UNION PLANTERS BANK, N.A., Claimant, 3 vvs. No. 05-CC-3350 DEPARTMENT OF NATURAL i RESOURCES, STATE OF ILLINOIS, Respondent. i REPLY MEMORANDUM IN SUPPORT OF MOTION FOR SUMMARY JUDGMENT This Reply Memorandum is submitted by Claimant, Regions Bank, successor by merger to Union Planters Bank, NA, as successor in interest to The First National Bank of Wood River, in support of its Motion for Summary Judgment pursuant to 735 ILCS and in reply to the Opposition ?led by the Department of Natural Resources, State of Illinois. INTRODUCTION Claimant, Regions Bank, successor by merger to Union Planters Bank, NA, as successor in interest to The First National Bank of Wood River (?Claimant?) brought this action in 2005, 1. n? n-P nrornf anr?\ on behalf Surefire Coal, Inc. (?Sure?re?). Seventeen years later, in correspondence dated March 29, 2005, the Department requested instructions from Claimant on presentation of Sure?re?s bond instruments, attached hereto and incorporated herein by reference as Exhibit B. These are the only undisputed material facts the Court is permitted to consider as a matter of law. On July 19, 2007, Claimant ?led its Motion for Summary Judgment and Memorandum in Support, arguing that, as a matter of law, the Letter expired on December 12, 1987; that the Department failed to demand payment before the expiration of the Letter and/or within a reasonable amount of time; and that the Department?s demand for payment failed to comply with the terms of the Letter. On July 22, 2013, the Department was granted leave to ?le its Opposition to Regions? Motion for Summary Judgment (?Opposition?) instanter. In its Opposition, the Department lays out eleven numbered paragraph which it contends are ?Undisputed Material Facts.? However, paragraphs 1 through 7 and paragraph 10 relate to the relationship between the Department and Sure?re and an alleged mining permit. As will be discussed below, the Letter is an independent obligation, and thus the Court is not permitted to consider any evidence outside the Letter in determining Claimant?s obligations. Likewise, the Department?s assertions in paragraphs 8, 9, and 11 relate to other alleged bonding instruments, which the Court is also not permitted to consider because they are outside of the Letter and irrelevant. The Department also states that ?it is uncontroverted that the face of the Letter of Credit does not contain an ?expiration date?.? This statement is false, as the expiration date is the subject of the Motion for Summary at issue. should be interpreted with reference to the underlying mining permlt, the law 18 Clear that tne Claimant and the Court are not permitted to interpret the Letter by referring to any underlying contracts or obligation. The Department claims that Letter is ambiguous but fails to offer any alternative reasonable interpretation of the expiration provision. In the alternative, even if the Court accepts the Department?s arguments, the Department failed to make a timely demand for payment, and requiring payment on the Letter would be inequitable. Furthermore, the Department fails to address its failure to present the documents called for by the Letter, which were required as a matter of law. ARGUMENT The Department argues that the terms of the Letter should be interpreted with reference to Sure?re?s mining permit; that the expiration date of the Letter cannot be determined due to an alleged ambiguity in its language; and that the Department had no reason to demand payment on the Letter until Sure?re defaulted on its obligations under the mining permit. The Department?s arguments are erroneous for several reasons: 1) the Letter is independent of and cannot be interpreted by means of any underlying contract or obligation; 2) the Letter is not ambiguous and plainly expired on December 12, 1987; and 3) in the alternative, even if the Court accepts the Department?s arguments, the Department failed to make a timely demand for payment under its own theory, and requiring payment on the Letter would be inequitable. Furthermore, the Department?s Opposition completely fails to address the fact that it has not complied with the terms on the face of the Letter. I. The Letter is an independent undertaking and cannot by interpreted by any instrument or evidence outside of the Letter. In its Opposition, the Department argues that the expiration date of the Letter was tied a ?ining permit issued to Sure?re. The Department argues that Sure?re?s mining permit had a rive-year term with a continuous bonding obligation, and once issued, the permit was not revisited until the time renewal is agreed upon between Sure?re and Department. However, the obligation of a letter of credit is completely independent of any other obligation and exists without reference to the underlying agreement between the Claimant?s customer (Sure?re) and the bene?ciary of the Letter (the Department). A ?stand-by? letter of credit authorizes the issuing bank to pay the named bene?ciary a sum of money if, within the time speci?ed by the letter, the bene?ciary presents certain documents, usually attesting or showing that the party who procured the letter has defaulted on an obligation to the bene?ciary. Newcastle Properties, Inc. v. Shalowitz, 221 Ill. App. 3d 716, 720, 582 1165, 1167 (1St Dist. 1991). Thus, a stand-by letter of credit involves three separate and distinct contacts or agreements: 1) the contract between the bank and its customer whereby the bank agrees to issue the letter of credit to the bene?ciary, 2) the underlying contract between the bank?s customer and the bene?ciary, and 3) the letter of credit itself. Stringer Construction Co. v. La Grange State Bank, 148 Ill. App. 3d 621, 625, 499 948, 951 (lSt Dist. 1984). It is well settled that the letter of credit is independent of 'the underlying obligation between the bank?s customer and the bene?ciary of the letter of credit. Pastor v. Nat ?1 Republic ofChicago, 76 I]l.2d 139, 147?148, 390 894, 897 (1979) (?The obligation of the credit is without reference to the compliance of the buyer (customer) or the seller (bene?ciary) with the underlying contract?); Bazaar, Inc. v. Exchange Nat ?1 Bank of Chicago, 168 Ill. App. 3d 811, 813, 523 57, 58 (1Sit Dist. 1988) letter of credit] is independent of the underlying agreement between the customer and the bene?ciary?); Professional Modular Surface, Inc. v. Uniroyal, Inc, 108 Ill. App. 3d 1046, 1049-1050, 440 177, 179 (1St Dist. 1982) (?The letter of credit is essentially a contract between the issuer and the bene?ciary. and is recognized as independent of the underlying contact between the customer and the bene?ciary?); Pioneer Bank Trust Co. v. Seiko Sporting Goods, USA, Ca, 184 Ill. App. 3d 783, 788, 540 808, 811 (1.51 Dist. 1989) (?The letter of credit is independent of the underlying contract and the obligations under the letter of credit have no relationship to compliance of the buyer or seller with the underlying contract?); Stringer Construction Co., Inc, 102 Ill. App. 3d at 923, 430 at 4; Vill. OfLong Grove v. Austin Bank ofChicago, 268 Ill. App. 3d 70, 74, 644 456, 458 (2d Dist. 1994). 8 Because the bank?s obligation on a letter of credit does not depend on the compliance of the parties with the underlying contact, the bank is permitted to consider only the documents called for by the letter in determining whether to pay on the letter. Pastor, 76 Ill.2d at 147-148, 390 at 897. This general rule, known as the independence principle, means that the bank may only determine whether the documents presented conform to the requirements of the letter of credit in determining whether to honor the demand. Vill. of Long Grove, 268 Ill. App. 3d at 74, 644 at'458. Because. of the independence principle, neither the bank nor a reviewing court is permitted to go behind the letter of credit or consider the underlying obligations between the bank?s customer and the letter?s bene?ciary in determining whether the letter of credit was payable. Id; Stringer Construction Co, Inc, 102 Ill. App. 3d at 923, 430 at 4. Although a letter of credit may reference the underlying contract between the bank?s customer and the bene?ciary, if the terms of the letter do not speci?cally adopt the underlying contract, the letter is not dependent on the underlying agreement. Pastor, 76 111.2d at 151, 390 at 899. letter of credit is an undertaking independent of any underlying contract. As such the obligation to pay does not depend upon the underlying contract or its performance unless it is so provided in the letter of credit. The terms and conditions of the letter of credit determine and govern the bank?s obligation to pay.? Id. In Pastor, the plaintiff, an insurance agent, procured a letter of credit in favor of the insurance company for which he acted as agent. The letter of credit authorized the insurance company to draw against the letter for the recovery of any debt owed to the company under the agency contract. Id at 144, 895. The insurance company was later liquidated by a court, and the liquidator then attempted to draw against the letter. Id. The insurance agent argued that the liquidation order terminated the agency contract before the liquidator attempted to draw against the letter, and that the letter of credit was enforceable only while the underlying agency contract remained in effect. Id. at 151, 899. The Supreme Court disagreed, ?nding that, while the letter referred to the agency contract as the basis for amounts to be drawn on the letter, the letter did not adopt the terms of the agency contract. Thus, the bank?s obligations were not conditioned on the continued validity of the agency contract. Id. In this case, the Department argues that the December 12, 1987, expiratiOn date would have caused the Letter to expire in middle of Sure?re?s ?ve-year mining permit, leaving Sure?re without the bonding required under that permit. The only evidence on the face of the Letter cited by the Department in support of this contention is the fact that the Letter refers to ?Permit No. 129.? However, the Letter refers to the mining permit only in the heading, not in the body of the Letter. See Exhibit A. Nothing in the Letter links the terms of the Letter to the duration of the permit or Sure?re?s obligations under the permit. Id. The only condition for payment was that the Department timely present a sight draft accompanied by ?a signed statement from the Department that the Perrnittee?s acts or failure to act warrant forfeiture of this Irrevocable Letter of Credit, pursuant to 62 Ill. Admin. Code 1806.12(c) and 1808.13.? Id. Notably, both of those sections of the Illinois Administrative Code were repealed in 1987, which further reinforces The December 12, 1987 expiration date. The Department?s argument that the Letter was valid after December 12, 1987 because it would otherwise have expired in the middle of Sure?re?s mining permit imposes terms and conditions not contained within the Letter. The Letter does not adopt the mining permit or tie the term of the Letter to the mining permit. The only path to the Department?s argument is through the mining permit, but reference to that underlying agreement in determining the bank?s obligation to pay is prohibited as a matter of law. The Department admits in its af?davit that it participated in negotiating the issuance of the Letter (see Opposition Af?davit 1] 7), and they could have negotiated terms speci?cally adopting the mining permit, but did not do so. court cannot remake a contract and give a litigant a better bargain than he himself was satis?ed to make.? Newcastle Properties, Inc, 221 Ill. App. 3d at 722-723. 582 at 1168-1169. What the Department now alleges it ?intended? as terms for the Letter is irrelevant and such evidence is improper parol evidence. Thus, the obligations of the Letter are completely independent of the existence, terms, and operation of the mining permit, and, as a matter of law, the Court may not consider the mining permit in determining the obligations of the Claimant to pay on the Letter. II. The Letter is unambiguous that it expired on December 12, 1987. The Department claims that Letter is ambiguous but fails to offer any reasonable alternative interpretation of the expiration provision and fails to consider the plain language of the Letter. In fact, the Letter is unambiguous on its face that it expired on December 12, 1987. In construing the nature and terms of a letter of credit, the same general principles apply which govern other written contracts. Stringer Construction Co., 148 Ill. App. 3d at 626, 499 at 952. Where the issue before the court is one of contact construction, the court may determine the meaning of a letter of credit from the instrument itself as a matter of law. Newcastle Properties, Inc, 221 Ill. App. 3d at 722-723, 582 at 1168-1169. The meaning of a written agreement must be determined from the words used by the parties. Stringer Construction Co., 148 Ill. App. 3d at 626, 499 at 952. When the terms of a contract are clear and unambiguous, they must be given their plain and ordinary meaning. Thompson 12. Gordon, 241 Ill.2d 428, 441, 948 39, 47 (2011); Newcastle Properties, Inc, 221 Ill. App. 3d at 722?723, 582 at 1168?1169; Molter Corp. v. Antwest Surety Ins. Co., 267 Ill. App. 3d 718, 721, 642 919, 922 (3d Dist. 1994). Whether or not an ambiguity exists is a matter of law for the court to determine. Newcastle Properties, Inc, 221 Ill. App. 3d at 722?723, 582 at 1168-1169. The mere fact that the parties do not agree upon the meaning of the terms of a contract does not create an ambiguity. 1d. at 728, 1172. A contract is considered ambiguous only if it is capable of being understood ?in more senses than one.? Id. The Department argues that the language the Letter is ambiguous, speci?cally the provision which states: This Letter of Credit will automatically extend for an additional term of One (1) year unless the Bank provides at least ninety (90) days? notice prior to the expiration date that it does not wish to extend the Letter of Credit for an additional period. The Department argues that ?the only reasonable interpretation of that language under the mining permit for which it is based is that the letter is automatically renewable and will remain in full force and effect unless the bank gives the parties 90 notice prior to automatic renewal that it no longer wishes to carry the letter.? Thus, the only alternative interpretation of the Letter offered by the Department references the terms of the underlying mining permit. As discussed above, the Letter is completely independent of the mining permit, and neither the Claimant nor the Court is permitted or authorized to consider the permit in determining whether the Claimant must honor the Department?s demand. Moreover, the only alternative interpretation offered by the Department is not reasonable. A court will not interpret a contract in manner that would render provisions meaningless or in a way that is contrary to the plain and obvious meaning of the language. Thompson, 241 Ill.2d at 441, 948 at 47. When language is inserted into a contract, it is presumed that it was done purposefully and the language used is to be given effect. Id. It is a rule of contract construction that no word is to be treated as meaningless if any reasonable meaning consistent the contract can be given to it. Realty Inv. Co. v. Consumers Budget Loan Co., 8 Ill.App.3d 206, 208, 289 696, 698-699 (5th Dist. 1972). The Department apparently interprets the Letter to state that its original term was inde?nite and without expiration. However, this interpretation fails to account for the fact that an ?expiration date? is Speci?cally referred to in that very sentence. If the original term was open-ended and dependent on the continued renewal of the permit between Sure?re and the Department, there would be no purpose for the provision under which the Letter would renew for ?an additional term.? There would be no need to extend the letter of credit for another term if the original term were inde?nite. Thus, the language of the Letter is clear that it is not valid inde?nitely and that it did have an expiration date. The only reasonable interpretation of the expiration provision is plain from the phrase ?an additional term of One (1) year.? By specifying that the Letter would automatically renew for an additional term of one year, the language is clear that the original term of the letter was also one year. Otherwise the word ?additional? serves no purpose where the Letter could simply have stated that it would automatically extend for a term of one year. Thus, the word ?additional? re?ects that the original term of the Letter was one year. The Department argues that the Letter was automatically renewable for an inde?nite period unless the Claimant gave notice that it was not going to be extended. However, the language of the Letter is plain on its face that the Letter would renew only 9139;. In order to make a letter of credit operable inde?nitely, the renewal clause must make clear that multiple future expiration dates are contemplated. Molter Corp, 267 Ill. App. 3d at 720, 642 at 921-922 clause at issue provides that the letter will be ?automatically extended for one 5 year from the present or any future expiration date. This language in the clause indicates the Bank?s intent to extend the credit to Amwest for an inde?nite period of time.? Emphasis in the original). Where the language of the letter of credit is clear that only extended term is contemplated, the letter is not valid inde?nitely. Stringer Construction Co., 148 Ill. App. 3d at 626, 499 at 952 (A provision allowing an extension of the expiration date for ?an 9? additional period of up to one (1) year clearly evinces an understanding that the letter of credit would not be extended beyond one year?). Here the Letter stated: ?This Letter of Credit will automatically extend for an additional of One (1) year unless the Bank provides at least ninety (90) days? notice prior to the expiration date that it does not wish to extend the Letter of Credit for an additional period.? See Exhibit A. Had it been intended to automatically renew inde?nitely, the Letter would have stated that it could be extended for multiple terms. Instead, the Letter clearly uses singular terms when referring to the additional term in two separate places within the expiration provision. The notice provision merely allowed the Claimant to cut off the additional one year term, and did not create an inde?nite obligation to pay until notice was given. The Department also emphasizes that the Letter was ?irrevocable.? In the context of letters of credit, irrevocability simply means that once an irrevocable credit is established, it cannot be subsequently modi?ed or revoked without the consent of the bene?ciary. Stringer Construction Co., 148 Ill. App. 3d at 625, 499 at 951. There is no evidence or allegation 1 that the Letter was modi?ed or revoked subsequent to its issuance, only that the Letter expired under the terms stated on its face at the time of its issuance. An agreement is ambiguous only if it is capable of being understood in more ways than one, but the Department?s asserted interpretation of the letter of credit is not reasonable because it improperly refers to the mining permit and deliberately fails to consider of the plain language on the face of the Letter. The only reasonable interpretation of the language of the letter of credit is that its original term was one year, i.e. through December 12, 1986 (?This Letter of Credit will automatically extend for an additional term of One (1) year?), which could be extended for another one year term, i.e. through December 12, 1987, unless the Claimant provided notice prior to September 12, 1986, that it did not wish to extend the letter of credit for the additional term (?unless the Bank provides at least ninety (90) days? notice prior to the expiration date that it does not wish to extend the Letter of Credit for an additional period?). See Exhibit A. These terms are contained in the unambiguous language on the face of the Letter. It is undisputed that the Department did not present a sight draft accompanied by the required signed statement prior to December 12, 1987. The date ?xed in a letter of credit for its expiration is an condition, and there must be strict compliance with that date before there can be liability. Christenson v. Broadway Bank Trust Co., 129 Ill. App. 3d 928, 930, 473 431, 433 (1St Dist. 1984). Because the December 12, 1987 expiration date is unambiguous as a matter of law and because it is undisputed that the Department did not properly demand payment on the letter prior to December 12, 1987, Claimant is entitled to summary judgment as a matter of law. I In the alternative, even if the Court accepts the Department?s arguments, the Department failed to make a timely demand for payment and requiring payment on the Letter would be inequitable. In the alternative, even if the Court ?nds that the Letter remained valid after December 12, 1987, the Department failed to make a timely demand for payment under its own interpretation. of the Letter, and it would be inequitable to require payment after such a delay. The Department?s interpretation implies that, because of the bonding requirements of the mining permit, the Letter was in effect through the life of the mining permit. However, the Department?s argument is contradicted by its own evidence. According to the af?davit submitted by the Department in support of its Opposition, 1999, Sure?re failed to renew its Permit No. 129 and ceased mining operations at this mine site.? See Opposition, Af?davit 9; Opposition Exhibit C. Thus the mining permit to which the letter of credit was supposedly tied expired on October 24, 1999, and, under the Department?s interpretation, the Letter expired on October 24, 1999. Accounting for the extended term of one year, the Letter would have expired on October 24, 2000, according to the Department?s theory. It is undisputed that the Department made no demand for payment on the Letter prior to October 24, 2000. The Department also argues that ?the State has no reason or entitlement to call on the Letter until its permittee defaults on its reclamation obligation, which occurred 17 years after the Letter was issued.? However, the Department?s own af?davit demonstrates: 1) that the Department?s alleged purpose in requiring the Letter was to ensure funding for reclamation activities (see Opposition, Af?davit 2) that Sure?re allegedly failed to undertake the reclamation work after its permit expired in 1999 despite noti?cations for the Department (see Opposition, Affidavit 11 and 3) that Sure?re?s failure to perform the reclamation was the event the precipitated the forfeit of Sure?re?s bonds including the Letter (see Opposition Af?davit 1110). Under Section l800.50(a) of Title 62 of the Illinois Administrative Code, the Department was required to forfeit Sure?re?s bond if Sure?re refused toconduct reclamation. See 62 Ill. Adm. Code The Department offers no explanation of why it did not forfeit Sure?re?s bond or demand payment on the Letter until 2005, six years after the permit expired and no reclamation activities were undertaken. Even if thelexpiration provision of the Letter were found by this Court to be somewhat ambiguous, the Letter must still be construed in a light favorable to the party which drafted the instrument. Transparent Products v. Paysaver Credit Union, 1988 WL 6692, *2 (ND. 111 1988). construction which makes the effect of the instrument more equitable is preferred to one which causes a result that is inequitable.? Id. Under the doctrine of laches, it would be inequitable to permit a bene?ciary to seek enforcement of a letter of credit without taking into account the delay of the bene?ciary in demanding payment. Id. at *4 (?After electing to sleep for so long on the instrument plaintiff cannot suddenly awake over a year later and demand payment with full knowledge that their neglect has operated to prejudice?) The doctrines of waiver and estoppel also apply to letter of credit transactions. Northern Trust Co. v. Oxford Speaker 109 Ill. App. 3d 433, 437, 440 968, 971 (151 Dist. 1982). The doctrine of waiver applies when a party intentionally relinquishes a known right or his conduct warrants an inference of such relinquishment. Id. at 43 8-439, 972. Equitable estoppel precludes a party from asserting rights that might have otherwise existed where the voluntary conduct of that party reasonably misleads another to his detriment. Id. Under the Department?s logic, the Letter expired ?ve years before the Department made any effort to forfeit Sure?re?s bonds or made any inquiries into payment on the Letter. That delay creates an inequitable result, particularly where the Letter states on its face that it was valid for only two years and expired 17 years before the Department?s correspondence. The Department waived and should be estopped from asserting any rights to payment when it knew in 1999 that the permit had expired and that Sure?re was refusing to conduct reclamation activities, yet the Department failed to take timely action to forfeit Sure?re?s bonds and demand payment on the Letter. The prejudice and inequity of requiring payment on theLetter after the passage of so much time is plain from the exhibits submitted by the Department in support of its Opposition Sure?re was involuntarily dissolved by the State of Illinois in 2005, leaving Claimant without reCourse against Sure?re. See Exhibit to the Department?s Opposition. IV. The Department?s demand for payment failed to comply with the terms of the Letter. The Department does not address the fact that its alleged demand for payment did to comply with the terms of the Letter, which is required as a matter of law. The terms and conditions of a letter of credit govern the bank?s obligation to pay, meaning the documents presented by the bene?ciary in demanding payment must comply with the letter?s terms. Christenson, 129 Ill. App. 3d at 930, 473 at 433. ?When the documents presented comply with the conditions speci?ed in the letter of credit, the issuer is authorized and obligated to pay. Conversely, when the documents do not comply, the issuer is not authorized to pay until discrepancies are waived by its customer.? Pioneer Bank Trust Co., 184 Ill. App. 3d at 788, 540 at 811; see also Pastor, 76 Ill.2d at 152, 390 at 899. In this case, the Letter authorized the Department to: draw on the Issuing Bank, up to the amount of $320,608.00, by sight draft presented for payment to the Issuing Bank. The sight draft shall include a signed statement from the Department that Permittee?s acts or failures to act warrant a forfeiture of this Irrevocable Letter of Credit, pursuant to 62 Ill. Admin. Code l806.12(c) and 1808.13. See Exhibit A. It is undisputed that the Department did not present a sight draft to Claimant and did not even specify the amount to be drawn on the Letter. See Exhibit B. It is also undiSputed that the Department did not provide a signed statement in compliance with the requirements of the Letter. Id. Notwithstanding the fact that the Letter expired long before the Department?s correspondence, Claimant was not authorized to pay on the Letter as a matter of law because the documents presentedlby the Department did not comply with the terms of the Letter and Sure?re is no longer able to waive any discrepancies due to its dissolution. The undisputed material facts in this case show that the unambiguous language of the Letter contains an expiration date of December 12, 1987, and that the Department failed to timely and properly demand payment on the Letter. In the alternative, even if the Court accepts the Department?s arguments, the Department failed to make a timely demand for payment under its own theory, and requiring payment on the Letter after such a delay would be inequitable. Furthermore, the Department failed to present the documents called for by the Letter, which was required as a matter of law. For all of the foregoing reasons, Claimant is entitled to summary judgment as a matter of law. I WHEREFORE, Claimant, Regions Bank, successor by merger to Union Planters Bank, N.A., as successor in interest to The First National Bank of Wood River, moves this Court to: a. Grant its Motion for Summary Judgment pursuant to 735 ILCS b. Enter an Order declaring: i) that the Letter of Credit expired on December 12, 1987, and ii) that Claimant has no payment obligations to the Department thereunder; and c. For such other relief as the Court deems equitable and just. Respectfully submitted, GREENSFELDER, HEMKER, GALE, P.C. Creek Drive, Suite 100 Belleville, Illinois 62226 Telephone: (618) 257-7308 Facsimile: (618) 257?7353 Attorneys for Claimant, Regions Bank, successor by merger to Union Planters Bank, NA. as successor in interest to The First National Bank of Wood River CERTIFICATE OF SERVICE The undersigned certi?es that the Reply Memorandum in Support of Claimants? Motion for Summary Judgment was served by enclosing the same in an envelope addressed to all parties listed below at their last known addresses with postage fully prepaid and by depositing said envelope in a United States Post Of?ce mailbox in Swansea, Illinois, on 1K0 day of $9va James I. Rammelkamp Assistant Attorney General 500 South Second Street Spring?eld, Illinois 62706 PM. DE 01 9 1985 W. ligwijiijii - al? ?1 1L l-wi-S-a ?um 0F MINES AND Mina?ms . ur-IH? M. .. . LAND RECLAMATION at. THE NATHC) NAIL. QANK WOOD RIVER. ILL. 62095 December 12, 1985 Irrevocable Letter of Credit Amount: $320,608.00 Permit No. 129 Illinois Department of Mines and Minerals Land Reclamation Division 227 South 7th Street Room 201 Springfield, IL 62706 The First National Bank of Wood River, Wood River, issues this Irrevocable letter of Credit to the Illinois IL (Issuing Bank) hereby Department of Mines and Minerals (Department) for SureFire Coal, Inc. Permit No. 129 (Permittee) . This Irrevooable letter of Credit authorizes the Department to draw on ?the Issuing Bank, up to the amount of $530,608.00, by sight draft presented for paynent to the Issuing Bank. The sight draft shall include a signed statement from the Department that the Pennittee's acts or failures to act warrant forfeiture of this Irrevocable letter of Credit, pursuant to 62 Ill. Admin. Code 1806.12(c) and 1808.13. The Issuing Bank authorizes the Department, its lawful assigns, or the attorneys for .the Department and its assigns, to sue, to waive notice and process, to appear on behalf of, and to confess Bank, in the event that this Irrevocable Letter 0 judgment against the Issuing Credit is dishonored. This Irrevocable letter of Credit shall be deered to be made in Sangamn County, Illinois, for purposes of enforcement and any actions thereon shall be enforce- able in the Courts of Illinois and shall be construed under Illinois law. The Issuing Bank is a national banking corporation operating under charter issued for national banking corporations and conducts its business at the address shown above. The Issuing Bank shall give prompt notice to the Permittee and to the Department of any notice received or action alleging the insolvency or bankruptcy of the Issuing Bank, or alleging any violations of regulatory requiramnts which could result in suspension or revocation of the Issuing Bank's charter or license to do business. In the event the Issuing Bank becomes unable to fulfi 11 its obligations under this, Irrevooable letter of Credit for any reason, notice shall be given inmediately to the Permittee and the Department, .in no way relieve the Issuing Bank of its obl letter of Credit. provided that such notice shall igations under this Irrevocable December 12, 1985 Page 2 . Upon the incapacity of the Issuing Ban}: by reason of bankruptcy, insolven- cy, or suspension or revocation of its ch er or license, the Permittee, within thirty days after receiving notice thereof from the Department, shall substitute for this Irrevocable Letter of Credit a replacement bond that fully complies with the Department's regulations. Upon the Permittee's failure to submit a replacement bond as herein provided, the Department shall suspend Permit No. 129 until such substitution has been made. This Irrevocable Letter of Credit is a binding obligation on the Issuing Bank, independent of the acts and omissions of the Permittee, payable upon presentment to the Departnent or its written order. The Department and/or the State of Illinois shall in no way be obligated to the Issuing Bank or Permittee for repayment of all or any portion thereof subject to the provisions of 62 Ill. Admin. Code 1808.14. This Letter of Credit will automatically extend for an additional term of One (1) year unless the Bank provides at least ninety (90) days notice prior to the expiration date that it does not wish to extend the Letter of Credit for an additional period. The Department has the right to draw this Irrevocable Letter of Credit in the event Permittee does not replace this Irrevocable Letter of Credit prior to thirty (30) days before the expiration of this Irrevocable Letter of Credit with a replacement bond that complies with the Department Regulations, pursuant to 62 Ill. Admin. Code 1806.12 and/or 62 Ill. Admin. Code 1808.13. FIRST m1 am OF WOOD RIVER i??fm Executive Vice President Illinois Department of - - Natural Resources Rod R. Btagoievich. Governor One Natural Resources Way - Springfield, Illinois 62702-1271 Joef Brunsvold, Director - . March 29, 2005 Union Planters Bank National Association 6200 Poplar Avenue Memphis, TN 38119 Dear Sirs: - The Illinois Department of Natural Resources, Of?ce of Mines and Minerals, Land Reclamation Division (Department) regulates mine reclamation and issues permits for mining under the authority of the Surface Coal Mining Land Conservation and Reclamation Act. A mining permit, No. 129, was issued to Sure?re Coal, Inc. by the Department on October 25, 1984. Bonds for permit No. 129 was posted with the Department are as follows: An irrevocable letter of credit written in the amount of $320,608.00 issued by The First National Bank 'of Wood River Illinois, Certi?cate of Deposit No. 112107 written in the amount of $52,695.59 issued by The First National Bank of Wood River Illinois, and Certi?cate of Deposit No. 15052 written in the amount of $14,665.00 issued by the Bank of Sesser Illinois. The Department has forfeited bonds posted under Sure?re Coal, Inc.'s permit No. 129. In researching the above banks, the Department was referred to the National Information Center, Federal Reserve System which list Union Planters Bank, National Association as the successor to both The First National Bank of Wood River Illinois and the Bank of Sesser Illinois. At this time, the Department is requesting instructions from Union Planters Bank on presentation of the bond instruments for collection to an Illinois of?ce or agent. Enclosed for your reference are cepies of the Sure?re Coalit Inc; permit No. 129 bond instruments. Should you have any questions, please feel free to contact'Mr. Ernest Ashby at 217-785-5199. Sincerely, erg. Scott K. Fowler, Supervisor Land Reclamation Division cc: J. Hosselton EXHIBIT '3 its EM Printed on recycled and recyclable paper 03290801.de