Franklin W. Briggs - Page 36




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         Construction’s furnishing a performance bond to Key West Polo                
         with regard to the construction contract.25                                  
              On June 19, 1989, Key West Polo sent Towers Construction a              
         notice of default on the construction contract, alleging that Key            
         West Polo had disbursed $3,473,900.48 directly to Towers                     
         Construction, relying upon Towers Construction’s representations             
         that “you have paid all bills for material and supplies as well              
         as all subcontractors and labor out of funds requested by you and            
         paid by us.”  The notice of default states that Key West Polo had            
         been advised by various suppliers and subcontractors that “there             
         are considerable balances past due that were to have been paid               
         with funds you received from us”.                                            
              On July 26, 1989, Key West Polo notified CB&T that Towers               
         Construction had breached the construction contract and requested            
         CB&T to pay Key West Polo $460,000 against the letter of credit.             
         Towers Construction attempted unsuccessfully to enjoin CB&T from             
         making payment to Key West Polo.  Although Towers Construction               
         continued to dispute its liability to Key West Polo, CB&T paid               
         $460,000 to Key West Polo.26  Towers Construction stopped work on            
         the construction contract and filed a claim of lien against Key              


               25 In consideration for the letter of credit, Columbus Bank            
          & Trust Co. (CB&T) was to receive a share of profits from the               
          construction project.                                                       
               26 The record does not reveal the exact date of the payment            
          by CB&T to Key West Polo.                                                   





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