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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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