This section contains the nature of the case and procedural background.

P sought a loan from D for the purpose of developing a subdivision on property P owned. D issued a commitment letter indicating that it would loan P $5.1 million and establish a $2 million line of credit to enable P to develop the subdivision. Security for the loan included a first mortgage, personal guarantees, and a $1.5 million standby letter of credit issued by First Reliance in favor of D. The letter of credit was secured by a cash deposit at First Reliance of approximately $310,000, several real properties owned by a D affiliate, and personal guarantees of the D principals. Under the terms D was permitted to make draws upon presentation of a draft accompanied by 1) The original letter of credit. 2) A notarized, sworn statement by d, or an officer thereof, that: a) P has failed to perform its obligations to D under the Loan Agreement and Promissory Note b) The amount of the draft does not exceed the amount due to D under the obligations; and; c) The signer has the authority to act for D with regard to the Letter of Credit. P defaulted on the Loan Agreement and related notes and loan documents by, among other things, failing to pay property taxes, to make interest payments due under the notes, or to pay the principal due under one note. D gave P notice of default and tendered a demand letter to First Reliance, seeking to draw the full amount of the letter of credit. P filed suit alleging fraudulent misrepresentation by D which induced P to enter the loan agreement. P admitted to being $70,000 in arrears on interest but argued that the terms of the agreement did not permit D to draw the full amount. P sought an ex parte temporary restraining order preventing First Reliance from honoring a draft by D, which the court granted. The court granted a preliminary injunction against drafts beyond amounts of accrued interest. D appealed.

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