Firm Obtains Trial Court Victory Sustaining Life Insurance Company Clients’ Claims Against an RMBS Trustee

The Firm obtained a trial court victory in New York State Supreme Court on behalf of insurance companies against an RMBS trustee. See Western and Southern Life Ins. Co. v. U.S. Bank Nat’l Ass’n, 2020 WL 6534496. The Complaint alleged that the RMBS trustee failed in its duties to the investors of the nine RMBS trusts at issue in the lawsuit, including failing to provide notices of breaches by various wrongdoers, failing to enforce trust provisions requiring that defective loans be repurchased by the RMBS sponsors, and failing to exercise the trustee’s duties to act as a prudent person (as required by the trusts) following the occurrence of Events of Default.

The RMBS trustee sought to dismiss the bulk of the Complaint, arguing, among other things, that plaintiffs’ claims were untimely, that plaintiffs’ claims failed to state a claim for relief, and that plaintiffs were barred by the terms of the trusts from bringing their claims.

Following briefing and oral argument, Commercial Division Justice Joel M. Cohen denied the RMBS trustee’s motion to dismiss in its entirety, except on certain narrow issues relating to three trusts which do not bar plaintiffs’ ability to recover on their remaining claims for those or any of the other trusts. The case is currently continuing in the discovery phase.

A copy of the Court’s decision is available here.