The Firm obtained a summary judgment victory in the New York Supreme Court, Commercial Division on behalf of an investment vehicle seeking hundreds of millions of dollars in damages against an RMBS trustee. See MLRN LLC v. U.S. Bank N.A., No. 652712/2018 (Sup. Ct. N.Y. Cnty. July 12, 2022) (NYSCEF No. 903). Justice Andrew Borrok granted MLRN’s affirmative summary judgment motion that it has standing to pursue its claims on all 62 Trusts. And, for the first time in a suit of its kind, Justice Borrok affirmatively granted summary judgment in favor of a Certificateholder (here, MLRN), finding as a matter of law that Events of Default (“EODs”) occurred in 6 of the 62 RMBS Trusts. The existence of EODs in the other 56 trusts remains a fact issue that will be determined by a jury at trial.
Justice Borrok also dismissed certain of U.S. Bank’s affirmative defenses, including champerty, negating clauses, assignment of claims, contractual standing, and no-action clauses.
U.S. Bank sought summary judgment dismissing many of MLRN’s claims on the grounds that MLRN did not have standing to sue U.S. Bank. Justice Borrok rejected U.S. Bank’s position and, instead, held affirmatively that MLRN had standing to sue on all 62 trusts.
Justice Borrok granted in part and denied in part U.S. Bank’s summary judgment motion on the applicable statute of limitations for certain of MLRN’s pre-EOD claims. In so doing, Justice Borrok adopted MLRN’s argument that New York’s six-year statute of limitation for breach of contract claims should apply. In so holding, the Court rejected U.S. Bank’s request to apply the shorter 4-year statute of limitations in Texas or California.
The litigation now proceeds in the trial court to expert discovery that will address re-underwriting of defaulted mortgage loans and damages. All post-EOD claims, and all servicing-related claims, remain alive and viable for trial.
A copy of the decision is available here.