District Judge Reaffirms Denial of Motion to Dismiss RMBS Repurchase Suit

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On January 7, Judge Alvin K. Hellerstein of the United States District Court for the Southern District of New York denied WMC’s motion to reconsider the denial of its motion to dismiss in light of the intervening New York state appellate decision in ACE Securities v. DB Structured Products (covered in the January 6, 2014 edition of the Week in Review). Judge Hellerstein had relied on the trial court decision in ACE as support for his original ruling that the plaintiff trustee’s claims accrued when WMC refused to repurchase loans that allegedly breached certain representations, not when the representations first were made. WMC moved to reconsider after the First Department; Appellate Division reversed the trial court in ACE and held that breach of contract claims accrue when the representations are made. Judge Hellerstein denied the motion, stating that while he had read the ACE appellate decision, it did not change his view that “the contract was breached not at the time of closing but at the time of failure to cure.” Order Denying Motion to Dismiss. Order Denying Reconsideration.