On June 17, New York’s Appellate Division, First Department intermediate appellate court affirmed the denial of Merrill Lynch’s motion to dismiss a repurchase suit brought by two RMBS Trusts. The plaintiff-trusts allege that Merrill Lynch violated its contractual obligations to repurchase loans acquired from the now-bankrupt originator ResMae Mortgage Corporation. The parties dispute whether Merrill Lynch guaranteed ResMae’s obligation to repurchase loans that breached representations and warranties in the event that ResMae was not able to do so. The First Department held that the contractual provision at issue was ambiguous and extrinsic evidence would be required to determine its meaning. Supreme Court Decision. First Department Decision.