S.D.N.Y. Denies Plaintiffs’ Sampling Motion in Consolidated Actions Against RMBS Trustee

Orrick - Finance 20/20
Contact

On August 21, 2017, Judge Katherine Polk Failla of the United States District Court for the Southern District of New York upheld a magistrate’s order denying plaintiff-certificateholders’ motion to attempt to prove their claims by re-underwriting a sample of the loans at issue in a consolidated action against Wells Fargo Bank, National Association, in its capacity as RMBS trustee. Judge Failla, after reviewing the magistrate’s order for clear error, affirmed that under the governing agreements, to prevail on a breach of contract claim against an RMBS trustee with respect to the loans underlying the trust, Plaintiffs must demonstrate a breach on a loan-by-loan and trust-by-trust basis. Accordingly, Plaintiffs cannot utilize sampling in their efforts to prove that the RMBS trustee breached its contractual obligations. Judge Failla also noted that Plaintiffs, rather than needing to prove that the trustee had actual knowledge of breaches of representations and warranties, could potentially demonstrate the trustee’s discovery of breaches through a showing of conscious avoidance or implied actual knowledge. Wells Fargo Sampling Order.

 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Orrick - Finance 20/20 | Attorney Advertising

Written by:

Orrick - Finance 20/20
Contact
more
less

Orrick - Finance 20/20 on:

Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
- hide
- hide