Nomura Home Equity Loan, Inc., Series 2006-FM2, by HSBC Bank USA, National Association, solely in its capacity as Trustee, et al., Respondents,v.Nomura Credit & Capital, Inc., Appellant. (And Three Other Actions.)

Brief

N.Y.March 22, 2017

To be Argued by To be Argued by CHRISTOPHER P. JOHNSON MICHAELS. SHUSTER Attorney for the Trustee for Attorney for the Trustee for NHELI 2006-FM2 and NHELI 2007-3 NHELI 2007-2 and NAAC 2006-AF2 (Time Requested: 5 Minutes) (Time Requested: 25 Minutes) APL-2016-00024 New York County Clerk's Index Nos. 653783/12, 651124/13, 652614/12 and 650337/13 atnurt nf Appeals nf tip? ~fate nf New Vnrk ~~~--.-- ..... ~~~ NOMURA HOME EQUITY LOAN, INC., SERIES 2006-FM2, by HSBC BANK USA, NATIONAL ASSOCIATION, solely in its capacity as Trustee; NOMURA HOME EQUITY LOAN, INC., SERIES 2007-3, by HSBC BANK USA, NATIONAL ASSOCIATION, solely in its capacity as Trustee; NOMURA ASSET ACCEPTANCE CORPORATION MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2006- AF2, by HSBC BANK USA, NATIONAL ASSOCIATION, as Trustee; NOMURA HOME EQUITY LOAN, INC., HOME EQUITY LOAN TRUST, SERIES 2007-2, by HSBC BANK USA, NATIONAL ASSOCIATION, as Trustee, Plaintiffs-Respondents, -against- NOMURA CREDIT & CAPITAL, INC., Defendant-Appellant. JOINT BRIEF FOR PLAINTIFFS-RESPONDENTS CHRISTOPHER P. JOHNSON ZACHARY W. MAzIN URIA. ITKIN KASOWITZ BENSON TORRES & FRIEDMAN LLP 1633 Broadway New York, New York 10019 Tel.: (212) 506-1700 Fax: (212) 506-1800 Attorneys for Plaintiffs-Respondents Nomura Home Equity Loan, Inc., Series 2006-FM2 and Nomura Home Equity Loan, Inc., Series 2007-3 by HSBC Bank USA, NA., as Trustee Date Completed: April 20, 2016 MICHAEL S. SHUSTER DANIELM. SULLIVAN ADAM T. KIRGIS HOL WELL SHUSTER & GOLDBERG LLP 750 Seventh Avenue, 26th Floor New York, New York 10019 Tel.: (646) 837-5151 Fax: (646) 837-5150 Attorneys for Plaintiffs-Respondents Nomura Home Equity Loan, Inc., Series 2007-2 and Nomura Asset Acceptance Corporation Mortgage Pass- Through Certificates, Series 2006-AF2 by HSBC Bank USA, NA., as Trustee TABLE OF CONTENTS COUNTER-STATEMENT OF QUESTIONS PRESENTED ................................. 1 PRELIMINARY STATEMENT ............................................................................... 2 STATEMENT OF FACTS ....................................................................................... 5 I. Nomura Securitized Thousands Of Loans Into Loan Pools Under Contracts Containing A Number Of Different Types Of Representations And Warranties .................................................................... 5 II. Forensic Reviews Revealed That The Loan Pools Are Massively Defective ....................................................................................................... 10 PROCEDURAL IIlSTORY .................................................................................... 12 STANDARD OF REVIEW .................................................................................... 14 ARGUMENT .......................................................................................................... 16 I. The Trustee Properly Pled Claims For Breach Of The No Untrue Statement Representation ............................................................................. 16 II. By Its Terms, The Sole Remedy Clause Does Not Apply To Breaches Of The No Untrue Statement Provision ........................................ 20 A. The Terms Of The Sole Remedy Clause Are Clear ........................... 20 B. The Cases Nomura Cites Do Not Change The Terms Of The Sole Remedy Clause Here .................................................................. 24 C. Enforcing The Sole Remedy Clause As Written Will Not Cause Uncertainty Or Upset Settled Expectations ............................. 29 D. Nomura's Suggestion That The Trustee May Only Enforce Claims Covered By The Sole Remedy Clause Fails .......................... 30 III. Limiting The Sole Remedy Clause To Its Terms Does Not Render It Meaningless ............................................................................................... 31 CONCLUSION ....................................................................................................... 37 1 TABLE OF AUTHORITIES Page(s) Cases AG Capital Funding Ptnrs., L.P. v. State St. Bank & Trust Co., 5 N.Y. 3d 582 (2005) .......................................................................................... 15 Ambac Assur. Corp. v. EMC Mortgage LLC, 121 A.D. 3d 514 (1st Dept. 2014) ....................................................... 4, 14, 25, 26 Artis v. Random House, Inc., 34 Misc. 3d 858 (Sup. Ct. N.Y. Cnty. 2011) ...................................................... 15 Assured Guaranty Corp. v. EMC Mortgage, LLC, 39 Misc. 3d 1207(A) (Sup. Ct. N.Y. Cnty. 2013) ............................................... 28 Chatterjee Fund Mgmt., L.P. v. Dimensional Media Assocs., 260 A.D. 2d 159 (1st Dept. 1999) ....................................................................... 26 Fed. Housing Fin. Agency v. Nomura Holding Am., Inc., 104 F. Supp. 3d 441 (S.D.N.Y. 2015) ......................................................... 6-7, 18 Greenfield v. Philles Records, Inc., 98 N.Y. 2d 562 (2002) ........................................................................................ 21 Innophos, Inc. v. Rhodia, S.A., 10 N.Y. 3d 25 (2008) .......................................................................................... 17 J.P. Morgan Sec., Inc. v. Vigilant Ins. Co., 21 N.Y. 3d 324 (2013) .................................................................................. 14, 15 Landon v. Kroll Lab. Specialists, Inc., 22 N.Y.3d 1 (2013) ............................................................................................. 15 Leon v. Martinez, 84 N.Y. 2d 83 (1994) .......................................................................................... 15 McMahan & Co. v. Wherehouse Entm't, Inc., 900 F. 2d 576 (2d Cir. 1990) ............................................................................... 17 Metro Life Ins. Co. v. Noble Lowndes Int'l, Inc., 84 N.Y. 2d 430 (1994) ........................................................................................ 36 11 Nat'l Conversion Corp. v. Cedar Bldg. Corp., 23 N.Y. 2d 621 (1969) ........................................................................................ 35 Reiss v. Fin. Performance Corp., 97 N.Y. 2d 195 (2001) ........................................................................................ 22 Schneider v. Chertoff, 450 F. 3d 944 (9th Cir. 2006) ........................................................................ 16-17 Tango Transp., LLC v. Transp. Int'l Pool, LLC, No. 08-559, 2009 WL 3753584 (W.D. La. Nov. 9, 2009) .................................. 17 Telerent Leasing Corp. v. Progressive Med. Imaging PLC, 918 F. Supp. 2d 666 (E.D. Mich. 2013) .............................................................. 16 Torchlight Loan Servs., LLC v. Column Fin., Inc., 42 Misc. 3d 1236(A), (Sup. Ct. N.Y. Cnty. 2014) ............................................. 15 U.S. Bank, N.A. v. Greenpoint Mortg. Funding, Inc., 907 N.Y.S. 2d 441, 2010 WL 841367 (Sup. Ct. N.Y. Cnty. Mar. 3, 2010) ..................................................................... 33 Utica Mut. Ins. Co. v. Prudential Property and Cas. Ins. Co., 64 N.Y. 2d 1049 (1985) ...................................................................................... 30 W. Union Tel. Co. v. Am. Commc'ns Ass'n, C.1.0., 299 N.Y. 177 (1949) ........................................................................................... 30 W.W.W. Assoc. v. Giancontieri, 77 N.Y. 2d 157 (1990) ............................................................................ 20, 29, 36 STATUTES 15 u.s.c. §77k ........................................................................................................ 17 CPLR 321 l(a)(l) ..................................................................................................... 12 CPLR 321 l(a)(7) ..................................................................................................... 12 111 COUNTER-STATEMENT OF QUESTIONS PRESENTED 1. Whether a clause in a residential mortgage-backed securitization agreement that limits remedies for breaches of explicitly identified loan-specific representations and warranties also bars a claim for relief for breaches of a separate representation and warranty, not mentioned in the remedy limitation clause, that transaction-related documents taken as a whole do not contain any untrue statement or misleading omission? The Appellate Division, First Department, correctly answered this question in the negative. 1 PRELIMINARY STATEMENT This appeal arises out of four securitizations of residential mortgage loans governed by substantively identical agreements. In each transaction, Defendant- Appellant Nomura Credit & Capital, Inc. selected and sold a pool of loans through an affiliated limited-purpose company to a securitization trust in exchange for hundreds of millions of dollars raised from investors. Following longstanding market practice, Nomura represented and warranted that each individual loan had certain key characteristics. Those loan-specific representations appear in Section 8 of the Mortgage Loan Purchase Agreements governing these transactions. In Section 7 of the agreements, Nomura also represented and warranted that neither the agreements nor any of the statements Nomura prepared in connection with the securitization, "taken in the aggregate," contained any untrue statements or misleading omissions (the "No Untrue Statement Provision"). Plaintiff- Respondent is the trustee of the four securitization trusts. This appeal concerns only the Appellate Division's reinstatement of the Trustee's claims based upon the No Untrue Statement Provision. Nomura's entire argument before both the Appellate Division and this Court relies on a so-called "sole remedy" clause that, by its terms, applies only to the loan-specific Section 8 representations, not to the Section 7 representations. The clause provides that, in the event Nomura materially breaches a loan-specific 2 representation, the "sole remedy" is for Nomura either to cure the breaches or to repurchase the breaching loans. But this "sole remedy clause" says nothing about the Section 7 representations, and neither Section 7 nor any other part of the agreements imposes any limitation on the remedies available for breaches of the No Untrue Statement Provision. The Appellate Division therefore correctly held that the sole remedy clause does not preclude claims under that Provision. Yet Nomura insists that it does. In fact, Nomura asks this Court to hold that the sole remedy clause precludes the Trustee, at the pleading stage, from even pursuing relief for violations of the No Untrue Statement Provision. Nomura seeks this result without meaningfully addressing the language in the sole remedy clause. Indeed, Nomura does not even contest that the sole remedy clause sets out expressly the loan-specific representations it covers, or that the clause does not so much as mention the No Untrue Statement Provision, let alone purport to constrain the remedies available under it. This Court can therefore resolve this appeal on straightforward grounds: Contracts are enforced according to their terms, and under its clear terms the sole remedy clause does not apply to the No Untrue Statement Provision. None of the arguments Nomura advances on appeal can make the sole remedy clause say something it does not say. Nomura points out, for example, that the Appellate Division previously ruled with respect to another securitization that 3 the sole remedy clause in the transaction documents there did preclude relief for breach of a no untrue statement provision. See Ambac Assur. Corp. v. EMC Mortgage LLC, 121 A.D. 3d 514 (1st Dept. 2014). Indeed Ambac reached that conclusion-because the sole remedy clause in that case was not limited to breaches of specific representations, but covered the entire contract. Different language, different result. Nomura also repeatedly accuses the Trustee of trying to "circumvent" the sole remedy clause because its claims under the No Untrue Statement Provision relate in some way to the mortgage loans underlying the transactions. The Trustee is not "circumventing" anything. The loan-specific representations (to which the sole remedy applies) and the No Untrue Statement Provision (to which it does not apply) are worded differently. The former contain representations as to the particular characteristics or qualities of individual loans. In contrast, the No Untrue Statement Provision addresses mischaracterizations of the securitization as a whole. Thus, a misstatement of, for example, a borrower's credit score for a single loan would breach a loan-specific representation, but it would not breach the No Untrue Statement Provision. However, Nomura's misrepresentations and misleading omissions in the transaction documents about the securitization as a whole-statements that misleadingly communicate that the loan pool is of proper quality or convey a false impression about Nomura's business practices-do fall 4 within the broad, "taken in the aggregate" language of the No Untrue Statement Provision. Read this way, the No Untrue Statement Provision and the sole remedy clause retain independent application. By contrast, Nomura offers no plausible interpretation of either term that preserves meaningful room for both. Nomura is correct on one point, however. This appeal is about "a contracting party's attempt to circumvent" contractual language. But it is Nomura that seeks to do the circumventing, not the Trustee. The Appellate Division's refusal to permit such evasion of the governing agreements should be affirmed. STATEMENT OF FACTS I. Nomura Securitized Thousands Of Loans Into Loan Pools Under Contracts Containing A Number Of Different Types Of Representations And Warranties Following a pattern typical in the industry, Nomura acted as the sponsor of the four residential mortgage loan securitizations at issue in this appeal. It accumulated and, on the closing date, sold several thousand loans worth anywhere from $765 million (R2053, (NAAC 2006-AF2)) to $1.2 billion (R445 (NHELI 2006-FM2)) to an affiliated entity, called a depositor, through a Mortgage Loan Purchase Agreement ("MLPA").1 The depositor, in tum, transferred the loans to a trust through a Pooling and Servicing Agreement ("PSA"). In the PSA, the 1 "R" refers to the record on appeal and "Norn. Br." to Nomura's opening brief. 5 depositor conveyed "all of its rights and interest under the [MLPA], to the extent of the Mortgage Loans sold under the [MLPA]" to the Trustee. R2976 (§2.01). The depositor kept no rights under the MLPA for itself; following the transfer, the Trustee was "entitled to exercise all rights of the Depositor under the [MLP A] as if, for such purpose, it were the Depositor." Id.; R3143 (MLPA §3(c)) ("Pursuant to the [PSA], the [the depositor] will assign all of its right, title and interest in and to the Mortgage Loans ... together with its rights under this Agreement, to the Trustee for the benefit of the Certificateholders.").2 Each securitization (and associated action) is known by the name of the trust, (referred to as NHELI 2007- 2, NHELI 2007-3, NHELI 2006-FM2, and NAAC 2006-AF2, respectively). Nomura was the only party positioned to evaluate the loans' suitability for securitization, and the economic rationale and structure of the transactions demanded it do so. Nomura initially acquired the loans and selected which to include in the loan pool. Among the parties to the transaction, Nomura was best situated to ensure that the trusts received what was expected, namely, a pool of loans that complied with Nomura's representations and warranties and was suitable for securitization. See Fed. Housing Fin. Agency v. Nomura Holding Am., Inc. 2 Nomura occasionally suggests that because the Trustee is not a party to the MLPA it may not exercise all of the depositor's rights under it. That suggestion contradicts the plain language of the agreements. 6 ("FHFA v. Nomura"), 104 F. Supp. 3d 441, 580 (S.D.N.Y. 2015) (Cote, J.) (finding that Nomura "was responsible for conducting diligence on the loans before purchase, decided which loans to purchase and securitize, and held the loans on its books before depositing them with NAAC or NHELI"). Without Nomura's assurances about the quality and characteristics of the loan pool, investors would not have bought the certificates and Nomura would not have received billions of dollars in proceeds. See, e.g., R2853, 2855-56, 2868 (NHELI 2007-2 Compl. ,-r,-r 1, 5, 8, 39); R67-69, 74--77 {NHELI 2006-FM2 Compl. ilil 1, 3-5, 22, 26, 29). Consistent with this market reality, Nomura made two sets of representations in two separate sections of the MLP A. Section 8 contains representations specific to each loan. By contrast, Section 7 contains a set of broader, transaction-wide representations, including the No Untrue Statement Provision. Loan-Specific Representations. In Section 8 of the MLP A, Nomura made numerous representations about the characteristics of each individual loan. For instance, Nomura represented that, "as to each Mortgage Loan," no fraud had occurred, there was no default, and the loans were properly underwritten. See R3150 (§8(ii)), 3151 (§8(xiv)), 3154 (§8(xli)). These loan-specific representations are incorporated in the PSA. See R2985 (§2.03(d)(vii)). Nomura promised to repurchase any loan that materially breached any one of these loan-specific representations and warranties. The PSA provides, "Upon 7 discovery by any of the parties ... of a breach of a representation or warranty set forth in ... Section 8 of the [MLP A] that materially and adversely affects the interests of the Certificateholders in any Mortgage Loan, the party discovering such breach shall give prompt written notice thereof to the other parties." R2986 (§2.03(e)). And Nomura "covenant[ed] with respect to the representations and warranties set forth in ... Section 8 of the [MLPA], that within ninety (90) days of the discovery of a breach of any representation or warranty ... that materially and adversely affects the interests of the Certificateholders in any Mortgage Loan, it shall cure such breach in all material respects and, if such breach is not so cured[,] ... repurchase the affected Mortgage Loan or Mortgage Loans from the Trustee." Id. The MLPA contains a similar repurchase protocol. See R3158 (§9(a)). The governing agreements each contain a clause setting out remedies available for breaches of the loan-specific representations in Section 8 of the MLP A. At the end of the PSA section that restates the repurchase protocol for breaches ofMLPA Section 8, the PSA says that "the obligation ... of the Sponsor to cure, repurchase or replace any Mortgage Loan as to which a breach has occurred or is continuing shall constitute the sole remedies against the Sponsor respecting such breach." R2988 (§2.03( e )) (emphasis added). The MLPA is similarly limited. It states, "the obligations of the Seller," i.e., Nomura, "to cure or repurchase a defective Mortgage Loan ... constitute the sole remedies ... 8 respecting ... a breach of the representations and warranties contained in Section 8." R3158 (§9(c)) (emphasis added). Transaction-Wide Representations. In contrast to Section 8's representations of the characteristics of each loan, in Section 7 of the MLP A Nomura made representations regarding the transaction as a whole. These include, for example, Nomura's ability to transfer title to the loans, the enforceability of its contractual obligations, and the absence of any governmental obstacle to Nomura's performance under the agreement. See, e.g., R3148 (§7(ii), (iv), (vi), (vii)). However, the Section 7 representations do not merely concern Nomura as an entity; they also address the nature of the loan pool. For example, Nomura represented that "[t]he execution, delivery and performance of this Agreement by the Seller ... does not create or impose ... any lien, charge or encumbrance which would have a material adverse effect upon the Mortgage Loans." R3148 (§7(iii)); see also R3149 (§§7(viii), 7(x) & 7(xiii)). Consistent with these transaction-level warranties, Section 7 also contains a sweeping representation that Nomura's statements in the transaction documents concerning the transaction as a whole are true and omit no material information: This Agreement does not contain any untrue statement of material fact or omit to state a material fact necessary to make the statements contained herein not misleading. The written statements, reports and other documents prepared and furnished or to be prepared and furnished by the Seller [i.e., Nomura] pursuant to this Agreement or in connection with the transactions contemplated hereby taken in the aggregate do not contain any untrue 9 statement of material fact or omit to state a material fact necessary to make the statements contained therein not misleading. R3148 (§7{v) (emphasis added)). This representation, like the others in Section 7, applies transaction-wide (not merely to individual loans). And it applies broadly to any statements Nomura "prepared or furnished ... in connection with the transactions contemplated" by the MLP A. Such statements appear in the governing agreements themselves, the Prospectus Supplement, and the Mortgage Loan Schedule (a spreadsheet listing loan-level information about the entire loan pool). The broader message ofNomura's statements is that the loan pool at the heart of the transaction was not materially defective. Neither Section 7 itself nor any other part of the MLP A or PSA limits the remedies available for breach of the Section 7 representations. In fact, Section 13 of the MLP A contains a broad proviso reserving remedies: "All rights and remedies ... under this Agreement are distinct from, and cumulative with, any other rights or remedies under this Agreement or afforded by law or equity and all such rights and remedies may be exercised concurrently, independently or successively." R3160. II. Forensic Reviews Revealed That The Loan Pools Are Massively Defective Before this litigation began, certificateholders in each trust here undertook extensive forensic reviews of thousands of loans to assess whether they conformed 10 to Nomura's representations. R2854, 2871 (NHELI 2007-2 Compl. ~~ 2, 45); R69, 80, 89 (NHELI 2006-FM2 Compl. ~~ 6, 37-38, 59). As the Appellate Division recognized, "the sheer volume of defective loans [found] in each" trust was "startling." R24. Out of the samples reviewed, tens of thousands of loans- between 45 percent and 83 percent-breached Nomura's representations and warranties. R2871-72 (NHELI 2007-2 Compl. ~47); R2021-22 (NAAC 2006- AF2 Compl. ~47); R80, 89 (NHELI 2006-FM2 Compl. ~~ 37, 59); Rl 136, 1145 (NHELI 2007-3 Compl. ~~ 37, 59). The reviews uncovered over 25,400 breaches. See R2858 (NHELI 2007-2 Compl. ~12 (over 14,000)); R2008-09 (NAAC 2006- AF2 Compl. ~12 (approximately 1,600)); R80, 89 (NHELI 2006-FM2 Compl. ~~ 37, 59 (over 8,085)); Rl 136, 1145 (NHELI 2007-3 Compl. ~~ 37, 59 (over 1,761)).3 3 Nomura repeatedly gripes that the certificateholders are "distressed debt investors" supposedly "looking to capitalize on the economic upheaval" of the financial crisis. Norn. Br. at 25. This complaint is irrelevant-Nomura's contractual obligations to the Trustee are indifferent to who the certificateholders are. Moreover, one of the certificateholders, Federal Home Loan Mortgage Corporation or Freddie Mac, has been invested since closing. Nomura similarly notes that HSBC, like Nomura, has "served ... as a sponsor in RMBS securitizations." Norn Br. at 14 n.10. Nomura does not explain why that matters, nor is it obvious why it would. HSBC brings claims solely in its capacity as Trustee on behalf of the trusts and their investors, not HSBC itself. 11 Although the Trustee notified Nomura of the extensive breaches in the trusts, Nomura refused to remedy them. The Trustee then filed these actions. PROCEDURAL HISTORY For each of the four trusts here, the Trustee brought separate actions. Although the complaints vary in certain respects, each seeks (i) repurchase of loans (or its monetary equivalent) that breach Nomura's loan-specific representations; and (ii) general contract damages for Nomura's breaches of the No Untrue Statement Provision. See R2888-91, 2896-97 (NHELI 2007-2 Compl. ifif 94-107, 123-29); R2039-41, 2047-48 (NAAC 2006-AF2 Compl. ifif 95-108, 124-31); R95-97 (NHELI 2006-FM2 Compl. if74-91); Rl 151-53 (NHELI 2007-3 Compl. irir 74-91). Nomura moved to dismiss the complaints under CPLR 321 l(a)(l) and (a)(7). Incorporating an earlier decision in another action against Nomura not on appeal here, the IAS Court denied the motions with respect to the Trustee's claims for violations of the Section 8 loan-specific representations. See, e.g., R37-40 (incorporating Nomura Asset Acceptance Corp. Alternative Loan Trust, Series 2006-S4, by HSBC Bank USA, Nat'l Ass'n v. Nomura Credit & Capital, Inc., No. 653390/2012, 2014 WL 2890341 (Sup. Ct. N.Y. Cnty. June 26, 2014)). However, the Court dismissed the Trustee's damage claims for breach of the No Untrue Statement Provision. According to the IAS Court, the Trustee's No Untrue 12 Statement Provision claims did not allege a breach "that was not also a breach of the [loan-specific representations] to which the sole remedy provisions apply." R1083. The IAS Court thus held that the sole remedy clause precluded relief for breaches of the No Untrue Statement Provision, even though the sole remedy clause does not mention that Provision, because the IAS Court thought such relief would be duplicative of the "sole remedy" for breaches of the loan-specific representations. The Appellate Division affirmed the IAS Court's holding regarding the Section 8 loan-specific representations (which Nomura does not appeal here), but reversed the dismissal of the Section 7 No Untrue Statement Provision claims, concluding that the IAS Court "erred in not allowing plaintiffs to pursue damages for breach of section 7 (as opposed to section 8) of the MLPA." R25. The Appellate Division noted that the broad language of the No Untrue Statement Provision encompasses additional documents including "prospectuses" and "loan tapes." Rl3. By contrast, the Court reasoned, the "plain language" of the MLPA states that the sole remedy clause applies only to "'a missing document or a breach of the representations and warranties contained in Section 8."' R25. The PSA's sole remedy clause is similarly targeted; the Appellate Division held that, in limiting the available remedies "respecting such breach," "'such breach' refers back to 'a breach of any representation or warranty set forth [in Section 8 of the 13 A1LPA],'" rather than referring to the transaction-wide representations in MLPA Section 7. See R25-26. In drawing this distinction, the Appellate Division contrasted the contract language here with that at issue in Ambac, 121 A.D. 3d 514, relied upon by Nomura. In Ambac, the Appellate Division explained, the sole remedy clause expressly applied to a breach of any representations made in '"this Agreement,' not as here, to specific sections of the MLPA." R26. Had the sophisticated parties here intended such a broad sole remedy clause, the Court continued, they could have included it in the contracts. (And, since Nomura as seller, or sponsor, and Nomura's affiliate as purchaser, or depositor, were the only two parties to the MLPA, Nomura easily could have done so.) Moreover, the Court noted, "section 13 of the MLP A provides that remedies are cumulative." R26. The Appellate Division therefore modified the IAS Court's Orders, reinstating the Trustee's causes of action seeking general contract damages under the No Untrue Statement Provision. STANDARD OF REVIEW When evaluating "the adequacy of a complaint under CPLR 321 l(a)(7), the court must give the pleading a liberal construction." J.P. Morgan Sec., Inc. v. Vigilant Ins. Co., 21 N.Y. 3d 324, 334 (2013). The court "accept[s] the facts as alleged in the complaint as true, accord[ s] plaintiffs the benefit of every possible 14 favorable inference, and determine[ s] only whether the facts as alleged fit within any cognizable legal theory." Leon v. Martinez, 84 N.Y. 2d 83, 87-88 (1994) (citing CPLR 3026). "Whether the plaintiff will ultimately be successful in establishing [its] allegations is not part of the calculus." Landon v. Kroll Lab. Specialists, Inc., 22 N.Y. 3d 1, 6 (2013) (quotation marks omitted). And a defendant cannot "prevail on a CPLR 321 l(a)(l) motion" unless "the documentary evidence conclusively refutes plaintiff's ... allegations." AG Capital Funding Ptnrs., L.P. v. State St. Bank & Trust Co., 5 N.Y. 3d 582, 590-91 (2005) (reversing grant of motion to dismiss). The notice pleading standard applicable to breach of contract claims is especially liberal. "Under notice pleading, plaintiff need not plead specific facts, but need only give defendant 'fair notice' of the nature and grounds of her claims." Artis v. Random House, Inc., 34 Misc. 3d 858, 864 (Sup. Ct. N.Y. Cnty. 2011). Courts deny motions to dismiss breach-of-contract claims as premature- including claims for breach of securitization contracts, like those here-when factual development may impact their resolution. See, e.g., J.P. Morgan Sec. Inc., 21 N.Y. 3d at 336--37 (2013) (reversing dismissal of breach-of-contract claim because application of defense depended on the facts); Torchlight Loan Servs., LLC v. Column Fin., Inc., 42 Misc. 3d 1236(A), at *5 (Sup. Ct. N.Y. Cnty. 2014) (plaintiff "need not establish the merits or plausibility of any of the alleged 15 warranty breaches, nor ... resolve every ambiguity or question of fact raised by defendants," which are "matter[s] for discovery, not a motion to dismiss"). ARGUMENT I. The Trustee Properly Pied Claims For Breach Of The No Untrue Statement Representation As a threshold matter, the Appellate Division properly reinstated the Trustee's claims under the No Untrue Statement Provision because the Trustee pled that Nomura made statements that violated the Provision. Each MLP A in the four securitizations contains an identical No Untrue Statement Provision in Section 7, in which Nomura represented that the MLP A itself and Nomura's own "written statements, reports and other documents ... in connection with the transactions contemplated [by the MLP A] taken in the aggregate do not contain any untrue statement of material fact or omit to state a material fact necessary to make the statements contained therein not misleading." R3148 (§7(v) (emphasis added)). The "in the aggregate" language can only be read to apply the Provision to the message Nomura conveyed about the securitization as a whole. Courts have interpreted "in the aggregate" to mean in "'the whole sum or amount,"' in "'total"' or in a "unitary amount, one '[f]ormed by combining into a single whole or total."' Telerent Leasing Corp. v. Progressive Med. Imaging PLC, 918 F. Supp. 2d 666, 674 (E.D. Mich. 2013) (citations omitted); see also Schneider v. Chertoff, 450 F. 3d 944, 953-54 & n.14 (9th Cir. 16 2006); Tango Transp., LLC v. Transp. Int'l Pool, LLC, No. 08-559, 2009 WL 3753584, at *7 (W.D. La. Nov. 9, 2009). Moreover, the No Untrue Statement Provision's warrant against false or misleading statements when "taken in the aggregate" parallels the rule in federal securities-law that statements must be read "as a whole" to determine whether representations and omissions, "taken together and in context, would have mis[led] a reasonable investor about the nature of the [investment]." McMahan & Co. v. Wherehouse Entm't, Inc., 900 F. 2d 576, 579 (2d Cir. 1990); compare R3148 (MLPA §7(v)) with, e.g., 15 U.S.C. §77k (imposing liability if a registration statement "contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading"). Tellingly, although the Trustee explained to the Appellate Division why the No Untrue Statement Provision and its "in the aggregate" clause should be interpreted in this fashion, Nomura did not suggest there and has not suggested here any alternative interpretation of the clause's meaning.4 4 Even if Nomura were to suggest some alternative interpretation on reply, the discovery needed to resolve any ambiguity would be reason enough to affirm the reinstatement of the No Untrue Statement Provision claims. See generally Innophos, Inc. v. Rhodia, S.A., 10 N.Y. 3d 25, 29 (2008) ("At best, defendants assert that the agreement is ambiguous and discovery is necessary."). 17 Relying on the broad language of this provision, the Trustee alleged several transaction-wide misrepresentations and misleading omissions in the transaction documents, including the Prospectus Supplement, the Mortgage Loan Schedule, and the governing agreements themselves. For example, the Trustee alleged that the Prospectus Supplement contained false statements about the business operations of Nomura and its originators, such as mortgage loan originator ResMAE Corporation, their general approach to underwriting loans, and their "quality control" procedures. Rl 146, 1148-49 (NHELI 2007-3 Compl. ~~ 62, 67); R1501-05 (NHELI 2007-3 Pro. Supp. at 91-95); R90, 92-93 (NHELI 2006-FM2 Compl. ~~ 62, 67); R535-39 (NHELI 2006-FM2 Pro. Supp. at 69-73).5 And the Trustee alleged that the Mortgage Loan Schedule that Nomura provided misrepresented the characteristics of the loan pool as a whole, LTV ratios, owner- occupancy status, and borrower credit scores. Rl 125-27, 1147, 1153 (NHELI 5 Notably, in a recent decision addressing Nomura's Prospectus Supplements for seven RMBS transactions-including NHELI 2006-FM2, NHELI 2007-2, and NHELI 2007-3-United States District Judge Denise L. Cote of the Southern District of New York found that those documents contained materially false statements. See FHFA v. Nomura, 104 F. Supp. 3d at 453 ("The Offering Documents did not correctly describe the mortgage loans. The magnitude of falsity, conservatively measured, is enormous."); see also id. at 560-61 ("[T]he Court confirmed that FHF A had ... succeeded in proving the wholesale abandonment of underwriting guidelines by originators."). 18 2007-3 Compl. ~~ 5-6, 9, 64, 90); R69-71, 91, 97 (NHELI 2006-FM2 Compl. ~~ 5-6, 9, 64, 90). Similarly, in the transaction documents, Nomura stated that it would aggregate and convey the loan pool (R3142 (MLP A Preliminary Statement)}, stated it would provide a list and description of each loan (R3143 (MLP A §2) }, and represented that it was ready and willing to execute the transaction (R314 7-49 (MLPA §7)). See R 2866-67 (NHELI 2007-2 Compl. ~~ 35-36 (explaining nature of the transaction)); R2016-17 (NAAC 2006-AF2 Compl. ~~ 35-36). And the transaction documents said nothing at all about the massive deficiencies in the loan pools at the heart of the securitizations. Taken together, Nomura's statements plainly communicated that the loan pool was viable and that any defects would be few, far between, and efficiently addressed. R2867-68 (NHELI 2007-2 Compl. ~~ 37-38); R2017-18 (NAAC 2006-AF2 Compl. ~~ 37-38). In fact, "[i]nstead of receiving a pool of loans having the characteristics and quality represented by Nomura, the Trust received a far riskier and less stable loan pool." R2879 (NHELI 2007-2 Compl. ~62); R2028 (NAAC 2006-AF2 Compl. ~62). Although the Appellate Division did not address the particulars of the Trustee's allegations, it recognized the fundamental distinction between the No Untrue Statement Provision and the loan-specific representations and noted that the broad scope of the No Untrue Statement Provision encompasses transaction-wide 19 documents such as prospectuses and loan tapes. Accordingly, the Appellate Division properly reinstated the Trustee's claims under the Provision. Nomura does not contest on appeal that the Trustee properly pied misstatements and omissions that, "taken in the aggregate," sent a false message about the transactions as a whole. Accordingly, the analysis in this Court starts from the premise that the Trustee's allegations plead a violation of the plain terms of the No Untrue Statement Provision. Nomura nevertheless insists that because those allegations are related to the mortgage loans in some way, the sole remedy clause somehow precludes the Trustee, at the pleading stage, from pursuing claims based on that Provision. Nomura's arguments fail. II. By Its Terms, The Sole Remedy Clause Does Not Apply To Breaches Of The No Untrue Statement Provision Nomura's primary contention on appeal is that the Appellate Division erred because the sole remedy clause precludes the Trustee from seeking damages under the No Untrue Statement Provision. This contention fails for the simple reason that it contradicts the governing agreements. A. The Terms Of The Sole Remedy Clause Are Clear The parties agree on one thing: Under New York law, contracts must be enforced as written. See, e.g., W.W.W. Assoc. v. Giancontieri, 77 N.Y. 2d 157, 162 (1990). For "[t]he fundamental, neutral precept of contract interpretation is that agreements are construed in accord with the parties' intent," and "[t]he best 20 evidence of what parties to a written agreement intend is what they say in their writing." Greenfield v. Philles Records, Inc., 98 N.Y. 2d 562, 569 (2002). Although Nomura repeats this cardinal rule, it refuses to accept the rule's consequences. The sole remedy clause in the governing agreements here-as opposed to the parallel provision in contracts underlying some other RMBS securitizations-is carefully drawn to apply only to breaches of the loan-specific representations in Section 8 of the MLP A, not to the representations in Section 7 such as the No Untrue Statement Provision. Nomura cannot change this decisive fact. Thus, in these contracts, construing the sole remedy clause according to its terms means it does not limit the remedies available for breach of the No Untrue Statement Provision. That is what the Appellate Division held, and its unassailable holding should be affirmed. Both the MLP A and the PSA have sole remedy clauses, and their scopes are plainly defined. MLPA Section 9(c) provides that the "obligations of the Seller ... to cure or repurchase a defective Mortgage Loan ... constitute the sole remedies of the Purchaser against the Seller respecting ... the representations and warranties contained in Section 8." R3158 (emphasis added). Similarly, the repurchase protocol in the PSA is triggered by "discovery ... of a [material and adverse] breach of a representation and warranty set forth in Section 2.03( d)(viii), (ix), and (x) [of the PSA] and Section 8 of the [MLPA]," and concludes by stating that cure 21 or repurchase are the sole remedies for "such breach." R2986. The No Untrue Statement Provision, which appears in Section 7(v) (or 7(5)) of the MLPA, is not on the list of representations to which the sole remedy clause applies. The structure established by the language makes sense-the sole remedy by its terms proceeds loan-by-loan, so it applies to loan-specific representations, like those in Section 8 of the MLP A, but not to transaction-wide representations like the No Untrue Statement Provision. The sole remedy clause's plain language should resolve this appeal, as none ofNomura's arguments can expand its reach. For instance, Nomura stresses that courts generally enforce clauses, like the sole remedy clause, that limit remedies. Indeed courts do enforce them-but only as far as their terms, not beyond them. That is the meaning of the principle, which Nomura cites, that "[ c ]ourts may not by construction add or excise terms, nor distort the meaning of those used and thereby make a new contract for the parties under the guise of interpreting the writing." Reiss v. Fin. Performance Corp., 97 N.Y. 2d 195, 199 (2001) (quotation marks omitted). The implication is that the language of a contractual term-at least where it is clear, as here-determines its scope. Were there any doubt that the sole remedy clause does not limit remedies for breach of representations the clause does not name, Section 13 of the MLP A dispels it. That section, which the Appellate Division pointed to as further support 22 for its precise construction of the sole remedy clause, contains a sentence reserving the depositor's rights to relief (which were assigned to the Trustee). "All rights and remedies," the sentence says, "are distinct from, and cumulative with, any other rights or remedies under this Agreement or afforded by law or equity." R3160 (emphases added). Moreover, "all such rights and remedies"-i.e., any right or remedy under the MLP A or available at law or equity-"may be exercised concurrently, independently or successively." Id. Nomura insists that Section 13 only "pertains to the delivery and sale of the mortgage loans," and therefore cannot be construed to reserve remedies for breaches of the No Untrue Statement Provision. Norn. Br. at 48, 49. To be sure, parts of Section 13 address the delivery of the mortgage loans. But the sentence just quoted is not one of them. On the contrary, it is worded as a sweeping reservation of rights-"All rights and remedies" are reserved as "distinct from, and cumulative with, any other rights or remedies under this Agreement." Nothing in the rest of Section 13 limits this reservation of rights solely to that Section. The breadth of the Section 13 reservation of rights contrasts dramatically with the targeted focus of the sole remedy clause. The latter provides a remedy respecting "such breach," meaning "a breach" of a Section 8 representation. R2986, 2988 (PSA §2.03(e)); see also R3158 (MLPA §9(c)). The contrast shows that the parties knew how to limit the scope of remedial clauses and how to expand 23 remedial clauses to cover the entirety of ''this Agreement." And although Nomura invokes the principle that, if there is inconsistency between a specific provision and a general one, the specific one controls (Norn. Br. at 49), Nomura misses the point. Of course the sole remedy clause controls within its textual scope-i.e., Section 8; what Section 13 confirms is that the sole remedy clause should be carefully limited to its terms. The Appellate Division properly did just that. Tellingly, Nomura hardly offers an alternative interpretation of the sole remedy clause. It half-heartedly suggests that the clause "would presumably not apply" to limit remedies for the breach of Section 7 representations "that are in no way related to the Mortgage Loans" (Norn. Br. at 47), but there is no textual basis for such a distinction either in the sole remedy clause or in Section 7. The sole remedy clause in this MLP A has no catch-all languag~.g., "or otherwise respecting a breach regarding the Mortgage Loans"-for Nomura to hang its hat on, as some other MLPAs do. See below at 24-28 (discussing Ambac). B. The Cases Nomura Cites Do Not Change The Terms Of The Sole Remedy Clause Here Instead of advancing a plausible way to read the sole remedy clause in these transactions to apply to breaches of the No Untrue Statement Provision, Nomura asserts that other decisions, one from the Appellate Division and a handful from the Supreme Court, have reached different results. Norn. Br. at 37. Those cases neither bind this Court nor undermine the Appellate Division's sound analysis. 24 Nomura especially emphasizes the Appellate Division's prior decision in Ambac, 121A.D.3d514, in which the court affirmed the dismissal of a cause of action based on a no untrue statement provision involving a different securitization. But the key to the different result there lies in the different contractual language. In Ambac, the MLP A stated that cure-or-repurchase was the "sole and exclusive remedy under this Agreement or otherwise respecting a breach of representations or warranties hereunder with respect to the Mortgage Loans." 121 A.D. 3d at 518 (emphases added and quotation marks omitted). Because of that broad, catch-all language, and because the No Untrue Statement Provision appeared in the MLP A, Ambac held that the only remedy for its breach was the repurchase protocol. And the Court in Ambac was careful to point out what the Ambac MLPA did not say: It did not include any self-limiting language that cure- or-repurchase was the sole remedy "under [a particular] Section" of the MLP A. Id. Noting that similar language was used elsewhere in the Ambac MLP A, the Court reasoned, "the omission of [such] a term from the sentence ... must be deemed an intentional choice of the parties." Id. Here, by contrast, the MLPA's sole remedy clause does limit itself to "a breach of the representations and warranties contained in Section 8"-i.e., the loan-specific representations (emphasis added). The panel below (which included two members of the Ambac panel) took this difference seriously, properly 25 distinguishing its holding from Ambac because "the sole remedy provisions in Ambac ... were more broadly worded." R26. And while in Ambac other provisions of the MLP A spoke in terms of specific sections of the agreement, which contrasted with the explicitly broader scope of the Ambac sole remedy clause, here the converse is true: Section 13 of the MLPA broadly reserves "[a]ll rights and remedies ... under this Agreement" --exactly the kind of contract-wide reference that is missing from the sole remedy clause. Thus, whereas in Ambac the court could conclude that the parties "simply chose not to" limit the repurchase protocol to a particular section of the MLPA (121 A.D. 3d at 518), here the language dictates the opposite conclusion. And it is language, furthermore, over which Nomura, as the party that sponsored the securitization and controlled both parties to the MLP A, had complete control. Cf. Chatterjee Fund Mgmt., L.P. v. Dimensional Media Assocs., 260 A.D. 2d 159, 159 (1st Dept. 1999) (contractual ambiguity must be construed against the drafter). Nomura's response to this straightforward analysis is to pretend that the contracts do not say what they say. It admits that the "sole remedy provision" in the MLP A here "expressly references the section setting forth loan representations [i.e., Section 8]." Norn. Br. 45. Nomura nevertheless denies that this express reference is "different in substance" than the Ambac MLP A because the latter "incorporate[ ed] the sole remedy language into the section setting forth loan 26 representations and warranties" and then "state[d] that cure and repurchase constitute the sole remedy 'respecting a breach of representations or warranties hereunder."' Id. (emphasis in original). The meaning of this observation is unclear, but it does not change that the Ambac MLP A explicitly covered the entire agreement, including the No Untrue Statement Provision there. Nor does it change the language of the sole remedy clauses in these cases. Nomura similarly tries to rewrite the Ambac PSA. It compares language from the Ambac PSA's sole remedy clause to language in the sole remedy clause in the PSA here, asserting that the language in both is "very similar." Norn. Br. at 46. Indeed, many of the same words are used; but not all, and it is the differences that count. The Ambac PSA provided "that the sponsor's obligations to substitute or repurchase a mortgage loan 'shall be the Trustee's and Certificateholder's sole remedy for any breach thereof."' Norn. Br. 46 (quoting Ambac, 121 A.D. 3d at 515 (alteration omitted)). What is a "breach thereof'? The immediately preceding sentence (which Nomura omits) reveals the answer: "The Depositor hereby assigns to the Trustee ... all of [the Depositor's] right, title and interest in the Mortgage Loan Purchase Agreement."6 Thus, just like the parallel clause in the 6 See Pooling and Servicing Agreement dated as of September 1, 2006, between Structured Asset Mortgage Investments II Inc., as depositor, Wells Fargo Bank, N.A., as Trustee, and EMC Mortgage Corporation, as Servicer, Sponsor and 27 MLPA, the Ambac sole remedy clause in the PSA was all-encompassing. The sole remedy clause in the PSA here, by contrast, is expressly limited to Nomura's obligation under the repurchase protocol, which applies only to the MLPA's Section 8 representations, not its Section 7 representations. See above at 20-24. Nomura also cites a grab-bag of trial-court cases, but its reliance on them is unavailing. See Norn. Br. at 37-39. In Assured Guaranty Corp. v. EMC Mortgage, LLC, 39 Misc. 3d 1207(A), at *5 (Sup. Ct. N.Y. Cnty. 2013), the sole remedy clause was identical to that in Ambac. The remaining cases were all decided by the same IAS Court without the benefit of the Appellate Division's holding below, and reflected that court's concern that the No Untrue Statement Provision would render the repurchase protocol superfluous. That concern is misplaced, as shown below, and anyway simply does not warrant judicial rewriting of contracts whose terms are plain. Indeed, with respect, the IAS Court here went astray by relying on that court's faulty analysis. See R1083 (citing U.S. Bank Nat'l Ass'n. v. Countrywide Home Loans, Inc., No. 652388/2011, 2013 WL 2356295 (Sup. Ct. N.Y. Cnty. July 18, 2014)). Company, for Bear Steams Mortgage Funding Trust 2006-AR2, Mortgage Pass-Through Certificates, Series 2006-AR2, §2.03(a), available online at http://www.sec.gov/Archives/edgar/data/1374883/000106823806001022/bsmf2 006-ar2_psaandex.htm (last visited April 20, 2016); see also Ambac, 121 A.D.3d at 516 (recognizing same). 28 C. Enforcing The Sole Remedy Clause As Written Will Not Cause Uncertainty Or Upset Settled Expectations Unable to explain away the limited language of the sole remedy clause, Nomura asks this Court to ignore it in the name of policy arguments that have no bearing here. Nomura darkly cautions, for example, that the decision below would "create significant uncertainty ... if allowed to stand." Norn. Br. 40. The opposite is true: Enforcing contract language as written promotes stability, not uncertainty. W.W.W. Associates, 77 N.Y. 2d at 162. The Appellate Division's decision gives lower courts a clear roadmap for distinguishing broad, Ambac-like sole remedy clauses from more narrow clauses like those here. It also gives future contracting parties an easy-to-use guide for drafting them. Nomura's real grievance is not that the decision below creates uncertainty, but that Nomura does not like the result. Nomura also vaguely invokes the "fundamental structure of the governing agreements here, in Ambac, and across RMBS securitizations" (Norn. Br. at 47), as though all RMBS contracts must be interpreted the same way because they are RMBS contracts. But Nomura's insistence that "across a multitude ofRMBS agreements, for breaches stemming from allegedly 'defective' loans, the sole contractual remedy is cure or repurchase" (id.) is little more than question-begging. The differences in the language of the contracts matter. The Appellate Division rejected Nomura's categorical approach in favor of hewing closely to those differences, which accords with this Court's instruction that "[e]ffect must be 29 given to the [parties'] intent as indicated by the language employed." W. Union Tel. Co. v. Am. Commc'ns Ass'n, C.1.0., 299 N.Y. 177, 184 (1949). D. Nomura's Suggestion That The Trustee May Only Enforce Claims Covered By The Sole Remedy Clause Fails Finally, Nomura vaguely suggests-without forthrightly arguing-that the Trustee cannot invoke the No Untrue Statement Provision because it appears in the MLP A as opposed to the PSA and, unlike the MLP A's loan-specific representations, is not covered by the repurchase protocol. For example, Nomura refers to the MLP A and PSA as "stand-alone contracts" and observes that the Trustee is only a party to the PSA and that, although both agreements contain a repurchase protocol, the PSA does not include a No Untrue Statement Provision. Norn. Br. at 15, 21-22. Nomura did not advance this suggestion below and has therefore waived it. See Utica Mut. Ins. Co. v. Prudential Property and Cas. Ins. Co., 64 N.Y. 2d 1049, 1050 (1985). Waived or not, Nomura's suggestion is belied by the plain language of the agreements. The PSA and MLP A simply are not "stand-alone" contracts. The MLPA contemplates that "[p]ursuant to the [PSA], the Purchaser [i.e., the depositor] will assign all of its right, title and interest in and to the Mortgage Loans ... together with its rights under this Agreement, to the Trustee for the benefit of the Certificateholders." R3143 (MLPA §3(c)) (emphasis added). And under the PSA the Trustee is "entitled to exercise all rights of the Depositor under the 30 [MLPA] as if, for such purpose, it were the Depositor." R2976 (§2.01). Although Nomura points out this assignment is "to the extent of the Mortgage Loans," that is no limitation. In the previous paragraph, the PSA provides that the depositor "sells, transfers, assigns, sets over and otherwise conveys to the Trustee for the use and benefit of the Certificateholders ... all the right, title and interest of the Depositor in and to the Trust Fund," which is defined to include "the assets of REMIC I," which is in tum defined to include "the rights under the Mortgage Loan Purchase Agreement." See, e.g., R2976 (PSA §2.01), R2968 (definition of"Trust Fund"), R2955 (definition ofREMIC I, (v)). In any event, the allegations of misrepresentations underlying the complaints-as Nomura repeatedly points out (~,Norn. Br. at 2)--revolve around the mortgage loans, whether on a loan-by- loan basis or with respect to the loan pool as a whole. III. Limiting The Sole Remedy Clause To Its Terms Does Not Render It Meaningless Nomura also contends that the Appellate Division "reads [the sole remedy clause] out of the contracts." Norn. Br. at 40. According to Nomura, the Trustee's allegations that Nomura breached the No Untrue Statement Provision are "fundamentally duplicative" of the allegations that Nomura breached the loan- specific representations. Id. at 35. Nomura is wrong. In fact, it is Nomura whose argument would excise a term from the agreements. 31 In the first place, Nomura assumes that, because the Appellate Division did not address its argument that the Trustee's No Untrue Statement Provision claims are duplicative, that Court must have "accept[ ed] as a given" that the Trustee alleges no breach of the No Untrue Statement Provision "that [is] not also a breach of the [loan-specific] Representations." Norn. Br. 35. Nothingjustifies that assumption. The Appellate Division simply held, on a motion to dismiss, that the plain language of the sole remedy clause did not foreclose the Trustee's claims as a matter of law. At this stage of the proceedings, the Trustee need only present a claim for relief under the No Untrue Statement Provision. The Trustee has done so, and it is therefore entitled to move forward. See above at 16-20. In any event, the Trustee's claims under the No Untrue Statement Provision are not "fundamentally duplicative" of those under the loan-specific representation claims. The loan-by-loan representations are breached whenever a single loan is not as warranted-for example, where a borrower's income or credit score was misrepresented. Such individual breaches would not breach the No Untrue Statement Provision because that Provision's "in the aggregate" language is directed to Nomura's statements about the transaction as a whole. For the same reason, breaches of the No Untrue Statement Provision focus on misrepresentations and misleading omissions different in kind from a misrepresentation of an individual loan. Just as the other representations in Section 7 of the MLP A apply 32 transaction-wide, the No Untrue Statement Provision targets how Nomura, in the transaction documents, characterized the securitization, Nomura's business practices, or the loan pool as a whole. Thus, although Nomura repeatedly insists that the Trustee's claims under the No Untrue Statement Provision "are for the same alleged misrepresentations that underlie Plaintifr s claims brought in connection with the mortgage loan representations and warranties" (Norn. Br. at 6- 7), that conclusory assertion ignores the Trustee's allegations and contradicts the distinct language of the No Untrue Statement Provision. Even without "in the aggregate" language, Justice Fried recognized a similar dichotomy in an RMBS agreement containing a no untrue statement provision. In U.S. Bank, N.A. v. Greenpoint Mortgage Funding, Inc., the plaintiff alleged that "pervasive" loan-level breaches rose "beyond the narrow constraints" of a repurchase remedy, independently breaching "the overarching language" of the no untrue statement provision. See 907 N.Y.S. 2d 441, 2010 WL 841367, at *7 (Sup. Ct. N.Y. Cnty. Mar. 3, 2010). Justice Fried denied the defendant's motion to dismiss that claim, concluding that there might be "a point at which the breaches of representations and warranties in individual loans rise to a violation of' a no untrue statement provision. Id. at *8. Justice Fried thus credited the distinction at the pleading stage between loan-specific representations and a no untrue statement 33 provision, the latter of which applies to misstatements and misleading omissions about the quality of the loan pool as a whole. 7 Nomura insists that "[ n ]o provisions in the MLP As-including the No Untrue Statement Provision-or the PSAs provide that, if breaches concerning the characteristics of the loans are pervasive or widespread, then the sole remedy provision does not apply." Norn. Br. at 41. Nomura swings at straw men. By its terms, the sole remedy clause does not apply to the No Untrue Statement Provision. The broad reservation of rights in Section 13 of the MLP A further confirms, if confirmation were needed, that the sole remedy clause must be limited to those terms. So whatever the No Untrue Statement Provision covers is beyond reach of the sole remedy clause. And the No Untrue Statement Provision covers materially misleading statements in any of the transaction documents "taken in the aggregate." Thus, the distinction between transaction-wide misstatements and omissions, on the one hand, and loan-by-loan misrepresentations, on the other, faithfully reflects this interplay between the express terms of the No Untrue Statement Provision and the limited scope of the sole remedy clause. 7 Nomura points out that there was no sole remedy provision in Greenpoint. Norn. Br. at 39 n.26. True but irrelevant. Greenpoint confirms that the Trustee's proposed interpretation of the No Untrue Statement Provision itself is reasonable. The Trustee separately explained above that the sole remedy clause does not preclude reliance on that representation (however construed). 34 In short, the Trustee has proffered an interpretation that harmonizes the No Untrue Statement Provision with the sole remedy clause and the repurchase protocol of which it is a part, leaving independent room for both. Its interpretation accords with the language of the contracts and the principle that "[a]ll parts of an agreement are to be reconciled, if possible." Nat'l Conversion Corp. v. Cedar Bldg. Corp., 23 N.Y. 2d 621, 625 (1969) (emphasis added). Nomura, by contrast, did not offer below and does not offer on appeal any interpretation that leaves meaningful scope to the No Untrue Statement Provision. On the contrary, Nomura's theory seems to be that, as long as a breach of the No Untrue Statement Provision is in some way related to the mortgage loans, the Trustee cannot assert a separate claim for the breach. Yet the transactions here are residential mortgage loan securitizations, and the transaction documents revolve around the loan pools Nomura securitized. The No Untrue Statement Provision broadly warrants that those documents contain no untrue statements and omit no material information "taken in the aggregate." If the Trustee cannot obtain relief for Nomura's mischaracterizations about the loan pool as a whole, then the broad terms of the No Untrue Statement Provision are toothless. In truth, then, it is Nomura, not the Trustee, who invites this Court to effectively excise terms from the contracts by arguing that the sole remedy clause should swallow up the No Untrue Statement Provision. The way to avoid such an 35 improper result is to do exactly what the Appellate Division did: construe the sole remedy clause according to its terms. Cf. W.W.W. Assoc., 77 N.Y. 2d at 162. * * * This appeal boils down to the language of the sole remedy clause that appears in the governing agreements. It is different than the clause Nomura now wishes were there; it is narrower, more targeted. To paraphrase one of the cases Nomura cites, Nomura "may [now] regret" agreeing to such a sole remedy clause, "but the courts let [it] lie on the bed [it] made." Metro Life Ins. Co. v. Noble Lowndes Int'l, Inc., 84 N.Y. 2d 430, 436 (1994) (quotation marks omitted). 36 CONCLUSION This Court should affirm the Appellate Division's Order. Dated: New York, New York April 20, 2016 Daniel M. Sullivan Adam T. Kirgis 750 Seventh Avenue, 26th Floor New York, New York 10019 Telephone: (646) 837-5151 Attorneys for Plaintiffs-Respondents HSBC Bank USA, NA., as Trustee for Nomura Home Equity Loan, Inc., Series 2007-2 and Nomura Asset Acceptance Corporation Mortgage Pass-Through Certificates, Series 2006-AF2 KASOWITZ, BENSON, TORRES & FRIEDMAN LLP 1633 Broadway New York, NY 10019 (212) 506-1700 Attorneys for Plaintiffs-Respondents HSBC Bank USA, NA., as Trustee for Nomura Home Equity Loan, Inc., Series 2006-FM2 and Nomura Home Equity Loan, Inc., Series 2007-3 37