To Be Argued By:
HOWARD F. SIDMAN
Time Requested: 15 Minutes
APL-2016-00237
New York County Clerk’s Index No. 653048/13
Court of Appeals
STATE OF NEW YORK
DEUTSCHE BANK NATIONAL TRUST COMPANY, SOLELY IN ITS
CAPACITY AS TRUSTEE OF THE HARBORVIEW MORTGAGE LOAN TRUST 2007-7,
Plaintiff-Appellant,
—against—
FLAGSTAR CAPITAL MARKETS CORPORATION,
Defendant,
—and—
QUICKEN LOANS INC.,
Defendant-Respondent.
RESPONDENT’S BRIEF
d
HOWARD F. SIDMAN
TODD R. GEREMIA
JONES DAY
250 Vesey Street
New York, New York 10281
Telephone: (212) 326-3939
Facsimile: (212) 755-7306
JEFFREY B. MORGANROTH
MORGANROTH & MORGANROTH, PLLC
344 North Old Woodward Avenue,
Suite 200
Birmingham, Michigan 48009
Telephone: (248) 864-4000
Attorneys for Defendant-Respondent,
Quicken Loans Inc.August 10, 2017
DISCLOSURE STATEMENT
Pursuant to 22 N.Y.C.R.R. § 500.1(f), Defendant-Respondent Quicken
Loans Inc. states that Quicken Loans Inc. is a wholly owned subsidiary of Rock
Holdings Inc. Quicken Loans Inc.’s corporate affiliates are Title Source Inc.; In-
House Realty LLC; Rock Processing LLC; and Rock Connections LLC. One
Reverse Mortgage LLC is a corporate subsidiary of Quicken Loans Inc.
TABLE OF CONTENTS
ii
DISCLOSURE STATEMENT .................................................................................. i
TABLE OF AUTHORITIES ................................................................................... iv
INTRODUCTION .................................................................................................... 1
QUESTIONS PRESENTED ..................................................................................... 4
STATEMENT OF THE CASE ................................................................................. 5
A. The Sale of Loans by Quicken Loans to Morgan Stanley ......... 5
B. The Repurchase Provision ......................................................... 6
C. The Complaint and Quicken Loan’s Motion to Dismiss ........... 7
D. The Supreme Court’s Order Dismissing the Complaint ............ 8
E. The First Department’s Decision and Order .............................. 9
ARGUMENT .......................................................................................................... 12
I. THE FIRST DEPARTMENT PROPERLY HELD THAT THIS
COURT’S DECISION IN ACE MANDATES DISMISSAL OF
DEUTSCHE BANK’S ACTION ....................................................... 12
A. Under ACE, a Cause of Action for Breach of
Representations and Warranties Accrues When They Are
Made ......................................................................................... 12
B. The “Accrual” Language in the Repurchase Provision
Does Not Extend the Limitations Period ................................. 14
1. The Repurchase Provision Imposes a Procedural
Condition, Not a Substantive One ................................. 15
2. Deutsche Bank’s Attempts to Make the
Repurchase Provision a Substantive Condition Are
Unavailing ...................................................................... 20
C. The Court Should Not Depart From Longstanding
Principles of New York Law to Follow an Unpublished
Decision by the Delaware Chancery Court .............................. 24
II. THE GENERAL OBLIGATIONS LAW SEPARATELY
BARS THIS ACTION ....................................................................... 26
A. The General Obligations Law Does Not Permit an
Agreement to Extend a Limitations Period Before
Accrual ..................................................................................... 26
TABLE OF CONTENTS
(continued)
Page
- iii -
B. The General Obligations Law Does Not Permit
Agreements to Make Accrual Indefinite or to Extend a
Limitations Period Beyond Six Years ..................................... 31
CONCLUSION ....................................................................................................... 32
- iv -
TABLE OF AUTHORITIES
Page(s)
CASES
ACE Sec. Corp., Home Equity Loan Trust, Series 2006-SL2 v. DB
Structured Prods., Inc.
25 N.Y.3d 581 (2015) ..................................................................................passim
ACE Sec. Corp. v. DB Structured Prods., Inc.,
112 A.D.3d 522 (1st Dep’t 2013), aff’d, 25 N.Y.3d 581 (2015) .......................... 8
Bank of N.Y Mellon v. WMC Mortg., LLC,
17 N.Y.S.3d 613 (Sup. Ct. N.Y. Cty. 2015), aff’d as modified, 28
N.Y.3d 1039 (2016) ............................................................................................ 15
Bank of N.Y.Mellon v. WMC Mortg., LLC,
No. 653831/13, 2478, 2017 N.Y. App. Div. LEXIS 3796 (1st
Dep’t 2017) ................................................................................................... 15, 28
Bayridge Air Rights v. Blitman Constr. Corp.,
80 N.Y.2d 777 (1992) ......................................................................................... 31
Bear Stearns Mortg. Funding Trust 2006-SL1 v. EMC Mortg. LLC,
No. 7701-VCL, 2015 WL 139731 (Del. Ch. Jan. 12, 2015) .............................. 25
Bear Stearns Mortg. Funding Trust 2006-SL1 v. EMC Mortg. LLC,
No. 82, 2015, 2015 WL 1228954 (Del. Mar. 17, 2015) ..................................... 26
Bulova Watch Co. v. Celotex Corp.,
46 N.Y.2d 606 (1979) ......................................................................................... 22
Deutsche Bank Nat’l Trust Co. v. Flagstar Capital Mkts. Corp.,
36 N.Y.S.3d 135 (1st Dep’t 2016) ................................................................ 15, 19
Deutsche Bank Nat’l Trust Co. v. Quicken Loans Inc.,
810 F.3d 861 (2d Cir. 2015) ........................................................................passim
v
Ely-Cruikshank Co. v. Bank of Montreal,
81 N.Y.2d 399 (1993) ......................................................................................... 30
Hahn Auto. Warehouse, Inc. v. American Zurich Ins. Co.,
18 N.Y.3d 765 (2012) ............................................................................. 13, 21, 22
John J. Kassner & Co. v. City of New York,
46 N.Y.2d 544 (1979) ..................................................................................passim
Lehman XS Trust, Series 2006-4N,
643 F. App’x 14, 15 (2d Cir. 2016) .............................................................. 15, 28
Lehman XS Trust, Series 2006-GP2 v. Greenpoint Mortg. Funding,
Inc., No. 12 Civ. 7935 (ALC) (HBP), 2014 WL 1301944
(S.D.N.Y. Mar. 31, 2014) ....................................................................... 15, 28, 29
Minskoff Grant Realty & Mgt. Corp. v. 211 Mgr. Corp., A.D.3d 843,
845 (2d Dep’t 2010) .......................................................................................... 21
Shapley v. Abbott,
42 N.Y. 443 (1870) ............................................................................................. 27
U.S. Bank Nat’l Ass’n, Solely as Trustee of the J.P. Morgan Alt. Loan
Trust 2007-A2 v. Greenpoint Mortg. Funding, Inc.,
No. 651954/2013, 2015 WL 915444 (Sup. Ct. N.Y. Cty. Mar. 3,
2015), aff’d, 45 N.Y.S.3d 11 (1st Dep’t 2016) ............................................. 15, 28
STATUTES AND REGULATIONS
CPLR 213(2) ........................................................................................................ 8, 14
N.Y. Gen. Oblig. Law § 17-103 ............................................................................... 27
N.Y. Gen. Oblig. Law § 17-103(1) ...................................................................passim
N.Y. Gen. Oblig. Law § 17-103(3) ............................................................ 2, 3, 27, 29
22 N.Y.C.R.R. § 500.1(f) ............................................................................................ i
INTRODUCTION
As the First Department ruled, “dismissal of th[is] action is mandated by the
Court of Appeals’ decision in ACE Sec. Corp., Home Equity Loan Trust, Series
2006-SL2 v. DB Structured Prods., Inc. (25 N.Y.3d 581 [2015]), which sets forth a
clear rule that a breach of contract claim in an RMBS put-back action accrues on
the date the allegedly false representations and warranties were made.” (Order at
3). The Plaintiff-Appellant here, Deutsche Bank National Trust Company
(“Deutsche Bank”), brought this action for alleged breach of representations and
warranties more than six years after those representations and warranties were
made. Under a straightforward application of the rule from this Court’s ACE
decision, Deutsche Bank’s action is therefore barred.
The First Department correctly determined that ACE mandates dismissal of
the Complaint here and that, alternatively, the Complaint should be dismissed for
the reasons set out by the U.S. Court of Appeals for the Second Circuit in Deutsche
Bank Nat’l Trust Co. v. Quicken Loans Inc., 810 F.3d 861 (2d Cir. 2015). In that
case, both the U.S. District Court for the Southern District of New York and the
Second Circuit rejected the same arguments Deutsche Bank made to both the
Supreme Court and the First Department in this action and now reiterates to this
Court. Like the First Department, the Second Circuit ruled that, under a
straightforward application of this Court’s decision in ACE, Deutsche Bank’s
2
claims for alleged breach of representations and warranties accrued when those
representations and warranties were made and held that Deutsche Bank “has not
persuaded us that the instant contract functions differently than that considered by
the New York Court of Appeals in ACE.” 810 F.3d at 867. The federal appellate
court also observed that “the New York Court of Appeals’ recent decision [in
ACE] is clear” concerning how to resolve the statute of limitations issues presented
by these cases. Id. at 865. As the First Department’s and the Second Circuit’s
decisions reflect, ACE disposes of this appeal. A total of four courts applying New
York law have now rejected the very arguments that Deutsche Bank re-asserts in
this Court, under the same contractual language.
Moreover, even assuming that the contract here could be read to delay onset
of the limitations period in the manner Deutsche Bank contends—and, under ACE,
it cannot—New York has long codified two rules that separately foreclose
Deutsche Bank’s efforts to evade the fact that it brought this lawsuit more than six
years after the alleged breach of contract occurred. First, parties may not agree to
extend a limitations period before a cause of action for breach of contract even
arises. See N.Y. Gen. Oblig. Law § 17-103(1) (parties may extend the time for
bringing suit only “after the accrual of the cause of action”) (emphasis added); id.
§ 17-103(3) (any purported extension in violation of this rule “has no effect”).
And, second, even after a cause of action arises, parties may agree to an extension
3
only if it is both (i) finite, and (ii) for an additional period that is less than the
original limitations period (i.e., less than six years). See N.Y. Gen. Oblig. Law §
17-103(1) (permitting an extension “within the time that would be applicable if the
cause of action had arisen at the date of the promise [to extend the limitations
period], or within such shorter time as may be provided in the promise”).
Deutsche Bank’s brief does not address—or even mention—these statutory
provisions, but its arguments contravene both of them. As Deutsche Bank would
have it, the contract at issue here indefinitely delays accrual of any cause of action
for breach of representations and warranties until after, inter alia, Deutsche Bank
discovers an alleged breach and makes a demand on Quicken Loans to comply
with the agreement. That is not only an improper ex ante agreement to extend a
limitations period, but it would extend the period indefinitely and potentially for a
period far in excess of the ordinary, six-year limitations period applicable to a
cause of action for breach of contract. That has long been forbidden by New York
law, as this Court has previously held. See, e.g., John J. Kassner & Co. v. City of
New York, 46 N.Y.2d 544, 552 (1979) (applying the rule of General Obligations
Law § 17-103(1) & (3) that a provision “adopted at the inception of the contract
and not after the cause of action had accrued[] may not serve to extend the Statute
of Limitations”).
4
Under this Court’s recent decision in ACE and, separately, under the long-
standing rules codified in the General Obligations Law that the First Department
applied, the First Department properly held that Deutsche Bank’s action is time-
barred. The Order on appeal should, therefore, be affirmed.
QUESTIONS PRESENTED
There are three independent bases for affirming the Appellate Division’s
Order. If the Court answers any of the following three questions in the affirmative,
the Appellate Division’s Order should be affirmed:
1. Under this Court’s decision in ACE, “[w]here … representations and
warranties concern the characteristics of their subject as of the date they are made,
they are breached, if at all, on that date.” 25 N.Y.3d at 589. Deutsche Bank’s
action here is predicated on representations and warranties that were made more
than six years before it commenced this action. Under ACE, and in light of New
York’s six-year statute of limitations for a breach of contract action, did the First
Department properly rule that Deutsche Bank’s causes of action for breach of
contract are time-barred?
2. Under § 17-103(1) of the General Obligations Law, parties may not
extend a limitations period before a cause of action for breach of contract even
arises. A provision in the parties’ contract outlining a mortgage loan repurchase
remedy states, in part, that a cause of action “arising out of the breach of …
5
representations and warranties” “shall accrue” upon satisfaction of a series of
conditions to occur in the future. Does this provision improperly purport to extend
the six-year limitations period on a cause of action for breach of contract before
any cause of action arises, in violation of § 17-103(1) of the General Obligations
Law?
3. Separately, § 17-103(1) of the General Obligations Law provides that,
even after a cause of action for breach of contract arises, parties may agree to an
extension of the limitations period only if the extension is both (i) finite, and (ii)
for an additional period that is less than the original limitations period (i.e., less
than six years). The same repurchase provision referenced in question 2, above,
would purport to extend the limitations period on any cause of action for breach of
a representation or warranty until sometime after, among other events, “discovery”
of such a breach by Deutsche Bank and potentially for a period of up to thirty years
after an alleged breach. Does this provision violate § 17-103(1) of the General
Obligations Law on these additional grounds?
STATEMENT OF THE CASE
A. The Sale of Loans by Quicken Loans to Morgan Stanley
On June 1, 2006, Quicken Loans entered into a contract, termed the Second
Amended and Restated Mortgage Loan Purchase and Warranties Agreement
(“MLPWA”), to sell mortgage loans to Morgan Stanley Mortgage Capital, Inc.
6
(“Morgan Stanley”). (R.28-29, 31 (Compl. ¶¶ 14-16, 22); R.78-95 (MLPWA §§
9.01, 9.02)). The contract set out representations and warranties by Quicken Loans
concerning the characteristics of the loans at the time of their sale. (R.78-95).
Each of those representations and warranties was made “as to each Mortgage Loan,
as of the related Closing Date for such Mortgage Loan.” (R.82 (MLPWA § 9.02)
(emphasis added)). Pursuant to the MLPWA and a series of Purchase Price and
Term Letters executed between Quicken Loans and Morgan Stanley, the loans
were sold in groups on various dates from December 7, 2006 to May 30, 2007.
(R.645-1514). The Closing Date for the last sale of loans under the MLPWA was
May 31, 2007. (Id.)
B. The Repurchase Provision
The MLPWA set forth, in a section of the agreement addressing remedies
for breach, the conditions precedent to bringing an action for breach of the
representations and warranties. (R.46 (Compl. ¶ 70); R.95-98 (MLPWA § 9.03)).
This provision required, among other things, that Quicken Loans be given sixty
days to cure or repurchase defective loans prior to the commencement of any
action for “breach of any representations and warranties.” (Id.) In pertinent part,
Section 9.03 of the MLPWA provided that:
Any cause of action against the Seller relating to or
arising out of the breach of any representations and
warranties made in Subsections 9.01 and 9.02 shall
accrue as to any Mortgage Loan upon (i) discovery of
7
such breach by the Purchaser or notice thereof by the
Seller to the Purchaser, (ii) failure by the Seller to cure
such breach, substitute a Qualified Substitute Mortgage
Loan or repurchase such Mortgage Loan as specified
above and (iii) demand upon the Seller by the Purchaser
for compliance with this Agreement.
(R.98). The MLPWA further provided that this cure and repurchase remedy was
the sole remedy for a breach of the representations and warranties. (Id.)
C. The Complaint and Quicken Loan’s Motion to Dismiss
This action by Deutsche Bank for alleged breach of representations and
warranties was not filed until August 30, 2013, more than six years after the
Closing Dates on which the pertinent representations and warranties were effective
with respect to the loans sold pursuant to the MLPWA. (R.294-295).
On March 17, 2014, Quicken Loans moved to dismiss the Complaint based
on the six-year statute of limitations applicable to breach of contract actions.
(R.20-21). As Quicken Loans stated in its motion to dismiss, the loans at issue in
this action were all sold between December 2006 and May 31, 2007, and thus the
representations and warranties on those loans were effective—and any alleged
breach of those representations and warranties would have occurred, if at all—by
no later than May 2007, which is more than six years before this action was
brought in August 2013. (R.646-1514).
8
D. The Supreme Court’s Order Dismissing the Complaint
The Supreme Court granted Quicken Loan’s motion to dismiss, ruling that
“the entire complaint is barred by the statute of limitations.” (R.18). The court
held that “any breach of Quicken’s representations and warranties under the
[MLPWA] occurred on or before ... May 31, 2007, more than six years prior to the
commencement of the action,” which was therefore “untimely under New York’s
six year statute of limitations for breach of contract. (CPLR 213(2)).” (R.15).
Based on ACE Securities Corp. v. DB Structured Products, Inc., 112 A.D.3d
522 (1st Dep’t 2013), aff’d, 25 N.Y.3d 581 (2015), the Supreme Court rejected
Deutsche Bank’s argument that “the cause of action arises under an ‘Accrual
Clause’ in the [MLPWA], rather than at the time the representations and warranties
were made.” (R.15). It held that “such a provision cannot serve to extend the
statute of limitations for a cause of action for breach of representations and
warranties which, under this Department’s decision in ACE (112 AD3d at 522),
accrues when the representations and warranties are made, not when the
repurchase demand is made and refused.” (R.15-16).
The Supreme Court also rejected Deutsche Bank’s argument that “Quicken
breached its obligation under MLPWA § 9.03 to notify the Trustee of Quicken’s
own discovery of breaches of the representations and warranties, and that the dates
of Quicken’s discovery cannot be resolved on a motion to dismiss.” (R.16). The
9
court noted that “[c]onsistent with this Department’s holding in ACE that the
failure to comply with a repurchase demand is not an independent breach of
contract, this court has previously held that a seller’s failure to notify the trustee of
breaching loans is also not an independent breach of contract.” (Id.) “[N]on-
compliance with the notice requirement under the repurchase protocol, a remedial
provision,” the court ruled, “does not give rise to an independent breach of contract
by the seller, or expand the remedies available against the seller under the
contract.” (Id.)
E. The First Department’s Decision and Order
After the Supreme Court granted Quicken Loans’ motion to dismiss, this
Court affirmed the First Department’s decision in ACE. By Decision and Order
dated August 11, 2016, the First Department in the instant case applied this Court’s
decision in ACE and unanimously affirmed the Supreme Court’s order, ruling that
this action is time-barred under ACE and, separately, for the reasons stated by the
Second Circuit in Deutsche Bank National Trust Co. v. Quicken Loans Inc., 810
F.3d 861 (2d Cir. 2015).
Specifically, the First Department dismissed the Complaint on two separate
grounds. First, the court applied the rule from ACE that “a breach of contract
claim in an RMBS put-back action accrues on the date the allegedly false
representations and warranties were made.” (Order at 8 (citing ACE, 25 N.Y.3d at
10
589)). The court observed that the representations and warranties at issue in this
action were effective between December 7, 2006 and May 31, 2007. Accordingly,
applying the six-year statute of limitations for a breach of contract cause of action,
the First Department ruled that “plaintiff’s causes of action for breach of contract
accrued, at the latest, on May 31, 2007, and this action, commenced more than six
years later on August 30, 2013, is barred by the statute of limitations.” (Id. at 9).
The First Department rejected Deutsche Bank’s argument that the “accrual”
term in § 9.03 of the MLPWA operates to extend the limitations period here, until
after Deutsche Bank discovers the alleged breaches and makes a demand on
Quicken Loans to repurchase loans allegedly not complying with the
representations and warranties in the agreement. That argument, the First
Department noted, would improperly “‘postpone the time from which the period of
limitation is to be computed’” (Order at 9-10 (quoting Kassner, 46 N.Y.2d at
551)), and would, separately, “contravene the principle that ‘New York does not
apply the ‘discovery’ rule to statute of limitations in contract actions,’” as that
long-standing principle of New York law was recently re-affirmed by this Court in
ACE. (Order at 10 (quoting ACE, 25 N.Y.3d at 594)). This would “create[] an
imprecisely ascertainable accrual date—possibly occurring decades in the future,
since some of the loans extend for 30 years—which the Court of Appeals has
11
‘repeatedly ... rejected in favor of a bright line approach.’” Id. (quoting ACE, 25
N.Y.3d at 593-94).
The First Department separately held that, even assuming for the sake of
argument that the accrual provision in the MLPWA could be enforced, Deutsche
Bank’s action would still be untimely. The First Department invoked the Second
Circuit’s decision in “a matter involving an accrual provision that is materially
identical to the one at issue here,” and indeed, involving the same parties as this
case. (Order at 10, discussing Deutsche Bank Nat’l Trust Co. v. Quicken Loans
Inc., 810 F.3d 861 (2d Cir. 2015)). The First Department held, relying on the
framework applied in ACE and by the Second Circuit following ACE, that the
demand requirement in the MLPWA is a procedural precondition to suit—not a
substantive condition that must be fulfilled before a cause of action for breach of
contract arises—and therefore does not forestall the start of the limitations period
on a cause of action for breach of contract. On this separate ground, the First
Department ruled that “all of plaintiff’s claims accrued no later than May 31, 2007,
and were not timely asserted when plaintiff commenced this action more than six
years later.” (Order at 14).
The First Department subsequently granted Deutsche Bank’s motion for
leave to appeal to this Court. The Clerk of this Court, in turn, informed the parties
by letter dated February 8, 2017 that Deutsche Bank’s appeal may be determined
12
by the alternative review procedure, pursuant to section 500.11 of the Court’s
Rules of Practice. By a subsequent letter, dated April 26, 2017, the Clerk’s Office
informed the parties that the Court had terminated its alternative review procedure
for Deutsche Bank’s appeal and ordered normal-course briefing and argument.
ARGUMENT
I. THE FIRST DEPARTMENT PROPERLY HELD THAT THIS
COURT’S DECISION IN ACE MANDATES DISMISSAL OF
DEUTSCHE BANK’S ACTION
A. Under ACE, a Cause of Action for Breach of Representations and
Warranties Accrues When They Are Made
As the First Department correctly held, this Court’s recent decision in ACE
Securities Corp. v. DB Structured Products, Inc., 25 N.Y.3d 581 (2015),
“mandate[s]” dismissal of Deutsche Bank’s action, which was brought more than
six years after the date on which the representations and warranties became
effective. (Order at 3 (emphasis added)). ACE resolves the issue of when the
statute of limitations starts to run on an action for breach of representations and
warranties with respect to loans in residential-mortgage-based securities
transactions.
In ACE, the Court held that such actions must be brought within six years of
the date on which the representations and warranties were made. It stated that
“[w]here ... representations and warranties concern the characteristics of their
subject as of the date they are made, they are breached, if at all, on that date.” 25
13
N.Y.3d at 589. The Court rejected the argument that, under a repurchase provision
in the contract at issue there, an alleged breach does not occur until a demand is
made for repurchase of the purportedly defective loans and the defendant refuses
the demand. Id. ACE held that the date on which the representations and
warranties were allegedly breached is the triggering event for the running of the
statute of limitations, not a later date on which a demand is made. Id. This is
because “New York does not apply the ‘discovery’ rule to statutes of limitations in
contract actions.” ACE, 25 N.Y.3d at 594. It is a “bright-line rule” that a breach of
contract cause of action arises when a party “‘possess[es] the legal right to [make
a] demand [...],’ not years later when [it] actually [makes] the demand.” Id. at 594
(quoting Hahn Auto. Warehouse, Inc. v. American Zurich Ins. Co., 18 N.Y.3d 765,
767 (2012) (emphasis supplied by the Court in ACE))).
The U.S. Court of Appeals for the Second Circuit applied this rule from ACE
in dismissing a lawsuit by Deutsche Bank, acting in its role as a Trustee, against
Quicken Loans and addressing a contractual provision that, in pertinent part, is
indistinguishable from the provision at issue on this appeal. The Second Circuit
observed that: “The New York Court of Appeals’ recent decision [in ACE] is
clear: A cause of action for breach of contractual representations and warranties
that guarantee certain facts as of a certain date [] accrues on the date those
14
representations and warranties become effective.” Deutsche Bank, 810 F.3d at
865.
Applying that straightforward teaching from ACE, the First Department here
properly ruled that “plaintiff’s causes of action for breach of contract accrued, at
the latest, on May 31, 2007, and this action, commenced more than six years later
on August 30, 2013, is barred by the statute of limitations.” (Order at 9 (citing
CPLR 213(2))). Likewise, the Second Circuit affirmed the district court’s
dismissal of Deutsche Bank’s action against Quicken Loans where Deutsche Bank
had claimed that Quicken Loans breached representations and warranties that were
made on May 8, 2007, but the Trustee had not commenced the lawsuit asserting
that alleged breach until more than six years later on October 8, 2013. See 810
F.3d 861. Both actions by Deutsche Bank against Quicken Loans were thus
deemed time-barred because they were made more than six years after the
representations and warranties at issue were allegedly breached.
B. The “Accrual” Language in the Repurchase Provision Does Not
Extend the Limitations Period
The rule from ACE applied by the First Department and the Second Circuit
disposes of this appeal. This action was commenced more than six years after the
representations and warranties from the MLPWA at issue were made. While
Deutsche Bank contends that a provision in the contract governing remedies
operates to delay the onset of the limitations period on a cause of action for breach
15
of contract, every New York court to have considered this kind of provision,
including the First Department below and, as noted, the Second Circuit in a suit
between these very parties, has rejected Deutsche Bank’s argument.1 Thus,
contrary to Deutsche Bank’s assertion in its brief (at 1), this appeal does not
present an “important” question, but one that has been definitively resolved.
1. The Repurchase Provision Imposes a Procedural Condition,
Not a Substantive One
Deutsche Bank contends that ACE does not dispose of this appeal because
the repurchase clause in § 9.03 of the agreement here, though similar to that in
ACE, includes the additional word “accrue.” (DB Br. at 13-17). According to
Deutsche Bank, this word should be deemed to delay indefinitely the running of
1 See Deutsche Bank Nat’l Trust Co. v. Flagstar Capital Mkts. Corp., 36
N.Y.S.3d 135, 137 (1st Dep’t 2016); Deutsche Bank Nat’l Trust Co., solely as
Trustee of the GSR Mortg. Loan Trust 2007-OA1 v. Quicken Loans, Inc., 810 F.3d
861, 867 (2d Cir. 2015), aff’g No. 13 Civ. 6482 (PAC), 2014 WL 3819356, at *3
(S.D.N.Y. Aug. 4, 2014) (“Thus, notwithstanding the ‘shall accrue’ language ... the
Trustee has not persuaded us that the instant contract functions differently than that
considered by the New York Court of Appeals in ACE.”); Lehman XS Trust, Series
2006-4N, 643 F. App’x 14, 15 (2d Cir. 2016), aff’g, Lehman XS Trust v.
Greenpoint Mortg. Funding, Inc., 991 F. Supp. 2d 472, 478-79 (S.D.N.Y. 2014);
Bank of N.Y Mellon v. WMC Mortg., LLC, 17 N.Y.S.3d 613, 617 (Sup. Ct. N.Y.
Cty. 2015), aff’d as modified, 28 N.Y.3d 1039 (2016); Bank of N. Y. Mellon v.
WMC Mortg., LLC, No. 653831/13, 2478, 2017 N.Y. App. Div. LEXIS 3796 (1st
Dep’t 2017); U.S. Bank Nat’l Ass’n, Solely as Trustee of the J.P. Morgan Alt. Loan
Trust 2007-A2 v. Greenpoint Mortg. Funding, Inc., No. 651954/2013, 2015 WL
915444, at *6 & n.4 (Sup. Ct. N.Y. Cty. Mar. 3, 2015), aff’d, 45 N.Y.S.3d 11 (1st
Dep’t 2016); Lehman XS Trust, Series 2006-GP2 v. Greenpoint Mortg. Funding,
Inc., Nos. 12 Civ. 7935 (ALC) (HBP), 2014 WL 1301944, at *3 (S.D.N.Y. Mar.
31, 2014).
16
the statute of limitations until the Trustee discovers alleged breaches and decides to
make a demand on Quicken Loans for cure or repurchase of any allegedly
defective loan and was refused. (Id.) In other words, as Deutsche Bank would
have it, it could wait until 2036 (i.e., through the full life of the loan) to file suit
alleging breaches of representations and warranties that occurred, if ever, in 2006,
and its claim should still be deemed timely so long as Deutsche Bank commenced
a lawsuit within six years of having demanded repurchase. That hardly serves the
purpose of “fairness to the defendant,” which Deutsche Bank acknowledges is a
“crucial aim of statutes of limitation.” (Id. at 17.)
The First Department properly rejected this notion, stating that “Plaintiff’s
attempt to distinguish ACE by the absence of an accrual provision in that case is
unavailing.” (Order at 9). As noted, ACE’s core holding is that where a claim is
based on a breach of representations and warranties, that breach occurs when the
representations and warranties are made—here, no later than the Closing Date:
“Where, as in this case, representations and warranties concern the characteristics
of their subject as of the date they are made, they are breached, if at all, on that
date.” ACE, 25 N.Y.3d at 589.
ACE further held that the limitations period begins running at the time the
representations and warranties are made even where a contract provides that a
plaintiff must comply with procedural requirements before bringing suit —such as
17
notice, demand, affording an opportunity to cure, and the defendant’s failure to
repurchase. Relying on well-established New York law, ACE differentiated
between a substantive condition precedent and a procedural condition precedent to
determine when the limitations period should start. With a substantive condition
precedent, there is no actionable “legal wrong” until the plaintiff satisfies the
conditions laid out in the contract. Id. at 597. Conversely, with a procedural
condition precedent, the “legal wrong has occurred” already—here, the alleged
breach of the representation and warranty—and the conditions are merely steps the
plaintiff must take before commencing a lawsuit. Id.
The demand-and-repurchase conditions in ACE were procedural. “The Trust
suffered a legal wrong at the moment [the seller] allegedly breached the
representations and warranties.” Id. At that moment, a cause of action existed, but
“the Trust was just limited in its remedies for that breach” until it cleared the
procedural hurdles set out in the contract. Id. at 598. ACE therefore distinguished
procedural conditions—including the notify-and-repurchase remedies provision at
issue there—from situations in which “parties ... contractually agree to undertake a
separate obligation, the breach of which does not arise until some future date.” Id.
at 594.
ACE makes clear that a repurchase obligation in connection with a breach of
a representation and warranty does “not fit this description” for a substantive
18
condition because it does not “expressly guarantee[] future performance.” Id. at
594-95. Instead, the repurchase obligation at issue in ACE was “dependent on, and
[indeed] derivative of, [the] representations and warranties,” which “were
breached, if at all, on” the closing date. Id. at 595. The repurchase obligations
thus did not serve to delay the running of the statute of limitations. Id. at 594.
That same framework applies here to bar Deutsche Bank’s action. Indeed,
the Second Circuit applied it to bar Deutsche Bank’s action against Quicken Loans
in federal court and addressed the very phrase in the repurchase provision—the
words “shall accrue”—that Deutsche Bank contends should distinguish this case
from ACE. The Second Circuit observed that, although the phrase “shall accrue”
in the repurchase provision “makes an initially appealing case for inclusion as a
substantive condition precedent,” that argument by Deutsche Bank does not
withstand scrutiny because “ACE requires us to examine the object of the
demand.” Deutsche Bank, 810 F.3d at 866-867 (emphasis in original).
Specifically, the repurchase protocol “merely” sets out an “alternative contractual
remedy.” Id. at 867. It does not impose any independent obligation. See id. The
relevant “performance,” the Second Circuit ruled, is “the truth or falsity of the R &
Ws [representations and warranties]” and “that performance (or nonperformance)
of the contract is not contingent on the Trustee’s demand; the R & Ws were true or
false—either performed or not—at the moment they were made, without any need
19
for the Trustee to make a demand.” Id. As in ACE, the demand requirement in the
repurchase protocol is thus “merely procedural,” the Second Circuit held, because
a demand by the Trustee “seeks only the remedy to which it is already entitled, not
performance of the underlying contractual obligation.” Id. at 867.
Here, just as in Deutsche Bank and ACE, Quicken Loans “breached the
representations and warranties in the parties’ agreement, if at all, the moment the
MLPA [here, the MLPWA] was executed.” ACE, 15 N.Y.3d at 598. The “legal
wrong” is the breach of representations and warranties. Indeed, the contract here
provides “[a]ny cause of action against the Seller relating to or arising out of the
breach of any representations and warranties ... shall accrue upon” a demand and
failure to repurchase a breaching loan. (R.98, § 9.03 (emphasis added)). This
language makes clear that the “breach” giving rise to a cause of action is the
“breach of the representations and warranties,” rather than a later failure to
repurchase following a demand.2 As the First Department explained, “the accrual
provision does not compel defendant to undertake a promised future performance,
separate from its obligations to cure or repurchase defective loans” and it therefore
does not delay the start of the statute of limitations on the underlying breach.
Deutsche Bank Nat’l. Trust Co., 36 N.Y.S.3d at 137 (emphasis added).
2 Amici LNR Partners, LLC and its affiliates make extended arguments in
their submission about commercial mortgage-backed securities trusts. This group
of amici does not present the Court with any pertinent contractual language from
these separate instruments, which in any event are not at issue on this appeal.
20
2. Deutsche Bank’s Attempts to Make the Repurchase
Provision a Substantive Condition Are Unavailing
Deutsche Bank has no persuasive response to this contractual language.
Appellant repeatedly emphasizes that it cannot sue until the requirements of § 9.03
have been satisfied. (See, e.g., DB Br. at 19). But that is only stating that the
demand requirement and repurchase obligations are both conditions which must be
satisfied. Deutsche Bank does not meaningfully address why they should be
deemed substantive conditions, rather than procedural conditions.
The key difference between the two kinds of preconditions is whether the
breach exists prior to the conditions being satisfied (in which case it is procedural)
or whether there is no breach until the conditions are satisfied (in which case it is
substantive). See ACE, 25 N.Y.3d at 597-98. Here, the contract makes clear that
the conditions are predicates to suit for an underlying “breach of any
representations and warranties,” i.e., a breach that existed, if ever, at the time the
contract closed. The plaintiff in ACE was barred from bringing suit until it
satisfied the conditions in the contract, but that did not mean that the limitations
period started to run only once those conditions had been satisfied. The analysis is
the same here: Deutsche Bank was barred from bringing suit until it satisfied the
demand requirement and allowed for the cure period to pass, but, under the
teaching of ACE, that does not mean the start of the six-year limitations period was
delayed until those procedural requisites had been satisfied.
21
Deutsche Bank invokes this Court’s decision in Hahn Auto. Warehouse, Inc.
v. American Zurich Ins. Co., 18 N.Y.3d 765 (2012), but Hahn does not support
Deutsche Bank. There, the Court held that an insurer’s claims for payment of
premiums was time-barred because it was brought more than six years after the
premiums were allegedly owed. The insurer argued that its claims were timely
because they were brought within six years of when the insurer demanded
payment, by issuing invoices to the insured. But this Court rejected that argument,
reasoning that a cause of action for payment owed on a contract “accrues when the
[party making the claim] possesses a legal right to demand payment.” Id. at 770
(alteration in Hahn; quoting Minskoff Grant Realty & Mgt. Corp. v. 211 Mgr.
Corp., A.D.3d 843, 845 (2d Dep’t 2010)). And the insurer in Hahn had the legal
right to demand those payments when they were due, not the later date when the
insurer actually issued invoices for them. See id.
Here, too, as the First Department acknowledged (Order at 13), Deutsche
Bank had a “legal right to demand” repurchase of allegedly defective loans when
the representations and warranties as to those loans were allegedly breached—at
the time of closing, which was more than six years before Deutsche Bank
commenced this action. That Deutsche Bank could not bring a lawsuit to seek a
remedy until after it took the requisite procedural steps of, among other things,
making a demand to repurchase the allegedly defective loans does not operate to
22
change the date that the “legal wrong” arose for statute of limitations purposes, as
ACE and Hahn—and the Second Circuit in rejecting this same argument by
Deutsche Bank—made clear.
Deutsche Bank also invokes ACE’s observation that parties may
contractually agree to undertake a separate obligation, the breach of which does not
arise until some future date. (DB Br. at 29). But that observation does not apply to
the contract in this case any more than it applied to the contract in ACE. In
rejecting a similar argument, the Court of Appeals discussed cases like Bulova
Watch Co. v. Celotex Corp., 46 N.Y.2d 606 (1979), in which a party makes a
“separate and distinct promise” to remedy a wrong that may occur in the future.
ACE, 25 N.Y.3d at 595. In Bulova, for example, a roofing contractor agreed to
replace a roof and, separately, guaranteed to make any necessary repairs to the roof
over a following twenty-year period. The Court held that the six-year limitations
period on breach of that separate guarantee ran from “each time a breach of the
obligation to repair the bonded roof occurred.” Bulova, 46 N.Y.2d at 611.
As the Second Circuit underscored in rejecting Deutsche Bank’s position,
that is not the kind of agreement the parties made here. See Deutsche Bank, 810
F.3d at 866 n.5 (noting that “[b]y contrast” to the roofer’s promise in Bulova to
repair leaks for twenty years after installation of the roof, “Quicken agreed only to
remedy defects that existed in the initial sale, not to ensure the quality of the loans
23
for their entire life”). Quicken Loans made specific, limited representations and
warranties concerning the characteristics of the underlying loans as of the date of
the agreement and the closing date of each loan. The repurchase protocol applies
to an alleged breach of those representations and warranties, and sets out the
procedural requirements Deutsche Bank had to satisfy before commencing an
action to seek its specified remedy for any such breach. Under ACE, that makes
the repurchase protocol precisely the kind of procedural condition that does not
operate to delay the start of the six-year limitations period under New York law.
This framework also furthers New York’s public policy. As this Court
explained in ACE, New York’s statute of limitations law is concerned with
promoting “finality, certainty, and predictability.” ACE, 25 N.Y.3d at 593.
Deutsche Bank claims that the First Department ruling creates “an imprecisely
ascertainable accrual date.” (DB Br. at 16). To the contrary, that is what Deutsche
Bank’s interpretation would do. Deutsche Bank’s view would effectively reward a
party that fails to diligently exercise its contractual obligations to make a demand
and allow for an opportunity to cure. Such delay could operate, as Deutsche Bank
would have it, to indefinitely postpone the start of the limitations period until a
party decides it wants that period to start by making a demand. In this case, for
example, under Deutsche Bank’s interpretation it should be allowed to bring a
lawsuit through the year 2036 (i.e., at any point during the full 30-year life of the
24
loan) to seek a remedy for a breach that would have occurred, if ever, in 2006.
ACE and the longstanding principles of New York law that it applied—and that the
Legislature codified in the General Obligations Law—do not allow a party to use
its own delay in complying with a contractual obligation to make a demand in such
a manner as to give itself unilateral control over both the operation of the statute of
limitations and its contractual counterparty. See ACE, 25 N.Y.3d at 597
(expressing “extreme[] reluctan[ce]” to “transform[] a standard breach of contract
remedy, i.e., damages, into one that lasted for the life of the investment”).
This well-established New York policy similarly mandates dismissal of
Deutsche Bank’s complaint here, as the First Department properly ruled.
C. The Court Should Not Depart From Longstanding Principles of
New York Law to Follow an Unpublished Decision by the
Delaware Chancery Court
Deutsche Bank also contends that the Court should not “depart” from an
unpublished decision applying Delaware law. (DB Br. at 22-23). But the contract
here provides for the application of New York law (R.106), which is simply
different in pertinent respects that are firmly established.
Critically, the Delaware Chancery Court relied on a recent statute enacted by
the Delaware General Assembly that expressly allows parties to specify in their
agreement a limitations period applicable to a claim for breach of contract. That
alternative, agreed-upon limitations period can be set even before the claim accrues
25
and also for “an indefinite period of time.” Bear Stearns Mortg. Funding Trust
2006-SL1 v. EMC Mortg. LLC, No. 7701-VCL, 2015 WL 139731, at *12 (Del. Ch.
Jan. 12, 2015). As discussed below, New York law is to the contrary. New York’s
General Obligations Law forbids any agreement to extend a limitations period for a
breach of contract cause of action before the cause of action even arises and, in any
event, does not allow any agreed-upon extension to be for an indefinite period. See
N.Y. Gen. Oblig. Law § 17-103(1); Kassner, 46 N.Y.2d at 552. There is thus no
reason for the Court to hesitate over any differences between Delaware and New
York law as applied to this case when the two states’ legislative bodies have made
markedly different policy choices.
Indeed, in this same vein, while the Delaware Chancery Court noted that
Delaware law treats “a contractual accrual provision as a condition precedent to a
plaintiff’s ability to sue,” the court did not draw a distinction between procedural
and substantive conditions precedent to suit. See Bear Stearns, 2015 WL 139731
at *10. But in New York law, that is a fundamental distinction which, as this Court
underscored in ACE, has been observed for “over 100 years” in determining when
a cause of action for breach of contract arises. ACE, 25 N.Y.3d at 597. The Court
also applied this long-entrenched framework in ACE, and Deutsche Bank has not
offered any persuasive reason why the Court should use this appeal as a vehicle to
26
eradicate or modify this principle on which parties contracting under New York
law have long relied.
Finally, Deutsche Bank fails to inform the Court that not only was Bear
Stearns an unpublished decision, but a petition for leave to appeal to the Delaware
Supreme Court was denied. See Bear Stearns Mortg. Funding Trust 2006-SL1 v.
EMC Mortg. LLC, No. 82, 2015, 2015 WL 1228954 (Del. Mar. 17, 2015).
II. THE GENERAL OBLIGATIONS LAW SEPARATELY BARS THIS
ACTION
Even assuming for the sake of argument that, under this Court’s decision in
ACE, Section 9.03 of the MLPWA could properly be read to delay the start of the
limitations period on Deutsche Bank’s asserted causes of action for breach of
contract—as Deutsche Bank contends—Deutsche Bank’s action would still be
untimely because any such agreement would be unenforceable under the New
York General Obligations Law on two separate grounds. These codified rules
governing the application of the statute of limitations, which Deutsche Bank
ignores, dispose of Deutsche Bank’s notion that “public policy” and “freedom of
contract” norms demand that the Court adopt Deutsche Bank’s view.
A. The General Obligations Law Does Not Permit an Agreement to
Extend a Limitations Period Before Accrual
This Court has long held that extension agreements “made prior to the
accrual of the cause of action ... have ‘no effect’” because they violate New York’s
27
“public policy” of “giving repose.” Kassner, 46 N.Y.2d at 550, 552. Specifically,
any agreement to extend a limitations period for a breach of contract cause of
action “made at the inception of liability [] is unenforceable because a party cannot
‘in advance, make a valid promise that a statute founded in public policy shall be
inoperative.’” Id. at 551 (quoting Shapley v. Abbott, 42 N.Y. 443, 452 (1870)).
This prohibition is codified in N.Y. General Obligations Law § 17-103, which
states that parties may extend the time for bringing suit only “after the accrual of
the cause of action.” N.Y. Gen. Oblig. Law § 17-103(1) (emphasis added). The
Legislature has also expressly declared that any extension made in violation of
§ 17-103 “has no effect.” Id. § 17-103(3); accord Kassner, 46 N.Y.2d at 552. In
Kassner, the Court applied this rule and held that a provision purporting to
“postpone the accrual of [a] cause of action” for breach of contract “may not serve
to extend the Statute of Limitations” under § 17-103(1) & (3) of the General
Obligations Law when “it was adopted at the inception of the contract and not after
the cause of action had accrued.” Kassner, 46 N.Y.2d at 552.
Deutsche Bank does not even mention these provisions of the General
Obligation Law, but they dispose of its extended argument invoking “freedom of
contract” norms. The First Department recognized that “freedom of contract”
cannot mean freedom to contravene legislative enactments concerning what parties
may and may not agree to, and so the Appellate Division here properly enforced
28
the contract in accordance with New York law. (See Order at 8 (applying the rule
from Kassner, which in turn applied the General Obligations Law, that an
“‘agreement to … extend the Statute of Limitations [that] is made at the inception
of liability [will be] unenforceable’”) (quoting Kassner, 46 N.Y.2d at 551))). This
Court’s precedents and the General Obligations Law make clear that, even if § 9.03
of the parties’ agreement could be interpreted to extend the limitations period “at
the inception of the contract,” such an extension would have “no effect.” Kassner,
46 N.Y.2d at 552.
Other courts have ruled similarly. Applying this Court’s holding in
Kassner, the First Department has recently held that a purported accrual provision
does not allow parties to “delay the running of a limitations period” because
agreements “made at the inception of liability to waive or extend the statute of
limitations are unenforceable.” Bank of N.Y. Mellon, 2017 N.Y. App. Div. LEXIS
3796, at *8 (quoting Kassner, 46 N.Y.2d at 551). Likewise, the Southern District
of New York applied these same legal principles in ruling that “parties may not
contractually adopt an accrual provision that effectively extends the statute of
limitations before any claims have accrued.” Lehman XS Trust, Series 2006-4N,
991 F. Supp. 2d at 478; U.S. Bank, 2015 WL 915444, at *5 (citing Kassner and
holding that “[t]he accrual provision cannot serve to delay the accrual of the breach
of contract cause of action for purposes of the statute of limitations”); Lehman XS
29
Trust, Series 2006-GP2, 2014 WL 1301944, at *3 (“[T]he accrual provision cannot
extend the statute of limitations.”).
Deutsche Bank is at pains to try to distinguish Kassner on its facts. That
effort fails. Deutsche Bank contends that Kassner addressed “a different” question
than presented by this matter. (DB Br. at 18). But Deutsche Bank omits from its
discussion that in Kassner the Court squarely addressed “when did the cause of
action accrue within the meaning of the Statute of Limitations.” 46 N.Y.2d at 549.
In pertinent part, the Court assumed a contractual provision concerning when a
cause of action for breach may “‘be … maintained’” was intended to “postpone the
accrual of the cause of action.” 46 N.Y.2d at 550, 552. But the Court held: “The
limitations provision contained in the contract cannot serve, in this case, to extend
the statutory period” because “extension agreements made prior to the accrual of a
cause of action continue to have ‘no effect.’” Id. at 549-550, 552 (quoting N.Y.
Gen. Oblig. Law § 17-103(3)). The same principle is directly applicable here.
Specifically, to the extent § 9.03 of the MLPWA might be deemed to postpone the
accrual of a breach of contract cause of action as Deutsche Bank contends, that
provision has “no effect.”
More fundamentally, it would not be enough to distinguish Kassner on its
facts, because Deutsche Bank does not come to grips with the provisions of the
General Obligations Law that Kassner applied. Deutsche Bank’s argument
30
amounts to a contention that “private parties [may] establish by contract when a
cause of action for breach accrues.” (DB Br. at 20). That is not the law, as
mandated by the Legislature. Put simply, as this Court has held, “[i]n New York, a
breach of contract cause of action accrues at the time of the breach.” Ely-
Cruikshank Co. v. Bank of Montreal, 81 N.Y.2d 399, 402 (1993). And under the
New York General Obligations Law, parties cannot make a claim for that “breach”
to start accruing at a later date by ex ante agreement—through imposing a
discovery and demand requirement or any other mechanism that would delay onset
of the statutory limitations period. Again, Kassner made clear in applying the
General Obligations Law that parties cannot “postpone the accrual of the cause of
action” by a contractual provision “adopted at the inception of the contract and not
after the cause of action ha[s] accrued.” 46 N.Y.2d at 552.
That rule squarely applies here. Accordingly, even if § 9.03 of the MLPWA
could be read to delay the limitations period from running on any claim by
Deutsche Bank for breach until a demand is made, that would ex ante extend the
statute of limitations in violation of the General Obligations Law, Kassner, and the
public policy considerations that these authorities effectuate.
31
B. The General Obligations Law Does Not Permit Agreements to
Make Accrual Indefinite or to Extend a Limitations Period
Beyond Six Years
Deutsche Bank’s interpretation of § 9.03 also violates a separate prohibition
in the General Obligations Law: that agreed-upon extensions (even after the
accrual of the action) cannot be for an indefinite period of time. Parties may only
agree to extensions that are (i) finite, and (ii) for an additional period that is less
than the original limitations period (i.e., less than six years). See N.Y. Gen. Oblig.
Law § 17-103(1) (permitting an extension “within the time that would be
applicable if the cause of action had arisen at the date of the promise [to extend the
limitations period], or within such shorter time as may be provided in the
promise”).
For example, in Bayridge Air Rights v. Blitman Construction Corp., 80
N.Y.2d 777, 779 (1992), the parties signed an agreement under which the
limitations period was “extended so as to commence upon final payment to [the
defendant] from an escrow account.” The Court of Appeals held that this
contractual provision was “void and unenforceable” because it “extend[ed] the
limitations period to an indefinite date in the future in contravention of the six-year
maximum provided by the statute [for breach of contract actions].” Id. at 779-80.
Here, reading § 9.03 of the MLPWA to extend the limitations period to whenever
Deutsche Bank demanded repurchase would mean that the limitations period
32
would be both (i) indefinite, and (ii) run not just for another six years but
throughout the entire life of a 30-year mortgage loan. Section 17-103(1) of the
General Obligations Law does not permit either of these changes to the limitations
period applicable to a cause of action for breach of contract.
Deutsche Bank nowhere in its brief addresses these provisions of the
General Obligations Law. But, even if § 9.03 could be read to extend the
limitations period for a future cause of action for breach of contract—and under
this Court’s decision in ACE and the established principles applied there it
cannot—such an agreement would be unenforceable under the § 17-103(1) of the
General Obligations Law. For this separate reason, Deutsche Bank’s breach of
contract action is time-barred and the First Department’s Decision and Order
should be affirmed.
CONCLUSION
The First Department’s Decision and Order should be affirmed. The Court’s
recent decision in ACE and provisions of the New York General Obligations Law
that Deutsche Bank does not address in its brief control the disposition of this
appeal and mandate dismissal of this action, as the First Department properly held.
Dated: New York, New York
August 10, 2017
Respectfully submitted,
Howard F. Sidman
Todd R. Geremia
JONES DAY
250 Vesey Street
New York, New York 10017
(212)326-3939
Jeffrey B. Morganroth
MORGANROTH & MORGANROTH, PLLC
344 North Old Woodward Ave., #200
Birmingham, Michigan 48009
(248) 864-4000
Attorneys for Defendant-Respondent,
Quicken Loans Inc.
33
CERTIFICATION
I certify, pursuant to 22 N.Y.C.R.R. § 500.13(c)(1), that the total word count
for all printed text in the body of the brief is 7,876, exclusive of the statement of
the status of related litigation; the corporate disclosure statement; the table of
contents, the table of cases and authorities and the statement of questions presented
required by subsection (a) of this section; and any addendum containing material
required by subsection 500.1(h) of this Part.
New York, New York
August 10, 2017
Dated:
Todd R. Geremia
JONES DAY
250 Vesey Street
New York, New York 10017
(212) 326-3939
Attorneys for Defendant-Respondent,
Quicken Loans Inc.
34