BNP Paribas Mortgage Corp. v. Bank of America, N.A., 866 F. Supp. 2d 257

BoA moved to dismiss the third-party complaint by BNP Paribas Mortgage Corp. and BNP Paribas (BNP) and Deutsche Bank AG (DB) regarding alleged notes tied to Ocala Funding/TBW; BNPPS and DBS are the Note Dealers.
Plaintiffs allege TBW/Ocala fraud and misrepresentation, seeking recovery for investments in short-term notes and asserting BoA breached Facility Documents as Indenture Trustee, Collateral Agent, Depositary, and Custodian.
BoA’s Third Party Motion to Dismiss argues no viable duty of care or fiduciary duty arises for Note Dealers in the private placement; Plaintiffs seek contribution from BNPPS/DBS.
Plaintiffs also sought leave to amend to add SACs alleging contract and fiduciary breaches, and non-contractual tort/equitable theories in response to BoA’s defenses.
The court granted the Third Party Motion to Dismiss in part (negligence and fiduciary duty claims against Note Dealers dismissed) and granted leave to amend for the SACs.
Damages considerations and incorporation issues were addressed; the court allowed SACs without wholesale incorporation of prior pleading allegations.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether BNPPS/DBS owe a duty of care to Plaintiffs in private placement	BoA asserts duty of care via Note Dealers' role and due diligence obligations.	Note Dealers had no non-contractual duty absent discretionary authority or fiduciary relationship; disclosures governed by contracts.	No independent duty; negligence contribution claims dismissed.
Whether the breach of fiduciary duty claim lies where waivers exist	BNP/DB allege fiduciary duties despite waivers due to affiliation and information access.	Purchase Agreements expressly disclaimed fiduciary duties; waivers bar such claims under NY law.	Waivers effective; no fiduciary duty found; fiduciary claims dismissed.
Whether the proposed amendments to add non-contractual claims should be granted	New tort/equitable claims should be allowed to address BoA’s affirmative defenses.	Delay and prejudice concerns; potential futility should bar amendment.	Leave to amend granted; amendments permitted; no undue prejudice shown.
Whether incorporation by reference in SACs is permissible	Allege facts from Conversion Actions by reference; not wholesale incorporation of dismissed claims.	Rule 8(a) requires specific incorporation; wholesale incorporation improper.	Incorporation allowed by reference to Conversion Actions’ factual allegations only; not wholesale claims.

King v. Crossland Savings Bank, 111 F.3d 251 (2d Cir. 1997) (elements of negligence existence of duty and proximate cause)
Siegel v. New Plan Excel Realty Trust, Inc., 84 A.D.3d 1702 (App. Div. 2011) (third-party contribution requires duty in tort)
In re Refco Securities Litigation, 759 F.Supp.2d 301 (S.D.N.Y. 2010) (broker duty limited in non-discretionary accounts)
de Kwiatkowski v. Bear, Stearns & Co., Inc., 306 F.3d 1293 (2d Cir. 2002) (non-discretionary broker duties limited; no fiduciary duty absent special circumstances)
Keenan v. D.H. Blair & Co., 838 F.Supp. 82 (S.D.N.Y. 1993) (broker may owe disclosure duties; reliance required for fraud claims)
SCS Communications, Inc. v. Herrick Co., Inc., 360 F.3d 329 (2d Cir. 2004) (factors governing leave to amend; strong preference for merits)
Foman v. Davis, 371 U.S. 178 (Supreme Court 1962) (rule to grant leave to amend freely absent undue delay or prejudice)
Centro Empresarial Cempresa S.A. v. American Movil, S.A.B. de C.V., 17 N.Y.3d 269 (N.Y. 2011) (sophisticated parties may contract away fiduciary duties; cannot invalidate release by ignorance)
Wallace v. 600 Partners Co., 86 N.Y.2d 543 (N.Y. 1995) (contract interpretation to effect expressed intentions)
Cooper v. Parsky, 140 F.3d 433 (2d Cir. 1998) (contracts can foreclose fiduciary duties unless special circumstances)