The Money Source Inc. v. American Ken, Inc.
2:22-cv-05204
E.D.N.YMay 19, 2025Background
- Plaintiff The Money Source, Inc. (TMS) and Defendant American Ken, Inc. entered a 2019 loan purchase agreement related to TMS’s Correspondent Seller’s Program for mortgage loans.
- The agreement required American Ken to ensure all loans complied with Fannie Mae standards and to repurchase or indemnify TMS for loans deemed ineligible or containing misrepresentations.
- TMS terminated the agreement in June 2022 for repeated breaches, including submission of loans with material misrepresentations, and made written demands for repurchase on fourteen loans.
- American Ken acknowledged repurchase obligations for certain loans but failed to repurchase any of the fourteen, leading TMS to mitigate by selling twelve as "scratch and dent" and seeking damages for all fourteen.
- TMS filed suit for breach of contract and indemnification, seeking damages and attorney’s fees. Defendant did not oppose summary judgment.
- The court evaluated TMS’s unopposed summary judgment motion on the merits, relying on record evidence submitted by Plaintiff.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Breach of contract on repurchase obligation | American Ken failed to repurchase 14 loans | No opposition provided | Breach established; TMS wins |
| Plaintiff’s due performance | TMS complied with all contract requirements | No opposition provided | Due performance found |
| Entitlement to indemnification (fees/costs) | Contract unambiguously requires indemnity | No opposition provided | Indemnification granted (fees denied w/o prejudice) |
| Damages calculation | Damages are properly supported by records | No opposition provided | $3,034,066.70 awarded; fees claim denied w/o prejudice |
Key Cases Cited
- Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (summary judgment standard requires genuine issue of material fact)
- Konikoff v. Prudential Ins. Co. of Am., 234 F.3d 92 (defines material and genuine factual disputes for summary judgment)
- Bolt Elec., Inc. v. City of New York, 223 F.3d 146 (contract interpretation under New York law)
- AEI Life LLC v. Lincoln Benefit Life Co., 892 F.3d 126 (enforceability of choice-of-law clauses in contracts)
- Oscar Gruss & Son, Inc. v. Hollander, 337 F.3d 186 (attorney's fees indemnification under New York law must be clear)