OPINION AND ORDER
In thе near-decade since the collapse of the United States real-estate market, this District has been inundated with lawsuits brought by putative victims of that collapse against those they blame for it. As time has lapsed, and with it various statutes of limitation,. the targets of these lawsuits—as- well as the proffered bases of liability—have evolved. The instant cases represent the latest wave: They are brought by and on behalf of certifi-cateholders (“Plaintiffs”) of 53 residential-mortgage-backed securities (“RMBS”) trusts (the “Trusts”) against the Trusts’ common Trustee, Wells Fargo Bank, National Association (“Wells Fargo” or “Defendant”). Plaintiffs allege that Defendant failed to discharge its duties as Trustee. More specifically, Plaintiffs claim that Defendant discovered pervasive documentation errors, breaches of seller representations and warranties (“R&Ws”), and
Defendant has moved to dismiss each of the above-captioned related actions for failure to state a claim.
BACKGROUND
A. Factual Background
Explanations of the typical formation process and structure of RMBS trusts abound in this District, and this Court will not here reinvent the wheel. Only a brief description is provided for context. See also BlackRock Allocation Target Shares v. Wells Fargo Bank, Nat’l Ass’n, No. 14 Civ. 9371 (KPF) (SN),
1. RMBS Trusts Generally
The Trusts in the instant action were originally -securitized by residential mortgage loans, and created to facilitate the sale of those loans to investors. (BR Compl. ¶¶ 3-4).
It is the sponsor-selected servicer’s responsibility to collect loan principal and interest (“P&I”) payments from the underlying borrowers. (BR Compl. ¶ 47). “After collection, the servicer sends the funds to the trust, which then makes payments to the noteholders. Mortgage delinquencies and defaults reduce the available P&I payments to be paid to the trust and passed through to investors,” (Id.). Therefore, “proper loan origination and underwriting of the mortgages underlying the RMBS, and proper and timely loan servicing and oversight” are of critical importance to investors, directly dictating their timely receipt of passed-through payments. (Id. at ¶ 48).
2. The Trusts, the Governing Agreements, and Defendant’s Duties Thereunder
The 53 Trusts at issue here are of two kinds: Pooling and Service Agreement (“PSA”) Trusts and Indenture Trusts.
12 of the 53 Trusts at issue in this case are Indenture Trusts. (Def. Br. 5). Indenture Trusts are governed by their Trust Agreements, Mortgage Loan Purchase and Sale Agreements (“MPLAs”), and Sale and Service Agreements (“SSAs”). (See BR Compl. ¶ 49). See generally BlackRock Allocation Target Shares,
Indenture Trusts differ from . PSA Trusts in that the Depositor conveys ownership of the pooled loans to the Issuer, which in turn issues its ownnotes pursuant to the indenture. Under the indenture, the Issuer collateralizes the notes by pledging the mortgage loans to the indenture trustee, which holds the pledge on behalf of the note-holders.
(Def. Br. 5).
The PSAs, Trust Agreements, MPLAs, and SSAs (together, the “Governing Agreements”) are of critical importance to Defendant’s motion; they dictate the scope of Defendant’s duties to Plaintiffs. The duties of an RMBS trustee are “distinct from those of an ‘ordinary trustee,’ which might have duties extending well beyond the agreement.” Phoenix Light SF Ltd. v. Bank of N.Y. Mellon (hereinafter, “PL/BNYM”), No. 14 Civ. 10104 (VEC),
Though the Governing Agreements at issue here are not identical, Plaintiffs argue that they all impose four fundamental duties on Defendant:
• First, Defendant “must ensure that the Trusts take perfected, enforceable title to the mortgage loans and must certify receipt of complete mortgage loan files from the Seller.” (Pl. Opp. 3 (citing BR Compl. ¶¶ 60, 62, 98, 159, Ex. 5; NCUAB Compl. ¶¶ 65-68, Ex. J; PL Compl. ¶¶ 58-67; CB Compl. ¶¶ 34-43)). In the event that Defendant “discovers a material defect (e.g., a missing document),” Defendant is obligated to “promptly identify the loan in its certifications, and require the Seller to cure or repurchase the loan.” (Pl. Opp. 3-4 (citing BR Compl. ¶¶ 6, 54, 98; NCUAB Compl. ¶¶ 70-71, 74-75; PL Compl. ¶¶ 65-66, 68; CB Compl. ¶¶ 41-42, 44)).
• Second, Defendant “must give notice to the Seller and other parties upon ‘discovery of any breach of the R&Ws which materially and adversely affects the interests of the Holders or the Trust, and thereafter enforce the obligations of the Seller to cure or repurchase the breaching loan.” (Pl. Opp. 4 (citing BR Compl. ¶¶ 63, 164; RP Compl. ¶¶ 7-10; NCUAB Compl. ¶¶ 75, 377; PL Compl. ¶ 68; CB Compl. ¶ 44)).
• Third, Defendant “must promptly notify a responsible Sfervicer upon learning оf the Servicer’s failure to perform in any material respect, and demand that such servicing failure be timely remedied.” (Pl. Opp. 4 (citing BR Comp. ¶¶ 1, 63-64; RP Compl. ¶ 10; NCUAB Compl. ¶¶ 75,90; PL Compl. ¶ 80; CB Compl. ¶ 55)).
• And fourth, in the event of a “servicing ‘Event of Default’ ” (“EOD”) as defined in the Governing Agreements, Defendant acquires heightened obligations “to exercise the same degree of care and skill as a prudent person would in the conduct of his or her own affairs.” (Pl. Opp. 4 (citing BR Compl. ¶¶ 27, 207; RP Compl. ¶¶ 17, 61; NCUAB Compl. ¶¶ 92, 414; PL Compl. ¶¶ 73-75; CB Compl. ¶¶ 49-51)).
The PSA Trusts define an EOD to “include a Servicer’s failure to: (i) act in accordance with the normal and usual standards of practice of prudent mortgage servicers; (ii) ensure the loans are serviced legally; and (iii) promptly notify [Defendant] and other parties upon discovery of Sellers’ R&W breaches.” (Pl. Opp. 4 (citing BR Compl. ¶¶ 25-26; RP Compl. ¶¶ 57, 59; NCUAB Compl. ¶¶ 85-87, 285-89, 337; PL Compl. ¶¶ 68, 79-80; CB Compl. ¶¶ 44, 54-55)). Defendant’s heightened obligations under the PSAs in the event of an EOD include “notifying the Servicer to require cure and notifying Cer-tificateholders of any uncured [EODs].” (Id. at 4-5 (citing BR Compl. ¶26; RP Compl. ¶¶ 60; NCUAB Compl. ¶¶ 90-91, 290; PL Compl. ¶¶ 69, 73-77; CB Compl. ¶¶ 45, 49-52)).
The Indenture Trusts’ Governing Agreements “contain similar provisions.” (Pl. Opp. 5 (citing BR Compl. ¶¶ 68-70; NCUAB Compl. ¶ 97 n.12; PL Compl. ¶¶ 131-32)). EODs with regard to Indenture Trusts, however, are “triggered by conduct of the Issuer (i.e,, the Trust itself) rather than the Servicer.” (Id. (citing BR Compl. ¶¶ 68-70; NCUAB Compl. ¶ 87 n.12; PL Compl. ¶¶ 131-32)). Plaintiffs maintain that this is a distinction without a difference, because here “each Indenture Trust contracted separately with Sellers and Servicers .,. [to] make certain R&Ws and agree to cure or repurchase defective loans,” .such that “known and unremedied Seller and. Servicer defaults [would still] constitute ... a violation of the issuer’s duties under the Indenture.” (Id. (quotation marks omitted) (quoting Royal Park/HSBC,
3. Defendant’s Alleged Breaches
Plaintiffs contend that while serving as Trustee, .Defendant realized that the Trusts contained numerous loans and loan files that materially breached the sellers’ R&Ws. (Pl. Opp. 5 (citing BR Compl. ¶¶ 73-120; RP Compl. ¶¶ 70-103; NCUAB Compl. ¶¶ 104-282; PL Compl. ¶¶ 107-15, Ex. F; CB Compl. ¶¶ 80-89, Ex. F)). Plaintiffs infer Defendant’s realization from a host of facts. For,example, Defendant “received ‘Document Exception Reports’ prepared by the custodians identifying -massive numbers of loan files that contained missing or incomplete documentation that were not cured within the specified time period.” (Id. (citing BR Compl. ¶¶ 98-99; NCUAB Compl. ¶ 352; PL Compl. ¶¶ 63, 119-20; CB Compl. ¶¶ 39, 93-94)), And Defendant itself “tracked and reported the Trusts’ pеrformance in remittance reports, including unprecedented levels of delinquencies, early payment defaults, loss severity, credit downgrades and mortgage insurance rescissions,” and “admitted” in its “internal documents” that its findings constituted “clear indications of Seller breaches of R&Ws.” (Id. at 5-6 (citing BR Compl. ¶¶ 110, 112; NCUAB Compl. ¶ 336; .PL Compl. ¶¶ 53, 104; CB Compl. ¶¶ 29, 78)). Additionally, & certain cases where “historical delinquencies and collateral losses were so severe that [they] caused ‘Triggering Events’ under the Trusts’ [Governing Agreements],” Defen
Plaintiffs conclude that, given the many different sources of information, Defendant’s responsible officers
knew of and received written notice of Servicer breaches of - duties with respect to specific loans in the Trusts, based on data from Servicers that it used to prepare monthly remittance reports and that identified and tracked when certain defaulted loans within the Trusts became distressed, when the loans were processed and eliminated, and the recurring annual and monthly servicing costs incurred by the Trusts for these defaulted loans.
(Pl. Opp. 7 (citing BR Compl. ¶¶ 146-53; RP Compl. ¶ 118; PL Compl. ¶¶ 128, 138-41; CB Compl. ¶¶ 103, 111-14)). Indeed, Defendant “uniquely” had
knowledge of the Servicers’ systemically abusive servicing practices, including © [Defendant’s] involvement in government investigations, prosecutions, and settlements targeting both itself and many of the Servicers for the same alleged improper servicing practices; and (ii) [Defendant’s] responsible officers’ receipt of written notice from Holders, monoline insurers and other stakeholders to other RMBS trusts regarding the same servicing violations by the same servicers to the Trusts here.
(Id. (citing BR Compl. ¶¶ 154-56; RP Compl. ¶¶ 121-27; NCUAB Compl. ¶¶ 258-60, 277-82; PL Compl. ¶¶ 142-48, Ex. H; CB Compl. ¶¶ 115-21, Ex. H)). And Plaintiffs contend that Defendant’s knowledge is evinced by its 'own internal records, which “further confirm that [Defendant] repeatedly received notice from investors and monoline insurers regarding systemic R&W violations.” (Id. at 6 (citing BR Compl. ¶¶ 100, 116; PL Compl. ¶¶ 99-102; CB Compl. ¶¶ 73-77)).
Even if Defendant lacked such direct notice and knowledge, they could not feign ignorance of the fact that “the Trusts were filled with loans originated by some of the most notorious financial-crisis-era lenders ... and were sponsored by banks with known securitization abuses.” (Pl. Opp. 6 (citing BR Compl. ¶¶ 80, 86, 94-95, Ex, 9; RP Compl. ¶ 71; NCUAB Compl; ¶¶ 47-48, 120-244; PL Compl. ¶¶ 109-10, Ex. F; CB Compl.” ¶¶ 82-83, Ex. F)). Plaintiffs argue that at a minimum, Defendant had to be aware of the “[h]ighly publicized news reports, lawsuits, and investigations concerning” its sellers, as well as the fact that “several of the Trusts [had] been the subject of RMBS investor lawsuits alleging pervasive loan underwriting abuses.” (Id. (citing BR Compl. ¶¶ 96-120, Ex. 10-11; RP Compl. ¶¶ 72-103; NCUAB Compl. ¶¶ 261-82; PL Compl. ¶¶ 107-15; CB Compl. ¶¶ 80-89)).
All of Plaintiffs’ claims build on the foundation of Defendant’s, alleged discovery and knowledge of these breaches. Plaintiffs allege .that despite this awareness, Defendant took “virtually no action to enforce Seller obligations to repurchase defective loans and Servicer obligations to cure defaults and reimburse the Trusts for damages.” (Pl. Opp. 7 (citing BR Compl. ¶¶ 163-87; RP Compl. ¶ 129; NCUAB Compl. ¶¶ 361-96; PL Compl. ¶¶ 115-18, 160-61; CB Compl. ¶¶ 89-92, 129-30)). This “inaction” has caused “billions of dollars in losses to the Trusts,” (Id.).
B. Procedural Background
The Blackrock plaintiffs brought the first of these related cases against Defendant on November 24, 2014. (2014 Civ. 9371, Dkt. # 1). Royal Park brought its action on December 11, 2014 (2014 Civ.
Defendant filed its Motion to Dismiss the Complaints in each of these four cases on April 30, 2015. (2014 Civ. 9371, Dkt. # 46-56).
Soon thereafter, on January 19, 2016, Judge Richard M. Berman, to whom these related cases were originally assigned, issued a Decision and Order resolving Defendant’s motion to dismiss. (2014 Civ. 9371, Dkt. #95). Judge Berman declined to exercise supplemental-jurisdiction over Blackrock’s PSA-Trust-related claims, granted Defendant’s motion in part, and declined to reach the merits of the parties’ claims. (Id. at Dkt. # 95). Judge Berman also extended to Plaintiffs the opportunity to amend their pleadings. (Id.; see also Dkt. # 101). The Blackrock Plaintiffs accordingly filed their amended complaint on February 23, 2016. (Id. at Dkt. # 105-06).
Defendant requested a pre-motion conference, which was scheduled for May 24, 2016. (2014 Civ. 9371, Dkt. #138, 158). During that conference, a briefing schedule was set for Defendant’s contemplated motion to dismiss the operative complaints. (Id. at Dkt. # 158).
Before any motion was filed, however, the five related cases at issue here were reassigned to the undersigned on June 17, 2016. (Docket Entries dated June 17, 2016). Defendant then fíléd its motion to dismiss each operative complaint on July 8, 2016. (2014 Civ. 9371, Dkt. #168-71). Plaintiffs filed their joint opposition on August 22, 2016 (id. at Dkt. # 201-02), and Defendant its reply on September 6, 2016 (id. at Dkt. # 208-09).
DISCUSSION
A. Applicable Law
. When considering a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), a court should “draw all reasonable inferences in [the ‘plaintiffs’] favor, assume all well-pleaded factual allegations to be true, and determine whether they plausibly give rise to an entitlement to relief.” Faber v. Metro. Life Ins. Co.,
“While Twombly does not require heightened fact pleading of specifics, it does require enough facts to ‘[nudge a plaintiffs] claims across the line from conceivable to plausible.’ ” In re Elevator Antitrust Litig.,
B. Analysis
Defendant launches numerous attacks on Plaintiffs’ pleadings, claiming that wholesale dismissal is warranted because: (i) Plaintiffs have failed to plead that Defendant discovered any of the alleged breaches of the Governing Agreements; (ii) Plaintiffs’ breach-of-contract and fiduciary-duty claims are premised on an EOD that occurred, if at all, without Defendant’s knowledge; (iii) Plaintiffs’ tort claims are duplicative of their contract claims, viola-tive of the economic-loss rule, and insufficiently pleaded; (iv) Plaintiffs do not, and cannot, have a cause of action under the Trust Indenture Act (the “TIA”); (v) the Streit Act, New York’s analogue to the TIA, either does not apply to Plaintiffs’ claims or was not violated; (vi) the NCUAB lacks standing to bring its derivative claims, which are actually improper direct claims; (vii) the NCUAB lacks standing to bring direct claims premised on Trusts unwound after it first brought its action; and (viii) Commerzbank’s claims are time-barred. The Court will consider each of these arguments in turn.
1. Defendant’s Motion to Dismiss Plaintiffs’ Breach-of-Contract Claims Is Denied
a. Plaintiffs’ Allegations Are Sufficient at the Pleading Stage
Defendant’s arguments on this first front focus on Defendant’s alleged knowledge, or perhaps more properly, its lack thereof, (Def. Br. 8). That is, Defendant contends Plaintiffs have pleaded only generalized allegations that, at most, Defendant may have been alerted “to a possibility of a breach, not that it discovered any actual breaches in the loans in the Trusts.” (Id.). Such allegations are insufficient as a matter of law, Defendant argues, because a viable breach-of-contract claim requires proof of a Trustee’s actual notice of a breach. Id. (quoting Policemen’s Annuity & Benefit Fund v. Bank of Am., NA (hereinafter, “PABF II”),
These arguments do not succeed. To the contrary, courts in this District have repeatedly rejected similar arguments by reminding litigants of the difference between sufficient pleading and successful claims. So too will this Court.
It is true that “[t]o prevail ultimately on the breach of contract claim, a plaintiff does have to demonstrate breach on a ‘loan-by-loan and trust-by-trust basis.’ ” Phoenix Light SF Ltd. v. Deutsche
Here, Plaintiffs have more than met this standard. Plaintiffs have alleged Defendant’s knowledge of R&W breaches on the basis of Defendant’s internal documents: Defendant received “exception reports identifying incomplete or improperly documented loan files that were not corrected or addressed.” (Pl. Compl. ¶¶ 63, 118-20; CB Compl. ¶¶ 39, 93-94)). Defendant also “received mortgage insurance coverage denials, and policy rescissions as a result of the improper loan underwriting,” and Defendant’s internal documents both reflect that Defendant tracked “the Trusts’ abject performance,” and “contain admissions that certain adverse metrics were indicative of Seller R&W breaches.” (Id. at 11-12; see also BR Compl. ¶ 110; NCUAB Compl. ¶ 336; PL Compl. ¶¶ 53, 104; CB Compl. ¶¶ 28, 78). It is Plaintiffs’ contention that such allegations “go far-beyond many other RMBS trustee complaints, which themselves- have been found sufficient to state a claim.” (Id. at 12). The Court agrees.
For good measure, Plaintiffs also amass the R&W breach allegations with which courts in this Circuit have become so familiar: Plaintiffs 'allege, inter' alia, that Defendant had discovered and knew of the alleged breaches on the basis of (i) “the abysmal performance of the Trust collateral” (BR Compl. ¶ 10); (ii) “a steady stream of'public disclosures [linking] the abject performance of the Trusts to systemic abandonment of underwriting guidelines” (id. at ¶ 12); (iii) various investor “putback initiatives” (id. at ¶¶ 14-17); (iv) investigations targeting Defendant’s own deficient servicing operations (id. at ¶¶ 19-20); (v) notice Defendant received in its capacity as Trustee to other RMBS trusts “from investors of pervasive and systemic violations of representations and warranties by the loan sellers” (id. at ¶ 100); (vi) lawsuits brought by monoline insurers against sellers “for breach of their representations and warranties in connection with other RMBS trusts” to which Defendant has ties (id. at ¶ 116); and (vii) Defendant’s analysis undertaken in connection with its provision of “collateral risk management services” (id. at ¶ 118). (See also RP Compl. ¶¶ 70-136; NCUAB Compl. ¶¶ 104-282; PL Compl. ¶¶ 107-15; CB Compl. ¶¶ 807 89). And with regard to several of the Trusts, “the historical delinquencies and collateral losses within the Trusts’ loan pools [were] so severe that [they] ... caused ‘Triggering Events’ under the Trusts’ Governing Agreements,” some of which amounted to EODs. (BR Compl. ¶ 111). This Court finds, as, have many others, that these allegations are sufficient to “raise a reasonable expectation that discovery will reveal evidence proving [Plaintiffs’] claim[s].” PL/DB, 172 F.Supp.3d at
Additionally, Plaintiffs allege that EODs occurred when Servicers failed to “(i) act in accordance with the normal and usual standards of practice of prudent mortgage servicers; (ii) ensure the loans were serviced legally; and (iii) promptly notify [Defendant] and other parties upon discovery [of Sellers’] R&W breaches.” (Pl. Opp. 4 (citing BR Compl. ¶¶ 25-26; RP Compl. ¶¶ 57, 59; NCUAB Compl. ¶¶ 85-87, 285-89, 337; PL Compl. ¶¶ 68, 79-80; CB Compl. ¶¶ 44, 54-55)), These allegations also support Plaintiffs’ claims that Defendant breached its post-EOD contractual duty to act as would a prudent person by failing to (i) notify Servicers of the R&W breaches of which it was aware, (ii) require those Servicers to cure' those breaches, or to repurchase defective loans; (iii) notify Certificateholders of any uncured EODs; and (iv) reimburse the Trusts for damages. (PL Opp. 3-5, 7 (citing BR Compl. ¶¶ 163-87; RP Compl. ¶ 129; NCUAB Compl. ¶¶ 361-96; PL Compl. ¶¶ 115-18, 160-61; CB Compl. ¶¶ 89-92, 129-30)).
In sum, Plaintiffs have pleaded adequately that Defendant discovered and knew of the alleged breaches of the Trusts’ Governing Agreements. Plaintiffs likewise adequately have pleaded that when Defendant failed to act despite its discovery and knowledge, it breached the Governing Agreements. Defendant’s motion to dismiss Plaintiffs’ breach-of-contract claims is denied.
b. Commerce Bank Does Not Change This Court’s Analysis
To its credit, Defendant acknowledges at the outset that its arguments regarding the adequacy of the Complaints’ discovery and knowledge allegations implicate “issues that have been resolved repeatedly against RMBS trustees.” (Def. Br. 8). Undaunted, Defendant contends that recent legal developments so “seriously undermine the federal court decisions to date rejecting the RMBS trustees’ contract-based arguments” that this Court must chart ¿'new course. (Id.). In support, Defendant relies upon the First Department’s “rejection” in Commerce Bank v. Bank of N.Y. Mellon,
This Court does not dispute Commerce Bank’s relevance to its analysis. Indeed the case addresses the very question now before the Court—the sufficiency of pleaded facts regarding an RMBS-trustee defendant’s knowledge of breach. Commerce Bank,
But the First Department did not elaborate on the bases for this conclusion. And without more, this Court will not read Commerce Bank to conflict with the very
Moreover, the Court notes that the Commerce Bank court was considering pleading sufficiency under a different standard. Defendant has challenged Plaintiffs’ pleading under Federal Rule of Civil Procedure 12(b)(6), the analytical requirements of which are outlined above. The Commerce Bank court analyzed pleading sufficiency under New York Civil Practice Law and Rules § 3211(a)(1) and (7). Even allowing for a similarity between Section 3211(a)(7) and Rule 12(b)(6), see Util. Metal Research, Inc. v. Generac Power Sys., Inc., No. 02 Civ. 6205 (FB) (RML),
Defendant also contends that the First Department relieved RMBS Trustees of a duty to “nose to the source.” (Def. Br. 10). But that contention overstates the First Department’s holding. In considering a trustee’s duties prior to an EOD, the First Department recited the well-settled proposition “that prior to default, indenture trustees owe note holders [only] an extra-contractual duty to perform basic, nondis-cretionary, ministerial functions.” Commerce Bank,
This holding is not inconsistent with the District decisions cited by the First Department, Prior to considering a trustee’s pre-default duties, the Commerce Bank court had found that the plaintiffs there had not alleged the requisite discovery by the defendant. Commerce Bank,
Courts in this Circuit have agreed. They have held that while “learning of facts merely suggestive of a breach would not require the Trustee to immediately raise a claim,” “upon receipt of such notice, it becomes incumbent upon the [Trustee] to pick up the scent and nose to the source.” Policemen’s Annuity & Benefit Fund of City of Chi. v. Bank of Am., NA (hereinafter, “PABF I”),
Finally, even if Defendant’s proffered interpretation of Commerce Bank were correct, this Court would be skeptical of its authority. As noted above, the case was decided under New York law that differs significantly from Rule 12(b)(6). And a district court only is “bound to apply the law as interpreted by New York’s intermediate appellate courts,” absent “persuasive evidence that the New York Court of Appeals ... would reach a different conclusion.” Cornejo v. Bell,
2. Defendant’s Motion to Dismiss Specific R&W Claims Is Denied
In a catch-all section in its opening brief, Defendant takes issue with various subsets of Plaintiffs’ claims. First, Defendant argues that Plaintiffs have improperly alleged violations of duties to enforce repurchase obligations with regard to certain Trusts that created no such obligations. (Def. Br. 16). Second, Defendаnt identifies three Trusts for which “Plaintiffs failed to allege that [Defendant] knew of R&W breaches prior to the expiration of the Warrantors’ obligations to repurchase loans that breached R&Ws.” (Id.). Third, Defendant argues that for “four additional Trusts, Plaintiffs fail to include any allegation regarding the relevant Warrantors, let alone allegations supporting a plausible inference that [Defendant] had knowledge of R&W breaches within the applicable limitations period.” (Id. at 17). And fourth, Plaintiffs argue that Defendant cannot be held liable for any failure to enforce its obligations to cure, substitute, or repurchase faulty loans against Warrantor American Home Mortgage Acceptance, Inc. (“AHM”), .because AHM filed for bankruptcy in 2007. (Id. at 17-18).
Plaintiffs rebut each allegation. First, Plaintiffs dispute Defendant’s argument that certain Trusts do not impose repurchase obligations on Defendant; they claim that the relevant governing agreements, read as a whole, require that Defendant “notify specified parties upon its discovery of a material R&Ws breach,” which notice “triggers [the] Seller repurchase obligations” that Defendant “has power to enforce.” (Pl. Opp. 13 (citing BR Compl. ¶¶ 63 & n.7, 193; RP Compl. ¶¶ 52-55; NCUAB Compl. ¶¶ 73-75; PL Compl. ¶¶ 44, 68; CB Compl. ¶ 44)). Second, Plaintiffs disclaim a duty to “allege the precise time of [Defendant’s] discovery of R&W breaches or knowledge of Servi-
Ultimately, the Court agrees with Plaintiffs. Each of Defendant’s arguments implicating the statute of limitations is premature; the Court cannot resolve these issues from the face of the Complaints. See Staehr v. Hartford Fin. Servs. Grp., Inc.,
3. Defendant’s Motion . to Dismiss Plaintiffs? Tort and Fiduciary-i Duty Claims Is Granted in Part and Denied in Part
a. Defendant’s Motion to Dismiss Plaintiffs’ General Negligence Claim Is Granted
The Court next turns to Defendant’s challenges to Plaintiffs’ tort claims, beginning with their claim for negligence. By way of background, “[t]o establish a negligence claim under New York law, a plaintiff must demonstrate that: [i] the defendant owed the plaintiff a cognizable duty of care as a matter of law; [ii] the defendant breached that duty; and [iii] plaintiff suffered damage as a proximate, result of that breach.” Millennium Partners,
Here, the sole basis of Plaintiffs’ general negligence claim is Defendant’s alleged breach of its contractual obligations. (See, e.g., BR Compl. ¶ 163 (asserting that Defendant was negligent “by failing to (i) provide notice to the parties to the Governing Agreements and/or the responsible sellers upon its discovery of these breaches, and (ii) take any action to enforce the sellers’ repurchase of the defective mortgage loans”)). As such, “the claim is precluded as duplicative.” RP/DB,
To be clear, Plaintiffs at times plead more specific tort claims under the rubric of negligence, and those claims are neither addressed nor dismissed here. The Court grants Defendant’s motion only insofar as it applies to Plaintiffs’ claims that Defendant was. negligent in performing its contractual duties. The Court will consider the viability of Plaintiffs additional tort claims in greater depth in the sections that follow,
b. Defendant’s Motion to Dismiss Plaintiffs Pre-Default Fiduciary-Duty Claims Is Granted
Plaintiffs’ fiduciary duty claims divide temporally into pre- and post-default claims. This Court will consider them chronologically.
“Prior to an Event of Default, an indenture trustee’s duty is governed solely by the terms of the indenture, with two exceptions: a trustee must still ‘[i] avoid conflicts of interest, and [ii] perform all basic, non-discretionary, ministerial tasks with due care.’ ” RP/HSBC,
c. Defendant’s Motion to Dismiss Plaintiffs Post-EOD Fiduciary-Duty Claims Is Denied
With regard to an indenture trustee’s fiduciary duties, however, an EOD is transformative: After an EOD, “an indenture trustee’s fiduciary duties expаnd under the New York common law such that ‘fidelity to the terms of an indenture does not immunize an indenture trustee against claims that the trustee has acted in a manner inconsistent with his or her fiduciary duty of undivided loyalty to trust beneficiaries.’ ” PL/DB,
As described above, Plaintiffs have alleged that EODs occurred when Servicers failed to “(i) act in accordance with the normal and usual standards of practice of prudent mortgage servicers; (ii) ensure the loans are serviced legally; and (iii) promptly notify [Defendant] and other parties upon discovery [‘of Sellers’] R&W breaches.” (Pl. Opp. 4 (citing BR Compl. ¶¶ 25-26; RP Compl. ¶¶ 57, 59; NCUAB Compl. ¶¶ 85-87, 285-89, 337; PL Compl. ¶¶ 68, 79-80; CB Compl. ¶¶ 44, 54-55)). And Defendant breached its posh-EOD duty to act as would a prudent person by failing to (i) notify Servicers of the R&W breaches of which it was aware, (ii) require those Servicers to cure those breaches, or to repurchase defective loans; (iii) notify Certificateholders of any uncured EODs; and (iv) reimburse . the Trusts for damages. (Pl. Opp. 7 (citing BR Compl. ¶¶ 163-87; RP Compl. ¶ 129; NCUAB Compl. ¶¶ 361-96; PL Compl. ¶¶ 115-18, 160-61; CB Compl. ¶¶ 89-92, 129-30)). As were these allegations sufficient to support a post-EOD breach-of-contract claim, so too are they sufficient to support Plaintiffs’ post-EOD, breach-of-fiduciary-duty claim. However, for the reasons explained more fully below, the portion of this claim that is duplicative in its remedy with Plaintiffs’ breach-of-contract claims is ultimately barred by the economic-loss doctrine, and Defendant’s motion tp dismiss that portion of the claim is granted.
d. Defendant’s Motion to Dismiss Plaintiffs’ Breach-of-Due Care-Claim Is Granted in Part and Denied in Part
“Under New York law, ‘an indenture trustee owes a duty to perform its ministerial functions with due care, and if this duty is breached the trustee will be subjected to tort liability.’ ” PL/DB,
e. Defendant’s Motion to Dismiss Plaintiffs’ Conflict-of-interest Claims Is Denied
To plead properly a conflict-of-interest claim, a plaintiff must allege more than the existence of a “relationship between an issuer and an indenture trustee that is mutually beneficial and increasingly lucrative.” RP/HSBC,
Courts in this District have found this requirement satisfied where a plaintiff alleges a defendant’s complicity in a “quid pro quo system.” RP/BNYM,
Here, Plaintiffs have alleged that Defendant refused to act against sellers and servicers “because doing so would havе exposed [Defendant’s] own misconduct as a Seller or Servicer for other RMBS trusts in which these same entities served as either trustee or servicer.” (Pl. Opp. 21 (citing BR Compl. ¶¶ 173-77; RP Compl. ¶¶ 151-52; NCUAB Compl. ¶¶ 355-59; PL Compl. ¶¶ 149-58; CB Compl. ¶¶ 122-27)). And this conflict, Plaintiffs allege, was “exacerbated” by Defendant’s “ongoing business relationships with the Sellers, Servicers and related companies,” the servicers’ payment of Defendant’s trustee fees, and Defendant’s economic disincentive to declare EODs. (Id. (citing BR Compl. ¶¶ 21, 178-85; RP Compl. ¶¶ 21-24, 63, 137-43; NCUAB
f. Defendant’s Motion to Dismiss Plaintiffs’ Claims for Breach of the Implied Covenant of Good Faith and Fair Dealing Is Granted
“New York law ... does not recognize a separate cause of action for breach of the implied covenant of good faith and fair dealing when a breach of contract claim, based upon the same facts, is also pled.” PL/DB,
Again, the viability of this claim must be considered at two stages—before and after an alleged EOD. Before a trustee discovers an EOD, a trustee has “no duties other than its contractual duties,” and “any cause of action for breach of implied duties cannot stand.” PL/BNYM,
After an EOD,- a trustee’s obligations are not so circumscribed by the Governing Agreements, as éxplained above.’ At this stage, the Court must determine.whether the “damages sought by [Plaintiffs] for breach of the implied covenant are not intrinsically tied to the damages allegedly resulting from breach of contraсt.” PL/DB,
Despite Defendant’s argument in its opening brief that this tort claim must be dismissed, Plaintiffs do not defend it. Instead, Plaintiffs’ tort arguments focus on the conflict-of-interest claim. Accordingly, the Court could find Plaintiffs’ implied covenant claim to be abandoned.
But even were it not abandoned, this claim would fail. Plaintiffs argue only that Defendant breached this covenant in failing to fulfill its contractual obligations. (See, e.g., PL Compl. ¶ 201 (“[Defendant] owed Plaintiffs, as express, intended third party beneficiaries under the PSAs, a duty of good faith and fair dealing pursuant to the PSAs that required [Defendant] to ensure that it did not, by act or omission, injure the rights of the Plaintiffs to receive the benefits and protections provided for under the PSAs.” (emphases added))). Plaintiffs’ breach-of-contract and breach-of-implied-covenant claims are based on the same alleged facts, and therefore the latter must fail. Defendant’s motion to dismiss Plaintiffs’ claims regarding a breach of an implied covenant of good faith and fair dealing is granted. See, e.g., PL/DB,
Plaintiffs’ allegations that Defendant breached duties independent of its contracts do not, themselves, “allow evasion of the economic loss rule, which presents a second, distinct barrier” .to tort claims stemming from contractual relationships. RP/HSBC,
Courts in this District have split with regard to the application of the economic-loss doctrine to tort claims brought against an RMBS trustee. Compare RP/HSBC,
5. Defendant’s Motion to Dismiss Plaintiffs’ TIA Claims Is Granted in Part and Denied in Part
i. Plaintiffs’ TIA Claims Regarding PSA-Governed Trusts Are Dismissed
Plaintiffs assert claims under Seсtions 315(a), (b), and (c) of the TIA.
ii. Defendant’s Motion to Dismiss Plaintiffs’ Section 315(a) Claim Is Granted
With respect to the Indenture Trusts, an interesting antecedent issue concerns whether Plaintiffs can bring a TLA claim at all. Sections 315(a), (b), and (c) of the TIA do not afford an express private right of action. See 15 U.S.C. § 77ooo; see also, e.g., Blackrock Allocation Target Shares: Series S Portfolio v. Bank of N.Y. Mellon (hereinafter, “BR/BNYM”),
The Court concludes, as have its sister courts in this Circuit, that a private right of action is implied under Sections 315(b) and (c), but not under Section 315(a). Considering first Section 315(a), this Court agrees with the other courts to consider the question that “this [SJection limits, rather than creates, liability.” RP/BNYM,
iii. Defendant’s Motion to Dismiss Plaintiffs’ Sections 315(b) and (c) Claims Is Denied
A different result obtains under Sections 315(b) and (c). Neither the Supreme Court nor the Second Circuit has determined whether either section affords an implied private right of action. But the Second Circuit has cited favorably case law consistent with such an implied right. See Bluebird Partners, L.P. v. First Fid. Bank, N.A.,
Defendant decries Plaintiffs’ reliance on cases like Zeffiro, which it claims are “inconsistent with the Supreme Court’s most recent private right of action jurisprudence—Stoneridge, Sandoval[,] and Armstrong v. Exceptional Child Ctr., Inc., — U.S. —,
In Fixed Income Shares, Judge Furman considered this issue with care, specifically grappling with the implications, of Sandoval. First, Judge Furman looked to .the reasoning of Zeffiro, which reasoning he noted “rel[ied] heavily on the factors articulated by the Supreme Court in Cort v. Ash,
Congress intended to create a private right of action under the TIA because [i] the TIA was enacted for the benefit of a special class, namely, debenture holders; [ii] legislative history revealed Congress’s intention “to nationalize the issues of concern in the Act”; [iii] the Securities and Exchange Commission (“SEC”) has no power to enforce the terms of an indenture after it has been qualified under the Act, leaving private ‘lawsuits as the only possible enforcement mechanism; and [iv] “[i]t is unquestionable that Congress intended to legislate over trust indentures and deal with the problem on a national scale.”
Id. (quoting Zeffiro,
Judge Furman also noted that Judge Mukasey had likewise found the TIA’s “text and legislative history [to] support the inference that Congress intended to permit debenture holders to sue in federal court.”
Judge Furman noted, however, that he had been given “pause” by the Supreme Court’s decision in Alexander v. Sandoval,
Later, in Blackrock Allocation Target Shares, Judge Daniels elaborated on
Judge Daniels picked up on this distinction, noting that “[cjourts have unanimously recognized a private cause of action under the TIA for at least thirty-five years.” BR/BNYM,
This Court reaches the same conclusion, even after considering the Supreme Court’s plurality decision in Armstrong v. Exceptional Child Center, Inc., — U.S. —,
Because Defendant does not otherwise challenge the viability of Plaintiffs’ TIA claims, the Court denies Defendant’s motion to dismiss Plaintiffs’ TIA claims under Section 315(b) and (c).
The parties agree that the Streit Act, Article 4A of the New York Real Property Law, does not apply to the 12 Indenture Trusts at issue here. (Def. Br. 24; Pl. Opp. 23 n.18; Def. Reply 10). Accordingly, to the extent that Plaintiffs have pleaded violations of the Streit Act implicating the Indenture Trusts, those claims are dismissed. See, e.g., PL/DB,
As for the PSA Trusts, Plaintiffs allege that Defendant violated Section 126(1) of the Streit Act when it “failed to exercise its rights under the Governing Agreements after becoming aware of numerous Events of Default, failed to notify Certificateholders and other parties of deficiencies, failed to take steps to address those deficiencies, and .., failed to enforce the repurchase, cure or substitution of defective Mortgage Loans.” (RP Compl. ¶¶ 198-99; see also NCUAB Compl. ¶¶ 430, 432; PL Compl. ¶¶ 197-98; CB Compl. ¶¶ 165-66).
This Court now adds its voice to the judicial chorus: Plaintiffs fail to plead a claim under Section 126(1) of the Streit Act because Plaintiffs have not pleaded that Defendant accepted a deficient trust instrument and Section 126(1) imposes no further duty.
In several of the operative pleadings, Plaintiffs reference “a duty” imposed “upon the trustee to discharge its duties under the applicable indenture with due care to ensure the orderly administration of the trust and to protect the trust beneficiaries’ rights”; this language echoes Section 124 of the Streit Act. (RP Compl. ¶ 69; see also NCUAB Compl. ¶¶ 13, 100). But only the NCUAB’s Complaint seems to allege that Defendant violated Section 124. (See NCUAB Compl. ¶ 431 (“In addition, Section 124 of the Streit Act imposes a duty upon the trustee to discharge its duties under the applicable indenture with due care in order to ensure the orderly administration of the trust and protect the trust beneficiaries’ rights.” (citing N.Y. Real Prop. Law § 124))). All told, the extent to which Plaintiffs intend to allege violations of Section 124 is unclear. Fortunately, the law is not so ambiguous: Section 124 “is a preliminary section that does not create any duties.” CB/HSBC,
The Court is not persuaded by Plaintiffs’ arguments that these conclusions are not in keeping with the purpose, legislative history, and case law that motivated the Streit Act. (See Pl. Opp. 22-23). The Court’s decision is in keeping with current case law and with the Streit Act’s plain text. Defendant’s motion to dismiss Plaintiffs’ Streit Act claims is granted.
While most of Defendant’s arguments are applicable to all five Plaintiffs, Defendant mounts individualized arguments against the NCUAB and Commerzbank. Beginning with the former, and because the NCUAB stands in a different position than its peer Plaintiffs, the Court will provide a brief background of. the genesis of its claims before considering the issue of its standing.
a. Factual Background
Plaintiff NCUAB manages the NCUA. As relevant here:
The National Credit Union Administration (“NCUA”) is an independent agency of the Executive Branch of the United States Government that, among other things, charters and regulates federal credit unions, and operates, and manages the National Credit Union Share Insurance Fund (“NCUSIF”) and the Temporary Corporate Credit Union Stabilization Fund (“TCCUSF”), The TCCUSF was created in 2009 to allow the NCUA to borrow funds from the United States Department of the Treasury (“Treasury Department”) to stabilize corporate credit unions under conservatorship or liquidation, or corporate credit unions threatened with conservatorship or liquidation. The NCUA must repay all monies borrowed from the Treasury Department for the purposes of the TCCUSF by 2021. The NCUSIF insures the deposits of account holders in all federal credit unions and the majority of state-chartered credit unions, The NCUA has regulatory authority over state-chartered credit unions that have their deposits insured by the NCUSIF.
(NCUAB Compl. ¶ 17 (citing Federal Credit Union Act, 12 U.S.O. §§ 1751, 1752a(a))). In certain specified circumstances, the NCUAB “may close an insured credit union and appoint itself the Liquidating. Agent for such- credit union. As liquidating agent for a failed credit union, the [NCUAB] succeeds to all rights, titles, powers, and privileges of the credit union, its members, accountholders, officers, and directors.” {Id.).
At various times in 2010, the NCUAB placed certain corporate credit unions (“CCUs”) into conservatorship, and then into involuntary liquidation, “appointing itself as the liquidating agent.” (NCUAB Compl. ¶ 24). In this capacity, the NCUAB “succeeded to all rights, titles, powers, and privileges of the CCUs' and of any member, account holder, officer or director óf the CCUs, With respect to the CCUs and their assets, including the right to bring the claims asserted in this action.” {Id. at ¶ 25). As liquidating agent, the NCUAB had the right to “sue on the CCUs’ behalf.” {Id.).
Also in 2010, “the NCUA and the [NCUAB] as liquidating agent created the NCUA Guaranteed Notes Program (the ‘NGN Program’) as a means of liquidating the distressed investment securities from ... five failed CCUs (the ‘Legacy Assets’), thereby stabilizing funding for the credit union system.” (NCUAB Compl. ¶ 27). This program entailed the transfer of certain Legacy Assets, “including the CCU’s investment in the [T]rusts at issue” in this case, to trusts (the “NGN Trusts”). (Id.). To create the NGN Trusts, “the NCUA Board in its Capacity as Liquidating Agent (as Sellers) transferred the [CCUs’ RMBS] certificates to the NGN Trusts (as Issuers) pursuant to the NGN Trust Agreements, and [Defendant] (as Owner Trustee) caused the Owner Trust Certificates ... to be. issued” to the NCUAB. (Id. at ¶ 29). The NGN Trusts are Delaware statutory trusts, created pursuant to and governed by the Delaware Statutory
Once the RMBS certificates were conveyed to the NGN Trusts, and the NCUAB left with only its Owner Trust Certificates, the NGN Trusts executed a second transaction. The Trusts entered into an Indenture Agreement with the Bank of New York Mellon (“BNYM”), through which they “(as Issuers) pledged the [certificates and the other assets of the trust estates to [BNYM] (as Indenture Trustee) and caused ... Notes to be issued pursuant to the NGN Indentures.” (NCUAB Compl. ¶ 29). “BNYM (as Indenture Trustee) [then] delivered the Notes [to] ... Initial Purchasers for further sale to investors.” (Id.).
The NGN Trust Agreements facilitated the following exchange: The NCUAB as liquidating agent “transferred and assigned” the former CCU-owned certificates, as well as the NCUAB’s “rights, title, and interest to assert the claims at issue in this [case] to the NGN Trusts,” and in exchange, the NCUAB received “certain certificates that represent a beneficial ownership interest in the NGN Trusts (the ‘Owner Trust Certificates’).” (NCUAB Compl. ¶ 80). This beneficial ownership interest entitled the NCUAB in its capacity as Liquidating Agent “to payments from the NGN Trusts after the principal balance of the Notes issued by the various NGN Trusts has been reduced to zero.” (Id.; see also id. at ¶ 31). And the NCUA, “in its capacity as an agency of the Executive Branch of the United States Government (in such capacity, the ‘Guarantor’) provided a guarantee, backed by the full faith and credit of the United States, of the timely repayment of all principal and interest to the investors in the NGN Trusts.” (Id. at ¶ 32; id. at Ex. D).
b. Defendant’s Motion to Dismiss NCUAB’s Derivative Claims Is Granted
Defendant’s standing claim with regard to the NCUAB is intertwined with its challenge to the NCUAB’s claims on their merits: Defendant • claims that the NCUAB lacks standing to assert its derivative claims (which, according to Defendant, are not in fact derivative), and, further, that the NCUAB lacks standing to bring direct сlaims as well. The Court will consider first the threshold question of the NCUAB’s standing, before addressing the derivative or direct nature of the claims the NCUAB asserts standing to bring.
i. Procedural History
To consider properly the NCUAB’s derivative claims, the Court first revisits events that followed the NGN Trust formation process described above. Critical to the Court’s analysis of the NCUAB’s standing is the fact that through the NGN Indenture Agreement, “BNYM was granted the right to take action against Defendant with respect to the certificates and the Trusts.” (NCUAB Compl. ¶ 33; id. at Ex. B). Specifically, the Granting Clause of the Indenture Agreement gave BNYM as Indenture Trustee “all of [the Trusts’] right, title and interest in and to ... the Underlying Securities ..., and all distributions thereon, ... [and] all present and future claims, demands, causes, and choses in action in respect of the foregoing, in-
On January 30, 2015, NCUA in its capacity as Guarantor asked BNYM to exercise this right and pursue the claims at issue in the instant action. (NCUAB Compl. ¶ 34). On February 24, 2015, BNYM declined to do so, stating that
BNY Mellon as Indenture Trustee on the various NCUA re-securitization trusts does not intend to pursue the claims outlined in the Amended Complaints[.] We take no position on the merits, but acknowledge and agree that the Guarantor [NCUA] has the right to pursue claims based on the re-securitization Trust Indentures when the Indenture Trustee fails to do so after receiving notice (which we have for the claims in the Amended Complaints).
(Id.; see also id. at Ex. G). In a sworn declaration provided on July 13, 2015, BNYM modified its position regarding the NCUAB’s standing slightly:
BNYM, solely in its capacity as the Indenture Trustee of the NGN Trusts, does not object to NCUA’s pursuit of the NCUA Suits on behalf of the NGN Trusts. BNYM, solely in its capacity as the Indenture Trustee of the NGN Trusts, takes a neutral position with respect to any challenge to NCUA’s standing and leaves it to the decision of the courts presiding over the NCUA Suits. The statements made in this paragraph 5 are made in reliance on NCUA’s statement in its letter to BNYM, dated July 7, 2015, that: “In bringing the NCUA Suits on behalf of the NGN Trusts, the NCUA Board has fully committed to protecting the best interests of the NGN Trusts and the NGN Noteholders. Recoveries on claims brought on behalf of the NGN Trusts will be remitted to the NGN Indenture Trustee for deposit into the NGN Trust accounts.”
(Id.; see also id. at Ex. I).
Subsequently, “for the certificates in the NGN Trusts, the [NCUAB] as liquidating agent” brоught the claims in the instant case “derivatively on behalf of the NGN Trusts, and [named] each NGN Trust ... herein as a nominal defendant.” (NCUAB Compl. ¶ 35). The NCUAB asserts standing to bring its action on three bases: “as liquidating agent [with] an interest in the NGN Trusts as the holder of the NGN Owner Trust Certificates, as an express third-party beneficiary of the NGN Trust Indentures, and pursuant to its authority under 12 U.S.C. § 1787 as the liquidating agent of the CCUs.” (Id.).
Defendant’s preliminary challenge to the NCUAB’s standing is its argument that the NCUAB cannot vindicate the NGN Trusts’ rights because the Trusts themselves were not entities capable of such vindication; because a trust is not an entity that can sue, another entity cannot sue on its behalf. (Def. Br. 24). Plaintiffs retort that the specific Trusts at issue are an exception to this rule. While common-law trusts may not be entities with the capacity to sue or be sued (id. (citing Tran v. Bank of N.Y., No. 13 Civ. 580 (RPP),
Accepting the proposition that the DSTA empowers the NGN Trusts to sue, the Court must determine whether the NCUAB may sue derivatively in NGN Trust’s stead. Defendant’s second challenge to the NCUAB’s derivative claims proceeds from its first: Both build on the foundational principle that “[a] plaintiff who asserts a derivative cause of action must establish the existence of a cause of action in the party whose rights are sought to be enforced. A cause of action cannot be derived from a source in which it does not exist.” Waters v. Horace Waters & Co.,
In each of their 2015 opinions, Judges Scheindlin and Forrest found that the NCUAB lacked standing at least in part because it had failed to meet the requirements imposed by Federal Rule of Civil Procedure 23.1 and Delaware law to bring a derivative suit. Judge Forrest found that the NCUAB had failed' to state a derivative claim on behalf of the NGN trusts because the NCUAB had sued to recover for itself: “[I]f NCUA were in fact acting in a derivative capacity ... for the NGN Trusts, any recovery would necessarily go to those Trusts.” NCUAB/U.S. Bank I,
Only Judgé Forrest had a subsequent opportunity to revisit the question of NCUAB’s standing,
Judge Forrest began with every court’s initial task in a putative derivative action: the determination of “who has the right to assert a direct claim, and who stands in a derivative рosition with regard to that claim.” NCUAB/U.S. Bank II,
This conclusion, Judge Forrest found, was confirmed by the “breadth and completeness of the Granting Clause,” the expansive language of which itself “forecloses derivative claims.” NCUAB/U.S. Bank II,
Unsurprisingly, Plaintiffs take issue with Judge Forrest’s reasoning. Among other criticisms, Plaintiffs argue that Judge Forrest “disregarded the fundamental role of a trustee vis-á-vis its trust and beneficial owners, and erroneously treated the Indenture assignment from the NGN Trust to the Indenture Trustee as divesting NCUA of its ability to bring a derivative claim,” apparently viewing the Indenture Trustee as “an entity entirely separate and apart from its duties and role as trustee to the NGN Trust and its beneficiaries.” (Pl. Opp. 29). Because “BNYM also is a trustee of the NGN Trust with duties flowing directly to beneficial owners, including NCUA,” Plaintiffs argue, the NCUAB is not twice removed from BNYM. (Id. at 29-30), Moreover, Plaintiffs argue that Judge Forrest confused the NCUAB’s rights to bring direct and derivative claims. The NCUAB brings its derivative claim on behalf of the NGN Trusts, on the basis of the Trusts’ right to bring that claim directly and BNYM’s acquiescence to'the NCUAB’s suit. (Pl. Opp. 31). The NCUAB admits that it has no standing to bring a direct claim against Defendant on the basis of its beneficial-owner status alone. (Id.), But, citing to the DSTA, the NCUAB argues that as a beneficial owner holding Owner Trust Certificates, it is statutorily authorized “to sue derivatively ‘if persons with authority to do so have refused to bring the action,’ and where trust ‘property is held or will be held by a trustee or trustees ... for the benefit of .. beneficial owners.’ ” (Id
This Court reaches the same conclusion as did Judge Forrest, though its reasoning is slightly different. “Under the NGN Trust Agreements, the [NCUAB] as liquidating agent transferred and assigned its rights, title, and interest to assert the claims at issue ... to the NGN Trusts.” (NCUAB Compl. ¶ 30 (citing Ex. C, NGN Trust Agreement § 3.01)).
to do all things not inconsistent with the provisions of [the] Indenture that it may deem advisable in order to enforce the provisions hereof or to take any action with respect to a default or an Event of Default hereunder, or to institute, appear in or defend any suit or other proceeding with respect hereto, or to protect the interests of the Noteholders and the Guarantor.
(Id. at Ex. B § 5.01(a)(i)).
Plaintiffs argue that irrespective of the NGN Trusts’ conveyance of their right to bring suits with respect to the certificates to BNYM, BNYM was also a trustee of the NGN Trust with duties flowing directly to beneficial owners. This the Court does not dispute. Plaintiffs’ argument, however, elides the role of the NGN Trusts in the equation. It may be true that BNYM owed duties to the NCUAB as a beneficial owner. But the NCUAB cannot bring a derivative suit simply because it meets certain prerequisites: It is a beneficial owner, and it has made a demand of BNYM. In so arguing, Plaintiffs miss the forest for the trees. The NCUAB may only sue “to enforce a right that [the Trusts] may properly assert but ha[ve] failed to enforce.” Fed. R. Civ. P. 23.1 (emphasis added). Anc here, there is no underlying right, because the NGN Trusts contracted it away.
Still, the NCUAB insists that the DSTA authorizes its suit. The NCUAB is correct insofar as the DSTA prоvides that
[a] beneficial owner may bring an action in the Court of Chancery in the right of a statutory trust to recover a judgment in its favor if persons with authority to do so have refused to bring the action or if an effort to cause those persons to bring the action is not likely to succeed.
12 Del. Code. § 3816(a).
Here, the NCUAB is a beneficial owner of the NGN Trusts insofar as it is a holder of NGN Owner Trust Certificates (NCUAB Compl. ¶ 30); these gave the NCUAB a beneficial interest in the NGN Trusts, to which Trusts the NCUAB transferred the former-CCUs’ RMBS certificates. (Id. at ¶¶ 29-30). Had this been the only transaction,, the NCUAB may well have had standing as a beneficial owner in the NGN Trusts to assert claims against Defendant on the NGN Trusts’ behalf. Those Trusts had a claim as RMBS certifi-cateholders, and the NCUAB may have been able to vindicate their claim in a derivative suit.
This was not the only transaction, however. In the very moment the NGN Trusts became certifieateholders, they entered into the Indenture Agreement with BNYM, to which agreement the NCUAB was not a party. In the Indenture Agreement, the NGN Trusts “assigned] the Trust Estate as collateral to the Indenture Trustee, to be held by the Indenture Trustee, as security for the benefit of the Note-holders and the Guarantor.” (NCUAB Compl., Ex. B at 5). The NGN Trusts also granted to BNYM all of their “right, title and interest in and to” the Trust Estate as well as “all present and future claims, demands, causes and choses in action.” (Id.). This language effected a, broad grant of rights to BNYM. Any right to sue that the NCUAB had against Defendant with regard to the Trust Estate was transferred, along with that Estate, to BNYM.
The Court understands Plaintiffs to be arguing that the NCUAB’s DSTA-con-ferred right to bring a derivative claim exists notwithstanding the Granting Clause; the DSTA created a specific right for Delaware-statutory-trust trustees that could not be, or at least was not here, contracted away by the NGN Trusts. But this argument would require the Court to read the sweeping language of the Granting Clause to have limits that it lacks on its face. This the Court will not do. As Judge Forrest held, the “contract must be read to mean what it says.” NCUAB/U.S. Bank II,
Moreover, reading the DSTA to imply a right that exists despite and unaffected by the parties’ agreements would be inconsistent with the preference that the statute consistently evinces for freedom of contract. Here, “[principles of contract law trump the principle of pursuing of a claim derivatively upon which plaintiff relies[,]” because that is what the DSTA itself requires. NCUAB/U.S. Bank II,
Precisely for this reason, the few cases to interpret the DSTA and similar statutes have affirmed that a court must give force to the parties’ bargain. See Grand Acquisition, LLC v. Passco Indian Springs DST,
Here, the contracts are clear. The Trust Agreement established that the NCUAB was “the sole beneficial owner of the portion of the [RMBS certificates] it [was] conveying to the Trust.” (NCUAB Compl., Ex. C, § 2.10(iv)). In Section 3.01, the NCUAB agreed that it would “contribute, transfer, convey and assign to, and deposit with, the Trust, without recourse, all of such Seller’s right, title and interest in and to the portion of the Trust- Estate consisting of such Seller’s portion of the [RMBS certificates].” (Id. at § 3.01 (emphasis added)). And this conveyance was to be “absolute,” and also was “intended by the parties, other than for federal, state and local income and franchise tax purposes, to constitute a sale of the [RMBS certificates] and all other assets constituting the Trust Estate by each Seller to the Trust.” (Id. at § 2.14(b)). Beneficial owners were express
In sum: The NCUAB lacks standing to bring a derivative claim against Defendant on behalf of thе NGN Trusts because the NGN Trusts lack standing to bring a claim against Defendant, having transferred all rights to such claim to BNYM through the Indenture Agreement. Defendant’s motion to dismiss the NCUAB’s derivative claims is granted.
c. Defendant’s Motion to Dismiss the NCUAB’s Direct Claims Is Denied
Separately, Defendant opposes the NCUAB’s standing to bring certain direct claims “arising from certificates previously held by a ‘recently unwound’ NGN Trust.” (Def. Br. 30 (citing NCUAB Compl. ¶ 26 & n.2)). Defendant asserts that this Court must assess the NCUAB’s standing as of the original complaint, despite the NCUAB’s subsequent amendment thereof. (Id.). In support of this argument, Defendant quotes language attributed to an unpublished Memorandum Decision and Order issued by Judge Forrest on May 11, 2016: “The subsequent winding-down of one NGN trust does not ... change the fact that at the time NCUA brought this suit, it did not have standing to pursue claims on behalf of the NGN trusts.” (Def. Br. 30 (citing 14 Civ. 9928, Dkt. # 141)).
As a preliminary matter, the Court agrees with the NCUAB that Defendant here confuses the standards for Article III standing.and “real-party-in-interest” status. (Pl. Opp. 33-34). “The Second Circuit has held that when defendants assert that a party other than plaintiff has standing, ‘their unspoken premise [is] that [plaintiffs] lacked standing because [the non-party] remained ... the real party in interest.’ ” Abu Dhabi Commercial Bank v. Morgan Stanley & Co. Inc.,
d. The Dismissal of the NCUAB’s Derivative Claims Is Without Prejudice
Defendant contends that the NCUAB’s dismissal should be with prejudice. (Def. Br. 26). It argues that allowing the NCUAB to amend its pleading would cause undue delay and prejudice, and would moreover be futile absent a basis to relate back the NCUAB’s new claims. (Id. at 27-29).
Plaintiffs dispute each of these claims. They remind the Court of the liberal standard afforded by Rule 17 for substitution. (Pl. Opp. 32). They further explain that the NCUAB did not amend its complaint earlier because it believed in good faith that the case law in this area was in flux, and was awaiting the Court’s disposition of the issue in this case. (Id.). And Plaintiffs assert that there is no relation-back problem because Rule 17 provides that a substituted party’s “claims will relate back to the date of the original complaint.” (Id. (quotation marks omitted) (quoting Advanced Magnetics,
The Court agrees with Plaintiffs. If the NCUAB still wishes to amend its pleading, it may move the Court for leave to do so. However, the NCUAB is advised that it will have to identify the party with whom it will replace itself and explain how such a substitution would rectify the standing deficiencies identified above. The NCUAB must further address, in detail, the contemplated impact that a substitution (and, conversely, a failure to substitute) would have on this case, particularly the ongoing discovery schedule.
8. Defendant’s Motion to Dismiss Commerzbank’s Claims as Untimely Is Denied
Finally, Defendant raises a claim of timeliness solely as to Commerz-bank, resolution of which requires a determination of the applicable statute of limitations. “Under New York’s ‘borrowing statute,’ a case filed by a non-resident plaintiff requires application of the shorter statute of limitations period, as well as all applicable tolling provisions, provided by either New York or the state where the cause of action accrued.” Cantor Fitzger
At the outset, the Court notes that the following facts are not in dispute: (i) the applicability of New York’s statute of limitations; (ii) the economic nature of Com-merzbank’s alleged injuries; (iii) Com-merzbank’s residency in Germany, on the basis of its incorporation and maintenance of its principal place of business in that country; and (iv) the fact that Commerz-bank is asserting claims assigned to it by Dresdner Bank, a German entity; Eurohy-po AG New York Branch, a German entity; Barrington II CDO Ltd., a Cayman Islands entity; and Palmer Square 3 Limited, an Irish entity. (CB Compl. ¶¶ 16-17).
First, the Court rejects Commerz-bank’s invocation of.the “financial base” exception to New York’s accrual rules. Commerzbank argues that • German law may not apply because
Commerzbank’s acquisitions and other activities related to certificates were conducted at and through Commerzbank AG London Branch (“London Branch”), which is a separate financial base[,] and “[w]here a plaintiff maintain[s] [a] separate financial base and where the impact of the financial loss is felt at that location, it .may constitute an alternative place of injury” under the New York borrowing statute.
(Pl. Opp. 35-36 (alterations in original) (quoting Baena v. Woori Bank, No. 05 Civ. 7018 (PKC),
Even if a branch could constitute a, base, Commerzbank has not made any effort .to show that this case is one of the “extremely rare case[s] where the party has offered unusual circumstances” to justify the Court’s employment of the financial-base exception. CB/DB,
Considering the very same language as did Judge Koeltl, this Court reaches the very same conclusion. “Even if all of the material decisions with respect to the purchase of the Certifiсates were made at the London branch of Commerzbank, Com-merzbank ultimately felt its economic losses at its principal place of -business and state of incorporation: Germany.” CB/DB,
Finding that German law applies, the Court must consider whether it bars Commerzbank’s claims. The silver lining of the “proliferation of RMBS litigation in America involving claims that accrued in Germany” is that “American courts have recently had the opportunity to interpret the German statute of limitations applicable to this case.” CB/DB,
[T]he relevant provision of German law is Section 195 of the German Civil Code, which has a three-year limitations period. That period begins to run at the end of the calendar year in which [i] the claim arose and [ii] the plaintiff either has knowledge of the circumstances giving rise to the claim and the identity of the defendant, or would have had such knowledge but for gross negligence. [UJnder German law, a plaintiff has knowledge of the circumstances giving rise to the claim when she obtains knowledge of the facts necessary to commence an action in Germany with an “expectation of success” or “some prospect of success,” though not without risk and even if the prospects of success are uncertain[.] To satisfy this standard, a plaintiff need not know all the relevant details or have conclusive proof available; knowledge of the factual circumstances underlying the claim is sufficient. •
Id. at 472,
Defendant argues that “Commerzbank has affirmatively alleged that it had knowledge of [Defendant’s] alleged breaches pri- or to January 1, 2012” because Commerz-bank pled that at the time of its sale of certain RMBS certificates in 2011, “it was apparent that Wells Fargo had breached its duties and would not take steps to remedy its failures.” (Def. Br. 32 (quoting CB Compl. ¶ 132)). But the Court cannot find this admission, even together with Commerzbank’s 2011 lawsuit “against several rating agencies in connection with RMBS” (id.), sufficient to prove that the German statute of limitations accrued on or before the end of 2011. The German standard for accrual is high: “Under German law, Commerzbank must have had
This Court shares this skepticism. Ultimately, it cannot determine, from the face of the Complaint, “that Commerzbank had sufficient knowledge of each element, of each of its claims with respect to each, or any, Trust [at the relevant time] such that it could have commenced this action with an expectation, or some prospect, of success.” CB/DB,
CONCLUSION
For the foregoing reasons, Defendant’s motion is GRANTED IN PART and DENIED IN PART as described in the text of this Opinion. If the NCUAB still wishes to amend its pleading, it is directed to move the Court for leave to do so within two weeks of this Opinion and Order.
The Clerk of Court is directed to terminate the following motions: in Case No. 14 Civ. 9371, the motion pending at Docket Entry # 169; in Case No. 14 Civ. 9764, the motion pending at Docket Entry # 113; in Case No. 14 Civ. 10067, the motion pending at Docket Entry # 126; in Case No. 14 Civ. 10102, the motion pending at Docket Entry # 111; and in Case No. 15 Civ. 10033, the motion pending at Docket Entry # 56.
SO ORDERED.
Notes
.Specifically, Defendant has moved to dismiss each of the five operative complaints in these actions: (i) the Amended Complaint in the action brought by certain BlackRock funds ("BlackRock”) and others (the “BR Compl.,” 14 Civ. 9371, Dkt. # 102-06); (ii) the Amended Complaint in the action brought by Royal Park Investments SA/NV ("Royal Park”) (the "RP Compl.,” 14 Civ. 9764, Dkt. # 24); (iii) the Second Amended Complaint in the action brought by the National Credit Union Administration Board (the "NCUAB”) (the “NCUAB Compl.,” 14 Civ. 10067, Dkt. # 82), (iv) the Second Amended Complaint in the action brought by Phoenix Light SF Ltd. ("Phoenix Light”) and others (the "PL Compl.," 14 Civ. 10102, Dkt. # 80); and the Complaint in the action brought by Commerzbank AG ("Commerzbank”) (the "CB Compl.,” 15 Civ. 10033, Dkt. # 1) (all five complaints, collectively, the "Complaints”). Because Defendant’s five motions are contained in a consolidated brief, the Court will refer to them in this Opinion as a single motion.
. This Opinion draws the facts in this section from the Complaints. The Court takes all well-pleaded allegations therein as true, as it must at this stage. See, e.g., Peralta v. St. Luke's Roosevelt Hosp., No. 14 Civ. 2609 (KPF),
. The Court cités to this Complaint for simplicity’s sake. Each of the Complaints contains a comparable description of RMBS trusts.
. Defendant clarifies that while ‘'Plaintiffs’ complaints identify claims on behalf of 59 RMBS trusts, ... Six of those trusts overlap with each other among the various actions.” (Def. Br. 2 n.2).
. At the time, there was a fifth related case that has since been separated from the original four, over which this Court does not preside, and which therefore is not at issue in this Opinion: Blackrock Balanced Capital Portfolio (FI) v. Deutsche Bank Nat'l Tr. Co., No. 14 Civ. 9367 (JMF). To avoid confusion, this Court in this section only refers to Defendant Wells Fargo.
. Defendant also cites an oral ruling by New York State Supreme Court Justice Charles É. Ramos "that discovery or actual knowledge cannot be inferred from generic public information about originator and servicer misconduct.” (Def. Br. 10). This decision is not germane to the Court’s analysis here, where Plaintiffs have alleged knowledge on the basis of far more than generic public information.
. The Court shares Judge Koeltl’s dismay with regard to Plaintiffs' mode of pleading: Plaintiffs' complaints include "discursive hi-
. "The [TIA] was enacted because previous abuses by indenture trustees had adversely affected 'the national public interest and the interest of investors in notes, bonds [and] debentures,’ and Congress sought to address this national problem in a uniform way.” Bluebird Partners, L.P. v. First Fid. Bank, N.A. N.J.,
(1) the indenture trustee shall not be liable except for the performance of such duties as are specifically set out in such indenture; and (2) the indenture trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, in the absence of bad faith on the part of such trustee, upon certificates or opinions conforming to the requirements of the indenture; but the indenture trustee shall examine the evidence furnished to it pursuant to [S]ection 77nnn of this title to determine whether or not such evidence conforms to the requirements of the indenture.
15 U.S.C. § 77ooo(a). Section 315(b) requires that
[t]he indenture trustee shall give to the indenture security holders ... notice of all defaults known to the trustee, within ninety days after the occurrence thereof; Provided, That such indenture shall automatically be deemed (unless it is expressly provided therein that such provision is excluded) to provide that, except in the case of default in the payment of the principal of or interest on any indenture security, or in the payment of any sinking or purchase fund installment, the trustee shall be protected in withholding such notice if and so long as the board of directors, the executive committee, or a trust committee of directors and/or responsible officers, of the trustee in good faith determine that the withholding of such nоtice is in the interests of the indenture security holders.
Id. at § 77ooo(b). And Section 315(c) dictates that
[t]he indenture trustee shall exercise in case of default (as such term is defined in such indenture) such of the rights and powers vested in it by such indenture, and to use the same degree of care and skill in their exercise, as a prudent man would exercise or use under the circumstances in the conduct of his own affairs.
Id. at § 77ooo(c).
. This resolution is critical to the Court's jurisdiction in this case: "[A]n affirmative answer” to the private-right-of-action question
Plaintiffs amended. Because (i) Judge Ber-man was correct in finding that he could exercise supplemental jurisdiction; (ii) Plaintiffs' federal Trust claims are no longer as numerically overwhelmed, and therefore substantially predominated, by Plaintiffs’ PSA Trust claims; (iii) discovery in this case has progressed significantly since Judge Berman’s Decision and Order; and (iv) Defendant has not moved the Court to withhold supplemental jurisdiction over Plaintiffs' PSA Trust claims, the Court affirms here that it has and is exercising supplemental jurisdiction over Plaintiffs’ state-law claims. See 28 U.S.C. § 1367.
, That section provides:
No trustee shall hereafter accept a trust under any trust indenture or mortgage within the contemplation of this article or act as trustee thereunder unless the instrument creating the trust shall contain the following provisions, among others, which confer the following powers and impose the following duties upon the trustees:
1. In the case of an еvent of default (as such term is defined in such instrument), to exercise such of the rights and powers vested in the trustee by such instrument, and to use the same degree of care and skill in their exercise as a prudent man would exercise or use under the circumstances in the conduct of his own affairs.
N.Y. Real Prop. Law § 126(1).
. Plaintiffs raise for the first time in their opposition brief the existence of an additional duty under Section 130-e. (PL Opp. 23). However, Plaintiffs do not allege that any duty imposed by Section 130-e was violated by Defendant, nor have they pleaded any such violation. Accordingly, the Court will not consider the viability of a Streit Act claim under Section 130-e. Moreover, the Court is skeptical that such a claim could succeed even if pleaded properly. See Commerzbank AG v. Deutsche Bank Nat’l Tr. Co., No. 15 Civ. 10031 (JGK),
. "Because Defendant’s motion is granted as to the Streit Act claim[s], the Court does not address whether the Streit Act applies to RMBS trusts or whether it provides a private cause of action for damages,” Phoenix Light SF Ltd. v. Bank of N.Y. Mellon, No. 14 Civ. 10104 (VEC),
. Defendant originally challenged the standing of both the NCUAB and Royal Park with regard to the derivative claims brought by each. Royal Park has subsequently abandoned its derivative claims, (Pl. Opp. 33 n.34 ("Royal Park’s action was brought as a class action, or in the alternative, derivatively in the right and for the benefit of the Covered Trusts against Wells Fargo. In light of recent authority, which has no effect on NCUA's claims whatsoever, Royal Park is electing to proceed only on a class basis.” (citing RP Compl. ¶¶ 1-2; Royal Park Invs. SA/NV v. Deutsche Bank Nat’l Tr. Co., No, 14 Civ. 4394 (AJN),
. In its opening brief, Defendant argues that Plaintiffs may not bring derivative actions on behalf of RMBS Trusts because such claims can only be brought directly, by investors in those Trusts; the RMBS Trusts themselves were not the parties who suffered the alleged harm and who would receive the benefit of recovery. (Def. Br. 29-30 (citing Yudell v. Gilbert,
The Court also will not consider whether the NCUAB has standing to sue on behalf of the NGN Trusts “as an express third-parly beneficiary of the NGN Trust Indentures, and pursuant to its authority under 12 U.S.C. § 1787 as the liquidating agent of the CCUs.” (NCUAB Compl. 1135). Defendant has not challenged and Plaintiffs havenot defended the NCUAB's standing on these bases. Moreover, the courts in this District to have considered the question have found that neither the NCUAB’s third-party-beneficiary status nor its authority under 12 U.S.C. § 1787 afford it standing to sue. See Nat’l Credit Union Admin. Bd. v. HSBC Bank USA, Nat’l Ass’n, 117 F.Supp.3d 392 , 398-99 (S.D.N.Y. 2015); Nat’l Credit Union Admin. Bd. v. U.S. Bank Nat’l Ass’n, No. 14 Civ. 9928 (KBF),2015 WL 2359295 , at *4 (S.D.N.Y. May 18, 2015). For the reasons those Courts articulated, this Court would find the same.
. As an aside, the Court notes that Defendant brought its motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) rather than under Rules 12(b)(1) (permitting dismissal for lack of subject-matter jurisdiction) or 23.1 (establishing prerequisites and pleading requirements for derivative suits). And this distinction is not without import; “In contrast to a motion to dismiss pursuant to Rule 12(b)(6),” for example, “a Rule 23.1 motion to dismiss for failure to [meet the rule's pleading requirements] is not intended to test the legal sufficiency of the plaintiffs’ substantive claim, 'Rather, its purpose is to determine who is entitled, as between the corporation and its shareholders, to assert the plaintiff’s underlying substantive claim on the corporation’s behalf.' ” In re Veeco Instruments, Inc. Sec. Litig.,
. The defendant in Judge Scheindlin’s case, which was reassigned to Judge Schofield on April 19, 2016, did not file a renewed motion to dismiss NCUAB’s pleading on the basis of
. The NCUAB has reprеsented that the relevant NGN agreements are substantively similar, and attached representative examples as exhibits to its pleading. The Court can therefore consider them. See Goel,
. The Court looks to Delaware law here because Delaware law governed the NGN Trusts' formation. See In re Goldman Sachs Mut. Funds, No. 04 Civ. 2567 (NRB),
. On reply, Defendant changes tack, recasting its original argument as one that the NCUAB lacked "a cognizable injury when it commenced this litigation,” (Def. Reply 14). Because this argument is raised for the first time on reply, this Court need not consider it. Cf. Cruz v. Zucker,
. New York Civil Practice Law and Rules Section 202 provides:
An action based upon a cause of action accruing without the state cannot be commenced after the expiration of the time limited by the laws of either the state or the place without the state where the cause of action accrued, except that where the cause of action accrued in favor of a resident of the state the time limited by the laws of the state shall apply-”
. Commerzbank has not addressed whether the laws of Ireland or the Cayman Islands might apply in the event that its claims accrued prior to their assignments.
. The Court notes also that Judge Daniels issued a Memorandum Decision and Order only days prior to the issuance of this Opinion, on March 21, 2017, in which he reached the same conclusion as did Judge Koeltl regarding the applicability of the German statute of limitations tó RMBS claims brought by Commerzbank AG. See Commerzbank v. Bank of N.Y. Mellon, No. 15 Civ. 10029 (GBD),
. Rule 44.1 of the Federal Rules of Civil Procedure permits the Court to consider, "in determining foreign law ... any relevant material or source, including testimony, whether or not submitted by a party or admissible under the Federal Rules of Evidence.” Fed. R. Civ. P. 44.1. The Rule further provides that "the court’s determination must be treated as a ruling on a question of law.” Id. "Accordingly, foreign law should be argued and briefed like domestic law. As with domestic law, judges may rely on both their own research and the evidence submitted by the parties to determine foreign law.” Commerzbank AG v. Deutsche Bank Nat’l Tr. Co., No. 15 Civ. 10031 (JGK),
. In its reply brief, Defendant for the first time posits a timeliness challenge to Com-merzbank’s claims based on New York’s six-year statute of limitations for breach-of-contract claims. (Def. Reply 14). Ironically, this timeliness argument fails by reason of its untimeliness. Cf. Cruz,