Justice Eileen Bransten
Bank of America Corporation moved to consolidate and stay the issue of successor liability in the instant action and three related actions asserted against it by MBIA Insurance Corporation and by plaintiffs in the three other pending cases. This action stemmed from 15 residential mortgage-backed securitizations, which were collateralized by residential mortgages originated and purchased by Countrywide Home Loans Inc. MBIA insured the securitizations, guaranteeing payments to their investors. MBIA brought the instant action against Countrywide and others alleging that they fraudulently induced MBIA to insure the securitizations and that Countrywide breached the representations and warranties in the transaction documents. In an amended complaint, MBIA added a cause of action alleging successor and vicarious liability against Bank of America, alleging that BofA’s purchase of Countrywide constituted a merger. The court denied BofA’s motion in this matter and in the three related matters, determining that MBIA would suffer significant prejudice if the successor liability issue were stayed.
