Justice Shirley Werner Kornreich
DB Structured Products (DBSP) moved to dismiss the complaint in this action alleging breach of contractual obligations to repurchase certain non-conforming loans. It purchased certain loans and sold them to ACE Securities. DBSP was obligated to cure a breach of a representation, and if the breach could not be cured, the sole remedy was to repurchase the affected loans. DBSP argued ACE’s claim for breach of contract accrued when it was executed in 2006, but ACE argued their claims did not accrue until DBSP breached its repurchase obligations. The court stated a demand was complete for statute of limitations purposes when the party making the demand first became entitled to do so, not from the time the demand was made. It noted before a trustee may sue DBSP for breach of its repurchase obligations it must follow three steps: discovery or notice by the bank, cure and repurchase. Thus, the trustee could not sue until discovery by the bank occurred and the cure period lapsed. The court ruled the limitations period began to run when DBSP improperly rejected a trustee’s repurchase demand, thus ACE’s claims did not accrue on the date of the contracts’ execution and the claims were timely, denying dismissal.
