Justice Shirley Werner Kornreich
DB Structured Products moved to dismiss the complaint in this mortgage-backed securities “put-back” action. The instant matter involved the same parties, almost identical contracts, claims and a trust comprised of similar loans to a related action the court ruled on on May 13, 2013. Here, DB sought dismissal arguing ACE Securities’ damages were limited to a Pooling and Servicing Agreement’s (PSA) sole remedy provision—the Repurchase Protocol—among other things. The court previously held that released, charged off, and liquidated loans were subject to repurchase, but dismissal could not be granted for such loans as discovery was necessary to determine which of the loans fell into these categories. Thus, DB withdrew that prong of its motion, but the court concluded ACE’s damages were limited to the formula set forth in the Repurchase Protocol as to DB’s remaining arguments, but ACE may maintain put-back claims for all nonconforming loans in the trust. ACE was not precluded from maintaining put-back claims for loans not specified in its demand letters. The court also noted if DB ran afoul of the PSA by failing to remedy the existence of nonconforming loans from the outset, such breach did not impact the timeliness of put-back claims.
