Manhattan Supreme Court at 60 Centre St. (NYLJ/Rick Kopstein)
The Commercial Division justice assigned to hear residential mortgage-backed securities cases issued companion rulings March 29 that limited the use of the CPLR’s “savings provision” by the plaintiffs’ bar to revive cases dismissed on statute of limitations grounds.
But in both rulings, Justice Marcy Friedman rejected the defendant’s claims that the recent Court of Appeals decision in ACE Securities Corp., Home Equity Loan Trust, Series 2006-SL2 v. DB Structured Prods., Inc., 25 NY3d 581 (2015), known as “ACE,” foreclosed use of the savings provision, which allows plaintiffs to cure procedural defects and re-file.
Friedman dismissed a re-filed version of the ACE case, on the grounds it could not be revived using the savings provision in CPLR §205(a). She said in ACE Securities Corp. v. DB Structured Products, 651854/2014, that because the plaintiff was substituted for the original one, the re-filed action did not comply with §205(a).
In the second case, U.S. Bank National Association v. DLJ Mortgage Capital, 654147/12, Friedman adhered to her 2015 decision to dismiss without prejudice. She said a new version that would argue non-time-barred claims could be re-filed. The defendants in that case argued the Court of Appeals ruling in ACE foreclosed re-filing on statue of limitations grounds.
Friedman rejected the claim, reaffirming her prior decision, which concluded that an issue existed as to whether the trustee for the RMBS certificate holders was entitled to commence a new action under the CPLR 205(a) savings provision.
Kasowitz, Benson, Torres & Friedman represented the plaintiffs in both actions.
Simpson Thacher & Bartlett represented the defendants in ACE Securities. Orrick, Herrington & Sutcliffe argued for the defendants in U.S. Bank.
Friedman has approximately 50 RMBS cases pending.