Opinion
Index No. 600352/2009
01-28-2016
U.S. BANK NATIONAL ASSOCIATION, as Indenture Trustee for the Benefit of the Insurers and Noteholders of GreenPoint Mortgage Funding Trust 2006-HE1, Home Equity Loan Asset-Backed Notes, Series 2006-HE1; SYNCORA GUARANTEE INC., formerly known as XL CAPITAL ASSURANCE INC., as Controlling Insurer, Note Controlling Party and Class Ax Insurer; and CIFG ASSURANCE NORTH AMERICA, INC., as Class Ac Insurer, Plaintiffs, v. GREENPOINT MORTGAGE FUNDING, INC., Defendant.
:
This breach of contract action arises out of the securitization of mortgage loans originated and sold by defendant GreenPoint Mortgage Funding, Inc. (GreenPoint). The sole remaining claims in the complaint are two causes of action for breach of contract brought by plaintiff Trustee U.S. Bank National Association (U.S. Bank or Trustee) against GreenPoint.
Claims brought by the insurer plaintiffs were dismissed by this court (Fried, J.) (See U.S. Bank Natl. Assn. v GreenPoint Mtge. Funding, Inc. [US Bank/GreenPoint], 34 Misc 3d 1231 [A], 2012 NY Slip Op 50331 [U] [Sup Ct, NY County 2012], aff'd 105 AD3d 639 [1st Dept 2013], lv denied 22 NY3d 863 [2014]; US Bank/GreenPoint, Sup Ct, NY County, Jan. 6, 2011, Index No. 600352/2009 [oral argument transcript]; US Bank/GreenPoint, Sup Ct, NY County, March 24, 2011, Index No. 600352/2009. See also US Bank/GreenPoint, 26 Misc 3d 1234 [A], 2010 NY Slip Op 50371 [U], 2010 WL 841367 [Sup Ct, NY County Mar. 3, 2010] [granting GreenPoint's motion to dismiss insurers' claims, but not Trustee's claims, based on standing].)
The Trustee now moves for partial summary judgment dismissing GreenPoint's first affirmative defense that the Trustee lacks standing. GreenPoint moves for summary judgment dismissing the Trustee's breach of contract claims based on its lack of standing. Both parties also cross-move to preclude the testimony of the parties' experts.
The court presumes familiarity with the procedural history of this case and the facts as stated in detail in this court's prior decisions and orders, and will not restate them here, except to the extent that they are relevant to these motions.
Background
Between September 2005 and July 2006, GreenPoint sold five separate pools of loans as part of a $1.83 billion securitization in connection with which GreenPoint Mortgage Fund Trust 2006-HE1 (Trust) issued Home Equity Loan Asset-Backed Notes, Series 2006-HE1 (Notes). (Joint Statement of Undisputed Material Facts [Joint Statement], ¶¶ 34-35, 47-53.) The Notes are residential mortgage-backed securities, and the Trust holds the collateral backing the Notes, consisting of 30,000 residential mortgage loans. (Id., ¶ 37.) In each transaction, GreenPoint sold a pool of loans to GMAC Mortgage Corporation (GMAC) as a nominal purchaser. GreenPoint also agreed to sell specified loans to Lehman Brothers Bank, FSB (Lehman Bank), GMAC then assigned the loans to Lehman Bank, with GMAC retaining the right to service the loans. By a series of assignments, Lehman Bank transferred the loans to Lehman Brothers Holdings Inc. (Lehman Holdings), the Sponsor of the securitization, which then transferred the loans to Structured Asset Securities Corporation (SASCO), the Depositor, which in turn transferred the loans to the Trust for which plaintiff is the Trustee. (Id., ¶¶ 23, 36.) The governing agreements under which these sales and transfers were made are described in detail below.
It is undisputed that "GreenPoint entered into at least two types of contracts with entities to which it sold loans: (1) agreements governing sales of loans between the parties (known as 'Flow' agreements); and (2) 'Purchase Price and Terms Letters,' or 'PPTLs' which supplied specific terms governing individual trades under the 'Flow' agreements, including, for example, the price and the anticipated closing date for the particular trade." (Joint Statement, ¶ 2.) More particularly, GreenPoint as "Seller" and GMAC as "Purchaser" entered into two Flow Agreements which set up a framework governing sales of mortgage loans and GMAC's rights and interest in the Agreements: a "Flow Revolving Credit Loan Purchase and Warranties Agreement," dated September 26, 2005, for sale of home equity lines of credit (HELOC Flow Agreement [Matheson Aff. In Supp., Ex I]); and a "Flow Mortgage Loan Purchase and Warranties Agreement," dated July 26, 2006, for sale of "closed-end second" lien loans (CES Flow Agreement [Matheson Aff. In Supp., Ex J]; Joint Statement, ¶ 17.)
The Flow Agreements contained representations and warranties by GreenPoint as Seller to GMAC as Purchaser, including representations and warranties regarding the quality and characteristics of the individual mortgage Loans. (Flow Agreements, §§ 6, 7.) These Agreements defined Purchaser as "GMAC Mortgage Corporation or its successor in interest or assigns or any successor to the Purchaser under this Agreement as herein provided." (Flow Agreements, § 1, "Definitions" at 7.) The Agreements both provided that if GreenPoint breached certain representations and warranties which materially and adversely affected the value of loans or the interests of the Purchaser, it could be required, "at the Purchaser's option," to cure or repurchase such loans. (HELOC Flow Agreement, § 8 [b]; CES Flow Agreement, § 8 [c].)
The HELOC and CES Flow Agreements both also contained provisions permitting GMAC to assign the loans and its rights as Purchaser, including its repurchase rights, and specifying the conditions of an effective assignment of such rights. (Flow Agreements, §§ 21, 28.) The assignment section of each of the Flow Agreements provided: "This Agreement shall bind and inure to the benefit of and be enforceable by the Seller [Greenpoint] and the Purchaser [GMAC] and the respective successors and assigns of the Seller and the Purchaser." (Flow Agreements, § 21.)
The HELOC Flow Agreement further provided, in pertinent part:
"No transfer of a Revolving Credit Loan shall be made unless such transfer is in compliance with the terms hereof. . . . The Purchaser may, subject to the terms of this Agreement, sell and transfer one or more of the Revolving Credit Loans, provided, however, that (i) in the case of a Securitization Transfer or an Agency Transfer, Purchaser shall have the right to assign its rights under this Agreement into such Securitization Transfer or Agency Transfer after which the issuer or trustee for the issuer of any such Securitization Transfer or any such Agency Transfer shall be deemed to be a Purchaser or (ii) in the case of any sale or transfer other than a Securitization Transfer or an Agency Transfer, any transferee will not be deemed to be a Purchaser hereunder binding upon the Seller unless such transferee shall agree in writing to be bound by the terms of this Agreement and an original counterpart of the instrument of transfer and an assignment and assumption of this Agreement substantially in the form of Exhibit G hereto executed by the transferee shall have been delivered to the Seller."(§ 21.) The HELOC Flow Agreement defined "Securitization Transfer" in the following provision: "The Purchaser may sell the Revolving Credit Loans either to whole loan purchasers ('Whole Loan Transfers'), exchange the Revolving Credit Loans for agency securities ('Agency Transfers') or convey the Revolving Credit Loans to securitized trust structures ('Securitization Transfers')." (§ 28.) It is undisputed that the HELOC Flow Agreement does not define the term "securitized trust structures." (Joint Statement, ¶ 22.)
In determining GreenPoint's motion to dismiss, this court (Fried, J.) held that "[t]here is an ambiguity as to whether the entire transaction from its inception was meant to be, or became, a 'securitized trust structure'." (US Bank/GreenPoint, 2010 WL 841367, at * 6.)
The CES Flow Agreement permitted GMAC's assignment of the underlying loans and its rights as Purchaser, subject to following condition:
"provided, however, that the transferee will not be deemed to be a Purchaser hereunder binding upon the Seller unless such transferee shall agree in writing to be bound by the terms of this Agreement and an original counterpart of the instrument of transfer and an assignment and assumption of this Agreement in the form of Exhibit H hereto executed by the transferee shall have been delivered to the Seller."(§ 21.) Unlike the HELOC Flow Agreement, the assignment section of the CES Flow Agreement did not include an exception, for Securitization (or Agency) Transfers, to the requirement that a specified form be used for the assignment.
It is undisputed that the loans were sold to GMAC under GMAC's "conduit lite program." As explained by GreenPoint, "[u]nder this program, the loans would nominally be sold to GMAC along with the loan servicing obligations . . . . Then, on the day when the HELOCs sale actually closed, GMAC, Lehman Bank, and GreenPoint would immediately enter an 'Assignment, Assumption & Recognition Agreement' which would rename Lehman Bank as the purchaser but leave the servicing obligations with GMAC." (Def.'s Memo. Of Law In Support Of Motion For Summary Judgment [Def.'s Memo. In Supp.] at 5 n 5; Pl.'s Memo. Of Law In Support Of Its Motion For Partial Summary Judgment [Pl.'s Memo. In Supp.] at 7 n 3, 8-9; Joint Statement, ¶ 6.)
It is further undisputed that in connection with this program, GreenPoint agreed to sell pools of loans to Lehman Bank as Purchaser, pursuant to five Purchase Price and Terms Letters: PPTLs, dated as of September 12, 2005, March 7, 2006, March 25, 2006, and April 19, 2006, sold HELOCs. A fifth PPTL, dated as of July 11, 2006, sold both HELOCs and CES loans. (Joint Statement, ¶ 47; Matheson Aff. In Supp., Exs. D-H.)
The first paragraph of each HELOC PPTL, defining Lehman Bank as "Purchaser," provided as follows:
"The Purchaser has the right to assign all of its rights under the Purchase Price and Terms Letter, the Agreement [defined above in the PPTL as the HELOC Flow Agreement], the Flow Interim Servicing Agreement and/or any of the HELOCs purchased under the Agreement to any affiliate of the Purchaser or third party."(Matheson Aff. In Supp., Ex. D.) Each HELOC PPTL contained a section 19, entitled "Transfers," which further provided:
"The Purchaser may sell the HELOCs either to whole loan purchasers ('Whole Loan Transfers'), exchange the HELOCs for agency securities ('Agency Transfers') or convey the HELOCS to securitized trust structures ('Pass-Through Transfers') (each a 'Transfer'). In the event that the Purchaser sells certain HELOCs into Pass-Through Transfers or Agency Transfers, the Seller agrees to cooperate with the Purchaser in reviewing and adhering to the terms of any agreements which might be required as part of Agency Transfers or Pass-Through Transfers."(Id., § 19.)
The parties do not assert that the provisions of the five PPTLs are materially different from one another.
The July 11, 2006 PPTL for HELOCs and CES loans contained a virtually identical first paragraph authorizing Lehman Bank as Purchaser "to assign all of its rights under" the PPTLs and HELOC and CES Flow and Servicing Agreements "to any affiliate of the Purchaser or third party." It also contained a virtually identical section 19, authorizing such Transfers for "HELOCs/Mortgage Loans." (Matheson Aff. In Supp., Ex. H, § 19.)
The Transfers sections for both the HELOC and the HELOC/CES loans also provided that the "Seller shall cooperate with the Purchaser in connection with any Transfer contemplated by the Purchaser pursuant to this Section 19." (Id., Exs. D, H, § 19.) By way of cooperation, the Transfers sections specified, among other things, that "the Seller shall (a) execute any agreements related to any Transfers ('Reconstitution Agreements')," and shall bring the representations and warranties in the HELOC Flow Agreement, or, in the case of the HELOC/CES PPTL, the HELOC and CES Flow Agreements, current as of the date the HELOCS and/or CES loans "are being transferred pursuant to a Transfer . . . ." (Id.) The PPTLs specifically contemplated transfers to trusts, thus further providing that the Seller shall:
"(b) provide to the trustee or a third party purchaser, as the case may be, subject to any Reconstitution Agreement and/or the Purchaser: (i) any and all information and appropriate verification of information which may be reasonably available to the Seller . . . , as the Purchaser shall reasonably request [and] . . . (iii) such additional representations, warranties, covenants, opinions of counsel, letters from auditors, and certificates of public officials or officers of the Seller as are reasonably believed necessary by the
trustee, such third party purchaser, any master servicer, any rating agency or the Purchaser, as the case may be, in connection with such transactions."(Id.)
In connection with each loan purchase, GMAC, Lehman Bank, and GreenPoint entered into at least one "Assignment, Assumption and Recognition Agreement" (AAR). These AARs were "made and entered into as of stated closing dates that correspond exactly or are closely proximate to the closing dates stated in the PPTLs for the mortgage loan sales. The AAR dated as of September 29, 2005 corresponds to the September 12, 2005 PPTL which specified a September 29, 2005 Closing Date for the sale of the HELOCs. (Matheson Aff. In Supp., Exs. M, D.) The March 29, 2006 AAR corresponds to the March 7, 2006 PPTL with a specified March 30, 2006 Closing Date. (Id., Exs. N, E.) The April 25, 2006 AAR corresponds to the March 25, 2006 PPTL with a specified April 25, 2006 Closing Date. (Id., Exs. O, F.) The May 25, 2006 AAR corresponds to the April 19, 2006 PPTL with a specified May 25, 2006 Closing Date. (Id., Exs. P, G.) Two July 28, 2006 AARs correspond to the July 11, 2006 PPTL with a specified July 28, 2006 Closing Date. (Id., Exs. Q, R, H.) There are also two August 4, 2006 AARs which correspond to an additional August 4, 2006 closing of loans referenced in the July 11, 2006 PPTL. (Joint Statement, ¶¶ 17-19.)
Under the AARs, GMAC assigned to Lehman Bank "all of its right, title and interest" in each of the mortgage loans, and "all of its right, title and interest as 'Purchaser' in, to and under" the Flow Agreements and Flow Interim Servicing Agreements, including its rights to seek repurchase of mortgage loans under the Flow Agreements. (Matheson Aff. In Supp., Ex. M, AAR, § 1.) In contrast, GMAC retained its rights to service the mortgage loans. (Id., § 1 [a], 3.) The AARs also provided: "The Assignee [Lehman Bank] agrees to be bound, as 'Purchaser', by all of the terms, covenants and conditions of the Purchase Agreement [defined as the Flow Agreement]" and other enumerated agreements. (Id., § 7.)
The parties do not assert that the provisions of the AARs are materially different from one another.
By various agreements, all dated as of August 1, 2006, the Lehman entities transferred the underlying loans to the Trust. These agreements included: an "Assignment and Assumption Agreement" (AAA) entered into between Lehman Bank as "Assignor" and Lehman Holdings as "Assignee" (Berger Aff., Ex. 22); a "Mortgage Loan Sale and Assignment Agreement" (MLSAA) entered into between Lehman Holdings as "Seller" and SASCO as "Depositor" (id., Ex. 23); a Transfer and Servicing Agreement (TSA) entered into among the Trust, SASCO as "Depositor," GMAC as "Servicer," and the Trustee (id., Ex. 24); and an Indenture between the Trust and the Trustee. (Id., Ex. 25.)
Summary Judgment Motions
The parties' dispute on the instant motions is whether the Trustee was assigned the status of "Purchaser" under the Flow Agreements, thus affording the Trustee standing to seek repurchase by GreenPoint, pursuant to these Agreements, of loans as to which representations and warranties were materially breached. The Trustee does not dispute that Lehman Bank did not use the assignment forms annexed as exhibits G and H, respectively, to the HELOC and CES Flow Agreements to assign the loans from Lehman Bank to Lehman Holdings and, through Lehman Holdings, ultimately to the Trustee. Nor does the Trustee dispute that contractual restrictions on assignment may be enforceable. Rather, as to the HELOC Flow Agreement, the Trustee argues, and GreenPoint disputes, that Lehman Bank assigned the loans to the Trustee in a Securitization Transfer, for which the form was not required. As to both Flow Agreements, the Trustee argues, and GreenPoint disputes, that the PPTLs modified the Agreements by eliminating the assignment form requirement and, in the alternative, that the parties' conduct constructively modified any requirement that a particular assignment form be used.
The standards for summary judgment are well settled. The movant must tender evidence, by proof in admissible form, to establish the cause of action "sufficiently to warrant the court as a matter of law in directing judgment," (CPLR 3212 [b]; Zuckerman v City of New York, 49 NY2d 557, 562 [1980].) "Failure to make such showing requires denial of the motion, regardless of the sufficiency of the opposing papers." (Winegrad v New York Univ. Med. Ctr., 64 NY2d 851, 853 [1985].) Once such proof has been offered, to defeat summary judgment "the opposing party must 'show facts sufficient to require a trial of any issue of fact' (CPLR 3212, subd [b])." (Zuckerman, 49 NY2d at 562.)
It is further settled that "documents executed at about the same time and covering the same subject matter are to be interpreted together, even if one does not incorporate the terms of the other by reference, and even if they are not executed on the same date, so long as they are 'substantially' contemporaneous." (Brax Capital Group, LLC v WinWin Gaming, Inc., 83 AD3d 591, 592 [1st Dept 2011] [citing Nau v Vulcan Rail & Constr. Co., 286 NY 188, 197 [1941], rearg denied 287 NY 630; Gulf Ins. Co. v Transatlantic Reins. Co., 69 AD3d 71, 81 [1st Dept 2009] [cited by Zyskind v Facecake Mktg. Tech., Inc., 110 AD3d 444, 446 n 1 [1st Dept 2013]. Compare Applehead Pictures LLC v Perelman, 80 AD3d 181, 189 [1st Dept 2010].)
Here, the PPTLs are all dated prior to the dates of corresponding AARs by which GMAC assigned to Lehman Bank its rights as Purchaser against GreenPoint under the HELOC and CES Flow Agreements. As discussed above, however, the PPTLs expressly referred to Lehman Bank as Purchaser under the Flow Agreements, although Lehman Bank was not yet a party to those Agreements. Each PPTL (quoted supra at 5) thus stated that Lehman Bank, Purchaser under the PPTL, "has the right to assign all of its rights under the Purchase Price and Terms Letter [and] the Agreement," which was defined in the PPTL as the relevant Flow Agreement. As also discussed above (supra at 7), the closing dates in the PPTLs all corresponded to the closing dates in the AARs by which Lehman Bank was actually assigned GMAC's rights as Purchaser under the Flow Agreements.
Under the above authority, the court holds that the PPTLs, AARs, and Flow Agreements must be read together "[e]ven though they [were] made at different dates, . . . since they were to effectuate the same purpose and formed a part of the same transaction." (See Nau, 286 NY at 197; see also Bank of N.Y. Mellon v WMC Mtge., LLC, 2014 US Dist Lexis 7317, * 13-14 [SD NY, Jan. 14, 2014, No. 12-Civ-7096 [KBF] [holding, in the residential mortgage-backed securities context, that two Mortgage Loan Purchase Agreements and a Pooling and Servicing Agreement must be "read together," as the "securitization was effected through three agreements that were executed contemporaneously"]; Bank of N.Y. Mellon v WMC Mtge, LLC, 2015 US Dist Lexis 99783, * 16, 20 [SD NY, July 30, 2015, No. 12-Civ-7096 [DLC].)
The court further holds that the provisions of the PPTLs and the Flow Agreements are inconsistent with respect to the requirements for Lehman Bank's transfer of its repurchase rights against GreenPoint under the Flow Agreements. Contrary to GreenPoint's contention, the PPTLs did not merely permit Lehman Bank, as Purchaser, to assign the loans and the rights of the Purchaser, leaving it to the Flow Agreements to "spell out how those assignments may be accomplished." (Def.'s Memo. In Opp. To Pl.'s Motion at 4.) Rather, the PPTLs expressly authorized Lehman Bank, without limitation, to assign "all of its rights" under the Flow Agreements (and other identified agreements) "to any affiliate of the Purchaser or third party." The PPTLs did not require use of a specified form to effectuate an assignment of the Purchaser's rights. In contrast, the CES Flow Agreement required use of a specified annexed form for any assignment of such rights, while the HELOC Flow Agreement required the assignment to be made in substantially the same form as an annexed form, unless the assignment of rights was made in an "Agency Transfer" or a "Securitization Transfer." The annexed form required the assignee to make certain representations and warranties, and thereby limited the parties that were eligible to acquire the status of assignee with the rights of Purchaser. For example, the form required a representation that the assignee was acquiring the loans "for investment for its own account only and not for any other person." (HELOC Flow Agreement, Ex. G, § 3 [d]; CES Flow Agreement, Ex. H, §3 [d].)
The Trustee asserts that the forms were inapposite to a transfer to a securitization sponsor, and that in connection with the transfer to Lehman Holdings, Lehman Bank could not have made the representation, which the forms required, that it was acquiring the loans "for its own account only and not for any other person." (Pl.'s Memo. In Opp. To Def.'s Motion at 9.) GreenPoint does not contest that this representation could not have been made by Lehman Bank in transferring the loans to Lehman Holdings. (See Def.'s Reply at 10.)
The PPTLs also contained detailed provisions regarding the transfer of loans which addressed the same subject matter as, but differed from, such transfer provisions in the Flow Agreements. Thus, the PPTLs (quoted supra at 6) required GreenPoint as Seller to cooperate with Lehman Bank as Purchaser in connection with any Transfer contemplated by section 19 of the PPTLs. For example, the PPTLs expressly required GreenPoint to update representations and warranties as of the date of the Transfer, and to provide information and make additional representations to trustees or other specified parties. The PPTLs Transfers section omitted any requirement to use a specified form to effectuate the permitted transfers.
The HELOC Flow Agreement contained a "Reconstitution" provision which, like the PPTL Transfer provision, provided that the Purchaser may sell the loans to whole loan purchasers, may exchange them for agency securities ("Agency Transfers") or may "convey [the loans] to securitized trust structures ('Securitization Transfers')." (HELOC Flow Agreement, § 28.) It further provided for the Seller (GreenPoint) to "cooperate with the Purchaser [initially GMAC] in reviewing and adhering to the terms of any agreements which might be required as part of Agency Transfers or Securitization Transfers (the 'Reconstitution Agreement')", and to deliver requested information regarding the originator and "Static Pool Information" regarding the loans. (Id.) It did not, however, refer to cooperation with, or provision of information to, trustees. Nor did it provide for updating of representations and warranties regarding the loans. A "Further Agreements" section in the HELOC Flow Agreement also did not require the Seller to make representations and warranties current as of the date of resales of the loans. (HELOC Flow Agreement, § 19.)
The CES Flow Agreement contained a similar section 19 entitled "Further Agreements," as well as a section entitled "Pass Through Transfer," which provided that the Purchaser "may convey the Mortgage Loans to one or more securitized trust structures ('Pass-Through Transfers')." (CES Flow Agreement, § 28.) It also provided, among other things, that "the Seller shall cooperate with the Purchaser in connection with any Pass-Through Transfer contemplated by the Purchaser pursuant to this Section 28." Like the PPTLs Transfers section, it required the Seller to execute Reconstitution Agreements and to provide reasonably requested information to trustees and other identified parties; to update representations and warranties regarding the loans; and to provide additional representations and warranties to trustees, third-party purchasers, and other identified parties in connection with the transactions. (Id.)
GreenPoint argues that the AARs are subsequent agreements, which impose the requirements of the Flow Agreements regarding transfers of loans and Purchaser's rights, including the requirement of the HELOC Flow Agreement that a form be used absent a Securitization Transfer, and the requirement of the CES Flow Agreement that the form be used for any transfer. (See Def.'s Memo. In Opp. to Pl.'s Motion at 12.) In support of this contention, GreenPoint relies on the provision of the AARs (quoted supra at 8) that Lehman Bank as Assignee agrees to bound as Purchaser "by all of the terms, covenants and conditions" of the Flow Agreements.
As the above review of the chronology of the PPTLs, AARs, and Flow Agreements shows, however, they are contemporaneous, interrelated Agreements pertaining to the same transaction. Moreover, although each AAR included a provision binding Lehman Bank to the terms and conditions of the relevant Flow Agreement, each PPTL entered into subsequent to an AAR continued to authorize Lehman Bank's transfer of its rights as Purchaser without restriction. Significantly, although the Flow Agreements contained detailed provisions governing the transfers of loans and of Purchaser rights against GreenPoint, and although the parties contemplated in their contemporaneous agreements that GMAC would assign its rights under the Flow Agreements to Lehman Bank, Lehman Bank and GreenPoint nevertheless set forth at length in their PPTLs the specific agreements they had reached regarding transfer of loans and Purchaser rights. The governing agreements here are hardly a model of precise drafting. Reading the agreements together, however, as the court must do, the court concludes that the PPTL transfer provisions would have no purpose or would be rendered meaningless if they were nullified by the AARs.
Contrary to GreenPoint's suggestion, the court's holding is not that the PPTLs could modify a contract made by different parties - i.e., the Flow Agreements originally entered into by GMAC and GreenPoint as parties. Rather, it is that Lehman Bank, as assignee of GMAC, entered into a related agreement with GreenPoint modifying its rights regarding transfer of loans and Purchaser rights under the Flow Agreements to which it became a party.
As the agreements considered together are not ambiguous with respect to the required use of a form to effectuate assignments of Lehman Bank's rights as Purchaser, the court may not, and need not, consider extrinsic evidence of the parties' intent in this regard. (See e.g. Greenfield v Philles Records, Inc., 98 NY2d 562, 569 [2002]; Waverlv Corp. v City of New York, 48 AD3d 261, 265 [1st Dept 2008].) The court notes, however, that the Trustee presents evidence that would be sufficient to raise a triable issue of fact as to the parties' intent as to the necessity for use of the Flow Agreement forms.
For example, it is undisputed that the agreements by which the Lehman entities transferred the loans to the Trust were copied to GreenPoint. (Joint Statement, ¶¶ 64-68 [relating to the AAA, MLSAA, and TSA Agreements].) The AAA was the initial agreement by which Lehman Bank transferred its rights as Purchaser, including its repurchase rights under the Flow Agreements, to Lehman Holdings. GreenPoint does not dispute that it received this (and the other August 1, 2006 transfer agreements), and that it stated that it "has no comments on this document." (Berger Aff., Ex. 79; Joint Statement, ¶ 68.) GreenPoint similarly stated that it "has no comments" on the TSA by which the Depositor, SASCO, transferred the loans and repurchase rights against GreenPoint to the Trust. (Berger Aff., Ex. 70; Joint Statement, ¶ 65.) GreenPoint's counsel asserts that GreenPoint examined the documents only if GreenPoint was to be a signatory or to verify the accuracy of information supplied by GreenPoint. (Def.'s Memo. In Opp. To Pl.'s Motion at 17 [citing Deposition of Michael Najewicz [GreenPoint's Assistant General Counsel] at 267-271 [Matheson Aff. In Opp., Ex. 2]].) This assertion appears questionable in light of the provisions of the Flow Agreements and PPTLs requiring GreenPoint to cooperate with Lehman Bank's transfers, but involves a credibility determination which could not be resolved on a summary judgment motion. In any event, as stated above, the court does not reach the issue of whether the parties' conduct modified the contractual requirements regarding assignments.
The AAA expressly provided: "The Assignor [Lehman Bank] hereby assigns to the Assignee [Lehman Holdings] all of its right, title and interest in and to the Loans and the Sale/Servicing Agreements . . . ." (AAA, § 1.) The Sale/Servicing Agreements were defined in the AAA to include both the Flow Agreements and related AARs. (Id., Ex. A.) The AAA further provided that Lehman Holdings' sole remedy for breach of a representation or warranty made by the seller (GreenPoint) under the Sale/Servicing Agreement "shall be to enforce such seller's obligations under the Sale/Servicing Agreement." (Id., § 6.)
In claiming that GreenPoint's conduct demonstrated that use of a form was not necessary to effectuate assignment of the loans, the Trustee also relies on GreenPoint's conduct in repurchasing loans from the Trust after the securitization closed. (Pl.'s Memo. In Supp. at 18.) The parties, however, dispute whether the loans were repurchased at Lehman Bank's or Lehman Holdings' request.
In view of this court's holding that Lehman Bank was not required to use an assignment form to transfer the loans and its Purchaser rights under the Flow Agreements to Lehman Holdings, the court need not reach the further issue, raised on the parties' motions for summary judgment, of whether the transfer was a "Securitization Transfer" within the meaning of the HELOC Flow Agreement. As resolution of the summary judgment motions does not rely on the meaning of "securitized trust structures," the court also need not reach the further issue, raised by the parties' cross-motions, of whether the parties' experts' opinions concerning this term should be stricken or precluded. The court notes parenthetically that the experts disagree as to whether the term is a "technical term of art." Given the dueling experts' affidavits, resolution of that issue would have required credibility determinations. It appears, however, that expert testimony on securitization practices at the time of the transfers in question would have been appropriate to aid the court in construing the term.
It is accordingly hereby ORDERED that the Trustee's motion for partial summary judgment is granted to the extent of dismissing GreenPoint's first affirmative defense alleging lack of standing; and it is further
ORDERED that GreenPoint's motion for summary judgment dismissing the complaint is denied with prejudice to the extent that the motion is based on the Trustee's lack of standing; and it is further
ORDERED that the parties' cross-motions to strike the opposing party's experts' affidavits and to preclude their testimony are denied; and it is further
ORDERED that the stay of discovery in this action is vacated and the parties are directed to participate, to the extent practicable, with the Part 60 RMBS Put-back Litigation Coordination (Master Index No. 777000/2015).
This constitutes the decision and order of the court. Dated: New York, New York
January 28, 2016
/s/_________
MARCY S. FRIEDMAN, J.S.C.