Homeward Residential, Inc. v. Sand Canyon Corporation

Filing 259

OPINION & ORDER re: 151 MOTION for Leave to Appeal September 30, 2016 Order filed by Sand Canyon Corporation. For the reasons stated above, Defendant's motion to certify the September 30 Order for interlocutory appeal is DENIED. The Clerk of Court is respectfully directed to terminate the motion docketed at ECF No. 151. SO ORDERED. (Signed by Judge John F. Keenan on 1/24/2018) (anc)

Case 1:09-md-02013-PAC Document 57 Filed 09/30/10 Page 1 of 45
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
------------------------------ X
USDC SDNY
:
HOMEWARD RESIDENTIAL, INC.,
DOCUMENT
solely in its capacity as
:
ELECTRONICALLY FILED
Servicer for the Option One
:
DOC #: _________________
Mortgage Loan Trust 2006-3,
:
DATE FILED: 1/24/2018
UNITED benefit of the Trustee :
for the STATES DISTRICT COURT
SOUTHERN DISTRICT Option One
and the holders of OF NEW YORK :
-----------------------------------------------------------x
Mortgage Loan Trust 2006-3
:
In re FANNIE MAE
Certificates, 2008 SECURITIES
: :
No. 08 Civ. 7831 (PAC)(JFK)
12 Civ. 7319
LITIGATION
09 MD 2013 ORDER
OPINION & (PAC)
Plaintiff,
: :
: :
OPINION & ORDER
-against: :
-----------------------------------------------------------x
:
SAND CANYON CORPORATION, f/k/a :
Option One Mortgage
:
Corporation,
:
HONORABLE PAUL A. CROTTY, United States District Judge:
Defendant.
:
------------------------------ X
APPEARANCES
BACKGROUND1
FOR PLAINTIFF HOMEWARD RESIDENTIAL, INC.:
Brian early years of this decade saw a boom in home financing which was fueled, among
The V. Otero
Stephen R. Blacklocks
Michael B. Kruse
other things, by low interest rates and lax credit conditions. New lending instruments, such as
HUNTON & WILLIAMS LLP
subprime mortgages (high credit risk loans) and Alt-A mortgages (low-documentation loans)
FOR DEFENDANT SAND CANYON CORPORATION:
kept Michaelgoing.Calhoon played a role too; they took on unmanageable risks on the
the boom L. Borrowers
Richard P. Sobiecki
Vernon Cassin would continue to rise and that refinancing options would always be
assumption that the market
Douglas Henkin
BAKER BOTTS Lending
available in the future.L.L.P. discipline was lacking in the system. Mortgage originators did
James Goldfarb
Daniel T. Brown
not hold these high-risk mortgage loans. Rather than carry the rising risk on their books, the
MURPHY & McGONIGLE, P.C.
originators sold their loans into the secondary mortgage market, often as securitized packages
JOHN F. KEENAN, United States District Judge:
known as mortgage-backed securities (“MBSs”). MBS markets grew almost exponentially.
Before the Court is Defendant Sand Canyon Corporation’s
But then the housing bubble burst. In 2006, the demand for housing dropped abruptly
(“Defendant”) motion to certify for interlocutory appeal under
and home prices began to fall. In light of the changing housing market, banks modified their
28 U.S.C. § 1292(b) the September 30, 2016 Order (the “September
lending practices and became unwilling to refinance home mortgages without refinancing.
30 Order”) granting Plaintiff Homeward Residential’s

1

1

Unless otherwise indicated, all references cited as “(¶ _)” or to the “Complaint” are to the Amended Complaint,
dated June 22, 2009. For purposes of this Motion, all allegations in the Amended Complaint are taken as true.

(“Plaintiff”) leave to amend.

For the reasons that follow,

Defendant’s motion is denied.
I.
A.

Background

Factual Background

Knowledge of the basic facts of this case is presumed and
is discussed at length in the Court’s August 22, 2017 Opinion
and Order (ECF No. 227).
are as follows:

Briefly stated, the facts of this case

In 2006, Defendant, a mortgage originator then

known as Option One Mortgage Corporation, sold a pool of over
7,500 mortgage loans with a total principal balance of
approximately $1.5 billion as part of a deal related to the
issuance of residential mortgage-backed securities (“RMBS”).
(Second Amended Complaint ¶¶ 1, 16, ECF No. 126 (filed Oct. 6,
2016) [hereinafter SAC].)

Defendant originated or purchased

5,625 mortgages and transferred them to Option One Mortgage
Acceptance Corporation (the “Depositor”) in October 2006. (Id.
¶¶ 1, 17.)

This transfer was structured as a sale and is

documented in a Mortgage Loan Purchase Agreement (“MLPA”) dated
October 19, 2006. (Id. ¶ 17.)

The Depositor conveyed “all

right, title, and interest” in the mortgage loans to a trust
called the Option One Mortgage Loan Trust 2006-3 (the “Trust”)
by means of a Pooling and Service Agreement (“PSA”) dated
October 1, 2006. (Id. ¶ 18.)

In December 2006, Defendant sold

an additional 1,958 mortgage loans to the Trust. (Id. ¶ 20.)
2

In

2008, Plaintiff took over servicing of the Trust loans and
assumed the authority to enforce Defendant’s obligations under
the MLPA. (Id. ¶¶ 12-13, 27-28).
In the MLPA, Defendant made over fifty representations
concerning the mortgage loans sold, including that “[t]here is
no material default, breach, violation or event of acceleration
existing under the Mortgage or the related Mortgage Note.” (Id.
¶ 21.)

Section 3.04 of the MLPA establishes Defendant’s

obligation to cure or repurchase loans within 120 days of
discovery or notice of the breach of any representation,
warranty, or covenant that materially and adversely affects the
value of a loan or the interests of the Trust and its
certificateholders in that loan. (Id. ¶ 24.)
In a letter dated March 8, 2012, Wells Fargo Bank N.A., as
Trustee, gave Defendant notice of breaches of representations
and warranties with respect to certain mortgage loans that
materially and adversely affected the value of the loans or the
Trust’s interest in those loans and demanded that Defendant
either cure those breaches or repurchase the loans within 120
days. (Id. ¶ 8.)

Defendant responded on July 10, 2012, denying

any merit to the claims. (Id.)

On May 29, 2015, the Law

Debenture Trust Company of New York, as Separate Trustee, gave
Defendant notice of material breaches of representations and
warranties with respect to an additional 649 loans and demanded
3

that Defendant either cure or repurchase those loans within 120
days. (Id. ¶ 9.)

The May 29 notice enclosed a letter from

Perry, Johnson, Anderson, Miller & Moskowitz LLP, counsel for
certain certificateholders, (the “Perry Johnson letter”) and a
set of schedules describing the nature of the breaches. (Id.)
The Perry Johnson letter alleged “pervasive and widespread
breaches” and reserved the right to give notice of additional
breaches. (Id. ¶ 9.)

To date, Defendant has not cured or

repurchased any loans. (Id. ¶¶ 8-9.)
Plaintiff alleges in the SAC that Defendant breached its
representations and warranties with respect to “many loans” in
the Trust and that Defendant was aware that there were
widespread and systemic deviations from its underwriting
guidelines when the loans in the Trust were approved. (Id. ¶¶
29, 33.)

Because Defendant was allegedly aware of the

widespread disregard of its underwriting guidelines and
resulting pervasive breaches, Plaintiff seeks to require
Defendant to honor its contractual obligation to repurchase all
Trust loans with respect to which it has breached its
representations and warranties, or otherwise compensate the
Trust. (Id. ¶ 10.)

In the alternative, Plaintiff seeks to

require Defendant to repurchase the 745 loans that were included
in the March 2012 and May 2015 letters demanding repurchase.
(Id.)
4

B.

September 30 Order Granting Leave to File Second Amended
Complaint
Plaintiff first brought suit in this action on September

28, 2012, alleging breaches as to 96 of the 119 loans listed in
the March 8, 2012 Trustee letter. (See Compl. ¶ 21, ECF No. 1
(filed Sept. 28, 2012).)

After receiving notice of the Perry

Johnson Letter, and after the deadline to file a second amended
complaint had passed, on November 25, 2015, Plaintiff sought
leave to amend its complaint to add (1) breach claims for the
649 additional loans identified by the Perry Johnson Letter, and
(2) non-loan-specific allegations that Defendant’s breaches were
widespread and pervasive, that Defendant knew it was selling
loans to the Trust that were in breach, and that Defendant
should therefore repurchase all Trust loans that are proven at
trial to materially breach those representations and warranties
(the “constructive discovery claim”). (See Mem. of L. in Supp.
of Mot. for Leave to File SAC, ECF No. 103 (filed Dec. 23,
2015).)

On September 30, 2016, Judge Torres granted leave to

file the SAC. (See Op. & Order, ECF No. 124 (filed Sept. 30,
2016).)
In the September 30 Order, Judge Torres held that Plaintiff
met both Federal Rule of Civil Procedure 15 amendment standards
and Federal Rule of Civil Procedure 16’s good cause requirement.
Judge Torres held that Plaintiff met Rule 16’s good cause

5

requirement because Plaintiff “diligently sought to amend” once
it became aware of the basis for its proposed new claims. (Id.
at 6.)

First, Plaintiff did not become aware of claims with

respect to loans beyond the original 96 until May 2015, when it
received notice from the Separate Trustee regarding the 649
additional loans. (Id.)

Second, documents produced by Defendant

during discovery provided evidence to Plaintiff for the first
time of Defendant’s widespread and systemic disregard of its
representations and warranties and showed that Defendant knew of
its breaches at the time it sold the loans to the Trust. (Id.)
Although Defendant argued that Plaintiff did not act diligently
in discovering its new claims because, as servicer, it had
access to the 649 loan files for more than seven years, Judge
Torres rejected this argument because Defendant provided no
support for its contention that Rule 16 diligence imposes a duty
to review and analyze “thousands of loans, each with loan files
consisting of hundreds of pages” to determine whether Defendant
had made additional breaches. (Id. at 7.)
Judge Torres next held that Plaintiff met Rule 15’s
“liberal” amendment standards. (Id.)

First, Plaintiff did not

unduly delay in seeking to amend, even though it had possession
of the relevant loan files since 2008, because “Plaintiff would
have had to review thousands upon thousands of documents in
order to discover evidence of the claims it now seeks to add.”
6

(Id. at 9.)

Second, amendment would not be futile, despite the

fact that the statute of limitations had run, because the
proposed new claims related back to Plaintiff’s original claims.
(Id. at 9-12.)

In finding that the new claims related back,

Judge Torres relied on Nomura Home Equity Loan, Inc. v. Nomura
Credit & Capital, Inc., 19 N.Y.S.3d 1 (N.Y. App. Div. 2015),
which held that new claims regarding additional loans sold to a
securitization trust related back to timely claims because the
defendant was on notice, before the suit was filed, that
certificateholders were investigating breaches in
representations and warranties. (Id. at 10.)

Judge Torres noted

that here, as in Nomura, a pre-suit letter informed Defendant
that additional loans were likely being investigated for
breaches. (Id. at 11.)

Further, Plaintiff, in both its original

and amended complaints, included allegations suggesting
Defendant’s systemic disregard for its underwriting guidelines
and its knowledge of breaches at the time of securitization.
(Id.)
Judge Torres also rejected Defendant’s argument that
Plaintiff’s claims must be limited to only those loans for which
Defendant has been given notice of an alleged breach because
“[c]ourts have held that a pleading sufficiently alleges that a
defendant discovered its own breaches—triggering its remedial
obligations—when the complaint alleges facts indicating the
7

seller’s widespread and systemic disregard of its
representations.” (Id. at 12-13.)

Finally, Judge Torres held

that because the fact discovery deadline had recently been
extended to March 2017, Defendant’s assertions regarding
prejudice were too speculative to override Rule 15’s liberal
standard. (Id. at 13.)
Plaintiff filed the SAC on October 6, 2016.

On December

21, 2016, Defendant filed a motion for leave to appeal the
September 30 Order granting leave to amend.1
II.
A.

Discussion
Legal Standard

District courts have discretion to certify for
interlocutory appeal an order granting a motion to amend a
complaint. See 28 U.S.C. § 1292(b).

Certification is

appropriate if the order “(1) involves a controlling question of
law (2) over which there is substantial ground for difference of
opinion [and] . . . (3) an immediate appeal would materially
advance the ultimate termination of the litigation.” Consub

1

On October 14, 2016, Defendant moved for reconsideration of the
September 30 Order, and on November 23, 2016, Defendant moved to
dismiss in part the SAC. (See ECF Nos. 128, 139.) On August 22, 2017,
the Court denied the motion for reconsideration and denied in part and
granted in part the motion to dismiss. The Court found that Defendant
did not provide the Court with sufficient grounds to justify the
extraordinary remedy of reconsideration, and that Plaintiff had
adequately pleaded its claims in the SAC, including its constructive
discovery claim, with the exception of its claim for breach of the
“no-fraud” representation in the MLPA, which the Court dismissed with
prejudice. (See Op. & Order, ECF No. 227 (filed Aug. 22, 2017).)

8

Delaware LLC v. Schahin Engenharia Limitada, 476 F. Supp. 2d
305, 308–09 (S.D.N.Y. 2007), aff’d, 543 F.3d 104 (2d Cir. 2008),
abrogated in part on other grounds by Shipping Corp. of India,
Ltd. v. Jaldhi Overseas Pte Ltd., 585 F.3d 58 (2d Cir. 2009).
“Leave to appeal . . . is warranted only in exceptional
circumstances sufficient to overcome the general aversion to
piecemeal litigation and to justify a departure from the basic
policy of postponing appellate review until after the entry of a
final judgment.” Brims v. Dunn, No. 11 CV 712(VB), 2012 WL
234435, at *1 (S.D.N.Y. Jan. 26, 2012) (internal quotation marks
omitted).

“Certification is limited to extraordinary cases

where appellate review might avoid protracted and expensive
litigation [and] is not intended as a vehicle to provide early
review of difficult rulings in hard cases.” Id.
B.

Analysis

Defendant argues that the Court should grant leave to
appeal because the September 30 Order involves a controlling
question of law:
Does New York law prohibit the expansion of
a breach-of-contract lawsuit seeking to
enforce the repurchase remedy for allegedly
defective mortgage loans when the plaintiff
fails to provide within the six-year
limitation period the contractually required
pre-suit notice and demand to repurchase,
regardless of whether the plaintiff also
makes a bare allegation of pervasive breach?
(Def.’s Mem. at 5.)
9

Defendant contends that there is substantial ground for
difference of opinion on this question because the September 30
Order’s application of the relation-back doctrine conflicts with
New York substantive law and federal law. (Id. at 7.)

First,

Defendant argues that it has a right under N.Y. C.P.L.R. §
213(2), the statute of limitations for contract claims in New
York, to be free of contractual liability six years after it
gave the representations and warranties in the MLPA because
C.P.L.R. § 213(2) is a statute of repose, which creates a
substantive right. (Id. at 7-8.)

By applying the relation-back

doctrine to allow Plaintiff to add new, untimely claims, the
September 30 Order “altered the parties’ substantive rights,
thereby violating the Rules Enabling Act.” (Id. at 7.)
Second, Defendant argues that Nomura directly conflicts
with the New York Court of Appeals’ opinion in ACE Securities
Corp. v. DB Structured Prods., Inc., 25 N.Y.3d 581 (2015),
because, according to Defendant, the Court of Appeals held that
the full running of the cure-or-repurchase period is a condition
precedent to bringing suit. (Id. at 11-12.)

Accordingly,

Plaintiff’s new claims should be barred because they relate to
loans for which Defendant was not given the opportunity to cure
or repurchase within the six-year limitations period. (Id. at
12.)

Further, Defendant argues that cases in the New York

10

Appellate Division, First Department, including U.S. Bank Nat’l
Ass’n v. GreenPoint Mortgage Funding, Inc., 147 A.D.3d 79 (N.Y.
App. Div. 1st Dep’t 2016) and Bank of New York Mellon v. WMC
Mortgage, LLC, 151 A.D.3d 72 (N.Y. App. Div. 1st Dep’t 2017),
reflect clear disagreement about the application of the
relation-back rule in light of ACE. (See Notice of Supplemental
Authority, ECF No. 156 (filed Jan. 13, 2017); September 18, 2017
Letter to Hon. John F. Keenan from Michael Calhoon, ECF No. 230
(filed Sept. 18, 2017).)
Third, Defendant argues that even if the Court were to find
that ACE and Nomura do not directly conflict, directly
conflicting holdings are not a necessary condition for
certifying an order for appeal if the issue is “particularly
difficult and of first impression for the Second Circuit.”
(Def.’s Mem at 12-13.)

Defendant contends that the Court could

certify the September 30 Order for interlocutory appeal based on
the strength of the arguments in opposition to the challenged
ruling. (Id. at 13.)
Alternatively, Defendant contends there is substantial
ground for difference of opinion even if Nomura was correctly
decided because the September 30 Order was incorrectly decided.
(Id. at 16-18.)

Defendant argues that the September 30 Order

misinterpreted Nomura’s relation-back holding because Plaintiff
here made no general pre-suit demand for cure or repurchase of
11

all loans, and incorrectly allowed Plaintiff to newly allege a
constructive discovery claim despite the requirement in the MLPA
that demand for cure or repurchase be made on a loan-by-loan
basis. (Id. at 18.)
Finally, Defendant argues that immediate appeal may advance
the termination of this litigation because the September 30
Order allows “thousands of more claims than have been in this
case since its 2012 commencement.” (Id. at 19.)

A ruling in

Defendant’s favor, it argues, would limit the number of loans at
issue, thereby promoting judicial economy and the conservation
of the parties’ resources, and “promote finality in both active
and future RMBS put-back cases in this circuit.” (Id. at 20.)
1.

No Substantial Ground for Difference of Opinion

Even if the Court were to find that the September 30 Order
involves a controlling question of law, Defendant has failed to
show that there is substantial ground for difference of opinion
on the issue of whether relation back of untimely claims is
barred because C.P.L.R. § 213(2) grants Defendant “a substantive
right to be free of contractual liability . . . six years after”
it signed the MLPA. (Id. at 7.)

The “substantial ground for a

difference of opinion” must arise out of a genuine doubt as to
whether the district court applied the correct legal standard in
its order. Consub Delaware LLC, 476 F. Supp. 2d at 309.

A

substantial ground for difference of opinion exists when “(1)
12

there is conflicting authority on the issue, or (2) the issue is
particularly difficult and of first impression for the Second
Circuit.” Id.

However, it is not sufficient that the relevant

case law is “less than clear” or allegedly “not in accord,” or
that there is a “strong disagreement among the parties.” Id.

“A

mere claim that a district court’s decision was incorrect does
not suffice to establish substantial ground for a difference of
opinion.” Id. at 309-10.

Rather, the district court must

“analyze the strength of the arguments in opposition to the
challenged ruling when deciding whether the issue for appeal is
truly one on which there is substantial ground for dispute.”
Frederick v. Capital One (USA) N.A., No. 14-CV-5460 (AJN), 2015
WL 8484560, at *3 (S.D.N.Y. Dec. 8, 2015).
First, Defendant’s argument that C.P.L.R. § 213(2) is a
statute of repose that “creates a substantive right” and would
bar any amended claims after six years is unavailing.

A statute

of repose is “[a] statute barring any suit that is brought after
a specified time since the defendant acted (such as by designing
or manufacturing a product), even if this period ends before the
plaintiff has suffered a resulting injury.” Statute of Repose,
Black’s Law Dictionary (10th ed. 2014).

Accordingly, a statute

of repose “acts to define temporally the right to initiate suit
against a defendant after a legislatively determined time
period.” P. Stolz Family P’ship v. Daum, 355 F.3d 92, 102 (2d
13

Cir. 2004).

A statute of limitations is “[a] law that bars

claims after a specified period; specif., a statute establishing
a time limit for suing in a civil case, based on the date when
the claim accrued (as when the injury occurred or was
discovered).” Statute of Limitations, Black’s Law Dictionary
(10th ed. 2014).

Thus, “[s]tatutes of limitations limit the

availability of remedies and . . . may be subject to equitable
considerations, such as tolling . . . [while] statutes of repose
affect the underlying right, not just the remedy, and thus they
run without interruption once the necessary triggering event has
occurred.” Police & Fire Ret. Sys. of City of Detroit v. IndyMac
MBS, Inc., 721 F.3d 95, 106 (2d Cir. 2013).
Under C.P.L.R. § 213(2), “[a] cause of action for breach of
contract ordinarily accrues and the limitations period begins to
run upon breach.” Guilbert v. Gardner, 480 F.3d 140, 149 (2d
Cir. 2007).

Although, as Defendant points out, New York courts

do not apply the “discovery rule” in breach of contract actions,
the limitations period for contract claims is subject to
equitable tolling and relation back. See Marvel Worldwide, Inc.
v. Kirby, 756 F. Supp. 2d 461, 472 (S.D.N.Y. 2010) (noting that
fraudulent concealment can toll the statute of limitations for
contract claims); Sea Trade Co. v. FleetBoston Fin. Corp., No.
03 CIV. 10254 (JFK), 2006 WL 2786081, at *2 (S.D.N.Y. Sept. 26,
2006) (counterclaim for breach of contract “save[d]” by New
14

York’s tolling rules); Wingspan Records, Inc. v. Simone, No. 12
CIV. 2172 NRB, 2014 WL 2116191, at *4 (S.D.N.Y. May 16, 2014)
(amended complaint for breach of contract claims would not be
time-barred under C.P.L.R § 213(2) if plaintiff could show that
new claims related back to timely filed complaint).

Thus,

C.P.L.R. § 213(2) is a statute of limitations, not a statute of
repose.

Further, none of the cases Defendant cites support its

argument that C.P.L.R. § 213(2) is a statute of repose that
would bar suit and extinguish the underlying right after a
specified time, even in cases where a plaintiff has not yet
suffered a resulting injury.

Indeed, in ACE, the court noted

that the statute of limitations for contract actions “begins to
run from the time when liability for wrong has arisen.” 25
N.Y.3d at 594; see also Bank of New York Mellon, 151 A.D.3d at
78 (noting in a breach of contract action that it is “wellsettled that the expiration of a time period set forth in a
statute of limitations does not extinguish the underlying right,
but merely bars the remedy”).
Second, there is not, as Defendant argues, a substantial
difference of opinion on the relation-back doctrine as applied
to RMBS put-back actions in New York courts.

Defendant has not

established that there is “conflicting authority on the issue”
or that this issue is “particularly difficult and of first
impression,” nor provided strong arguments in opposition to the
15

holding of the September 30 Order.

Contrary to Defendant’s

assertions, the holding in ACE does not conflict with Nomura.
The New York Court of Appeals in ACE upheld the dismissal of the
suit as untimely where the plaintiff failed to provide notice of
breach and opportunity to repurchase or cure for any loans
before the expiration of the six-year statute of limitations.
See ACE Sec. Corp., 25 N.Y.3d at 592, 599.

The plaintiff argued

that the suit was timely because the claims did not accrue until
the defendant refused to cure or repurchase defective loans. Id.
at 594.

The court rejected this argument and held that

“[Defendant’s] failure to cure or repurchase was not a
substantive condition precedent that deferred accrual of the
Trust’s claim; instead, it was a procedural prerequisite to
suit.” Id. at 599.

Thus, the holding in ACE does not “eliminate

the use of relation back,” (Def.’s Mem. at 11), where, as here
and in Nomura, timely claims were filed within the six-year
statute of limitations after Defendant was given the required
opportunity to repurchase or cure.
Similarly, the First Department in GreenPoint and Bank of
New York Mellon upheld dismissals of plaintiffs’ claims where
the plaintiffs did not provide any timely pre-suit breach
notices. See Bank of New York Mellon, 151 A.D.3d at 79
(plaintiff could not assert timely claims against originator
where it did not provide notice and opportunity to cure within
16

six-year statutory period for any loans); GreenPoint, 147 A.D.3d
at 86 (plaintiff’s claims predicated on actual notice of breach
did not relate back to timely constructive discovery claims
where no pre-commencement breach notices were sent to
defendant).

In fact, the Court in GreenPoint specifically

distinguished its decision from the holding in Nomura on these
grounds:
With respect to the relation back issue, the
most important factual distinction between
this case and Nomura is that [in Nomura] the
trustees actually sent presuit breach
notices . . . [which] expressly stated that
the trustees were still investigating the
matter and that further nonconforming
mortgages might be discovered. . . . Here,
no such precommencement breach notice was
ever sent to [Defendant], so its obligation
to cure (repurchase) or otherwise respond
was not triggered; the breach notices were
only sent after the action was commenced.
GreenPoint, 147 A.D.3d at 88.

Thus, there is no substantial

disagreement among New York courts about the application of the
relation-back doctrine to breach of contract claims brought
after the six-year statute of limitations.
Defendant argues in the alternative that a substantial
ground for difference of opinion exists because (1) even if
Nomura was correctly decided, the September 30 Order “stretched
the relation-back principle beyond what ACE permits” because
Plaintiff made no general pre-suit demand for cure or repurchase
of all loans, and (2) Plaintiff cannot allege a constructive
17

discovery claim because the MLPA requires loan-by-loan notice
and demand for cure or repurchase. (Def.’s Mem. at 16-18.)

The

Court already considered and rejected these arguments in its
Opinion and Order denying reconsideration of the September 30
Order and denying in part Defendant’s motion to dismiss. (See
Op. & Order at 19-22, ECF No. 227 (filed Aug. 22, 2017).)
Further, “[a] mere claim that a district court’s decision was
incorrect does not suffice to establish substantial ground for a
difference of opinion” that would warrant certification for
appeal. Consub Delaware, 476 F. Supp. 2d at 309–10.

Thus,

Defendant has not shown that there is substantial ground for
difference of opinion on whether relation back of untimely
claims is barred by C.P.L.R. § 213(2), nor has Defendant
provided strong arguments in opposition to the September 30
Order.
2.

Defendant has not Shown that Interlocutory Appeal Would
Ultimately Advance the Termination of This Litigation
Finally, Defendant argues that immediate appeal “may

materially advance the termination of the litigation because the
[September 30] Order allows thousands more claims than have been
in this case” since 2012 and a ruling in Sand Canyon’s favor
would promote finality in RMBS put-back actions. (Def.’s Mem. at
19-20.)

Defendant has not demonstrated that immediate appeal

would materially advance the termination of this litigation.

18

Judge Torres granted leave to amend on September 30, 2016 and
discovery in this action is well underway.

Certification of

appeal to the Second Circuit, or potentially to the New York
yourt of Appeals, could considerably delay this case, which has
been pending since 2012.

Further, in light of the lack of

substantial difference of opinion on the proposed issue for
appeal, it is not clear that an immediate appeal would have any
significant impact on other RMBS put-back actions.

Accordingly,

Defendant has failed to show that certification for
interlocutory appeal is warranted.
CONCLUSION

For the reasons stated above,

Defendant's motion to certify

the September 30 Order for interlocutory appeal is DENIED.

The

Clerk of Court is respectfully directed to terminate the motion
docketed at ECF No. 151.
SO ORDERED.

Dated:

New York, New York
January
2018

'lv'i ,

/few {Jo~nan

United States District Judge

19