Ambac Assurance Corporation v. US Bank National Association

Filing 197

ORDER STAYING ISSUES RELATED TO WATERFALL INTERPRETATION granting #192 Letter Motion to Stay re: #192 JOINT LETTER MOTION to Stay Ambacs Fifth and Sixth Causes of Action addressed to Judge William H. Pauley, III from Henry J. Ricardo and Michael T. Marcucci dated February 9, 2021. NOW, THEREFORE, the Court ORDERS as follows: 1. Ambac's Fifth and Sixth Causes of Action are stayed while the 2005-10 Action is pending before the Second Circuit Court of Appeals. 2. Neither party shall serve expert reports or otherwise engage in expert discovery related to Ambac's Fifth and Sixth Causes of Action, whether such expert discovery would fall under Phase 1 or Phase 2, as defined in the July 18, 2018 Scheduling Order (Dkt. 76) and the current Revised Scheduling Order (Dkt. 194), while the 2005-10 Action is pending before the Second Circuit Court of Appeals. 3. Neither party shall move for summary judgment on Ambac's Fifth or Sixth Causes of Action while the 2005-10 Action is pending before the Second Circuit Court of Appeals. 4. Within ten days of the Second Circuit Court of Appeal's issuance of a mandate in the appeal of the 2005-10 Action, the Parties will submit a joint letter informing the Court of the Parties' positions with respect to whether expert discovery and summary judgment briefing related to Ambac's Fifth and Sixth Causes of Action is required in this action in light of the Second Circuit Court of Appeals' decision in the 2005-10 Action, and if so proposing a schedule for such discovery and briefing. SO ORDERED. (Signed by Judge William H. Pauley, III on 2/25/2021) (kv) Modified on 2/25/2021 (kv).

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK

AMBAC ASSURANCE CORPORATION,
Plaintiff,
Case No. 17-cv-2614-WHP
-againstU.S. BANK NATIONAL ASSOCIATION,
Defendant.

[PROPOSED] ORDER STAYING ISSUES RELATED TO
WATERFALL INTERPRETATION
WHEREAS, on March 12, 2018 Plaintiff Ambac Assurance Corporation (“Ambac”) filed
an Amended Complaint (Dkt. 62) in the above-captioned case against Defendant U.S. Bank
National Association (“U.S. Bank,” and together with Ambac, the “Parties”);
WHEREAS, Ambac’s Fifth Cause of Action seeks a declaratory judgment that U.S.
Bank, as Trustee of five RMBS Trusts (the “Covered Trusts”), must account for and distribute
funds pursuant to the provisions in the governing agreements of the Covered Trusts related to the
distribution of funds and Ambac’s rights to receive distributions (the “Waterfall Provisions”),
and Ambac’s Sixth Cause of Action alleges breach of contract based on U.S. Bank’s failure to
account for and distribute funds pursuant to the Waterfall Provisions;
WHEREAS, on June 8, 2018 Ambac filed a separate action against U.S. Bank as trustee
of the Harborview 2005-10 Mortgage Loan Trust, No. 18-cv-5182 (the “2005-10 Action”)
asserting, among other things, that U.S. Bank breached its contractual obligations by
misapplying the provisions in the governing agreement of Harborview 2005-10 Mortgage Loan

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Trust related to the accounting for and distribution of funds and Ambac’s right to receive
distributions (the “HV 2005-10 Waterfall Provisions”);
WHEREAS, on December 7, 2020 the District Court in the 2005-10 Action issued an
opinion and order, and on December 22, 2020 issued a judgment, holding that the HV 2005-10
Waterfall Provisions were unambiguous and interpreting them as a matter of law;
WHEREAS, Ambac has filed a notice of appeal to the Second Circuit Court of Appeals
of the judgment in the 2005-10 Action, docketed at No. 21-70 (2d Cir.); and
WHEREAS, the Parties agree that the decision of the Second Circuit Court of Appeals in
the 2005-10 Action would clarify the law governing the Waterfall Provisions in this action and
may permit the parties to streamline or avoid expert discovery in this action and/or to coordinate
expert discovery between this action and the HV 2005-10 Action;
NOW, THEREFORE, the Court ORDERS as follows:
1.

Ambac’s Fifth and Sixth Causes of Action are stayed while the 2005-10 Action is
pending before the Second Circuit Court of Appeals.

2.

Neither party shall serve expert reports or otherwise engage in expert discovery
related to Ambac’s Fifth and Sixth Causes of Action, whether such expert
discovery would fall under Phase 1 or Phase 2, as defined in the July 18, 2018
Scheduling Order (Dkt. 76) and the current Revised Scheduling Order (Dkt. 194),
while the 2005-10 Action is pending before the Second Circuit Court of Appeals.

3.

Neither party shall move for summary judgment on Ambac’s Fifth or Sixth
Causes of Action while the 2005-10 Action is pending before the Second Circuit
Court of Appeals.

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4.

Within ten days of the Second Circuit Court of Appeal’s issuance of a mandate in
the appeal of the 2005-10 Action, the Parties will submit a joint letter informing
the Court of the Parties’ positions with respect to whether expert discovery and
summary judgment briefing related to Ambac’s Fifth and Sixth Causes of Action
is required in this action in light of the Second Circuit Court of Appeals’ decision
in the 2005-10 Action, and if so proposing a schedule for such discovery and
briefing.

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