ACE SEC CORP v. DB STRUCTURED PRODUCTS INC

No. 85

25 N.Y.3d 581 (2015)

36 N.E.3d 623

15 N.Y.S.3d 716

2015 NY Slip Op 04873

ACE SECURITIES CORP., HOME EQUITY LOAN TRUST, SERIES 2006-SL2, by HSBC BANK USA, NATIONAL ASSOCIATION, as Trustee Pursuant to a POOLING AND SERVICING AGREEMENT, DATED AS OF MARCH 1, 2006, Appellant, v. DB STRUCTURED PRODUCTS, INC., Respondent.

Court of Appeals of New York.

Decided June 11, 2015.


Attorney(s) appearing for the Case

Bancroft PLLC, Washington, D.C. ( Paul D. Clement , of the District of Columbia bar, admitted pro hac vice, Erin E. Murphy, of the District of Columbia Bar, admitted pro hac vice, and Stephen V. Potenza of counsel), and Kasowitz , Benson, Torres & Friedman LLP, New York City ( Marc E. Kasowitz , Michael M. Fay and Zachary W. Mazin of counsel), for appellant.

Simpson Thacher & Bartlett LLP, New York City ( David J. Woll and Thomas C. Rice of counsel), for respondent.

Jones & Keller, P.C., Denver, Colorado ( Michael A. Rollin and Maritza Dominguez Braswell , of the Colorado bar, admitted pro hac vice, of counsel), for CXA-13 Corporation, amicus curiae.

McKool Smith, New York City ( Gayle R. Klein , Robert W. Scheef and John C. Briody of counsel), for Association of Mortgage Investors, amicus curiae.

Patterson Belknap Webb & Tyler LLP, New York City ( Erik Haas and Henry J. Ricardo of counsel), for Association of Financial Guaranty Insurers, amicus curiae.

Kellogg, Huber, Hansen, Todd, Evans & Figel, P.L.L.C., Washington, D.C. ( Andrew C. Shen , David C. Frederick , Wan J. Kim , Gregory G. Rapawy and Matthew A. Seligman of counsel), and Korein Tillery LLC, Chicago, Illinois ( George A. Zelcs , John Libra and Michael Klenov of counsel), for National Credit Union Administration Board, amicus curiae.

Venable LLP, Baltimore, Maryland ( Gregory A. Cross , Mitchell Y. Mirviss , Colleen M. Mallon and C. Alexander Hortis of counsel), for LNR Partners, LLC and others, amici curiae.

Sullivan & Cromwell LLP, New York City ( H. Rodgin Cohen of counsel), and Sullivan & Cromwell LLP, Washington, D.C. ( Brent J. McIntosh and Jeffrey B. Wall of counsel), for Chamber of Commerce of the United States of America and another, amici curiae.

Wachtell, Lipton, Rosen & Katz, New York City ( George T. Conway III , Theodore N. Mirvis , Charles D. Cording and Vladislav S. Vainberg of counsel), for Securities Industry and Financial Markets Association, amicus curiae.

Jenner & Block LLP, Washington, D.C. ( Matthew S. Hellman of counsel), and Jenner & Block LLP, New York City ( Stephen L. Ascher of counsel), for Mortgage Bankers Association, amicus curiae.

Steven L. Schwarcz , Duke Law School, Durham, North Carolina, amicus curiae.

Ethan J. Leib , Fordham Law School, New York City, and Patrick M. Connors , Albany Law School, for Ethan J. Leib, and others, amici curiae.

Keller Rohrback L.L.P. ( Derek W. Loeser , admitted to the Washington bar, pro hac vice, of counsel), and Keller Rohrback L.L.P., New York City ( David S. Preminger of counsel), for Federal Home Loan Bank of Boston and others, amici curiae.


OPINION OF THE COURT

This appeal stems from a transaction involving residential mortgage-backed securities (RMBS). Two certificateholders in the ACE Securities Corp., Home Equity Loan Trust, Series 2006-SL2 (the Trust) sued DB Structured Products, Inc. (DBSP), the sponsor of the transaction, for failure to repurchase loans that...

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