On October 27, 2015, Justice Eileen Bransten of the New York Supreme Court issued a Decision and Order granting in part and denying in part cross motions for summary judgment brought by Countrywide and Ambac in an RMBS action brought by Ambac against Countrywide. Justice Bransten’s order addressed numerous issues, including the following.
Justice Bransten held that Insurance Law §3105 does not require Ambac to prove justifiable reliance on an alleged misrepresentation or that the misrepresentation proximately caused Ambac’s harm, but instead only that there was a misrepresentation and that it was material. Justice Bransten also concluded that the contractual repurchase remedy will not be the sole remedy available to Ambac if it can prove breaches of other sections of the Insurance & Indemnity Agreements at trial. Justice Bransten declined to dismiss on timeliness grounds Ambac’s claims with respect to loans that were not the subject of repurchase demands within six years of the relevant securitization’s closing, but held that Ambac would be required to prove at trial that Countrywide discovered those loans breached within the limitations period. Finally, Justice Bransten granted Countrywide’s motion with respect to Ambac’s claims for indemnification and reimbursement, holding that neither is available under the contracts at issue. Order on Summary Judgment.
In this same action, and on the same day, Justice Bransten also ruled on the parties’ motions to strike certain experts. She granted Ambac’s motion to strike portions of the testimony from a Countrywide expert report that addressed legal interpretations of New York Insurance Law on the grounds that the testimony invaded the province of the court. Justice Bransten denied Ambac’s motion to strike several other Countrywide experts and also denied Countrywide’s motion to strike two of Ambac’s experts. Order on Experts.