Summary
holding that plaintiffs were not "excused from complying with the 'Event of Default' provision because of the alleged impossibility of showing such an event"
Summary of this case from Chatham Capital Holdings, Inc. v. ConruOpinion
2012-06-28
WALNUT PLACE LLC, et al., Plaintiffs–Appellants, v. COUNTRYWIDE HOME LOANS, INC., et al., Defendants–Respondents, The Bank of New York Mellon, etc., Nominal Defendant.
Grais & Ellsworth LLP, New York (David J. Grais of counsel), for appellants. Goodwin Procter LLP, New York (Mark Holland of counsel), for Countrywide Home Loans, Inc., Park Granada LLC, Park Monaco Inc. and Park Sienna LLC., respondents.
Grais & Ellsworth LLP, New York (David J. Grais of counsel), for appellants. Goodwin Procter LLP, New York (Mark Holland of counsel), for Countrywide Home Loans, Inc., Park Granada LLC, Park Monaco Inc. and Park Sienna LLC., respondents.
Wachtell, Lipton, Rosen & Katz, New York (Theodore N. Mirvis of counsel), for Bank of America Corporation, respondent.
SAXE, J.P., FRIEDMAN, RENWICK, DeGRASSE, RICHTER, JJ.
Order, Supreme Court, New York County (Barbara R. Kapnick, J.), entered on or about March 29, 2012, which, in this action alleging breach of representations and warranties made by defendant sellers in pooling and service agreements (PSAs), granted defendants' motion to dismiss the complaint, unanimously affirmed, with costs.
The court correctly held that plaintiff certificate holders' action is barred by the “no-action” clause in the PSAs, which plainly limits certificate holders' right to sue to an “Event of Default,” which, under section 7.01 of the PSAs, involves only the Master Servicer ( cf. Sterling Fed. Bank, F.S.B. v. DLJ Mortg. Capital, Inc., 2010 WL 3324705, *4, 2010 U.S. Dist. LEXIS 85771, *14 [N.D. Ill., Aug. 20, 2010, No. 09–C–6904] ). Contrary to plaintiffs' contention, section 2.03 of the PSAs does not render the no-action clause ambiguous, nor does it permit plaintiffs' to bring this action. That section merely provides for a remedy in the event of a breach, and does not reference or contemplate actions by certificate holders to achieve that remedy. Plaintiffs' argument that the “Event of Default” provision does not apply in this case is unavailing. Plaintiffs' interpretation of the “no-action” clause would improperly excise the “Event of Default” provision and distort the plain meaning of the clause ( see Bailey v. Fish & Neave, 8 N.Y.3d 523, 528, 837 N.Y.S.2d 600, 868 N.E.2d 956 [2007] ). Nor are plaintiffs excused from complying with the “Event of Default” provision because of the alleged impossibility of showing such an event. The “prevention/impossibility” doctrine, upon which plaintiffs' argument relies, only applies, where, unlike here, nonperformance of a condition precedent was caused by the party insisting that the condition be satisfied ( see Ellenberg Morgan Corp. v. Hard Rock Cafe Assoc., 116 A.D.2d 266, 271, 500 N.Y.S.2d 696 [1986] ).
We have considered plaintiffs' remaining arguments and find them unavailing.