On February 6, the Second Circuit affirmed a trial court order dismissing repurchase and indemnification claims brought by the Federal Housing Finance Agency ("FHFA"), acting on behalf of U.S. Bank as Trustee, against GreenPoint Mortgage Funding Inc., predicated on allegations that mortgage loans sold by GreenPoint breached representations and warranties in the relevant loan purchase agreements.
First, the Second Circuit affirmed the district court's finding that the breach of contract claims were brought after the six-year statute of limitations expired, following the long line of New York cases holding (i) that a breach of contract cause of action accrues when the representations and warranties become effective; and (ii) that an express accrual clause cannot delay the statute of limitations under New York law.The Court also affirmed the district court's dismissal of U.S. Bank's indemnification claim, determining that it amounted to the mere repackaging of a breach of contract claim in an effort evade the applicable statute of limitations issue. Finally, the Court affirmed dismissal of another indemnification claim—first pressed when the Second Amended Consolidated Complaint was filed—that purportedly arose not from the representations and warranties or other trust documents, but from a separate set of "Indemnification Agreements." Because that claim did not arise from the same conduct or transaction at issue in the initial complaint, however, the Court reasoned that the relation-back doctrine did not apply, and the claim was also time-barred.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.