Federal Home loan Lender Off Bay area v. Countrywide Monetary Firm

A135898

Brand new demo court concluded res judicata prohibited Government Mortgage Financial out-of San Francisco’s (the lending company) allege facing Nationwide Financial Company (Countrywide Economic) and sustained Countrywide Financial’s demurrer into the first revised problem in the place of get off to amend.

The lending company is attractive. It contends the latest courtroom erred by the concluding res judicata banned their claim up against Nationwide Monetary as the [t]right here is zero final judgment to the merits during the a prior action which could keeps given increase to help you res judicata contained in this step. We disagree and you may affirm. We stop the latest philosophy out of res judicata taverns brand new Bank’s claim facing Nationwide Economic once the: (1) brand new Bank’s voluntary dismissal of its claim facing Countrywide Monetary within the the last step is actually a last wisdom into the deserves; and you may (2) the newest claim the lending company disregarded from inside the an earlier lawsuit is the same cause of step while the allege it claims against Nationwide Economic in the modern suit. Which have voluntarily overlooked having bias says out-of manage person wrongdoing facing certainly several defendants for the very own strategic reasons, the financial institution will most likely not avoid the res judicata effects of its choice and you will sue the latest overlooked defendant anew, once more alleging control-individual responsibility, in the reliance on the latest pendency of these same states from the remaining stars in the 1st step.

I undertake as the true next allegations about Bank’s revised grievance for the intended purpose of reviewing your order sustaining Countrywide Financial’s demurrer:

Judge of Appeal, Very first District, Section 5, Ca

In a method called securitization, an entity originate[s] mortgages otherwise acquires those people loans and you may aggregates her or him for the a security pool or loan pond offered to a lending institution called good depositor. 1 The new depositor offers the newest money to help you a count on, which in turn issues certificates you to definitely people-like the Financial-should buy. At some point just before , the lending company bought 95 domestic mortgage-supported securities out-of individuals ties traders inside 78 securitization trusts backed by residential mortgage loans at a cost of over $thirteen.5 billion dollars. The lending company bought certificates for the four securitizations from Nationwide Ties Business (Countrywide Ties). CWALT, Inc. (CWALT) provided the latest permits within the four securitizations. Nationwide Bonds apparently provided the new licenses from the fifth securitization. dos

In , the financial institution charged eight bonds buyers which given and you will offered this new 95 residential home loan-supported bonds, together with organizations and therefore given the new certificates otherwise managed one of many entities you to issued the fresh new certificates (Borrowing Suisse or even the Credit Suisse action). step three The newest core of Bank’s states is defendants made not the case or misleading statements during the offering data files granted concerning the this new home-based home loan-supported securities the financial institution bought.

One of several defendants into the Borrowing from the bank Suisse was indeed Countrywide Securities Business, CWALT, and Nationwide Financial. As relevant right here, the financial institution so-called: (1) Countrywide Ties made untrue or misleading comments on the sale of securities in the solution regarding Providers Password sections 25401 and you will 25501 which have esteem so you can securitizations 74 by way of 78; cuatro (2) Nationwide Ties and you can CWALT made false or misleading comments inside the admission off areas 11 and you may a dozen of your own Vernon loans Ties Operate off 1933 (areas eleven & 12) with respect to securitizations 75 courtesy 78; and (3) Nationwide Financial broken part fifteen of the Securities Operate (Point 15) predicated on their control of CWALT. In its Point fifteen claim against Countrywide Monetary, the lending company so-called CWALT stayed with no purpose rather than located and put financing toward trusts. Below Part 15 ? Nationwide ? thus is likely with the Bank together and you may severally having, and a comparable extent given that, CWALT.

For the , the financial institution recorded the criticism on step prior to us looking to erica Company (declaratory relief action). The financial institution sought for a beneficial erica Business-which in fact had purchased Countrywide’s assets-was accountable for one damage Nationwide needed to spend from inside the the credit Suisse action.