Federal Home loan Lender From Bay area v. Countrywide Economic Organization

A135898

The new trial judge ended res judicata barred Federal Home loan Bank of San Francisco’s (the lending company) allege up against Countrywide Monetary Company (Countrywide Monetary) and you will sustained Nationwide Financial’s demurrer into first amended issue rather than get-off in order to amend.

The lending company is attractive. They argues the brand new court erred of the concluding res judicata barred the allege facing Nationwide Monetary given that [t]right here was zero latest wisdom with the deserves in an earlier action that could has considering increase in order to res judicata contained in this step. I differ and you may affirm. We conclude the fresh philosophy from res judicata taverns the latest Bank’s allege up against Nationwide Monetary as the: (1) this new Bank’s volunteer dismissal of their allege up against Nationwide Financial in the the prior action is a last wisdom towards the deserves; and you will (2) the fresh new claim the financial institution disregarded during the a prior lawsuit is the same cause for action as the allege it claims against Nationwide Financial in the current lawsuit. Which have voluntarily dismissed having bias states from handle people wrongdoing against certainly one of multiple defendants for the very own proper reasons, the lending company may not steer clear of the res judicata effects of the choice and you may sue the fresh new dismissed accused anew, again alleging manage-person accountability, inside reliance on the latest pendency of those exact same claims from the left stars in the 1st action.

I deal with since real the following allegations on Bank’s revised criticism with regards to evaluating the transaction retaining Nationwide Financial’s demurrer:

Judge out-of Desire, First Section, Division 5, Ca

For the a method entitled securitization, an organization originate[s] mortgage loans otherwise acquires those individuals money and aggregates him or her toward an effective guarantee pool otherwise loan pond on the market in order to a financial institution entitled good depositor. 1 This new depositor carries this new funds to a count on, which in turn things permits you to definitely dealers-including the Bank-can find. Will ultimately ahead of , the lending company ordered 95 residential financial-supported securities out of various ties people into the 78 securitization trusts backed by home-based mortgages at a cost of over $thirteen.5 mil cash. The financial institution bought licenses inside the four securitizations out-of Nationwide Bonds Firm (Countrywide Securities). CWALT, Inc. (CWALT) approved the fresh permits into the five securitizations. Nationwide Securities frequently awarded new permits regarding the 5th securitization. 2

Inside the , the lending company charged 7 securities buyers hence provided and offered new 95 home-based financial-supported securities, and the agencies and this provided the latest certificates or managed among entities you to definitely provided the permits (Borrowing Suisse and/or Credit Suisse action). 3 The latest crux of Bank’s states try defendants made not true or misleading statements in have a peek at this website the providing files awarded about the the fresh new residential mortgage-recognized ties the bank bought.

Among the many defendants during the Credit Suisse was in fact Countrywide Securities Agency, CWALT, and you may Countrywide Financial. Due to the fact related right here, the financial institution so-called: (1) Nationwide Securities produced incorrect or mistaken comments about revenue out of bonds in pass away from Organizations Code sections 25401 and you can 25501 with value to help you securitizations 74 because of 78; 4 (2) Nationwide Bonds and you may CWALT generated not the case otherwise mistaken comments into the pass away from parts eleven and you will a dozen of one’s Securities Operate off 1933 (parts 11 & 12) regarding securitizations 75 because of 78; and you can (3) Nationwide Economic violated area 15 of your Ties Operate (Point 15) based on their command over CWALT. With its Area 15 claim up against Nationwide Monetary, the lending company alleged CWALT lived for no mission rather than discovered and put financing on the trusts. Below Point 15 ? Countrywide ? hence is liable with the Lender together and you will severally with, in order to a similar the quantity given that, CWALT.

During the , the bank registered the latest ailment from the step just before united states trying to erica Business (declaratory rescue step). The lending company wanted an effective erica Agency-which had bought Countrywide’s property-try responsible for one damage Countrywide must shell out from inside the the credit Suisse step.