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Aurora Commercial Corp. v. Standard Pacific Mortgage, Inc.

United States District Court, D. Colorado

March 19, 2014

AURORA COMMERCIAL CORP., as Successor by merger to AURORA BANK FSB, f/k/a Lehman Brothers Bank, FSB Plaintiff,


WILLIAM J. MARTÍNEZ, District Judge.

This is a breach of contract action brought by Plaintiff Aurora Commercial Corp. ("Plaintiff" or "ACC"), as successor in interest to Aurora Bank, FSB ("Aurora Bank"), formerly known as Lehman Brothers Bank, FSB ("LBB"), against Standard Pacific Mortgage, Inc. ("Defendant"). Plaintiff alleges Defendant breached certain representations and warranties it made regarding mortgage loans it sold to LBB, and that Defendant is obligated under a written contract to repurchase the loans. Before this Court is Defendant's Motion to Dismiss Plaintiff's Second Amended Complaint (the "Motion"). (ECF No. 32.) For the following reasons, Defendant's Motion is GRANTED.


On June 5, 2013, Aurora Bank merged with and into ACC. (Compl. (ECF No. 31) ¶ 1.) ACC is the surviving entity and successor to Aurora Bank. ( Id. ) ACC is incorporated in and has its principal place of business in Delaware. ( Id. ¶ 4.) Before its merger into ACC, Aurora Bank, a federal savings bank formerly known as LBB, had its home office in Delaware and its principal place of business in New York. ( Id. ¶ 5.)

In 2004, Defendant and LBB entered into a Loan Purchase Agreement (the "Agreement") which provided for the purchase and sale of mortgage loans. ( Id. ¶ 12.) The Agreement expressly incorporated the additional terms found in the Aurora Loan Services Seller's Guide (the "Seller's Guide"). ( Id. ¶ 13.) The Agreement and the Seller's Guide (together, the "Purchase Agreement") set forth the obligations and duties of the parties with respect to the purchase and sale of mortgage loans, including, but not limited to, representations and warranties by Defendant regarding individual mortgage loans purchased or sold, and remedies for breach of those representations and warranties. ( Id. ¶ 14.) The Purchase Agreement also provided that New York law shall apply. ( Id. ¶ 15.)

The Seller's Guide states that "[i]n the event of a breach of any of the representations, warranties or covenants contained in Section 700 through 710 herein, which breach materially and adversely affects the value of the Mortgage Loans or the interest of Purchaser, ... Seller shall, at Purchaser's option, repurchase the related Mortgage Loan... at the Repurchase Price." (ECF No. 47-1 at § 710.) The Seller's Guide also states that "[a]ny such repurchase shall occur no later than thirty (30) days after the earlier of the date on which Purchaser notifies Seller of such breach or the date on which Seller knows of such breach." ( Id. )

Defendant sold numerous loans to LBB under the Purchase Agreement, including the ten loans at issue in Plaintiff's operative Complaint (the "Subject Loans"). (ECF No. 31-2.) The Subject Loans were sold to LBB between December 2006 and May 2007. ( Id. ; ECF No. 32-2.) On February 7, 2012, Plaintiff sent a written demand to Defendant for the repurchase of each of the Subject Loans, alleging that Defendant had breached certain representations and warranties in the Purchase Agreement. (ECF No. 32-2.)

On these facts, Plaintiff filed this action against Defendant on November 30, 2013. (ECF No. 1.) On June 26, 2013, Plaintiff filed a Second Amended Complaint, asserting two claims: (1) breach of contract, and (2) breach of express warranty. (Compl. ¶¶ 27-40.) Defendant moved to dismiss on July 15, 2013, arguing that Plaintiff's claims are time-barred. (ECF No. 32.) Plaintiff filed a Response to Defendant's Motion on September 3, 2013. (ECF No. 47.) Defendant filed its Reply on September 20, 2013. (ECF No. 48.)


Under Federal Rule of Civil Procedure 12(b)(6), a defendant may move to dismiss a claim in a complaint for "failure to state a claim upon which relief can be granted." In evaluating such a motion, a court must "assume the truth of the plaintiff's well-pleaded factual allegations and view them in the light most favorable to the plaintiff." Ridge at Red Hawk, L.L.C. v. Schneider, 493 F.3d 1174, 1177 (10th Cir. 2007). In ruling on such a motion, the dispositive inquiry is "whether the complaint contains enough facts to state a claim to relief that is plausible on its face.'" Id. (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). Granting a motion to dismiss "is a harsh remedy which must be cautiously studied, not only to effectuate the spirit of the liberal rules of pleading but also to protect the interests of justice." Dias v. City & Cnty. of Denver, 567 F.3d 1169, 1178 (10th Cir. 2009) (quotation marks omitted). "Thus, a well-pleaded complaint may proceed even if it strikes a savvy judge that actual proof of those facts is improbable, and that a recovery is very remote and unlikely.'" Id. (quoting Twombly, 550 U.S. at 556).

"In evaluating a Rule 12(b)(6) motion to dismiss, courts may consider not only the complaint itself, but also attached exhibits and documents incorporated into the complaint by reference." Smith v. United States, 561 F.3d 1090, 1098 (10th Cir. 2009) (internal citations omitted). "[T]he district court may consider documents referred to in the complaint if the documents are central to the plaintiff's claim and the parties do not dispute the documents' authenticity." Jacobsen v. Deseret Book Co., 287 F.3d 936, 941 (10th Cir. 2002).[1]


Defendant moves for dismissal under Rule 12(b)(6), arguing that Plaintiff's Complaint is time-barred pursuant to Delaware's three-year statute of limitations for breach of contract actions. (ECF No. 32 at 8, 9.) Plaintiff argues that New York's six-year statute of ...

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