United States District Court, D. Colorado
ORDER GRANTING DEFENDANT'S MOTION FOR SUMMARY JUDGMENT
WILLIAM J. MARTÍNEZ, District Judge.
This breach of contract action is brought by Plaintiff Lehman Brothers Holdings, Inc. ("Plaintiff"), as successor in interest to Lehman Brothers Bank, FSB ("LBB"), against Universal American Mortgage Company, LLC ("Defendant"). Plaintiff alleges that Defendant breached certain representations and warranties it made regarding mortgage loans it sold to LBB, and that Defendant was thus contractually obligated to repurchase the loans and/or indemnify Plaintiff. (Am. Compl. (ECF No. 7).) Before this Court is Defendant's Motion for Summary Judgment ("Motion"). (ECF No. 42.) For the following reasons, Defendant's Motion is GRANTED.
The relevant undisputed facts are as follows. On September 20, 2005, Defendant and LBB entered into a Loan Purchase Agreement (the "Agreement") which provides for the purchase and sale of mortgage loans. (Statement of Undisputed Material Facts ("SUMF") (ECF No. 42 at 2-4) ¶ 6.) In addition to the conditions contained in the Agreement, it also expressly incorporates the additional terms and conditions of the Aurora Loan Services Seller's Guide (the "Seller's Guide"). ( Id. ¶ 8.) The Agreement and the Seller's Guide (together, the "Purchase Agreement") set forth the obligations and duties of the parties, including various representations and warranties by the seller regarding individual mortgage loans purchased or sold, and remedies for breach of those representations and warranties. ( Id. ¶ 10.) Pursuant to the Purchase Agreement, these representations and warranties are made as of the purchase date for each loan. ( Id. ) The Purchase Agreement contains an express New York choice of law provision. ( Id. ¶ 7.)
Defendant sold numerous loans to LBB under the Purchase Agreement, including the loan challenged here (the "Storemski Loan"). ( Id. ¶ 8.) LBB purchased the Storemski Loan from Defendant on September 1, 2006, and subsequently sold the loan to Plaintiff. ( Id. ¶ 9; Am. Compl. ¶ 21.) On or about October 30, 2006, Plaintiff sold the Storemski Loan to Freddie Mac. (SUMF ¶ 11.) On February 29, 2008, Freddie Mac demanded that Plaintiff indemnify it for its losses incurred as a result of the foreclosure of the property securing the Storemski Loan, alleging that Plaintiff violated the purchase agreement it had with Freddie Mac. (SUMF ¶ 13.) On May 23, 2008, Plaintiff paid Freddie Mac in compliance with its demand. ( Id. ¶ 14.)
On March 11, 2011, Plaintiff filed suit with respect to several loans in the U.S. District Court for the Southern District of Florida. ( Id. ¶ 17.) Plaintiff's claims were dismissed in January of 2013, and Plaintiff was granted leave to re-file its claims in several separate lawsuits, including the instant action with respect to the Storemski Loan. ( Id. ) On January 16, 2013, Plaintiff filed the instant action, and an Amended Complaint was filed the following day. (ECF Nos. 1 & 7.) Plaintiff, as LBB's assignee, alleges that Defendant breached the Purchase Agreement with LBB by breaching the representations and warranties described therein, and by refusing to repurchase the Storemski Loan and/or indemnify Plaintiff for its losses. (Am. Compl. ¶¶ 53-54.)
Defendant filed the instant Motion on January 15, 2014. (ECF No. 42.) Plaintiff filed a Response to Defendant's Motion on January 21, 2014 (ECF No. 48) and a Supplement to its Response on February 6, 2014 (ECF No. 55). Defendant filed its Reply on February 7, 2014. (ECF No. 58.) With leave of Court, Plaintiff filed a Sur-Reply on February 17, 2014 (ECF No. 63), and Defendant filed a Notice of Supplemental Authorities on August 15, 2014 (ECF No. 67-1). The parties' subsequent requests to file further briefing on the Motion were denied. (ECF Nos. 75 & 84.)
II. LEGAL STANDARD
Summary judgment is appropriate only if there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c); Celotex Corp. v. Catrett , 477 U.S. 317, 322 (1986); Henderson v. Inter-Chem Coal Co., Inc. , 41 F.3d 567, 569 (10th Cir. 1994). Whether there is a genuine dispute as to a material fact depends upon whether the evidence presents a sufficient disagreement to require submission to a jury or conversely, is so one-sided that one party must prevail as a matter of law. Anderson v. Liberty Lobby , 477 U.S. 242, 248-49 (1986); Stone v. Autoliv ASP, Inc. , 210 F.3d 1132 (10th Cir. 2000); Carey v. U.S. Postal Serv. , 812 F.2d 621, 623 (10th Cir. 1987).
A fact is "material" if it pertains to an element of a claim or defense; a factual dispute is "genuine" if the evidence is so contradictory that if the matter went to trial, a reasonable party could return a verdict for either party. Anderson , 477 U.S. at 248. The Court must resolve factual ambiguities against the moving party, thus favoring the right to a trial. Houston v. Nat'l Gen. Ins. Co. , 817 F.2d 83, 85 (10th Cir. 1987).
Defendant's Motion raises three arguments that summary judgment is warranted: (1) Plaintiff's claim is time-barred; (2) Plaintiff's claim fails for lack of causation; and (3) Plaintiff's claim for indemnification fails because its payment to Freddie Mac was voluntary. (ECF No. 42 at 7-18.) Because the Court finds Defendant's statute of limitations argument dispositive, it will begin with this argument.
The key disputed issue with respect to the statute of limitations is whether the Court should apply New York or Delaware's limitations period. While the parties agree that the Purchase Agreement is governed by New York law, they dispute whether the New York "borrowing" statute should be applied in this case to determine which state's statute of limitations should be used. ( See ECF Nos. 42 at 7-11; 48 at 7-10.) The New York borrowing statute provides that:
An action based upon a cause of action accruing without the state cannot be commenced after the expiration of the time limited by the laws of either the state or the place without the state where the cause of action accrued, except that where the cause of action accrued in favor of a ...