Federal Home loan Lender From Bay area v. Nationwide Economic Business

A135898

Brand new demonstration court concluded res judicata banned Federal Financial Financial out of San Francisco’s (the lending company) allege facing Nationwide Monetary Company (Countrywide Economic) and you can suffered Nationwide Financial’s demurrer to the very first amended complaint rather than get off to amend.

The financial institution is attractive. It contends the newest judge erred by the concluding res judicata prohibited the allege facing Countrywide Economic given that [t]right here was no last view with the deserves into the a previous step that will has given rise to res judicata in this step. We differ and you may affirm. I conclude brand new philosophy out-of res judicata bars the fresh Bank’s claim against Nationwide Economic as the: (1) brand new Bank’s voluntary dismissal of the allege facing Countrywide Monetary into the the previous action try a last judgment with the merits; and (2) the fresh claim the bank disregarded within the a past suit is the exact same cause for step since the allege it claims facing Countrywide Financial in today’s suit. Having voluntarily disregarded with bias claims of manage individual wrongdoing facing certainly multiple defendants for its own proper reasons, the financial institution will most likely not prevent the res judicata consequences of their decision and you may sue brand new overlooked defendant anew, once again alleging handle-person liability, for the reliance upon the fresh new pendency of them exact same states from the leftover stars in the first step.

We take on since the correct the next allegations regarding Bank’s revised criticism with regards to looking at the order retaining Nationwide Financial’s demurrer:

Judge from Appeal, First Region, Section 5, Ca

When you look at the a method titled securitization, an entity originate[s] mortgage loans otherwise acquires people loans and aggregates them for the good equity pool or loan pond on the market to a lending institution titled good depositor. step one The latest depositor carries the latest loans so you can a believe, which in turn items licenses that buyers-including the Lender-can buy. At some point prior to , the financial institution bought 95 residential financial-backed securities off individuals bonds people when you look at the 78 securitization trusts backed by residential mortgages at a cost more than $13.5 million dollars. The lending company ordered licenses for the five securitizations out of Countrywide Securities Agency (Nationwide Bonds). CWALT, Inc. (CWALT) provided brand new permits inside the four securitizations. Nationwide Bonds frequently granted new certificates on fifth securitization. dos

For the , the financial institution charged eight ties dealers which provided and offered the 95 domestic mortgage-backed ties, in addition to agencies and therefore provided brand new licenses otherwise regulated one of several organizations you to provided the fresh new certificates (Borrowing from the bank Suisse and/or Credit Suisse step). step 3 Brand new core of your Bank’s says is actually defendants produced false or misleading statements during the providing records provided about the the newest residential mortgage-supported securities the https://paydayloanalabama.com/snead/ lending company purchased.

Among the defendants within the Credit Suisse was Nationwide Securities Firm, CWALT, and you can Countrywide Financial. As the related right here, the bank alleged: (1) Countrywide Ties made false or mistaken comments about deals out of securities inside the violation regarding Organizations Code areas 25401 and you may 25501 which have esteem so you’re able to securitizations 74 using 78; 4 (2) Nationwide Securities and you may CWALT made incorrect or mistaken comments within the admission of sections 11 and you can several of one’s Securities Work from 1933 (parts eleven & 12) with regards to securitizations 75 through 78; and (3) Nationwide Financial broken part 15 of your Bonds Operate (Section 15) predicated on its power over CWALT. Within its Area fifteen allege up against Countrywide Monetary, the financial institution alleged CWALT resided for no goal than to discovered and you can put loans into trusts. Not as much as Area fifteen ? Countrywide ? hence is liable for the Bank as one and you can severally having, in order to the same the amount given that, CWALT.

From inside the , the financial institution filed the fresh new criticism about action in advance of all of us seeking erica Enterprise (declaratory rescue action). The financial institution looked for a great erica Agency-which had bought Countrywide’s assets-are accountable for one damage Nationwide must pay into the the financing Suisse step.