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September 29, 1998


The opinion of the court was delivered by: CEDARBAUM


 This is an action for a declaratory judgment pursuant to 28 U.S.C. § 2201. Plaintiff seeks a judgment declaring that it, and not defendant, is the proper plaintiff in a pending action in the New York Supreme Court. The question presented is whether defendant assigned its rights in the state action to plaintiff. *fn1"

 Both parties have moved for summary judgment. For the reasons discussed below, defendant did not assign its rights in the state action to plaintiff. Accordingly, plaintiff's motion is denied, and defendant's motion is granted.


 Undisputed Facts

 In 1987, Chase Bank issued loans to the Leader Alloys Company (hereafter "Leader loans"). The Leader loans were secured by an agreement that granted Chase a security interest in Leader's "personal property," including its inventory. The accounting firm of Ullman Weisberg/Pollack Einhorn certified the value of the inventory for the Leader loans.

 In June 1988, the First New York Bank for Business (hereafter "FNYBB") purchased the Leader loans from Chase. Ullman, retained by Leader, continued regularly to certify the value of the Leader inventory from 1988 until 1990. FNYBB allegedly relied on the certifications for the years 1988 through 1990 to decide whether to increase the amount of the Leader loans and whether to renew the Leader loans.

 In April 1991, Leader defaulted on the loans, and FNYBB liquidated Leader's inventory. When the value of the inventory turned out to be substantially less than Ullman had certified, FNYBB sued Ullman in the New York Supreme Court for breach of a third-party beneficiary contract and for negligent misrepresentation (hereafter the "Ullman action"). The Ullman action, which seeks $ 1.2 million in damages, has been stayed pending the outcome of this action and this court's determination of the proper plaintiff in that action. (Def. 56.1 Stat. P 3; Hawes Aff. P 7; Hawes Aff., Ex. F, Ullman action Compl. PP 8, 11, 14, 17, 20, 33, 35, 39, 79; Hawes Aff., Ex. O, Compl., Ex. A, Leader loans security agreement; Pl. Mem. at 1 n.3.)

 On November 13, 1992, FNYBB was declared insolvent, and defendant was appointed receiver. Defendant then hired Crown North Corporation to manage an auction of the Leader loans. (Def. 56.1 Stat. PP 1-2.)

 In 1995, defendant combined the Leader loans with five other loans as a non-performing loan pool, and held an auction of the loan pool. Plaintiff hired Robert Hawes to review the loan files for the purpose of valuing the loans, and determining if plaintiff should bid for them at the auction. (Hawes Aff. PP 1, 5-6.)

 During the week of October 15, 1995, Hawes went to the Crown offices in Hoboken, New Jersey, to review the loan files. The Leader loan file contained documents pertaining to the Ullman action. Specifically, Hawes found the complaint, discovery documents, attorney notes on litigation strategy, litigation status reports dated from June through September of 1992, and notes from an FDIC lawyer dated from March through July of 1995. Hawes believed that the documents had been placed in the file because defendant intended to assign its rights in the Ullman action with the loans, and wanted bidders to be "aware of the full value of the loan" when formulating their bids. Hawes believed that the Leader loans themselves were uncollectible and worthless. (Hawes Aff. PP 6-7, 10-13.)

 Hawes states that he spoke by telephone to one of Crown's loan advisors who was "to the best of my recollection" Jerry Lloyd. (Hawes Aff. P 14.) Lloyd denies having spoken to Hawes. (Lloyd Aff. P 3.)

 At any rate, Hawes affirms that the loan advisor with whom he spoke told him that "it would seem that the FDIC is intending to assign the [Ullman action] to the buyer, otherwise they would have removed all of the law suit information from the file." (Hawes Aff. P 14.)

 Plaintiff ultimately bid $ 86,656.21 for the loan pool that included the Leader loans. The amount bid was 2.4 per cent of the value of the outstanding principal balance of the loans in the loan pool. (L.S.A. Attachment 1.) In his affidavit, Hawes states that but for the value of the Ullman action, plaintiff would have bid only $ 17,500 for the pool. (Hawes Aff. PP 16-17.) On December 28, 1995, defendant assigned to plaintiff the loans in the pool that included the Leader loans. (Ex. M.)

 The documents presented by plaintiff do not show all the subsequent communications between the parties, but it does appear that in February 1996, plaintiff contacted defendant's counsel in the Ullman action seeking to be substituted as plaintiff in that action. After a number of letters were exchanged, defendant wrote to plaintiff on April 8, 1996, and stated that plaintiff had no interest in the Ullman action and had no right to be substituted as plaintiff. (Pl. Mem. at 5-6; Hawes Aff., Ex. T.)

 The Loan Sale Agreement

 The loan sale agreement (hereafter "L.S.A.") by which defendant sold the pool that included the Leader loans to plaintiff assigns to plaintiff "all the right, title, and interest of Seller . . . in ...

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