United States District Court, S.D. New York
August 22, 2005.
DEUTSCHE BANK AG, Plaintiff,
AMBAC CREDIT PRODUCTS, LLC and AMBAC ASSURANCE CORPORATION, Defendants.
The opinion of the court was delivered by: DENISE COTE, District Judge
MEMORANDUM OPINION AND ORDER
Defendants Ambac Credit Products and Ambac Assurance
Corporation (collectively "Ambac") have moved for summary
judgment, and in response plaintiff Deutsche Bank AG ("DB") has
moved to amend its pleadings. The Ambac motion is denied; the DB
motion is granted.
At the initial conference held on December 2, 2004, Ambac did
not indicate that it wished to bring a summary judgment motion in
advance of discovery, and a schedule was set that provided for
the filing of a pretrial order in this non-jury case without the
filing of a summary judgment motion. Ambac filed a summary
judgment motion in April of this year, and the parties thereafter
submitted a revised scheduling order, which the Court adopted,
providing for the completion of discovery and the submission of a
pretrial order after the summary judgment motion was fully
submitted. Ambac sold protection to DB in a 2000 transaction known as
"Triplets," which concerned a pool of 60 "Reference Obligations."
One of those obligations included bonds issued by Solutia, which
filed for bankruptcy in late 2003. As a result, DB sought the
benefits of its agreement with Ambac, specifically, payment of
$8.771 million upon delivery of the bonds. The parties dispute
the time by which DB had to deliver the bonds in order to receive
the payment, referring to provisions in a Master Agreement that
incorporated definitions and terms developed by the International
Swaps and Derivatives Association, and in the Confirmation for
the Triplets transaction. Ambac contends that DB delivered the
bonds almost a month too late, and that it therefore has no
obligation to pay DB.
Ambac has not shown that it is entitled to summary judgment.
There are disputed issues of fact as to how to read the various
documents and how their terms should be applied to the issues in
dispute. Ambac's related request that DB be barred from pursuing
evidence of industry custom is also denied. This is precisely the
kind of case in which the practices of the industry may be
particularly useful to the fact-finder.
DB has moved to amend its complaint to add two claims. Since
the addition of these two claims will have no impact on the scope
of discovery, DB's motion is granted. Ambac may renew its
arguments regarding the legal and factual deficiencies with these two claims in its memorandum of law accompanying its pretrial
order submissions. Accordingly, it is hereby
ORDERED that Ambac's motion for summary judgment is denied, and
DB's motion to amend is granted.
IT IS FURTHER ORDERED that the parties shall contact Magistrate
Judge Fox no later than September 16, 2005, in order to arrange
settlement discussions under his supervision.
IT IS FURTHER ORDERED that the pretrial order is due January
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