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In re Part 60 RMBS Put-Back Litigation

Supreme Court of New York, First Department

November 16, 2017

In re Part 60 RMBS Put-Back Litigation Natixis Real Estate Capital Trust 2007-HE2, etc., Plaintiff-Respondent,

          Natixis Real Estate Capital, Inc., Defendant-Appellant.

          Davis & Gilbert LLP, New York (H. Seiji Newman of counsel), for appellant.

          Quinn Emanuel Urquhart & Sullivan, LLP, New York (Andrew R. Dunlap of counsel), for respondent.

          Renwick, J.P., Manzanet-Daniels, Andrias, Kern, Oing, JJ.

         Order, Supreme Court, New York County (Marcy S. Friedman, J.), entered on or about November 10, 2016, which, to the extent appealed from as limited by the briefs, denied, with prejudice, defendant's motion for commissions permitting it to serve subpoenas on a corporation and an individual located in Texas, insofar as those subpoenas requested information about the appointment of Computershare Trust Co., N.A. as Separate Securities Administrator, unanimously modified, on the law, to make the denial without prejudice, and, so modified, affirmed, without costs.

         We affirm the denial of defendant's motion, but for different reasons than stated by the motion court. In making our determination, we take judicial notice of the briefs, orders, and pleadings submitted on the motion (see Kinberg v Kinberg, 85 A.D.3d 673, 674 [1st Dept 2011]; Assured Guar. [Uk] Ltd. v J.P. Morgan Inv. Mgt. Inc., 80 A.D.3d 293, 303 [1st Dept 2010], affd 18 N.Y.3d 341');">18 N.Y.3d 341 [2011]). We also review the motion court's order de novo, since the court denied the motion based on law of the case - a matter of law (see Gulf Ins. Co. v Transatlantic Reins. Co., 13 A.D.3d 278, 279 [1st Dept 2004]).

         The motion court erred in denying the motion based on law of the case. Neither this Court's decision on the prior appeal (149 A.D.3d 127');">149 A.D.3d 127 [1st Dept 2017]) nor the order it affirmed, denying defendant's CPLR 3211 motion to dismiss, bars defendant's argument that Computershare lacks capacity to sue because its appointment as Separate Securities Administrator failed to satisfy the requirements of section 10.10 of the Pooling and Services Agreement (PSA). That particular issue was not actually litigated on defendant's motion to dismiss (see People v Grasso, 54 A.D.3d 180, 210 [1st Dept 2008]). Moreover, the procedural posture and evidentiary burden on the motion to dismiss differs from the present motion (see Feinberg v Boros, 99 A.D.3d 219, 224 [1st Dept 2012], lv denied 21 N.Y.3d 851');">21 N.Y.3d 851 [2013]). On the motion to dismiss, defendant had to accept as true the complaint's allegation that Computershare had been duly appointed, and it was only after discovery commenced that defendant could determine whether the requirements of section 10.10 had been satisfied.

         Defendant did not waive the defense that Computershare lacked capacity to sue. Defendant moved to dismiss for lack of standing, and it included lack of standing as an affirmative defense in its answer. While capacity to sue and standing are different legal concepts (see Silver v Pataki, 96 N.Y.2d 532, 537 [2001]), this Court has used the terms interchangeably (see e.g. Springwell Nav. Corp. v Sanluis Corporacion, S.A., 81 A.D.3d 557');">81 A.D.3d 557 [1st Dept 2011]). Thus, defendant should not be penalized for using the term "standing" instead of "capacity" (see CPLR 3026).

         Nor should the affirmative defense be deemed waived on the ground that it is too conclusory (see Robbins v Growney, 229 A.D.2d 356, 358 [1st Dept 1996]). It "would be an excessively severe result" to "treat[] the defense as waived" (Scholastic Inc. v Pace Plumbing Corp., 129 A.D.3d 75, 81 [1st Dept 2015]), especially since plaintiff has known since at least April 29, 2016 that defendant was disputing the effectiveness of Computershare's appointment. Moreover, "[i]f the [capacity] defense is meritorious, a determination of that issue would result in a speedy and less expensive conclusion to otherwise protracted litigation" (id.).

         Despite the foregoing, we deny the motion, since defendant did not demonstrate that a commission is "necessary or convenient" (CPLR 3108). In particular, defendant's motion papers did not include "allegations that the proposed out-of-State deponent[s] would not cooperate with a notice of deposition or would not voluntarily come within this State or that the judicial imprimatur accompanying a commission will be necessary or helpful" (MBIA Ins. Corp. v Credit Suisse Sec. [USA] LLC, 103 A.D.3d 486, 488 [1st Dept 2013] ...


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