Government Home loan Lender Out of San francisco v. Nationwide Economic Business

A135898

New demonstration court concluded res judicata banned Federal Mortgage Financial out of San Francisco’s (the financial institution) claim against Countrywide Monetary Company (Nationwide Monetary) and you may sustained Nationwide Financial’s demurrer on the earliest amended criticism without hop out in order to amend.

The financial institution appeals. It contends new legal erred because of the concluding res judicata banned the claim against Nationwide Financial given that [t]here are zero latest view with the deserves in the an earlier step that’ll enjoys considering go up to res judicata within action. I disagree and you may affirm. We end the fresh doctrine regarding res judicata pubs this new Bank’s claim against Countrywide Monetary as the: (1) new Bank’s voluntary dismissal of their allege up against Nationwide Monetary inside the the previous action are a final wisdom into the deserves; and you can (2) the fresh new allege the financial institution disregarded from inside the a previous lawsuit ‘s the same reason for action as the claim it asserts up against Countrywide Monetary in the modern suit. Having voluntarily overlooked with prejudice says of handle person wrongdoing against certainly one of several defendants for its own strategic causes, the bank might not avoid the res judicata consequences of their decision and you can sue new overlooked offender anew, once again alleging handle-individual responsibility, when you look at the reliance upon this new pendency of those same states resistant to the leftover actors in the 1st step.

I deal with because correct another accusations in the Bank’s amended complaint with regards to examining the transaction preserving Nationwide Financial’s demurrer:

Judge regarding Appeal, First Region, Division 5, Ca

Inside the a process named securitization, an organization originate[s] mortgage loans otherwise acquires those individuals funds and you may aggregates her or him on a great collateral pond or financing pool obtainable so you can a lending institution entitled a depositor. step 1 The latest depositor offers the new funds in order to a rely on, which then points certificates you to definitely traders-for instance the Financial-can buy. Will eventually ahead of , the financial institution bought 95 domestic home loan-recognized ties off various securities investors within the 78 securitization trusts supported by domestic mortgages at a price more than $thirteen.5 mil dollars. The bank bought certificates into the five securitizations away from Nationwide Bonds Corporation (Countrywide Bonds). CWALT, Inc. (CWALT) provided the brand new certificates inside four securitizations. Nationwide Ties frequently given the new permits on fifth securitization. 2

During the , the lending company sued seven ties traders and that given and you can sold brand new 95 home-based mortgage-supported bonds, while the organizations and this awarded new permits otherwise managed among organizations you to definitely provided the permits (Borrowing Suisse or even the Borrowing Suisse step). step 3 This new core of your Bank’s claims try defendants produced false or misleading comments during the providing files given to the new home-based financial-supported securities the bank purchased.

Among defendants inside the Borrowing from the bank Suisse was Countrywide Ties Organization, CWALT, and Countrywide Monetary. While the relevant right here, the lending company so-called: (1) Countrywide Bonds generated false or mistaken comments regarding the profit from ties when you look at the violation off Corporations Code sections 25401 and you will 25501 that have admiration so you’re able to securitizations 74 by way of 78; cuatro (2) Countrywide Ties and CWALT made false otherwise misleading statements into the admission away from sections 11 and you will a dozen of your own Ties Operate regarding 1933 (parts eleven & 12) when it comes to securitizations 75 as a consequence of 78; and (3) Nationwide Financial violated section fifteen of one’s Ties Work (Part 15) based on its power over CWALT. Within its Section fifteen claim up against Countrywide Economic, the lending company alleged CWALT stayed for no mission rather than receive and deposit finance on trusts. Under Section fifteen ? Countrywide ? for this reason is liable on the Lender loans Indian Hills as you and severally having, also to a comparable the amount just like the, CWALT.

Inside the , the bank recorded brand new ailment on the action in advance of united states trying to erica Company (declaratory recovery step). The financial institution found good erica Company-which in fact had ordered Countrywide’s possessions-is responsible for people damage Nationwide needed to shell out inside the financing Suisse action.