U.S. Bank National Association, as successor (Wells Fargo Bank, NA), as Trustee (Registered Holders of Citigroup Commercial Mortgage Trust 2007-C6, Commercial Mortgage Pass-Through Certificates, Series 2007-C6), acting by and through Special Servicer CW Capital Asset Management LLC, Plaintiff-Appellant,
Bank of America N.A., Defendant-Appellee.
Argued: November 8, 2017
APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN
DISTRICT OF NEW YORK
by Plaintiff U.S. Bank National Association from orders of
the United States District Court for the Southern District of
New York (Paul G. Gardephe, J.) denying
Plaintiff's motion to retransfer the suit to the United
States District Court for the Southern District of Indiana,
where it was instituted, and granting judgment on the
pleadings in favor of Defendant Bank of America N.A., by
reason of untimeliness under the laws of New York. The
district court in Indiana had transferred the case to New
York under 28 U.S.C. § 1631 based on its conclusion that
the defendant was not subject to personal jurisdiction in
Indiana. Although we disagree with that conclusion (and
therefore with the propriety of the transfer under §
1631), we affirm the New York district court's denial of
the motion to retransfer to Indiana, treat the original
transfer as one made under 28 U.S.C. § 1404(a) (rather
than § 1631), and vacate the judgment that the suit was
untimely under the laws of New York. The judgment is VACATED
and the case is REMANDED for further proceedings.
Colleen M. Mallon (Gregory A. Cross, on the brief), Venable
LLP, Baltimore, Maryland, for Plaintiff- Appellant.
Elizabeth P. Papez (Luke A. Connelly, Stephanie A. Maloney,
on the brief), Winston & Strawn LLP, Washington, D.C. and
New York, New York, for Defendant-Appellee.
Before: LEVAL, LIVINGSTON, and CHIN, Circuit Judges.
suit for breach of contract, Plaintiff U.S. Bank National
Association appeals from orders of the United States District
Court for the Southern District of New York (Paul G.
Gardephe, J.) denying its motion to retransfer the
suit to the United States District Court for the Southern
District of Indiana, where it was instituted, and granting
judgment on the pleadings in favor of Defendant Bank of
America N.A., by reason of the untimeliness of the suit under
New York's statute of limitations. The district court in
Indiana had transferred the case to New York under 28 U.S.C.
§ 1631, based on its conclusion that the suit could not
be brought in Indiana because the Defendant (a nationally
chartered bank and citizen of North Carolina) was not subject
to personal jurisdiction in Indiana.
disagree with the Indiana district court's conclusion
that the Defendant was not subject to the jurisdiction of the
Indiana court, and therefore we necessarily conclude that the
Indiana court's transfer to New York was not authorized
by § 1631. We nonetheless affirm the New York district
court's denial of Plaintiff's motion to retransfer to
Indiana, treat the original transfer as one made under 28
U.S.C. § 1404(a) (rather than § 1631), and vacate
the judgment of dismissal rendered on the ground that the
suit was untimely under the laws of New York.
The Mortgage Loan Purchase Agreement
2007, Defendant Bank of America's predecessor, LaSalle
Bank N.A., entered into a Mortgage Loan Purchase
Agreement (the "MLPA"), for the sale of a portfolio
(of approximately 100 commercial mortgage loans) to an
entity acting for the benefit of an investment
trust (the "Trust"), for which Plaintiff U.S. Bank
(a nationally chartered bank and citizen of Ohio) serves as
Trustee. The MLPA was supplemented by a Pooling and Servicing
Agreement (the "PSA"), which provided that the
purchaser would deposit the loans into the Trust and assign
all of its rights under the MLPA to the Trust.
MLPA, the seller made representations and warranties
regarding the loans. These included Representation No. 8 (set
forth in the margin),  which effectively represented the absence
of any restrictions that would interfere with the
mortgagor's ability to pay its obligations under the
mortgage loan or would materially and adversely affect the
value of the mortgaged property.
MLPA prescribes specific remedies available to the mortgagee
in the event of a "Document Defect or a Breach" of
a representation. App. 79. Pursuant to Section 3(c), the
seller of the loan portfolio (Defendant's predecessor)
undertook a commitment that, upon receipt of notice of a
Document Defect or Breach, it would:
cure such Document Defect or Breach . . . in all material
respects, or, if such Document Defect or Breach . . . cannot
be cured . . ., (i) repurchase the affected Mortgage Loan at
the applicable Purchase Price . . ., or (ii) substitute a
Qualified Substitute Mortgage Loan for such affected Mortgage
Loan . . . .
PSA, in Section 2.03, similarly provides that, after
receiving timely notice of a Document Defect or Breach, the
(i) cure such Document Defect or Breach, as the case may be,
in accordance with Section 3 of the applicable [MLPA], (ii)
repurchase the affected Trust Mortgage Loan in accordance
with Section 3 of the related [MLPA], or (iii) within two (2)
years of the Closing Date, substitute a Qualified Substitute
Mortgage Loan for such affected Trust Mortgage Loan . . . .
The Indiana Loan
the items in the portfolio sold pursuant to the MLPA, was a
$9 million loan (the "Loan"), which is the subject
of this litigation, made in 2007 to Women's Physicians
Group, LLC. Repayment of the Loan was secured in part by a
mortgage on a two-story commercial building (the
"Property") (then owned by the borrower/mortgagor
Women's Physicians Group), which was located on a
hospital campus in Indiana. Women's Physicians Group had
purchased the Property from Galen Hospital Corporation (the
"Hospital") pursuant to a special warranty deed.
The deed includes two title exceptions that run with the
property: (1) a use restriction, which, absent the consent of
the Hospital, prohibits use of the Property otherwise than as
an ambulatory surgery center and medical offices, and (2) a
right of first refusal in favor of the Hospital for any sale,
transfer, or assignment.
2012, Women's Physicians Group lost the major tenant for
the Property, was unable to secure a new tenant that would
use the Property in a manner that conformed to the use
restriction, and consequently defaulted on the
Loan. On December 13, 2012, the Trust, which
had acquired the Loan pursuant to the MLPA, commenced a
foreclosure action in Indiana state court against Women's
Physicians Group. The foreclosure court appointed a receiver,
who similarly failed to secure either a tenant or a waiver or
modification of the deed restrictions.
October 18, 2013, Plaintiff-Trustee notified Bank of America
that it had violated MLPA Representation No. 8 and demanded
that Bank of America cure the violation or repurchase the
Loan, as provided in the MLPA. Bank of America did not do so.