ACE Securities Corp. v. DB Structured Products, Inc

In ACE Securities Corp. v. DB Structured Products, Inc. (2015 WL 3616244, 2 [June 11, 2015] [ACE], affg 112 AD3d 522 [1st Dept 2013]), the Court of Appeals recently affirmed that a cause of action for breaches of representations and warranties accrues at the time of execution of the agreement in which the representations and warranties were made (there, a Pooling and Servicing Agreement). The Court also held that a sponsor's refusal to repurchase allegedly defective mortgage loans pursuant to a contractual repurchase protocol does not give rise to a separate cause of action for breach of contract. (Id.) Rather, "the cure or repurchase obligation is an alternative remedy, or recourse" for breaches of representations and warranties concerning the quality of mortgage loans. As the Court further held, the sponsor's failure to cure or repurchase "was not a substantive condition precedent that deferred accrual" of the claim (there, the Trust's claim).