On September 17, 2019, the First Department issued a decision in HSBC Bank USA v. Merrill Lynch Mtge. Lending, Inc., 2019 NY Slip Op. 06567 [175 AD3d 1149], holding that a PSA’s sole remedy provision allied only to claims for breach of representations and warranties:
The motion court correctly found that plaintiff had standing to assert the breach of notice claims. Defendants’ reading of PSA § 2.03 (a) contradicts the definition of the Assignment and Assumption Recognition Agreement (AARA) set forth in the PSA. Any conflict must be resolved in favor of that definition, which with regard to this term is more specific (see Isaacs v Westchester Wood Works, 278 AD2d 184, 185 [1st Dept 2000]).
Defendants’ reading also contradicts the AARA, which should be read together with the PSA (see Ambac Assur. Corp. v EMC Mtge. LLC, 121 AD3d 514, 515 [1st Dept 2014] [various agreements governing residential mortgage-backed securitization are “interlocking”]).
Defendants failed to establish by documentary evidence that the notice obligations were not transferred to defendant Countrywide Home Loans, Inc. and thereafter to defendant Bank of America, N.A., because the transfer agreement is not included in the record.
The court correctly found that the sole remedy provision in section 2.03 (a) does not apply to the notice claims asserted here (cf. Ambac Assur. Corp., 121 AD3d at 516). When viewed in the context of all the governing agreements, that provision is limited to breaches of representations and warranties. As the motion court found, defendants’ interpretation would drastically limit the rights that actually were assigned to plaintiff.
(Emphasis added).