On June 21, 2022, Justice Chan of the New York County Commercial Division issued a decision in Deutsche Bank Natl. Trust Co. v. EquiFirst Corp., 2022 NY Slip Op. 31953(U). In this decision, Justice Chan addresses a question left unanswered by the Court of Appeals in Deutsche Bank Natl. Trust Co. v. Barclays Bank PLC, in which it held that the statute of limitations for put-back claims brought by Deutsche Bank National Trust Co. was four years, because that was the statute of limitations for a breach of contract claim in California, where Deutsche Bank National Trust Co. is located. That question is whether the statute of limitations for a breach of representations and warranties claim should be based on the residence of the Depositor, because (for these trusts), the representations and warranties had been made to the Depositor, not the trustee (Deutsche Bank National Trust Co.), and that the Depositor had merely assigned its rights to the trustee.
As Justice Chan explained, in Deutsche Bank Natl. Trust Co. v. Barclays Bank PLC
the Court of Appeals was asked to decide which test-the plaintiff-residence rule or the multi-factor test-should apply to determine where plaintiffs breach of contract claims accrued for SOL purposes. . . . The Court chose to apply the plaintiff-residence rule from the two alternative tests that the litigants presented on appeal without addressing the depositor-residence theory raised by Judge Wilson in his dissent.
So, she held that she was not bound by the Court of Appeal’s decision because the depositor-residence theory was not an argument with which it had been presented.
Justice Chan nonetheless held that even though Deutsche Bank National Trust Co was enforcing claims that had been assigned to it by the Depositor, the statute of limitations governing the trust’s claims was California’s four-year statute of limitations, reasoning:
Thus, the claims accrued to the Trust instead of [the Depositor] since the representations and warranties were made for the benefit of the Trust and the transactions occurred concurrently, leaving no time for [the Depositor] to own the Mortgage Loans or be exposed to any risk of loss