Polsinelli's Loan Originator Client Awarded Litigation Costs Under Fee Shifting Clause of MLPA
The Second Circuit recently reversed
a S.D.N.Y decision granting summary judgment in favor of a CMBS Trust whose Special Servicer sued Polsinelli’s commercial loan Originator client seeking repurchase of a loan due to the Originator’s alleged breaches of representations and warranties. The Originator countered that it had not breached any representations and warranties and that in any event the Trust’s claim was barred by New York’s six-year statute of limitations applicable to contract suits. The Originator contended that the statute of limitations began to run on the closing date of the loan sale. The Trust argued that the statute of limitations did not begin to run until after the trust suffered harm from the alleged breaches and demanded repurchase of the loan, years after the loan sale closed. The District Court initially ruled in favor of the Trust, granting a $19.6 million summary judgment to the Trust. The District Court, citing a fee-shifting provision in the loan sale contract, included $1.2 million in the judgment for the Trust’s litigation costs.
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