2009 D e c i sion s O p inion s of the U nit e d S t at e s C our t of Appe al s for the Thir d C ir c uit 12-16-2009 

# In Re: O ak wo o d H omes C orp P r e c e de nt i al or N on-P r e c e de nt i al : N on-P r e c e de nt i al D ocke t N o . 08-4445

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Thi s de c i sion i s br ou ght t o you for f r e e and ope n a c c e s s b y the O p inion s of the U nit e d S t at e s C our t of Appe al s for the Thir d C ir c uit at V i ll anova U nive r sity S choo l of L a

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w . vi ll anova . e du . Re c omme nde d C it at ion " In Re: O ak

wood H ome s C orp " (2009). 2009 D e cisio n s . P ape r 96. http://d i git alc ommon s .l a

w . vi ll anova . e du/thir dc ir c uit_2009/96NO T PRECEDEN TI AL

U N IT E D S T A T E S C O U R T O F A P P E A L S F O R T H E T H IR D C IR C U IT N o. 08- 4445

In r e: O A K W O O D H O M E S C O R P . , etal , D ebtor s

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v. C R E D IT S U IS S E (f

/k /a C re d it S u iss e F irst B o sto n , A S w iss B a n k in g C o rp o ra tio n ); C R E D IT S U IS S E S E C U R IT IE S (U S A ) L L C (f /k /a C re d it S u iss e F irst B o sto n L L C ); C R E D IT S U IS S E H O L D IN G S (U S A ), IN C . (f /k /a C re d it S u iss e F irst B o sto n In c .); C R E D IT S U IS S E (U S A ) IN C . (f/k/a C red itS u isse F ir st B o ston (U S A ) Inc . ); J O H N D O E S 1- 100

O n A p p ea l from the U n it ed S tat es D istri ct C o u rt

forthe D i s tr i ctof D el aw ar e ( D . C . N o. 07- cv- 00799 ) D is tr ic t J u d g e : H o n o ra b le J o s e p h J . F a rn a n , J r.

Subm i t t ed U nderT hi r d C i r cui tL A R 34. 1( a)

D ece m ber14, 2009 B efor e: SL O V I T E R , J O R D A N and W E I S, C i r cui tJ udges

( Fi l ed: D ece m ber16, 2009) OP I NI ON2

S L O V IT E R , C i r cui tJudge . T hi s appea l chal l enges the D i s tr i ctC our t ’ s gr antof part i al s um m aryj udgm ent bas ed upon the N ew Y or k in p a ri d e licto d o c trin e . B e c a u se th e p a rties h a v e se ttl e d a ll re m a in in g iss u e s, th e m a tter is rip e f o r a p p e a l. F o r th e re a so n s s tate d b e lo w , w e w ill a f f i r m. I. O akw ood H om es C orpor at i on ( “O akw ood”) pr oduced a nd s ol d m anufa ctur ed h o m es, th e p u rch ase rs of w h ich w ere o ften low -i n co m e ind ividu als w ith p o o r cred it . In the 1990s , O akw ood expande d i t s bus i nes s t o i ncl ude mort gage f i nanci ng. O akw ood re tain e d M e rrill L yn c h to se c u ritize th e p a ym e n t stre a m s o n th e m o rtg a g e lo a n s th a t it fi nance d. Secur i t i zat i on i s a pr oces s byw hi ch expe ct ed paym ents tr eams a r e pool ed t ogetherand r es tructur ed i nt o s ecur i t i es , w hi ch ar e then s ol d t o i nves t or s . B ys ecur i t i zi ng the p ay m en t strea m s, O ak w o o d w as a b le t o o b tai n li q u idityto f u n d it s o p era ti o n s. In 1 9 9 4 , O ak w o o d retaine d A p p ell ee C red itS u isse (“C red itS u isse”) to p erf o rm fu ture p eriod ic sec u ri ti za ti o n s. O ak w o o d ac co m p li sh ed the s ec u ri ti za ti o n s in the o rdin ary cour s e of bus i nes s w i th t he t aci tappr oval of i t s B oar d of D i r ect or s , w hi ch w as compri s ed of legal and bu si ness professi on al s fr om real est at e dev el op m ent com pan i es, l aw fi rm s, and i nves t m entbanks . B ythe l at e 1990s , O akw ood’ s annual r evenue gr ew t o near l y$1 bi l l i on. O akw ood’ s bus i nes s det er i or at ed i n 1999 w hen the mar ketform anufa ctur ed3

hous i ng col l aps ed and pur chas er s began t o defa ul ton thei rl oans . O akw ood i ncurr ed cos t s i n r epos s es s i ng, r efurbi s hi ng, and r efi nanci ng the homes. M eanw hi l e, i nves t or d e m a n d f

o r O a k w o o d ’s s e c u rities w a s w a n in g , an d O a k w o o d h a d a su rp lu s o f u n so ld hom e i nvent oryati t s s al es cent er s and fa ct or i es . O akw ood’ s C hi ef Fi nanci al O ffi cer

“ e m p h a siz e d [ u n f

a v o ra b le] c u rre n t m a rk e t co n d iti o n s . . . a n d u n c e rta in tyw ith re g a rd to [O akw ood] exi s t i ng i n t he mar ketpl ace . ” A pp. at774- 75. R at i ngs agenc i es ques t i oned O akw ood’ s cr edi tw or thi nes s and dow ngr aded i t s cr edi tr at i ng. O akw ood announce d o p e ra tin g lo s s e s in its S E C f ilin g s a n d in p re s s re le a s e s . Faci ng a l i qui di tys hor t age, O akw ood cont act ed C r edi tSui s s e i n l at e 1999 and p ro p o se d a sto p -g a p f

in a n c in g tra n sa c tio n th a t w o u ld p ro v id e O a k w o o d w ith im m e d iate l i qui di ty . I n as s es s i ng the pr opos ed tr ans act i on, J ames X anthos of C r edi tSui s s e pr epar ed a n in te rn a l m e m o ra n d u m (t h e “ X a n th o s M e m o ” ) t h a t s u m m a ri z e d O a k w o o d ’s c re d it r is k . T he X anthos M emo di s cus s ed the det er i or at i ng m arketcondi t i ons , m ent i oned the r i s k of bankrupt cy , and r ecomm ended a gai ns tthe tr ans act i on. T he X anthos M emo w as cons i s t entw i th t he mar ket ’ s unfavor abl e per cept i on of O akw ood: i t s s t ock w as tr adi ng at abouta quart erof i t s book val ue. O akw ood w as notgi ven a c opyof the X anthos M emo, a fa cti temphasi zes i n i t s br i ef. H ow ever , the pr opos ed tr ans act i on di s cus s ed i n the X a n th o s M e m o n e v e r m a te ri a liz e d . A t th e e n d o f

2 0 0 0 , C re d it S u iss e w a s “ th e o n lyg a m e in to w n ” th a t w a s w ill in g to pr ovi de s t op- gap fi nanci ng forO akw ood. A pp. at2141. O akw ood negot i at ed a f i nanci ng4

p a c k a g e w ith C re d it S u iss e . D o u g las M u ir, w h o h a d b e e n a n O a k w o o d o f f ice r w ith r es pons i bi l i tyoverO akw ood’ s s ecur i t i zat i on pr ogr am, t es t i fi ed thatthe fi nanci ng packa ge

“ w a s in [ O a k w o o d ’s ] b e s t in te re s ts ,” a n d th a t O a k w o o d ’s B o a rd a g re e d . A p p . a t 2 1 4 1 . T h e f in a n c in g e n a b led O a k w o o d to m a in tain “ b u sin e ss a s u su a l,” i.e., to c o n tin u e its per i odi c s ecur i t i zat i ons . A pp. at1557. A s one of O akw ood’ s B oar d m ember s des cr i bed, “[ t] h e se cu ri ti za ti o n p rog ram h ad b ee n an integ ral pa rto f [ O ak w o o d ’s] op era ti o n fo r a l ong t i m e. . . . [T]he [B ] oar d w as ful l yaw ar e of how the [s ecur i t i zat i on] pr ogr am oper at ed, how i tw as doi ng and atno t i m e undert ook t o m andat e the di s cont i nuance of i t . ” A p p . a t 1 3 9 1 . I n 2001, O akw ood turned t o C r edi tSui s s e aga i n t o fac i l i t at e a s hor t - t erm fi nanci ng tr ans act i on. O akw ood “ul t i m at el ycl os ed a tr ans act i on thatw as – thatw or ked for every one, ” ac cor di ng t o M ui r . A pp. at2136. L at erthaty ear , C r edi tSui s s e negot i at ed a di ffe r enttr ans act i on t o r e- s ecur i t i ze a nd s el l s om e of O akw ood’ s m os ts ubor di nat ed s ecur i t i es ata fr act i on of thei rparval ue. “I tw as the unani m ous cons ens us of [ O a k w o o d ’s] B o a rd th a t th e tra n sa c tio n b e c o m p lete d .” A p p . at 8 1 0 . O a k w o o d tried to s t em t he r i s i ng t i de of de faul t s bydi vert i ng l oans i nt o i t s exi s t i ng l oan as s um pt i on p ro g ra m , b u t th e e f

f o rt re s u lte d in “ s ig n if

ic a n t a d v e rs e liq u id ity e f f e c ts .” A p p . a t 8 9 1 . A l th o u g h C r e d i tS u i s s e “ o n o c c a s i o n ” c o rr e s p o n d e d w i th O a k w o o d a n d i t s a t t o rn e ys re g a rd in g v a rio u s tra n sa c tio n s a n d iss u e s, C re d it S u iss e d id n o t co n tro l O a k w o o d o r te ll i t w h a t to d o . A p p . at 1 5 3 5 . In d e e d , O a k w o o d d id n o t f o rm a llye n g a g e C re d it S u iss e a s itsA l though O akw ood’ s s ucce s s or - i n- i nt er est br oughtthe 1 act i on un derl y i ng this app eal , w e refert o the successor -i n-i nter est as “O akw ood” foreas e of r efe r ence . D oi ng s o does notaff ectour 5 f in a n c ia l a d v is e r u n til a f te r t h e e v e n ts a t is s u e . O n N o v e m b e r 1 5 , 2 0 0 2 , O a k w o o d f ile d f o r b a n k ru p tc yu n d e r 1 1 U .S .C . § § 1 0 1 , et s eq. I ts t at ed thati tdi d s o “bas ed pr i m ar i l yupon the cont i nued poorper form ance of l oans or i gi nat ed, the extr emel yw eak c ondi t i ons i n the manufactur ed hous i ng i ndus tryand th e d e ter io ra tin g f

in a n c ial te rm s in th e a ss e t-b a c k e d se c u ritiza tio n m a rk e t,” in a d d iti o n to

“ th e g e n e ra l ec o n o m ic r e c e ss io n .” A p p . at 4 4 5 -4 6 . O a k w o o d m o v e d f o r p e rm iss io n in the B ankrupt cyC our tt o cont i nue enga gi ng i n the s ecur i t i zat i ons and otherfi nanci ng tr a n s a c t i o n s w i th C r e d i tS u i s s e . I n s u p p o r tth e r e o f , O a k w o o d a s s e r t e d th a t“ [ h ] i s t o r i c a l l y, s ecur i t i zat i on tr ans act i ons have pr ovi ded the mosteff ect i ve and l eas texpens i ve fi nanci ng tech n iqu e f

o r sati sfy ing [O ak w o o d ’s] trem en d o u s li q u idityn ee d s. ” A p p . at 18 2 . “In f a c t,” O a k w o o d n o ted , “[ O a k w o o d ] h isto ric a llym a d e a m a ter ial p ro f it o n its s ecur i t i zat i on tr ans act i ons , ” and “ [a] l though thatpr ofi thas been r educe d oreven el i m i nat ed, the s ecur i t i zat i on tr ans act i ons . . . s t i l l r emai n the l eas texpens i ve met hod for f in a n c in g [ O a k w o o d ’s ] o p e ra tio n s .” A p p . a t 1 8 2 . T h e c o u rt g ra n te d O a k w o o d ’s m o tio n . O n N o v e m b e r 1 3 , 2 0 0 4 , O a k w o o d ’s s u c c e ss o r-in -in ter e st (a liq u id a tio n tru st, w h ich is th e A p p e llan t in th is a p p e a l) o b jec ted to p ro o f

s o f c laim f iled b yC re d it S u iss e in th e B a n k ru p tc yC o u rt a n d a s s e rt e d , in tera lia , count er cl ai m s of comm on l aw negl i gence , br eac h of fi duci aryduty , and br eac h of i m pl i ed contr act . O akw ood al l eged, and 1a n a lysis . S e e Of f i c i a lComm . o

f Uns e c u r e d

Cr e d i t o rs v . R. F. Laf f er t y & C o. , 267 F. 3d 340, 357 ( 3d C i r . 2001) ( hol di ng thatas a mat t erof fe der al bankrupt cyl aw , the debt or - i n- pos s es s i on s ucce eds t o the cl ai m s and def ens es of t he debt oras theyexi s t ed at th e f i l i n g o f th e b a n k ru p t c y p e t i t i o n , i n c l u d i n g a n y in p a ri d e licto d e f e n se s tha t m a y b e a ss e rte d a g a in st i t). W e re c o g n ize th a t th is is a m i nor i ty vi ew as i t r el at es t o the in p a ri d e licto d o c tr in e . See O f f i ci alC om m . of

U ns ecur ed C r edi t ors of A H ER F v. Pr i c e wat e r ho us e Coope rs , LLP , N o. 07- 1397, 2008 W L 3895559, at*5 ( 3d C i r . J ul y1, 2008) ( not i ng, i n a ce r t i fi cat i on of ques t i on of law to th e P e n n sy lv a n ia S u p re m e C o u rt, th a t “ L a ffer ty ’ s vi ew of in p a ri d e licto i s a mi nor i tyo n e” ). H ow ever , w e ar e bound byour p re c e d e n t. 6 co n ti n u es to all eg e, th at C red itS u isse k n ew the tran sac ti o n s itw as struc turi n g w ere “val ue- des tr oy i ng” and “ w oul d eventual l ydr i ve O akw ood i nt o bankrupt cy , ” and that C r edi tSui s s e “ne verbother ed t o undert ake f ur therdue di l i gence aboutthe ef fec t s of th o se tra n sa c tio n s, n e v e r c o n v e y e d its su p e rio r u n d e rsta n d in g o f th e tra n sa c tio n s to O akw ood, and neve rbehave d i n acc or dance w i th the fi duci arypos i t i on i thad as s um ed by r efus i ng t o part i ci pat e i n fur therval ue des truct i on. ” A ppel l ant ’ s B r . at6. O akw ood s ought$50 m i l l i on forthe di m i nut i on i n the val ue of i t s as s et s and $21 mi l l i on i n fee s t hat i tpai d t o C r edi tSui s s e forthe tr ans act i ons . T he B ankrupt cyC our thel d thatO akw ood w a s e n title d to a ju ry tria l o n th e s e c la im s , s ee I n r e O akw ood H

om es C or

p. , 378 B . R . 59, 73 (B ank r. D . D el . 20 07 ), and the b ank rupt cyrefer ence w as w i thd raw n so thatthe case c o u ld b e h e a rd in th e D is tr ic t C o u rt . I n the D i s tr i ctC our t , C r edi tSui s s e fi l ed a mot i on forpart i al s um m aryj udgm ent w hi ch the C our tgr ant ed bas ed on the in p a ri d e licto d o c tr i n e . Th e b a n k ru p t c yc l a i msT h e D is tr ic t C o u rt h a d ju ri s d ic tio n u n d e r 2 8 U . S .C . § 2 1334( b) and 157( d) . W e have j ur i s di ct i on under28 U . S. C . § 1291. 7 w e re re f e rr e d b a c k to th e B a n k ru p tc yC o u rt , w h e re th e p a rt ie s re a c h e d a s e ttle m e n t. O ak w o o d b rou g h t th is ap p ea l cha ll en g ing the D istri ct C o u rt ’s gra n t of p arti al su m m ary j ud gm ent on t he co m m on l aw cl ai m s. 2 II. We r e v i e w a d i s tr i c tc o u r t ’ s d e c i s i o n t o g r a n ts u mm a ryj u d g me n td e n o v o , a n d we appl ythe s ame st andar d t he di s tr i ctcourts houl d have appl i ed i n det erm i ni ng w hether s u m m a ry ju d g m e n t w a s a p p ro p ri a te . Stat e Aut o P r op. & Cas. I ns . C o. v. P r o D es ign, P. C. , 566 F. 3d 86, 89 ( 3d C i r . 2009) ( ci t at i on om i t t ed) . Sum m aryj udgm ents houl d be g ra n ted “ if

th e p lea d in g s, th e d isc o v e rya n d d isc lo su re m a ter ials o n f ile, a n d a n ya f

f id a v its s how thatther e i s no genui ne i s s ue as t o anym at er i al fac tand thatthe movanti s ent i t l ed t o j udgm entas a mat t erof l aw . ” Fed. R . C i v. P. 56( c) ( 2) . “I n r evi ew i ng the D i s tr i ct C our t ’ s gr antof s um m aryj udgm ent , w e vi ew the fa ct s i n a l i ghtm os tfavor abl e t o the n o n m o v in g p a rt y ,” in th is c a s e , O a k w o o d . B u sc h v . M a rp le N e w to w n Sc h . D ist. , 567 F. 3d 8 9 , 9 5 n . 7 (3d C ir . 2 0 0 9 ) (cit ati o n s o m itted). III . T he doctr i ne of in p a ri d e licto r efe r s t o “[t ] he pr i nci pl e thata pl ai nt i ff w ho has part i ci pat ed i n w r ongdoi ng m aynotr ecove rdamages r es ul t i ng fr om the w r ongdoi ng. ” B la c k ’s L a w D ic tio n a ry (8 th e d . 2 0 0 4 ). I t d e ri v e s f ro m th e L a tin , i n par idel i cto pot i orT h e p a rt ies d o n o t dispu te th e D istri ct C o u rt ’s 3 d e te rm in a tio n th a t N e w Y o rk la w a p p lie s . 8 e st c o n d iti o d e

fen d e n tis : “I n cas e of e qual orm utual faul t. . . the pos i t i on of the [def endi ng] party. . . i s the bett erone. ” B at em an E i chl er, Hi l lR i char ds , I nc. v. B er ner , 472 U . S. 299, 306 ( 1985) ( quot at i on and ci t at i on om i t t ed) . T he doctr i ne i s r ecogni zed a s a d e f e n s e u n d e rNe w Yo r k c o mm o n l a w. See Jack s on v. A s s oc. D r

y G oods C or

p. , 192 3 N .E .2 d 1 6 7 , 1 7 0 (N .Y . 1 9 6 3 ), o v e r r u l e d o n o th e rg r o u n d

s b y D’ Amb r o s i o v . Ci t

y o f N. Y. , 4 3 5 N .E .2 d 3 6 6 , 3 6 9 (N .Y . 1 9 8 2 ); A brigh tv. Sh ap i ro , 626 N . Y . S. 2d 73, 74 ( A pp. D i v. 1995) . U nderN ew Y or k l aw , the in p a ri d e licto d o c trin e “ d o e s n o t n e c e ss a rilya p p ly w her e ther e i s a di ffe r ence i n t he qual i tyof the fa ul t . ” I r oquois G as C or

p. v. I nt ’ lRy. C o. , 2 7 0 N .Y .S . 1 9 7 , 1 9 8 (A p p . D iv . 1 9 3 4 ); see al so McA da m v. D ean W

i t t er R eyno lds, I nc. , 896 F. 2d 750, 757 ( 3d C i r . 1990) ( not i ng thata court“maynotforbi d r ecove ry[on gr ounds of in p a ri d e licto ] on acc ountof a pl ai nt i ff’ s act i vi t i es i n a s epar at e s ett i ng”) (cit ati o n o m itted). O ak w o o d ’s ne g li g en ce an d im p li ed co n tr ac t cl aim s d o n o t surv ive s u m m ary j ud gm ent unde r N ew Y ork’s i n par idel i cto doctr i ne. D ur i ng the r el evantt i m e per i od, O akw ood deci ded t o us e s ecur i t i zat i on tr ans act i ons t o bol s t eri t s l i qui di tyas i thad done su c c e ss f u llyth ro u g h o u t th e 1 9 9 0 s. T h e d e c isio n to d o so c a m e f ro m O a k w o o d a n d its B oar d of s ophi s t i cat ed bus i nes s and l egal pr ofes s i onal s , w ho r ecogni zed thatthe tr ans act i ons w er e i n O akw ood’ s bes ti nt er es t . T he D i s tr i ctC our tapt l yobs erved that9

O akw oo d’s al l egati on s “ar e enti rel ybased o n [it s] fi nan ci ng strat egies and transact i on s, al l of w hi ch w er e author i zed a nd di r ect ed byO akw ood’ s B oar d and M anage m ent . . . . ” A pp. at74. E ven af

t erdecl ar i ng bankrupt cy , O akw ood as ked the B ankrupt cyC our tfor perm i s s i on t o cont i nue the tr ans act i ons as “the mosteff ect i ve and l eas texpens i ve fi nanci ng t echni que fors at i s fy i ng [O akw ood’ s ] tr emendous l i qui di tyneeds . ” A pp. at 1 8 2 . T h a t C re d it S u iss e p ro v id e d O a k w o o d w ith th e m e c h a n ism f o r c a rry in g o u t th is asp ec t of it s b u sine ss p lan d o es n o t l esse n O ak w o o d ’s cu lpab il ity . A s the D istri ct C o u rt no t ed, C redi tS uis se m erel y“assi st ed O akw oo d’s i m plem entat i on of it s ‘ fl aw ed’ busi ness pl an bys tructur i ng and exe cut i ng thes e tr ans act i ons , tr ans act i ons w hi ch pr ovi ded the l i qui di tynece s s aryforO akw ood’ s cont i nued oper at i on, exac t l yw hatO akw ood empl oy ed C red itS u isse to d o . ” A p p . at 65 -66 . T o the e x tent the f inan cing d ec isi o n s w ere b lam e w o rth y , O a k w o o d w a s a t lea st a s c u lp a b le a s C re d it S u iss e : O a k w o o d ro u tin e ly a p p ro v e d th e “ v a lu e -d e stro y in g ” tra n sa c tio n s a s a n a p p ro p ria te w a yto ra ise liq u id ity w hen the companyw as i n fi nanci al tur m oi l . T he in p a ri d e licto d o c tr in e b a rs th e c la im s . See, e. g. , G r ani t e Partners , L. P . v. B ear, St ear ns & Co. , 17 F. Supp. 2d 275, 309 (S .D .N .Y . 1 9 9 8 ) (f

in d in g th a t in p a ri d e licto bars cl ai m byi nv estm ent fund s agai nst b rok er-d ea lers un d er N ew Y o rk law w h ere “[ t] h e F u n d s w ere ac ti v e a n d v o lun tary p a rticip a n ts in th e se c u rities p u rc h a se s a b o u t w h ich th e yn o w c o m p lain ” ); B uechne rv. A very , 8 3 6 N .Y .S .2 d 1 , 2 -3 (A p p . D iv . 2 0 0 7 ) (f in d in g th a t in p a ri d e licto b a rs c laim

“ b a se d u p o n th e c o o p e ra tio n o f th e m a n a g e m e n t . . . w ith d e f e n d a n t th ird p a rties inT he exc ept ion der i ves fr om the fa ctthatcorpor at i ons act 4 th ro u g h th e ird ir e c to rs , o f f ic e rs , a n d c o n tr o llin g s to c k h o ld e rs . See gener al l y U nencum ber ed A s s et

s , Trus tv. JP Mor

gan C has e Bank (In r e N a t’ l C e n tu r

y F in . E n te r ., In c ., In v . L itig .) , 617 F. Supp. 2d 7 0 0 , 7 1 2 -13 (S . D . O h io 2 0 0 9 ) (co ll ec ti n g ca ses). 10 c o m m ittin g th e a lle g e d w ro n g s ” ). O akw ood s eeks t o avoi d t he cons equenc es of in p a ri d e licto b ya rg u in g th a t C re d it Sui s s e w as an “i ns i der . ” A ppel l ant ’ s B r . at39. T he in p a ri d e licto d o c trin e g e n e ra lly does notappl yw hen one pa r tycontr ol s the other– the s o- cal l ed “i ns i der ” exc ept i on – 4 beca us e i tw oul d al l ow a def endantthatcontr ol l ed a pl ai nt i ff t o avoi d l i abi l i tybybl ami ng th e p la in tif

f it c o n tr o lle d . See, e. g. , Kal b, V oor his & Co. v. A m . F i n. C or p. , 8 F. 3d 130, 133 ( 2d C i r . 1993) ( not i ng, underT exas l aw , that“w her e the part i es do nots t and on equa l t erm s and one pa r tycontr ol s the other , the i n par idel i cto doctr i ne does notappl y ”) . N ew Y o rk c o u rt s h a v e re c o g n iz e d th e e x c e p tio n . See, e. g. , B uechne r , 836 N . Y . S. 2d at3; s ee al s o C ent erv. H

am pt on A f f i l i at es , I nc. , 488 N . E . 2d 828, 829- 30 ( N . Y . 1985) ( r ecogni zi ng si m i l ar excepti on i n the con t ext of an ag ent w ho defraud s hi s pri ncipal ). C redi tS uis se w as notan “i ns i der ” forpurpos es of in p a ri d e licto beca us e O akw ood r et ai ned t ot al contr ol overi t s deci s i ons . T he undi s put ed evi dence above, and the depos i t i on t es t i m ony r eci t ed atl ength bythe D i s tr i ctC our t , demonstr at e O akw ood’ s contr ol overi t s deci s i onm aking process. O a k w o o d ’s re lia n c e o n a b a n k ru p tc yd e f in itio n o f “ in s id e r” is m is p la c e d . See Sc h u b e r t v . L u c e n t T

e c h s ., In c . (In r e W

in s ta rC o m m c ’n s , In c .) , 554 F. 3d 382, 395 ( 3d11

C i r . 2009) . I n Sch ub ert , w e cons i der ed the meani ng of “i ns i der ” underthe B ankrupt cy C o d e , 1 1 U .S .C . § 1 0 1 (3 1 )( B ). I d. T he B ankrupt cyC ode pr ovi des thata trus t ee c an a v o i d th e tr a n s f

e ro f p r o p e r tyi n t e r e s t s f

r o m a d e b t o rt o a n “ i n s i d e r . ” 1 1 U. S . C. § 547( b) ( 4) ( B ) . W e not ed thatw hen C ongr es s defi ned “i ns i der ” i n § 101( 31) , i tus ed la n g u a g e to in d ic a te “ a c a te g o ry o f c re d ito rs , s o m e tim e s c a lle d ‘n o n -s ta tu to ry in s id e rs ,’ w ho fal l w i thi n t he def

i ni t i on butout s i de of a nyof the enumer at ed ca t egor i es . ” Sch ub ert , 554 F. 3d at395. W e thus r ej ect ed the ar gum entthatonl ya “pe r s on i n contr ol ” coul d be an i ns i der , hol di ng that“the ques t i on i s w hetherther e i s a cl os e r el at i ons hi p [betw een debt orand cr edi t or ] and . . . anythi ng otherthan cl os enes s t o s ugges tthatanytr ans act i ons w er e notconduct ed atarm ’ s l ength. ” I d. a t 3 9 6 -9 7 (c ita tio n s a n d q u o ta tio n s o m itte d ). T he r eas oni ng i n Sch ub ert d o es n o t app lyto the m ea n ing o f “ inside r” u n d er N ew Y o rk’s in p a ri d e licto doctr i ne. T he j us t i fi cat i on forthe doctr i ne her e i s notbas ed on the s t atut orypr ovi s i on orl egi s l at i ve hi s t ory . I ns t ead, the j us t i fi cat i on r el at es t o the contr ol thatother s exertovera corpor at i on thatdoes notacton i t s ow n. I V. T he in p a ri d e licto d o c trin e d o e s n o t ap p lyto O a k w o o d ’s b re a c h o f f id u c iar yd u ty c laim . W ith re g a rd to th is c laim , the a lleg e d w ro n g d o in g is C re d it S u iss e ’s f a ilu re to pr ovi de i t s opi ni on aboutthe tr ans act i ons w i th O akw ood, and s um m aryj udgm entw as w arr ant ed bec aus e of a l ack of pr oxi m at e ca us at i on. A ccor di ng t o a mem berof O akw ood’ s B oar d, the B oar d w as “ful l yaw ar e” of the s ecur i t i zat i ons and how theyo p e r a t e d a s a n “ i n t e g r a l p a r to f [ Oa k wo o d ’ s ] o p e r a t i o n , ” a n d th e Bo a r d “ a tn o t i me u n d e rto o k to m a n d a te th e d isc o n tin u a n c e o f [ th e tra n sa c tio n s].” A p p . at 2 2 2 1 . C re d it Sui s s e di d notdi ves tO akw ood of i t s deci s i on- m aki ng author i ty , and ther e i s no t es t i m ony th a t O a k w o o d w o u ld h a v e c h a n g e d its b u sin e ss p lan h a d C re d it S u iss e a c tu a llyo f f e re d its a d v ice . M o re o v e r, O a k w o o d a ttribu ted its b a n k ru p tcy t o “ e x tre m e lyw e a k [ m a rk e t] condi t i ons ” – nott o anys uppos ed “va l ue- des tr oy i ng” tr ans act i ons . A pp. at445. T he undi s put ed fa ct s underm i ne a pr oxi m at e ca us al l i nk betw een Cre di tSui s s e’ s om i s s i ons a n d O a k w o o d ’s in

ju ry. S e e LNC I

n v s . , I n c . v . Fi rs tFi d . Ba n k

, N. A. , 173 F. 3d 454, 465 ( 2d C i r . 1999) ( “[W ] her e damages ar e s oughtforbr eac h of fi duci arydutyunderN ew Y or k l aw , the pl ai nt i ff mustdemonstr at e thatthe def endant ’ s conductpr oxi m at el ycaus ed injuryin o rde r t o estab li sh li ab il ity . ”) (cit ati o n s o m itted); N or thbay C ons t . C o. v. B auco C ons t . C or

p. , 8 3 2 N . Y . S . 2 d 2 8 0 , 2 8 1 (A p p . D iv. 20 0 7 ) (no ti n g sam e). A rea so n ab le j u ry coul d notfi nd i n favorof O akw ood. V. Forthe above - s t at ed r eas ons , the j udgm entof the D i s tr i ctC our tw i l l be af fi r m ed.

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