17‐1290

Lehman XS Trust v. Greenpoint Mortgage Funding, Inc.

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

______________

August Term 2017

(Argued: April 17, 2018          Decided: February 6, 2019)

Docket 17‐1290

LEHMAN XS TRUST, SERIES 2006‐GP2, (LXS 2006‐GP2), by U.S. BANK

NATIONAL ASSOCIATION, solely in its capacity as Trustee, LEHMAN XS

TRUST, SERIES 2006‐GP3, (LXS 2006‐GP3), by U.S. BANK NATIONAL

ASSOCIATION, solely in its capacity as Trustee, LEHMAN XS TRUST, SERIES

2006‐GP4, (LXS 2006‐GP4), by U.S. BANK NATIONAL ASSOCIATION, solely in

its capacity as Trustee,

Plaintiffs‐Appellants,

v.

GREENPOINT MORTGAGE FUNDING, INC.,

Defendant‐Appellee.

*

______________

Before:

WESLEY, CHIN, AND CARNEY, Circuit Judges.

Plaintiff U.S. Bank National Association (“U.S. Bank”) appeals from a

judgment entered in the United States District Court for the Southern District of

New York (Carter, J.) dismissing its second amended consolidated complaint as

untimely. U.S. Bank argues, among other things, that the district court erred in

 

* The Clerk of the Court is respectfully directed to amend the official caption as noted

above.  
2

dismissing its complaint because (1) its claim for indemnification under the

contract in dispute is independent of its claim for breach of that contract, and the

former claim therefore was timely filed in federal court; and (2) its claim for

indemnification based on separate contracts executed at a later date relates back

to the original state‐court filing under Federal Rule of Civil Procedure 15(c). We

disagree. AFFIRMED.

_________________

HECTOR TORRES (David J. Abrams, David J. Mark, on the brief),

Kasowitz Benson Torres LLP, New York, NY, for Plaintiffs‐

Appellants.

THEODORE R. SNYDER (James A. Murphy, New York, NY;

Cameron S. Matheson, Glen Allen, VA, on the brief), Murphy &

McGonigle, P.C., for Defendant‐Appellee.

_________________

WESLEY, Circuit Judge:

This appeal is the most recent chapter in the ongoing saga of the last

decade’s housing finance crisis. At the core of the appeal are three trusts (the

“Trusts”) composed of residential mortgage‐backed securities that Defendant‐

Appellee GreenPoint Mortgage Funding, Inc. (“GreenPoint”) sold in 2006 to

Lehman Brothers Holding, Inc., and Lehman Brothers Bank, FSB (collectively,

“Lehman”), with Plaintiff‐Appellant U.S. Bank acting as Trustee. Six years after

the sale, in 2012, a forensic review of the Trusts revealed that nearly all of the
3

sample mortgages GreenPoint sold to Lehman were in breach of the

representations and warranties (“R & Ws”) GreenPoint made in its Flow Mortgage

Loan Purchase and Warranties Agreements (“MLPAs”) with Lehman.  

GreenPoint failed to cure orrepurchase the loans within the contractual time

frames. As a result, the Federal Housing Finance Agency (“FHFA”)—acting on

behalf of U.S. Bank as Trustee and as conservator for the Federal Home Loan

Mortgage Corporation (“Freddie Mac”),1 which in turn was the beneficial owner

of some of the certificates issued by the Trusts—filed summonses with notice in

New York Supreme Court.2

GreenPoint removed the actions to federal court, at which point the FHFA

dropped out of the litigation and U.S. Bank as Trustee filed an amended and

 

1 On September 6, 2008, Freddie Mac was placed into conservatorship by the FHFA

pursuant to 12 U.S.C. § 4617.

2 In the New York courts, a plaintiff commences an action “by filing a summons and

complaint or summons with notice.” N.Y. C.P.L.R. § 304(a). A party may elect to file a

summons with notice if the party is not prepared to serve the complaint; in that case, the

summons must put the defendant on notice of “the nature of the action and the relief

sought,” as well as “the sum of money for which judgment may be taken in case of

default.” Id. § 305(b).
4

consolidated complaint.3 After discovery and the filing of a second amended

consolidated complaint, GreenPoint moved for summary judgment as to three

counts of this complaint, and to dismiss as to the fourth count, arguing, among

other things, that the claims were barred by New York’s statute of limitations.  

The district court concluded, for various reasons discussed in this opinion,

that none of U.S. Bank’s claims was timely. The issue before this Court is whether

any of U.S Bank’s claims survive GreenPoint’s motions for summary judgment

and dismissal. We affirm the district court’s conclusion that none does.

BACKGROUND

I. Factual Background

In 2006, Lehman, not a party to this appeal, purchased aggregated pools of

residential home mortgages from GreenPoint.4 The sales were governed by two

 

3 The FHFA ceased prosecuting its claims in this case because of a “no action” clause

contained in the Trust Agreements. A “no action” clause bars “individual certificate

holders from bringing independent law suits which are more effectively brought by the

trustee unless certain exceptions are met.” Deutsche Bank Nat’l Tr. Co. v. Quicken Loans Inc.,

810 F.3d 861, 868 n.8 (2d Cir. 2015) (cleaned up) (internal quotation marks omitted)

(“Deutsche Bank”).

4 In 2006, before Lehman began bankruptcy proceedings, U.S. Bank entered into

agreements to serve as Trustee of the Trusts at issue in this case.  
5

MLPAs, each of which contained a series of R & Ws as to the quality of the

mortgage loans.5 When Lehman purchased the loans from GreenPoint in 2006,

they had an aggregate principal balance exceeding $3.39 billion.  

Lehman conveyed the mortgage loans and its rights under the MLPAs to a

depositor (also not a party to this appeal), which then conveyed the mortgage

loans to three Trusts—GP2, GP3, and GP4—via another set of contracts

denominated “Trust Agreements.”6 The last dates on which Lehman purchased

mortgage loans from GreenPoint (i.e., the effective dates of the R & Ws) were May

15, 2006 (GP2), June 15, 2006 (GP3), and July 17, 2006 (GP4). The Trusts closed on

 

5 Although the MLPAs at issue are separate contracts, the language relevant to the issues

on appeal is identical in the two documents, and U.S. Bank treats the documents as one

in its brief to this Court. The first MLPA was signed between Lehman Brothers Bank, FSB

and GreenPoint in 2001; the second MLPA was signed between Lehman Brothers

Holdings, Inc. and GreenPoint in 2006.  

6 The “depositor” here was a third‐party entity called Structured Asset Securities

Corporation (“SASC”). SASC’s role was to create the three Trusts and, “[c]oncurrently

with the execution” of the Trust Agreements, to “transfer, assign, set over, deposit with

and otherwise convey to the Trustee, without recourse . . . all the right, title and interest

of the Depositor in and to the Mortgage Loans.” J.A. 387, § 2.01(a). In other words, the

depositor’s role was to create the Trusts. In the same moment that the parties closed on

the MLPAs, SASC acquired an interest in the Trust’s assets, placed the assets in the Trusts,

and transferred the Trusts to the Trustee (U.S. Bank). The signatories to the Trust

Agreements were SASC as depositor; U.S. Bank as Trustee; Aurora Loan Services LLC as

master servicer (a role not relevant to this appeal); and Lehman as underwriter.  
6

the MLPAs on May 31, 2006 (GP2), June 30, 2006 (GP3), and July 31, 2006 (GP4).

Once the mortgage loans were deposited into the Trusts, they were securitized and

certificates were issued representing rights to cash flows from the securitized loan

portfolios. Investors then purchased the certificates, thereby acquiring an

ownership interest in the Trusts. Freddie Mac was one of these investors.7  

The R & Ws contained in the MLPAs and the Trust Agreements made

assertions about the quality of individual mortgage loans and the mortgage loan

pools. Specifically, Section 7 of the MLPAs represented that the mortgage loans

were “underwritten in accordance with [GreenPoint’s] Underwriting Guidelines,”

J.A. 160, 261; that the mortgage loan schedules were “complete, true and correct,”

id. 154, 255; that GreenPoint possessed complete mortgage files, id. 161, 262; and

that, except as specifically scheduled, the loan‐to‐value ratio for the mortgage

loans did not exceed 80%, id. 158, 259. The MLPAs provided that GreenPoint made

 

7 Freddie Mac was the beneficial owner of certificates in a single class issued by each of

the Trusts. It did not, however, own more than 25% of “each Class affected thereby” the

alleged default, a condition the contractual no action clause required for a certificate

holder to commence litigation. Although we note that GreenPoint appears to be correct

that the FHFA (acting as conservator for Freddie Mac) did not satisfy this condition, we

express no judgment on GreenPoint’s merits argument that the FHFA lacked standing to

bring suit because of the no action clause.
7

these R & Ws “as of” each closing date. Section 2.03 of the Trust Agreements

incorporated the R & Ws from the MLPAs.

In an effort to ensure compliance with the R & Ws, the MLPAs and the Trust

Agreements created a contractual remedy in the event that GreenPoint breached.

Under Section 8 of the MLPAs, upon learning of a breach, GreenPoint had sixty

days to “use its best efforts promptly to cure such [b]reach in all material respects.”

Id. 165, 268. If the breach could not be cured, Section 8 of the MLPAs provided that

GreenPoint “shall, at the Purchaser’s option, repurchase such Mortgage Loan” at

an established repurchase price. Id. The Trust Agreements included an identical

clause, except they gave GreenPoint ninety days from the discovery of the breach

to cure or repurchase. The same section of the MLPAs contained an Accrual

Provision that established how the parties would proceed in the event of a breach.8  

 

8 The Accrual Provision states:  

Any cause of action against [GreenPoint] relating to or arising out of the

Breach of any [R & Ws] . . . shall accrue as to any Mortgage Loan upon

(i) discovery of such Breach by the Purchaser or notice thereof by

[GreenPoint] to the Purchaser, (ii) failures by [GreenPoint] to cure such

Breach or repurchase such Mortgage Loan as specified above, and
8

Section 9 of the MLPAs also contained an indemnification clause, which

reads, in relevant part:  

[GreenPoint] agrees to indemnify [Lehman] and hold it harmless

from and against any and all claims, losses, damages, penalties, fines,

forfeitures, legal fees and related costs, judgments, and any other

costs, fees and expenses that [Lehman] may sustain in any way

related to (i) any act or omission on the part of [GreenPoint] or any

other person or entity in the origination, receiving, processing,

funding or servicing any Mortgage Loan prior to the related Transfer

Date or otherwise arising from the transfer of servicing of the

Mortgage Loans provided for in this Agreement, [and] (ii) any

assertion based on, grounded upon [or]resulting from a Breach of any

of [GreenPoint’s R & Ws] contained herein . . . . [GreenPoint] shall

immediately notify [Lehman] if a claim is made by a third party with

respect to this Agreement or the Mortgage Loans . . .

J.A. 167, 270.

In addition to the indemnification provisions included in the MLPAs,

GreenPoint (together with Lehman and SASC) entered into separate

Indemnification Agreements for each Trust. The agreements provided that

GreenPoint would “indemnify and hold harmless” the other parties to the MLPAs

 

(iii) demand upon [GreenPoint] by the Purchaser for compliance with this

Agreement.

J.A. 166, 269.
9

and Trust Agreements “from and against any and all losses, claims, liabilities,

damages, penalties, fines, forfeitures, legal fees and expenses and related costs,

judgments, and any other costs, fees and expenses” that “arise out of or are based

upon any untrue statement or alleged untrue statement of any material fact” or

the omission of any such fact in the information GreenPoint provided to Lehman.

Id. 1062, 1071, 1080. The relevant “as of” dates for the Indemnification Agreements

were May 30, 2006 (GP2); June 28, 2006 (GP3); and July 28, 2006 (GP4).

In 2012, Freddie Mac conducted a forensic review of the loan files9 and

determined that an overwhelming percentage of the mortgage loans in the Trusts

breached GreenPoint’s R & Ws under the MLPAs and Trust Agreements.10 U.S.

 

9 The operative complaint discusses the forensic review in the passive voice, making it

impossible for us to determine from the complaint alone who initiated the review in 2012

and why. See, e.g., J.A. 1129 ¶ 41 (“Forensic reviews were undertaken . . . .“).  However,

U.S. Bank’s brief to this Court explains that Freddie Mac—not U.S. Bank—conducted the

review, presumably after it and other certificate holders suffered major losses on their

investments because of high rates of default. Appellant Br. 9.   

10 U.S. Bank alleges that this analysis showed that 93.5% of the sampled loans in the GP2

Trust were in breach, 99.8% of the sampled loans in the GP3 Trust were in breach, and

100% of the sampled loans in the GP4 Trust were in breach. The breaches included

misrepresentations of borrower income, leading to a higher debt‐to‐income ratio than

GreenPoint’s guidelines permitted; misrepresentations of occupancy status of homes to

which the mortgage loans related, decreasing the value of the mortgage loans; improper

calculations of debt and debt‐to‐income ratios; failure to verify borrower assets or
10

Bank submitted breach notices to GreenPoint on the following dates: March 19,

2012, and August 24, 2012, for the GP2 Trust; March 19, 2012, for the GP3 Trust;

and April 17, 2012, forthe GP4 Trust. GreenPoint did not cure orrepurchase within

the sixty‐ or ninety‐day periods established in the MLPAs and Trust Agreements,

respectively.  

II. Procedural History

Almost immediately after the sixty‐day cure periods expired, the FHFA

commenced three actions against GreenPoint in New York Supreme Court, New

York County, “as conservator for” Freddie Mac and “on behalf of” U.S. Bank as

Trustee. The FHFA filed summonses with notice for the GP2, GP3, and GP4 Trusts,

respectively, on May 30, 2012, June 29, 2012, and July 30, 2012, exactly one day

ahead of the six‐year anniversaries of the closing dates of the three Trusts.

GreenPoint removed the actions to the United States District Court for the

Southern District of New York on October 24, 2012. On November 21, 2012, the

 

qualifying loans with insufficient credit score; and incorrect calculations of loan‐to‐value

and cumulative loan‐to‐value ratios, which, according to U.S. Bank, are allegedly “among

the most important measures of the risk of a mortgage loan.” J.A. 1130–41.
11

district court consolidated the three actions and authorized the plaintiffs to file a

single consolidated complaint, which they did on November 26, 2012.  

The FHFA dropped out of the litigation in January 2013, and U.S. Bank—

now the sole plaintiff—filed an amended consolidated complaint.11 The amended

consolidated complaint included three causes of action related to breach of

contract and indemnification. GreenPoint moved to dismiss, and the district court

denied the motion. See Lehman XS Tr., Series 2006‐GP2 v. GreenPoint Mortg.

Funding, Inc., 12 Civ. 7935, 12 Civ. 7942, & 12 Civ. 7943, 2014 WL 1301944 (S.D.N.Y.

Mar. 31, 2014).  

The parties commenced discovery. Although they completed that task by

early December 2014, U.S. Bank requested a stay of further proceedings pending

the New York Court of Appeals’ resolution of an appeal taken from ACE Securities

 

11 GreenPoint invoked federal jurisdiction under 28 U.S.C. § 1345, which provides that

“the district courts shall have original jurisdiction of all civil actions, suits or proceedings

commenced by the United States, or by any agency or officerthereof expressly authorized

to sue by Act of Congress.” As the removal notices indicated, the FHFA is a federal

agency for the purposes of § 1345. See 12 U.S.C. § 4511(a) (“There is established the

Federal Housing Finance Agency, which shall be an independent agency of the Federal

Government.”). When the FHFA dropped out of the suit, however, U.S. Bank filed its

amended consolidated complaint under diversity jurisdiction as well as 28 U.S.C. § 1345.  
12

Corp. v. DB Structured Products, Inc., 112 A.D.3d 522 (1st Dep’t 2013), leave to appeal

granted by 23 N.Y.3d 906 (2014). Soon after the Court of Appeals issued its opinion,

see ACE Secs. Corp. v. DB Structured Prods., Inc., 25 N.Y.3d 581 (2015) (“ACE”), U.S.

Bank moved for and was granted leave to file a second amended consolidated

complaint (“SACC”). It filed that complaint, which is the focus of the present

appeal, on March 3, 2016.

The SACC mirrored the first amended consolidated complaint with respect

to the first two causes of action: (1) breach of contract seeking specific

performance, based on GreenPoint’s failure to repurchase the noncompliant loans

or cure its breach of the R & Ws; and (2) breach of contract seeking monetary

damages, based on the same allegations. The SACC expanded the third cause of

action—indemnification based on language in the MLPAs and the Trust

Agreements—to seek not only expenses incurred in connection with the first two

causes of action, but also a monetary award of $1.1 billion. Finally, the SACC

added a fourth cause of action for indemnification arising under the separate

Indemnification Agreements. The fourth claim sought reimbursement for losses
13

based on a separate set of R & Ws that GreenPoint made when the parties executed

the Indemnification Agreements.  

GreenPoint moved for summary judgment on the first three claims, arguing

they were time‐barred. It moved for dismissal of the fourth claim under Federal

Rules of Civil Procedure 12(b)(1) and 12(b)(6), asserting that the FHFA and U.S.

Bank lacked standing and that U.S. Bank had failed to state a claim. The district

court granted the motion for summary judgment and dismissed the fourth claim

as time‐barred. See Lehman XS Tr., Series 2006‐GP2 v. GreenPoint Mortg. Funding,

Inc., 12 Civ. 7935, 12 Civ. 7942, & 12 Civ. 7943, 2017 WL 1293773, at *10 (S.D.N.Y.

Mar. 29, 2017). The court found that the contractual claims (claims one and two)

were time‐barred because the FHFA filed the summonses with notice more than

six years after the statute of limitations began to run under New York law. Id. at

*7. With respect to the third claim, seeking indemnification, the court found that

U.S. Bank’s claim was “not one for indemnification” but instead was “more

appropriately characterized as one to recover losses incurred by breach of

contract.” Id. at *8. Accordingly, the court concluded that the third claim, too, was

time‐barred. Finally, the court held that the fourth claim, also seeking
14

indemnification, was time‐barred because it involved a new set of operative facts

and therefore could not relate back to the original complaint pursuant to Federal

Rule of Civil Procedure 15(c), even assuming the original complaint was timely

filed. Id. at *9. U.S. Bank appealed.  

DISCUSSION

We review a district court’s grant of summary judgment de novo, mindful

that summary judgment is appropriate only “if the movant shows that there is no

genuine dispute as to any material fact and the movant is entitled to judgment as

a matter of law.” Sousa v. Marquez, 702 F.3d 124, 127 (2d Cir. 2012) (quoting Fed. R.

Civ. P. 56(a)). We also review de novo a district court’s grant of a motion to dismiss,

including its interpretation and application of statutes of limitations and

contractual terms. Deutsche Bank, 810 F.3d at 865. When we sit in diversity

jurisdiction and must decide a question of New York state law, we are bound “by

the law of New York as interpreted by the New York Court of Appeals.” Licci ex

rel. Licci v. Lebanese Canadian Bank, SAL, 739 F.3d 45, 48 (2d Cir. 2013) (per curiam).  

In ACE, 25 N.Y.3d at 596, the New York Court of Appeals held that a cause

of action for breach of R & Ws that guarantee particular facts as of a certain date,
15

but do not guarantee future performance, accrues on the date those R & Ws

become effective. We were called upon to apply ACE in Deutsche Bank. Deutsche

Bank involved facts similar to the case now before us: a trustee, Deutsche Bank,

sought to recover from Quicken Loans, which originated a pool of mortgage loans

that Deutsche Bank later discovered breached R & Ws made in the mortgage‐loan

agreements. 810 F.3d at 863. The issue was whether the trustee’s cause of action

for breach of the R & Ws accrued when the R & Ws became effective (making the

claims untimely) or when the trustee demanded repurchase or cure and was

rebuffed (making the claims timely). Looking to ACE, we held that the trustee’s

cause of action accrued “[i]mmediately upon effectiveness of the R & Ws,” because

at that point, “the Trustee was entitled to demand the contractual remedy—cure

or repurchase—as to any material breach.” Id. at 866. We also rejected the trustee’s

argument that the remedy clause was substantive (meaning a condition precedent

to a party’s performance) rather than procedural (seeking a remedy for a

preexisting wrong). Id. at 867. Because we deemed the demand process to be

“merely procedural,” we held that it did not “delay accrual of the cause of action,”

making the trustee’s claims untimely. Id. (citing ACE, 25 N.Y.3d at 597).  
16

U.S. Bank argues that, notwithstanding Deutsche Bank, ACE, and the

numerous cases that followed,12 its causes of action for breach of contract accrued

not when the R & Ws became effective, but when GreenPoint was made aware of

the breaches and failed to cure. According to U.S. Bank, this case is distinguishable

from Deutsche Bank and ACE because here, sophisticated parties negotiated for a

contract provision establishing that a cause of action for a breach of the R & Ws

“shall accrue,” J.A. 166, 269, only when the Trustee made a demand for

compliance. U.S. Bank made no such demand until 2012.  

While this appeal was pending, the New York Court of Appeals granted

review in a similar case, Deutsche Bank Nat’l Tr. Co. v. Flagstar Capital Mkts. Corp.,

32 N.Y.3d 139 (2018). U.S. Bank pinned its hopes on Flagstar and urged us to await

the New York high court’s decision. Flagstar, U.S. Bank argued, would

“definitively determine the validity of an express accrual clause under New York

 

12 See, e.g., U.S. Bank Nat’l Ass’n v. Dexia Real Estate Capital Mkts., 643 Fed. App’x 48 (2d

Cir. 2016) (summary order); Wells Fargo Bank, NA v. JPMorgan Chase Bank, N.A., 643 Fed.

App’x 44 (2d Cir. 2016) (summary order); Homeward Residential, Inc. v. Sand Canyon Corp.,

12 Civ. 7319, 2018 WL 557913 (S.D.N.Y. Jan. 24, 2018); U.S. Bank Nat’l Ass’n v. Bank of Am.,

N.A., 15 Civ. 8153, 2016 WL 5118298 (S.D.N.Y. Sept. 20, 2016), appeal docketed, 16‐3560 (2d

Cir. 2016); Bank of N.Y. Mellon v. WMC Mortg., LLC, 151 A.D.3d 72 (1st Dep’t 2017); U.S.

Bank Nat’l Ass’n v. GreenPoint Mortg. Funding, Inc., 147 A.D.3d 79 (1st Dep’t 2016).  
17

law.” Appellant Br. 19. Flagstar did just that, but U.S. Bank’s prediction of

vindication proved wrong. Under Flagstar, an express accrual clause cannot

operate to delay the commencement of a limitations period under New York law,

regardless of the parties’ sophistication or clearly expressed intentions. See

Flagstar, 32 N.Y.3d at 139. In other words, Flagstar clarified the sole issue that U.S.

Bank asked us to resolve: namely, whether sophisticated parties could create a

substantive condition precedent by including an express accrual clause that would

delay the running of the statute of limitations. See id. The New York Court of

Appeals answered that question in the negative. The rules from ACE and Deutsche

Bank therefore govern U.S. Bank’s contractual claims here.  

I.   Causes of Action One and Two: Breach of Contract

The statute of limitations on a breach of contract claim in New York is six

years, and this period begins to run when a breach occurs. See N.Y. C.P.L.R.

§§ 203(a), 213(2); Deutsche Bank, 810 F.3d at 865 (citing Ely‐Cruikshank Co. v. Bank of

Montreal, 81 N.Y.2d 399, 402 (1993)). As we explained in Deutsche Bank on facts

indistinguishable from those now before us, “the statute of limitations began to
18

run on the date the R & Ws became effective and were either true or false at that

time.” 810 F.3d at 867.  

The undisputed facts are that the effective dates of the R & Ws were May 15,

2006 (GP2); June 15, 2006 (GP3);13 and July 17, 2006 (GP4). The FHFA filed in state

court on May 30, 2012 (GP2); June 29, 2012 (GP3); and July 30, 2012 (GP4). As the

district court correctly concluded, “[e]ach of these actions was filed over six years

after the statute of limitations on the breach of contract actions began running.”

Lehman XS Tr., 12 Civ. 7935, 12 Civ. 7942, & 12 Civ. 7943, 2017 WL 1293773, at *7.

The first two causes of action were therefore untimely under settled New York

law. The district court properly granted summary judgment to GreenPoint.  

II.   Cause of Action Three: Indemnification Under Section 9 of the MLPAs

When an aggrieved party recovers not from a wrongdoer but from a third

party, the third party’s subsequent claim against the wrongdoer becomes one for

 

13 The district court’s reasoned opinion includes a scrivener’s error in its recitation of the

effective dates of the R & Ws. See Lehman XS Tr., 12 Civ. 7935, 12 Civ. 7942, & 12 Civ. 7943,

2017 WL 1293773, at *7 (indicating that the last sale date for the GP3 Trust was “June 15,

2008”). It is clear, however, from the rest of the opinion, the complaint, the parties’

submissions to the district court, and the parties’ papers on appeal that the final date of

sale for loans in the GP3 Trust was June 15, 2006.  
19

indemnification. See Oscar Gruss & Son, Inc. v. Hollander, 337 F.3d 186, 200 (2d Cir.

2003) (applying New York law) (quoting Hooper Assocs., Ltd. v. AGS Computs., Inc.,

74 N.Y.2d 487, 492–93 (1989)); see also Mas v. Two Bridges Assocs., 75 N.Y.2d 680, 690

(1990) (indemnification arises when “a party held legally liable to plaintiff shifts

the entire loss to another”).  

Thus, under New York law, absent “unmistakably clear” language in an

indemnification provision that demonstrates that the parties intended the clause

to cover first‐party claims, an agreement between two parties “to indemnify” each

other does not mean that one party’s failure to perform gives rise to a claim for

indemnification. Bridgestone/Firestone, Inc. v. Recovery Credit Servs., Inc., 98 F.3d 13,

21 (2d Cir. 1996); see also BNP Paribas Mortg. Corp. v. Bank of Am., N.A., 778 F. Supp.

2d 375, 415 (S.D.N.Y. 2011) (“Unless the indemnification clause refers exclusively

or unequivocally to claims between the indemnitor and indemnitee, the court

must find the agreement to be lacking evidence of the required intent to cover such

claims.” (internal quotation marks omitted)). Consequently, absent such language,

“[w]here parties agree to ‘indemnify’ each other for losses incurred by a breach of

contract, where those lo[s]ses do not relate to liability to a third party, the
20

characterization of ‘indemnification’ is no more than an epithet for recovery for

breach of contract.” Xerox State & Local Sols., Inc. v. Xchanging Sols. (USA), Inc., 216

F. Supp. 3d 355, 364 (S.D.N.Y. 2016). Put simply, “[a]n action does not become

[one] for indemnity merely because the pleader has so denominated it.” Peoples’

Democratic Rep. of Yemen v. Goodpasture, Inc., 782 F.2d 346, 350 (2d Cir. 1986)

(quoting Bunker v. Bunker, 80 A.D.2d 817, 817 (1st Dep’t 1981)) (internal quotation

marks omitted).  

Here, the distinction between a claim for breach of contract and one for

indemnification is relevant in determining the timeliness of U.S. Bank’s third

claim. Under New York law, a cause of action for contractual indemnification

“does not arise until liability is incurred by way of actual payment” to a third

party. Varo, Inc. v. Alvis PLC, 261 A.D.2d 262, 265 (1st Dep’t 1999) (internal

quotation marks omitted); see also McDermott v. City of New York, 50 N.Y.2d 211,

216 (1980). Therefore, if U.S. Bank is correct that it has a cause of action for

indemnification, the third claim in the SACC was timely. If, however, U.S. Bank’s

indemnification claim is merely a reformulation of its breach‐of‐contract claims,
21

the third cause of action was untimely for the same reasons as the first two causes

of action.  

According to U.S. Bank, GreenPoint should pay for breaching the promises

it made in the MLPAs concerning the quality of the mortgages it sold. This claim,

U.S. Bank insists, is not the same as its breach of contract claims because “the

parties here bargained for two separate remedies contained in two separate

sections of the MLPAs.” Appellant Br. 28. U.S. Bank contends the third claim is

“independent” because the indemnification provisions found in Section 9 of the

MLPAs allow it to “pursue any and all remedies otherwise available at law or in

equity, including, but not limited to, the right to seek damages,” J.A. 168, 270, in

addition to the repurchase provision found in Section 8. As counsel explained at

oral argument, U.S. Bank is seeking “damages that relate to the

misrepresentations, so that unlike the initial claim[s], there’s an additional element

of proof that has to be established.” Oral Arg. at 2:10–3:30.

Had U.S. Bank paid a certificate holder for harms to the certificate holder

stemming from GreenPoint’s breach, its claim against Greenpoint would be for

indemnity. But the claim here seeks payment to U.S. Bank arising from
22

GreenPoint’s violations of the R & Ws that it made to U.S. Bank as Trustee. It is a

breach of contract claim, plain and simple.

We reach this conclusion for two reasons. First, Section 9 of the MLPAs does

not “unequivocally” or in “unmistakably clear” language extend to first‐party

claims. See J.A. at 167–68, 270 (“[GreenPoint] agrees to indemnify [U.S. Bank] and

hold it harmless from and against any and all claims, losses, damages, penalties,

fines, forfeitures, legal fees and related costs, judgments, and any other costs, fees

and expenses that [U.S. Bank] may sustain . . . [and GreenPoint] shall immediately

notify [U.S. Bank] if a claim is made by a third party with respect to this Agreement

or the Mortgage Loans.”). In the absence of such language, the provision must be

read to contemplate an actual indemnification scenario, in which U.S. Bank would

be entitled to repayment if it paid out costs to a third party. U.S. Bank does not

allege that to date it has paid on claims to third parties directly tied to GreenPoint’s

breaches of its  R & Ws.  

Second, the allegations in the SACC belie the argument that U.S. Bank is

seeking to recover something different under its indemnification claim than what

it seeks under the breach of contract claims. See J.A. at 1148–50, ¶ 99 (“To date, the
23

Trusts have sustained approximately $1.1 billion in aggregate collateral‐level

losses and damages as a result of GreenPoint’s breaches of its R & Ws and failure to

repurchase breaching Mortgage Loans.” (emphasis added)). The argument that

Section 9 provides an “independent” remedy is, therefore, meritless: the

indemnification claim cannot be “independent” if its success directly depends on

the breaches of the R & Ws in the MLPAs outlined in the contract claims. As the

New York Court of Appeals explained in ACE, even if two sections of the contract

provide alternative remedies for the same breach, “the underlying act the Trust

complains of is the same: the quality of the loans and their conformity with the

[R & Ws].” 25 N.Y.3d at 596.

Thus, U.S. Bank’s “indemnification” claim is in reality a repackaged version

of its breach of contract claims. See Goodpasture, 782 F.2d at 350. There is no

“indemnified” party who covered a loss that should have been paid by a third‐

party obligor. There is thus no “independent” claim for indemnification. U.S. Bank

cannot circumvent the statute of limitations by recasting its contract claim as one
24

for indemnification. The district court properly dismissed the third claim as

untimely.14

III.   Cause of Action Four: Breach of the Indemnification Agreements

In its fourth claim, raised for the first time in the SACC filed on March 3,

2016, U.S. Bank alleges breaches of the Indemnification Agreements. These three

agreements (separate and distinct from the indemnification clauses in the MLPAs)

are documents the parties signed immediately before they closed on the MLPAs.

In them, GreenPoint independently represented that it had complied with the

R & Ws it made in the MLPAs. All three agreements contain the same statement:

“GreenPoint hereby represents and warrants, as of the date of the Prospectus

Supplement, that the GreenPoint Information is true and correct in all material

 

14 GreenPoint also argues that this claim should be dismissed under Federal Rule of Civil

Procedure 12(b)(1) because the FHFA did not have standing to file the summonses with

notice in the first instance. U.S. Bank may not, GreenPoint argues, be substituted as the

real party in interest under Federal Rule of Civil Procedure 17(a) because there was no

“honest mistake” in the initial naming of the plaintiff. In a letter brief it submitted to this

Court pursuant to Federal Rule of Appellate Procedure 28(j), U.S. Bank directs our

attention to a recent opinion from this Court holding that “a plaintiff’s honest mistake is

not a precondition for granting a Rule 17(a)(3) motion.” Klein ex rel. Qlik Techs., Inc. v. Qlik

Techs., Inc., 906 F.3d 215, 227 (2d Cir. 2018). Because we agree with the district court that

U.S. Bank’s claim was untimely on a different basis, we decline to address this argument.   
25

respects and includes all ‘Seller Information’ as defined in the [MLPAs].” J.A. 1063

(GP2), 1072 (GP3), 1081 (GP4).  

According to U.S. Bank, under Federal Rule of Civil Procedure 15(c), its

claim for breach of the Indemnification Agreements relates back to the filing dates

of the state court summonses with notice, therefore rendering the claim timely, at

least as to the GP2 and GP4 Trusts.15 We disagree.  

Rule 15(c) provides that an amendment to a pleading “relates back to the

date of the original pleading” where, as relevant here, “the amendment asserts a

claim or defense that arose out of the conduct, transaction, or occurrence set out—

or attempted to be set out—in the original pleading.” Fed. R. Civ. P. 15(c)(1)(B).

 

15 The FHFA filed its summons with notice for the GP2 Trust on May 30, 2012, exactly six

years after May 30, 2006, the date that the GP2 Indemnification Agreement was executed.

Therefore, if U.S. Bank’s claim were to relate back to this date, it would be timely.

Similarly, the GP4 Indemnification Agreement was executed on July 28, 2006, and six

years from that date was July 28, 2012, a Saturday. The time to file therefore fell on “the

next succeeding business day”—Monday, July 30, 2012. See N.Y. Gen. Constr. § 25‐a(1);

Fed. R. Civ. P. 6(a)(1). This is precisely the day that the FHFA filed its summons with

notice, and, consequently, if U.S. Bank’s claim were to relate back to this date, it would

be timely as well. U.S. Bank’s claim as to the GP3 Trust, however, is untimely even under

its “relation‐back” theory, because the GP3 Indemnification Agreement was executed on

June 28, 2006, and the FHFA filed its summons with notice on June 29, 2012, one day after

the statute of limitations had run.   
26

The purpose of Rule 15(c)’s relation‐back provision is “to balance the interests of

the defendant protected by the statute of limitations with the preference expressed

in the Federal Rules of Civil Procedure in general, and Rule 15 in particular, for

resolving disputes on their merits.” Krupski v. Costa Crociere S. p. A., 560 U.S. 538,

550 (2010). “[T]he central inquiry is whether adequate notice of the matters raised

in the amended pleading has been given to the opposing party within the statute

of limitations by the general fact situation alleged in the original pleading.” Slayton

v. Am. Express Co., 460 F.3d 215, 228 (2d Cir. 2006) (internal quotation marks

omitted).

Thus, “even where an amended complaint tracks the legal theory of the first

complaint, claims that are based on an entirely distinct set of factual allegations

will not relate back.” Id. (internal quotation marks omitted). This includes claims

that are based on different contracts.16  

 

16 See, e.g., 6A Charles Alan Wright & Arthur R. Miller, Federal Practice & Procedure

§ 1497 (3d ed. 2018) (“[A]mendments alleging . . . the breach of an independent

contract . . . may be subject to the defense of statute of limitations because of a failure to

meet the transaction standard.”); see also Morgan Distrib. Co. v. Unidynamic Corp., 868 F.2d

992, 994 (8th Cir. 1989); In re Rationis Enters., Inc. of Panama, 45 F. Supp. 2d 365, 367

(S.D.N.Y. 1999).
27

The SACC’s allegations of breaches of the GP2 and GP4 Indemnification

Agreements do not relate back to the filing date of the FHFA’s original pleading

in New York Supreme Court. The original summonses with notice involved

actions for breach of contract and declaratory relief (GP2) and breach of contract,

declaratory relief, specific performance, and indemnification (GP3 and GP4) under

the provisions of the MLPAs. J.A. 23 (GP2), 38 (GP3), 53 (GP4). The focus of the

summonses was GreenPoint’s contractual obligation “to cure or repurchase from

the Trust[s] those mortgage loans where R & Ws have been breached.” Id. 24, 39,

54. The summonses, in other words, contained no mention of the Indemnification

Agreements, and sought recovery only for breaches of the R & Ws in the MLPAs,

which governed the initial sale of the mortgage loans from GreenPoint to Lehman.

Although the underlying R & Ws in the MLPAs and the Indemnification

Agreements employ the same terms, we cannot conclude that GreenPoint was on

notice when the FHFA filed the original complaint that the litigation would also

involve the Indemnification Agreements. Indeed, the FHFA had no reason to

include any claims related to the Indemnification Agreements, in which it had no

interest and to which it was never a signatory. Those documents were intended to
28

outline the scope of GreenPoint’s obligation to indemnify Lehman and its

successors for claims brought against Lehman by third parties—not to protect

certificate holders (like the FHFA) from the sale of unsound securitized mortgage

loans.  

Simply put, the original complaint and the SACC invoke separate contracts;

the signatories to the Indemnification Agreements and the MLPAs are different;

and the nature of the claims and the remedies they seek are not the same. See

ASARCO LLC v. Goodwin, 756 F.3d 191, 202–03 (2d Cir. 2014); 6A Charles Alan

Wright & Arthur R. Miller, Federal Practice & Procedure § 1497 (3d ed. 2018)

(collecting cases); see also Lehman XS Tr., 12 Civ. 7935, 12 Civ. 7942, & 12 Civ. 7943,

2017 WL 1293773, at *9 (“[I]t cannot be said that based on the facts alleged in the

original pleading, GreenPoint was given adequate notice that Plaintiff would

bring claims pursuant to the Indemnification Agreements.”). The fourth cause of

action does not relate back to the original filing for claims based on any of the

Trusts, and that cause of action was therefore untimely asserted.
29

CONCLUSION

The district court properly dismissed U.S. Bank’s claims as untimely. For the

foregoing reasons, the judgment of the district court granting GreenPoint’s

motions for summary judgment and to dismiss is AFFIRMED.