Financial Services Litigation & Investigations Group
Financial Services Litigation & Investigations Group
In the face of turmoil and uncertainty, the world's major financial institutions continue to choose our team to help them manage their business, litigation and reputational risks and thrive in the new economic and regulatory climate. To our clients we are much more than litigators - we are business partners who have a stake in their success.
OneWest Bank Wins Reversal in Mortgage Case
On November 16, Paul, Weiss achieved a victory in the Appellate Division, Second Department for our client OneWest Bank, FSB, successfully obtaining a reversal of a decision issued by Justice Jeffrey A. Spinner of the New York Supreme Court, Suffolk County.
In a widely publicized decision last year, Justice Spinner took the unprecedented step of voiding and cancelling a borrower's mortgage and note (thus entirely eliminating the borrower's debt repayment obligations), as well as vacating a previously entered judgment of foreclosure and sale, based on his view that the bank had not participated in good faith in settlement conferences held following the foreclosure judgment. Justice Spinner said he based his decision on equitable principles.
Paul, Weiss successfully argued that no such basis existed for the unprecedented relief awarded, and that reversal was warranted based on multiple legal grounds. In its unanimous opinion, the Second Department reasoned that the "severe sanction...was not authorized by any statute or rule...nor was the plaintiff given fair warning that such a sanction was even under consideration." The Second Department reinstated the judgment of foreclosure and sale, the mortgage and the note.
The Paul, Weiss team was composed of litigation partners Brad S. Karp, Allan J. Arffa (who argued the appeal) and Robyn F. Tarnofsky.