Ambac Assurance Corporation v. US Bank National Association
- Paul Engelmayer
- 1:17-cv-02614
- U.S. District Court · Southern District of New York
- 5
In Ambac v. U.S. Bank, Judge Engelmayer denied Barbara Stephens’s motion to intervene because her claims involved different trusts.
Barbara Stephens’s request to participate in Ambac Assurance Corporation’s lawsuit against U.S. Bank National Association was denied; the existing parties’ lawsuit continued without her intervention.
What happened
In Ambac Assurance Corporation v. U.S. Bank National Association, Barbara Stephens, representing herself, asked to join a lawsuit involving alleged duties owed by U.S. Bank as trustee. She said her claims concerned two properties connected to different mortgage trusts and sought money related to borrower defaults.
The court said Ambac’s lawsuit concerned five trusts that were not the trusts connected to Stephens’s claims. The court found that Stephens had not shown that her interests were connected to this case or that a decision here would harm her claims.
Judge Paul A. Engelmayer denied both intervention as of right and permissive intervention. The court directed the clerk to close the motion and did not address Stephens’s arguments about Ambac’s responses to her discovery requests.
The detailed version
- Ambac Assurance Corporation v. US Bank National Association · No. 1:17-cv-02614
- Paul Engelmayer
- May 4, 2023
Background
Barbara Stephens, proceeding without a lawyer, moved to intervene in Ambac Assurance Corporation’s lawsuit against U.S. Bank National Association. U.S. Bank did not respond to the motion. Stephens’s motion concerned two parcels of land: one she said was secured by the Harborview Mortgage Loan Trust 2005-10 and another that was lost through foreclosure to Deutsche Bank as trustee of the Harborview Mortgage Loan Trust 2006-BU1. She argued that Ambac’s claims covered the mortgages for those properties and sought recovery of money for borrower defaults allegedly caused by U.S. Bank. She also referred to a contempt motion she had filed against Ambac in a Florida state court concerning a subpoena related to the properties.
Ambac opposed intervention. Among other arguments, Ambac asserted that Stephens had not shown connections to the trusts involved in this case, that Ambac generally did not insure individual mortgages, and that Ambac did not insure Stephens’s mortgage. Ambac also submitted earlier email correspondence in which its counsel explained that this litigation did not concern Stephens’s claims.
Legal standards
Federal Rule of Civil Procedure 24(a)(2) governs intervention as of right. The court explained that an applicant must satisfy four requirements: the motion must be timely; the applicant must claim an interest related to the property or transaction involved in the lawsuit; resolving the lawsuit may practically impair that interest; and existing parties must not adequately protect the interest.
Rule 24(b) governs permissive intervention. It allows a court to permit intervention when the proposed intervenor has a claim or defense sharing a common legal or factual question with the main action, provided intervention would not cause undue delay or prejudice to the original parties.
Court’s analysis
The court assumed, without deciding, that Stephens’s motion was timely and that she asserted legally protectable interests. It held that the lawsuit concerned U.S. Bank’s alleged contractual and fiduciary duties as trustee to five different trusts: Harborview Mortgage Loan Trusts 2005-2, 2005-8, 2005-12, 2005-13, and 2005-16. Ambac insured certain classes of securities within those trusts.
The court found that Stephens’s claims concerned Harborview Mortgage Loan Trust 2005-10 and Harborview Mortgage Loan Trust 2006-BU1, which were separate trusts not involved in the litigation. Stephens therefore had not shown that her interests sufficiently related to the property or transaction at issue, as required for intervention as of right. She also had not shown that an adverse decision concerning the five trusts in Ambac’s lawsuit would compromise her claims concerning the separate trusts.
For the same reasons, the court held that Stephens’s claims did not share a common question of law or fact with the main action. The court therefore denied permissive intervention as well. Because it resolved the motion on the lack of a sufficient connection to the case, it did not consider Stephens’s arguments about Ambac’s responsiveness to her discovery requests.
Disposition
Judge Paul A. Engelmayer denied Stephens’s motion to intervene, including intervention as of right and permissive intervention. The court directed the clerk to close the motion pending at docket 302.
Read the full 5-page opinion on CourtListener, the free public archive maintained by the Free Law Project.