Syncora Guarantee Inc.’s lawsuit accusing JPMorgan Chase & Co. (JPM) unit Bear Stearns & Co. of making false and misleading statements connected with a mortgage-backed securities transaction was dismissed on appeal.
The bond insurer sued JPMorgan Securities LLC, formerly Bear Stearns, in New York state Supreme Court in Manhattan in June 2011 over the transaction, known as GreenPoint Mortgage Funding Trust 2007-HE1.
JPMorgan moved to dismiss the complaint, saying that Syncora had already tried to litigate the claims in U.S. District Court. Justice Charles Ramos in May 2012 denied the motion, saying the state-law claims in the suit aren’t in the jurisdiction of the federal court.
An appeals court in Manhattan today reversed Ramos’s ruling and dismissed the suit, saying Bermuda-based Syncora is bound by its decision to first file the claims in federal court.
“Here, both actions arise out of the same transaction, involve the same allegations concerning Bear Stearns’s and EMC’s concerted actions in the ’mortgage-loan-securitization chain’ and seek the same recovery for the same alleged injuries -- that is, recovery of ’claims payments made and to be made’ under the policy,” Justice Karla Moskowitz wrote. EMC Mortgage was a Bear Stearns unit.
A JPMorgan spokeswoman, Jennifer Zuccarelli, and Michael Corbally, a Syncora spokesman, didn’t immediately reply to e-mails seeking comment on the appeals court ruling.
The case is Syncora Guarantee Inc. v. JPMorgan Securities LLC, 651566/2011, New York state Supreme Court (Manhattan).
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