On December 14, the Wisconsin Court of Appeals issued a decision in favor of Simpson Thacher client Countrywide Home Loans in The Segregated Account of Ambac Assurance Corp. v. Countrywide Home Loans, Inc., holding that Countrywide was not subject to personal jurisdiction in Wisconsin for Ambac’s claim that it was fraudulently induced to issue financial guaranty insurance policies in numerous RMBS transactions backed by Countrywide-originated loans.
Earlier this year, the Firm successfully petitioned and obtained reversal in the Wisconsin Supreme Court of a Court of Appeals decision holding that registration to transact business in a State constitutes consent to jurisdiction, an issue that has divided courts around the country. On remand to the Court of Appeals, Ambac advanced numerous alternative grounds for jurisdiction, including that Countrywide consented to jurisdiction by appearing in a Wisconsin insurance rehabilitation proceeding that created the plaintiff entity; and that Countrywide was subject to jurisdiction under provisions of Wisconsin’s long-arm statute. In a 17-page decision, the Court of Appeals concluded that Ambac failed to “to come to grips with” Countrywide’s arguments that appearance in an insurance rehabilitation proceeding did not constitute consent to jurisdiction in a separate tort action, and that specific jurisdiction was absent under the long-arm statute. In May 2017, the same team in a separate action concerning 17 residential mortgage-backed securitizations issued by Countrywide obtained reversal in the First Department, Appellate Division of an unfavorable summary judgment decision on multiple breach of contract and fraud issues that have been actively litigated by RMBS issuers for years.
The Simpson Thacher team includes Joe McLaughlin (Picture) (who argued the appeal), Shannon McGovern, Rachel Sparks Bradley, Sarah Sheridan and Rebecca Sussman.
Involved fees earner: Joseph McLaughlin – Simpson Thacher & Bartlett; Shannon McGovern – Simpson Thacher & Bartlett; Rachel Sparks Bradley – Simpson Thacher & Bartlett; Sarah Sheridan – Simpson Thacher & Bartlett; Rebecca Sussman – Simpson Thacher & Bartlett;
Law Firms: Simpson Thacher & Bartlett;
Clients: Countrywide Home Loans, Inc.;