ORIX Capital Markets v. GMAC Commercial Mortgage Corp.
Filed 1/22/07 ORIX Capital Markets v. GMAC Commercial Mortgage Corp. CA2/7
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 977(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 977(b). This opinion has not been certified for publication or ordered published for purposes of rule 977.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION SEVEN
ORIX CAPITAL MARKETS, Plaintiff and Appellant, v. GMAC COMMERCIAL MORTGAGE CORPORATION, Defendant and Respondent. | B184519 (Los Angeles County Super. Ct. No. BC296034) |
APPEAL from a judgment of the Superior Court of Los Angeles County, Joanne O'Donnell, Judge. Affirmed in part, reversed in part and remanded.
Pircher, Nichols & Meeks, James L. Goldman and I. Bruce Speiser for Plaintiff and Appellant.
Quinn Emanuel Urquhart Oliver & Hedges, Richard A. Schirtzer, Johanna Y. Ong and Eugene T. Chen for Defendant and Respondent.
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ORIX Capital Markets, LLC (ORIX) appeals from the judgment entered in favor of GMAC Commercial Mortgage Corporation (GMACCM) after a bifurcated court trial limited to the issue of ORIX's standing to pursue its breach of contract action against GMACCM. We affirm in part, reverse in part and remand.
FACTUAL AND PROCEDURAL BACKGROUND
1. ORIX's Purchase of Note Pool Certificates
In 2002 ORIX purchased more than $20 million of note pool certificates ‑ ‑ a type of investment also known as asset-backed securities ‑ ‑ reflecting indirect interests in two securitized pools of loans made to convenience stores and gas stations. The note pool certificates had been issued pursuant to a complex series of transactions effectuated through several related agreements, which were all executed contemporaneously.[1] First, commercial lender Enterprise Mortgage Acceptance Company, LLC (EMAC) sold a pool of loans to a trust formed for the purpose of acquiring the loan pool -- the EMAC Owner Trust -- in accordance with the terms of an owner trust agreement.
Second, pursuant to a loan pool pooling and servicing agreement (loan pool PSA), the EMAC Owner Trust transferred the pooled loans to a second trust ‑ ‑ the Loan Pool Grantor Trust ‑ ‑ and LaSalle National Bank (LaSalle) was appointed as the trustee. In exchange for transferring the loans to the Loan Pool Grantor Trust, the EMAC Owner Trust received one class A loan pool certificate representing all the beneficial ownership interests in the pooled loans, except a specified portion of the interest payments on the loans, which was represented by one class X loan pool certificate also issued to the EMAC Owner Trust. The loan pool PSA provided that a servicer was responsible for servicing and administering the underlying loans, including collecting payments and conducting a semi-annual compliance review of each borrower; monitoring the status of insurance policies borrowers were required to maintain; monitoring borrowers' compliance with loan provisions regarding underground petroleum storage tanks and environmental laws; enforcing due-on-sale and due-on-encumbrance clauses in the loans; and making reasonable efforts to foreclose upon or otherwise convert defaulted loans. Although EMAC was the initial loan pool servicer, in May 2001 GMACCM assumed the servicing of the loan pools at LaSalle's request because of a high level of delinquencies and EMAC's inability to fulfill its obligations as servicer.
Third, pursuant to an indenture agreement, the EMAC Owner Trust issued six classes of collateralized notes and transferred the class A loan pool certificate, along with the right to receive distributions owed on it, to an indenture trustee, also LaSalle, as collateral to secure the payment of principal and interest due under the notes.
Fourth, pursuant to a note pool pooling and servicing agreement (note pool PSA), the notes were transferred to LaSalle, this time in its capacity as appointed trustee of a third trust -- the Note Pool Grantor Trust. LaSalle issued note pool certificates corresponding to each class of notes. EMAC was the initial servicer under the note pool PSA (EMAC was subsequently replaced by GMACCM) and was authorized â€
