FEDERALDistrict Court, S.D. New York
2011

Ellington Credit Fund, Ltd. v. Select Portfolio Servicing, Inc.

837 F. Supp. 2d 162District Court, S.D. New York • Decided 2011Voided
FLAGSHIPLien WaiverDispute ResolutionCited 179 times

HOLDING

Hedge funds invested in mortgage-backed securities sued the servicer for mismanagement and breach of contract. The court dismissed most claims because the investors lacked legal standing to sue for problems that occurred before they bought in, and they failed to follow the contract's required dispute procedures before filing suit. This case shows that contract terms controlling who can sue and what steps must be taken first are enforceable and will block lawsuits that skip those steps.

KEY FINDINGS

Lien Waiver

Always follow the exact dispute resolution steps in your contract before suing—skipping required notices or procedures will get your case thrown out

Dispute Resolution

Check whether you have legal standing to sue for the specific harm you're claiming; you may not be able to sue for problems that happened before you became involved

FULL COURT OPINION