12-0083-cv
Fin. Sec. Assurance Inc. v. Bakal

                  UNITED STATES COURT OF APPEALS
                      FOR THE SECOND CIRCUIT

                              SUMMARY ORDER
RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY
ORDER FILED ON OR AFTER JANUARY 1, 2007 IS PERMITTED AND IS GOVERNED BY FEDERAL
RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN
CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE
EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION
"SUMMARY ORDER"). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY
PARTY NOT REPRESENTED BY COUNSEL.

          At a stated term of the United States Court of Appeals
for the Second Circuit, held at the Daniel Patrick Moynihan
United States Courthouse, 500 Pearl Street, in the City of New
York, on the 5th day of December, two thousand twelve.

PRESENT:    DENNY CHIN,
            CHRISTOPHER F. DRONEY,
                 Circuit Judges,
            JOHN GLEESON,
                 District Judge.*

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WELLS FARGO BANK, N.A., solely in its
capacity as Trust Administrator,
               Interpleader-Plaintiff-
               Appellee,
                  -v.-                                12-0083-cv
FINANCIAL SECURITY ASSURANCE INC., AKA
ASSURED GUARANTY MUNICIPAL CORP.,
               Interpleader-Defendant-
               Cross-Defendant-Appellant,
               -v.-
CEDE & CO., as registered Holder of
certain Certificates and nominee name of
the Depositary Trust Company,
               Interpleaders-Defendants-
               Appellees,

ALEXANDER BAKAL, DAVID VISHER, ESM
MANAGEMENT LLC, ESM FUND I, LP, COMPASS
SAV LLC, COMPASS OFFSHORE SAV PCC LTD.,

      *
          The Honorable John Gleeson, of the United States
District Court for the Eastern District of New York, sitting by
designation.
JEAN DAVID ITTAH,
               Interpleaders-Defendants-
               Cross-Claimants-
               Appellees,

ESM INVESTORS LTD., ORION PARTNERS LLC,
DOES, 1-100, beneficial owner of certain
Certificates,
               Interpleaders-
               Defendants.**
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FOR INTERPLEADER-DEFENDANT-   ADAM M. ABENSOHN (Philippe Z.
CROSS-DEFENDANT-APPELLANT:    Selendy, Sanford I. Weisburst on
                              the brief), Quinn Emanuel Urquhart
                              & Sullivan, LLP, New York, New
                              York.
FOR INTERPLEADERS-DEFENDANTS- LAURA E. KRABILL (M. Norman
CROSS CLAIMANTS-APPELLEES:    Goldberger on the brief), Ballard
                              Spahr, LLP, Philadelphia,
                              Pennsylvania, Jarett M. Behar,
                              Sinnreich Kosakoff & Messina LLP,
                              Central Islip, New York, Alexander
                              Bakal, pro se, New York, New York,
                              David Visher, pro se, Malibu,
                              California.

          Appeal from the United States District Court for the

Southern District of New York (Sand, J.).
          UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED,

AND DECREED that the order of the district court is AFFIRMED.

          Interpleader-defendant-cross-defendant-appellant

Financial Security Assurance Inc., AKA Assured Guaranty Municipal

Corp. ("Assured"), appeals from the district court's order

entered December 13, 2011, implementing its memorandum and order

entered March 29, 2011, granting judgment on the pleadings in




     **
          The Clerk of Court is directed to amend the official
caption to conform with the above.

                               -2-
favor of the interpleaders-defendants-cross-claimants-appellees

and against Assured.

            On appeal, Assured principally challenges the district

court's interpretation of Section 4.02(a)(3) of the Pooling and

Servicing Agreement ("PSA"), i.e., the district court's holding

that Assured is entitled only to distribution of funds related to

its subrogation rights in the certificates it insures, as opposed

to reimbursement of all amounts it paid under the Financial

Guaranty Insurance Policy (the "Insurance Policy").    We assume

the parties' familiarity with the underlying facts, the

procedural history of the case, and the issues on appeal.

            We review de novo the district court's grant of
judgment on the pleadings, Desiano v. Warner-Lambert & Co., 467

F.3d 85, 89 (2d Cir. 2006), and the district court's

interpretation of a contract.    Fishoff v. Coty Inc., 634 F.3d

647, 652 (2d Cir. 2011).

            As an initial matter, we reject Assured's argument that

the district court erred in considering, in interpreting the PSA,

the Prospectus Supplement and other transaction documents related

to the PSA.   Under New York law, which governs the PSA, the

district court properly considered all writings forming part of a

single transaction, see This Is Me, Inc. v. Taylor, 157 F.3d 139,

143 (2d Cir. 1998), as Assured itself asked the district court to

do below.

            We agree with the district court's conclusion that the

PSA unambiguously entitles Assured only to the distribution of

funds related to its subrogation rights in the certificates it

                                 -3-
insures, rather than to reimbursement of all amounts it paid

under the Insurance Policy.

           Section 4.02(a)(3) of the PSA provides that Assured

will receive distribution "up to the Aggregate Certificate

Insurer Reimbursement ['CIR'] Amount" as the third step in the

order of distribution described in Section 4.02.    The Aggregate

CIR Amount, in turn, is defined by Section 1.01 of the PSA as

"the sum of the Class 1-A-3 [CIR] Amount, the Class 2-A-3 [CIR]

Amount and the Class 4-A-2 [CIR] Amount."     The CIR Amount of each

of those three certificate classes is "any amount owing to

[Assured] under Section 4.02 or 4.07 for reimbursement, with

interest, for claims paid . . . under the . . . Insurance Policy

. . . ."   Under the Insurance Policy, Assured "shall be

subrogated to the rights of each [certificate holder] to receive

distributions with respect to each Certificate held by such

Holder."   Thus, these contract provisions by their plain meaning

provide Assured only with subrogation rights in the certificates

it insures.

           We find unpersuasive Assured's argument that it is

entitled to reimbursement of any and all claims it paid out under

the Insurance Policy as such an interpretation is not supported

by the plain language of the PSA, and moreover, it would render

meaningless several other provisions of the PSA, as the district

court observed in its memorandum and order.    See RJE Corp. v.
Northville Indus. Corp., 329 F.3d 310, 314 (2d Cir. 2003) (per

curiam) (under New York law, courts "consider the entire contract

to safeguard against adopting an interpretation that would render

                                -4-
any individual provision superfluous" (citation and internal

quotation marks omitted)).

          We have considered all of Assured's remaining arguments

and find them to be without merit.    Accordingly, we AFFIRM the

order of the district court.

                               FOR THE COURT:
                               Catherine O'Hagan Wolfe, Clerk




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