On March 7, 2018, New York Supreme Court Justice Marcy S. Friedman denied a motion by Morgan Stanley ABS Capital I Inc. (“Morgan Stanley”) to dismiss a claim by RMBS Trustee Deutsche Bank National Trust Company (the “Trustee”) for failure to notify the Trustee of alleged breaches of representations and warranties regarding the mortgage loans in an RMBS trust. As a matter of first impression, Justice Friedman ruled that a claim for failure to notify does not accrue until the defendant discovers a breach of representations and warranties and fails to promptly notify the Trustee. She rejected Defendants’ argument that failure to notify claims accrue on the closing date, at the same time as the underlying claim for breach of representation and warranty. The court further held, however, that the Trustee was not harmed by any failure to notify occurring after the contractual repurchase period has ended; in other words, after six years from closing. Justice Friedman also reaffirmed that a Trustee bringing a failure to notify claim ultimately would bear the burden to prove that the failure to notify caused it some form of compensable harm.  [Order]