The Tribunal concludes that the language of the C30 Pro Supp and all the information it has provided to C30 Trust investors do not wave the needle in favour of both parties` interpretation of the C30 PSA. The fact that the C30 Pro Supp refers to certain forms of service allowance as “primary compensation” does not mean that the special services provider would never be entitled to penalty interest. Indeed, each specially booked loan will give a special feast of service, liquidation fee and training fee (provided one of these events occur), whereas in the history of CMBS 1.0, only 247 REO loans have led to the payment of punitive interest to the special services provider. For the vast majority of loans specially served, the “main compensation” for the special services provider will therefore clearly be these other costs. The fact that the C30 Pro Supp reveals that the special services provider may, in some cases, be entitled to penalty interest does not in itself mean that CWC is clearly entitled to such compensation. The C30 Pro Supp proof is neutral. See also In re Prudential Lines Inc., 158 F.3d 65, 79 (2d Cir. 1998) (“[A]lthough the [non-party] Claimants attempt to introduce their interpretation as one plausible reading of the policy, this cannot be said to be the expectation or intention of the contract parties…. [A] Although the language of the contract is less clear, it was informed by the behaviour of the signatories that reflects an agreement inconsistent with the position demanded in this case by non-treaty applicants.” Royal Park v. Deutsche Bank, No. 14 Civ. 4394 (AJN) (BCM), 2016 WL 4613390, around 12 n.11 (S.D.N.Y.
31.08.2016) (“The historical opinion of a foreigner (even if the non-interested becomes a third party) cannot change the terms of the contract or assist the Court in interpreting.” MBL Contracting v. King World, 98 F. Supp. 2d 492, 497 (S.D.N.Y. 2000) (since two contracting parties have a common understanding of what is meant by agreement, the understanding of a third party beneficiary of this agreement does not control its importance); AQ Asset Mgmt. v. Levine, 974 N.Y.S.2d 332, 340 (1st Dep`t 2013) (In a summary judgment: “In fact, [the complainants] are trying to impose their own interpretation of an agreement in which they did not participate…. Allowing the dissolution of the merger would ignore the clear language of the OSG and the idea that the parties are free to enter into contracts as they wish and that the courts should apply those contracts in written form”).
Discovery also showed that C-III has royalty-sharing agreements with other service providers that explicitly provide for the allocation of expected penalty interest on reO sales – which Appaloosa says has never happened. (See Casse Decl., 423-428; 430; CWC 56.1 C101). Appaloosa`s own expert, Andrew Berman, who worked for a (non-serviceer) partner of C-III, testified that C-III received (and received) penalties as charges; (ii) have entered into royalty allocation agreements in which penalty interest has been awarded; and (iii) when the C-III RLRs, which reflected the imposition of penalties on ERR sales, refused to say that C-III had acted improperly. (Casse Decl., e.g. 13-37, 38-39, 131-59). Regardless of this, Appaloosa asserts that Carleton, after filing its documents in this case, stated that C-III agreed with Appaloosa`s interpretation of C30 PSA because it was consistent with the understanding and practice of C-III.