On September 23, Justice Charles E. Ramos of New York State Supreme Court granted in part defendant Bank of America NA’s motion to dismiss a suit brought by monoline insurer CIFG Assurance North America Inc. CIFG claims $170 million in damages in connection with its insurance of two re-REMIC RMBS transactions. The court dismissed CIFG’s fraudulent inducement claim for insufficient particularity, finding CIFG’s allegations were not tailored to the RMBS at issue. The court also dismissed CIFG’s negligent misrepresentation claim based on the arm’s-length relationship between the parties, its claim for rescission or rescissory damages because it had continued to accept insurance premiums, and its contractual indemnity claim. The court allowed CIFG’s breach of contract claim to proceed, but dismissed its breach of the covenant of good faith and fair dealing claim as duplicative. Decision.
CIFG Assurance North America Inc.
RMBS Insurer Sues Goldman in New York State Court
CIFG Assurance North America Inc. (“CIFG”) filed suit in New York Supreme Court against Goldman Sachs and affiliated entities, and M&T Bank, the originator of the majority of the loans that backed approximately $277 million of RMBS insured by CIFG. CIFG asserts claims for fraudulent inducements and breach of contracts, alleging that Goldman misrepresented or omitted important details concerning the mortgages, including Goldman’s alleged plan to offload its own exposure of these RMBS to the investors. In addition to seeking damages, CIFG has demanded that Goldman and M&T cure or repurchase the allegedly defective loans. Complaint.