Commercial Division Blog
Posted: January 18, 2016 / Categories Commercial, Contracts, Fraud/Misrepresentation
Agreement Assigning "All Right, Title and Interest" in Bonds Insufficient to Assign Fraud Claims
On January 12, 2016, the First Department issued a decision in Dexia SA/NV v. Stanley, 2016 NY Slip Op. 00122, holding that an assignment of claims was insufficient to assign fraud claims, explaining:
The Court of Appeals recently explained that the right to assert a fraud claim related to a contract or note does not automatically transfer with the respective contract or note. Thus, where an assignment of fraud or other tort claims is intended in conjunction with the conveyance of a contract or note, there must be some language — although no specific words are required — that evinces that intent and effectuates the transfer of such rights. Without a valid assignment, only the assignor may rescind or sue for damages for fraud and deceit because the representations were made to it and it alone had the right to rely on them.
We find that plaintiff FSAM's agreement to deliver "all right, title and interest" in the RMBS to the Dexia plaintiffs did not include fraud claims, since FSAM only assigned rights in the subject securities without explicitly referencing any related tort claims or the overall transaction between FSAM and defendants.
(Internal quotations and citations omitted).