Court Grants, in Large Part, Bank of America’s Motion to Dismiss Suit by CIFG

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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.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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