RMBS Plaintiff's Claims Dismissed Because of Failure Properly to Assign Tort Claims

On April 12, 2017, Justice Ramos of the New York County Commercial Division issued a decision in Royal Park Investments SA/NV v. Morgan Stanley, dismissing an RMBS plaintiff's tort claims because they had not been properly assigned to it, explaining:

It is well settled in New York, that the right to assert a fraud claim related to a contract or note does not automatically transfer with the respective contract or note. There must be some language that evinces an intent to transfer fraud claims.

. . .

Here, it is undisputed that the PTA transfers to RPI all rights, title, and interest in and to the Portfolio Property, which is expressly limited to contractual rights and obligations. RPI has failed to persuade this Court that the plain terms of the RTA are ambiguous. Absent evidence of ambiguous language, this Court need not look beyond the four corners of the PTA to determine the issue of standing.

There is simply no language in the documents evidencing an outward expression of an intent to assign the tort claims at issue. Contrary to RPI's assertions, the above-mentioned language of rights, title, and interest in and to the Portfolio Property reveals no verifiable intention to include tort claims. RPI cannot rely on extrinsic evidence . . . to create an ambiguity in the PTA when none exists. As sophisticated parties represented by counsel that are routinely involved in complex financial transactions, the Court can presume that if they intended to assign non-contractual claims, they would have done so through express language.

(Internal citations omitted).