Phoenix Light SF Ltd. v. Credit Suisse AG — 144 A.D.3d 537

Majority

p. 537

Phoenix Light SF Limited et al., Appellants, v Credit Suisse AG et al., Respondents. Phoenix Light SF Limited et al., Appellants, v Morgan Stanley et al., Respondents.

[40 NYS3d 774]—

Judgment, Supreme Court, New York County (Charles E. Ramos, J.), entered May 6, 2015, in index No. 653123/13, to the extent appealed from as limited by the briefs, dismissing the common-law fraud, fraudulent inducement, and aiding and abetting fraud claims, unanimously reversed, on the law, with costs, and those claims reinstated. Appeal from order, same court and Justice, entered on or about April 23, 2015, to the extent it granted defendants’ CPLR 3211 (a) (7) motion to dismiss the aforesaid claims, unanimously dismissed, without costs, as subsumed in the appeal from the judgment. Order, same court and Justice, entered on or about April 23, 2015, in index No. 652986/13, which, to the extent appealed from as limited by the briefs, granted defendants’ CPLR 3211 (a) (7) motion to dismiss the common-law fraud, fraudulent inducement, and aiding and abetting fraud claims, unanimously reversed, on the law, with costs, and the motion denied.

The allegations that with respect to their purchase of

p. 538

residential mortgaged-back securities plaintiffs relied on misrepresentations and omissions made by defendants in the offering documents are sufficient to state the justifiable reliance element of the fraud claims; plaintiffs are not required to allege that they requested from defendants the actual loan files or due diligence reports or that they obtained representations and warranties made directly by defendants about the quality of the loans, as opposed to those made to defendants by other parties with direct access to the relevant information (see IKB Intl. S.A. v Morgan Stanley, 142 AD3d 447 , 449-450 [1st Dept 2016]; Basis Yield Alpha Fund Master v Morgan Stanley, 136 AD3d 136 , 142-143 [1st Dept 2015]; CIFG Assur. N. Am., Inc. v Goldman, Sachs & Co., 106 AD3d 437 [1st Dept 2013]). We find that the remaining elements of the fraud claims are also sufficiently alleged (see IKB Intl., 142 AD3d 447 ; MBIA Ins. Corp. v Countrywide Home Loans, Inc., 87 AD3d 287 , 294-296 [1st Dept 2011]).

We see no basis for reassignment to a different justice.

Concur—Acosta, J.P., Renwick, Moskowitz, Feinman and Kahn, JJ.

Cases cited

IKB International S.A. v. Stanley 142 AD3d 447 N.Y. App. Div. 2016-08-11 at 449-450 p. 538
Basis Yield Alpha Fund Master v. Stanley 136 AD3d 136 N.Y. App. Div. 2015-12-29 at 142-143 p. 538
CIFG Assurance North America, Inc. v. Goldman, Sachs & Co. 106 AD3d 437 N.Y. App. Div. 2013-05-07 p. 538
MBIA Insurance v. Countrywide Home Loans, Inc. 87 AD3d 287 N.Y. App. Div. 2011-06-30 at 294-296 p. 538