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CIFG Assurance North America, Inc. v. Goldman, Sachs & Co – Case Brief Summary (New York)

In CIFG Assurance North America, Inc. v. Goldman, Sachs & Co. (106 AD3d 437, 966 N.Y.S.2d 369 [1st Dept 2013] [CIFG]), the Appellate Division addressed the sufficiency of a monoline insurer's pleading of justifiable reliance in the RMBS context, holding that the insurer "was not required, as a matter of law, to audit or sample the underlying loan files." (Id., at 438.)

The Court found "a question of fact as to whether plaintiff insurer reasonably relied on defendants' representations," where "plaintiff conducted its own due diligence, utilizing an outside consultant to analyze the characteristics of the underlying loans," and "the characteristics analyzed by plaintiff's consultant were the subject of written warranties that were not demonstrably known by plaintiff to be false when made." (Id., at 437-438.)