Federal Deposit Insurance Corp. v. W.R. Grace & Co

In Federal Deposit Insurance Corp. v. W.R. Grace & Co. (N.D.Ill. 1988) 691 F.Supp. 87, affirmed in part and reversed in part on other grounds (7th Cir. 1989) 877 F.2d 614, a bank assigned its fraud cause of action to the Federal Deposit Insurance Corporation and the federal district court held the fraud cause of action could be assigned in its entirety, including a claim for punitive damages. Applying Illinois law, the court distinguished prior cases finding no assignability where the claim involved personal injury rather than property damage. According to the court, Illinois, like California, generally distinguishes between nonassignable torts to the person and assignable torts to property. (691 F.Supp. at p. 92.) The court further concluded punitive damages "are a type of relief which is part and parcel of the underlying cause of action and do not constitute an independent basis of recovery." (Ibid.) Thus, when the fraud cause of action was assigned, the corresponding punitive damages claim went with it.