On May 25, 2023, the First Department issued a decision in SureFire Dividend Capture, LP v. Industrial & Commercial Bank of China Fin. Servs. LLC, 2023 NY Slip Op. 02841, holding that a fraud claim relating to a contract or note can be assigned, but that the agreement transferring the claim must show an intent to transfer the claim, explaining:
Defendant met its burden of establishing that plaintiff lacked standing to bring its fraud-based claims on behalf of nonparties Aalii Fund, LP and Alpha Capital Partners, LC (together, the “A Funds”). While fraud claims in New York are freely assignable, the right to assert a fraud claim related to a contract or note does not automatically transfer with the respective contract or note. Thus, where a plaintiff alleges fraud-based claims as a successor-in-interest under New York law, there must be some language — although no specific words are required — that evinces that intent and effectuates the transfer of such rights.
Here, the one-paragraph subscription agreement provided only for the transfer of the full balance of A Funds’ interest in Broad Reach Capital LP to Sure Fire Dividend Capture SPV5 for the purposes of facilitating an in-kind subscription to the Fund in the amount of its 2/28/19 balance. This plain language was unambiguous and did not evince an intent to assign the fraud-based claims. Rather, the transfer of the amount of its 2/28/19 balance plainly refers to the transfer of the amount invested in the fund, with nothing more. Nor may plaintiff insert extra-contractual allegations of intent into an agreement that is unambiguous on its face.
(Internal quotations and citations omitted).