Opinion ID: 1464318
Heading Depth: 2
Heading Rank: 4

Heading: Certification of Questions to the New York Court of Appeals

Text: On appeal, the Trust argued that New York's champerty law did not apply to this lawsuit because the relevant statute was never intended to prohibit assignments in complex commercial transactions where the assignee has a substantial interest at stake. Appellant's Br. at 26. Recognizing ambiguities in New York law, we certified the following questions to the New York Court of Appeals: 1. Is it sufficient as a matter of law to find that a party accepted a challenged assignment with the primary intent proscribed by New York Judiciary Law § 489(1), or must there be a finding of sole intent? 2. As a matter of law, does a party commit champerty when it buys a lawsuit that it could not otherwise have pursued if its purpose is thereby to collect damages for losses on a debt instrument in which it holds a pre-existing proprietary interest? 3. (a) As a matter of law, does a party commit champerty when, as the holder of a defaulted debt obligation, it acquires the right to pursue a lawsuit against a third party in order to collect more damages through that litigation than it had demanded in settlement from the assignor? (b) Is the answer to question 3(a) affected by the fact that the challenged assignment enabled the assignee to exercise the assignor's indemnification rights for reasonable costs and attorneys' fees? Trust v. Love Funding, 556 F.3d at 114.