Assured Guaranty filed a brief today in the New York state Supreme Court against a motion to dismiss its case against Credit Suisse.

In October last year, the financial guarantor sued DLJ Mortgage Capital, a Credit Suisse Group unit, over $1.8 billion of MBS it insured.

The plaintiff claimed that DLJ Mortgage Capital failed to abide by its contractual obligations and that it securitized thousands of RMBS and induced investors to buy them and insurers to insure them by claiming the loans met specified standards.

Assured claimed that those representations were false and that it is exposed to hundreds of millions of dollars in current and future claims payments as a result.

In the brief submitted today, Assured said that roughly 93% of the 7,918 mortgage loans that it reviewed, breached one or more of DLJ’s representations concerning credit quality and other key features.

Credit Suisse is looking to get the case dismissed and claims that Assured is not entitled to rescissory damages. But a recent ruling in the MBIA case against Countrywide may set the bank back a step.

In the ruling a New York Supreme Court judge ruled that an insurer is entitled to rescissory damages, where rescission is unavailable or impractical, for a sponsor’s violation of its contractual warranties.

"That is the exact scenario here," said Assured in the brief.  

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