On January 11th, the Second Circuit held that a trust holding securitized commercial mortgages did not engage in champerty when it sued the originator of a defaulted mortgage for breaches of various representations and warranties. Defendant asserted the defense of champerty because the trust was assigned the right to sue as part of a settlement with the firm funding the defaulted loan. After the issue was certified to state court, the Second Circuit held that the trial court record did not support a finding of champerty. The trust already had an interest in the loan prior to the assignment, and there was no evidence the trust intended to generate new litigation costs by suing the originator. It is not champerty to acquire indemnification rights for reasonable costs and fees that were incurred in past legal actions. Trust v. Love Funding Corp.