Siblings Battle Over Ecuadorian Inheritance
We’ve blogged before about legal translation services for probate matters and will contests. In the case discussed below, the plaintiff sued his siblings and his brother’s investment companies for allegedly engaging in a fraudulent scheme designed to deprive him of his inheritance from their wealthy parents’ estate.
The plaintiff and his brother and sister defendants are each citizens of Ecuador and Germany. The plaintiff and his brother live in Ecuador, which in English means “Republic of the Equator”. Their sister lives in Israel. The siblings’ father, now deceased, built one of the largest commercial groups in Ecuador and had bank accounts all around the world. The father owned numerous companies that were individually owned by himself, his wife, and/or their children.
Court Proceedings in Israel and Ecuador
After their parents died, the siblings initiated legal proceedings in Israel and Ecuador in order to adjudicate their inheritance rights.
An Israeli court decided that the estate was governed by Ecuadorian law, which required the estate to be divided equally among the three siblings. An inventory of the estate was performed in Ecuador in accordance with a probate proceeding, and the court ordered a distribution of the assets in 2017. The court held that her father’s estate included stock holdings valued at approximately $124,000.
Years later, the sister had argued that her parents’ estate included stock holdings belonging to the parent company. The sister was unsuccessful in this approach. The Ecuadorian court held that there was no evidence in the record to support her claims that her father had left 41 companies and had intermingled the stock ownership of the companies so that some companies were controlled by other ones. The siblings’ mother died a number of years after the father, and her estate was similarly inventoried and disbursed in Ecuador.
Plaintiff Files Suit in Delaware State Court
The plaintiff then filed suit in Delaware because his brother allegedly transferred the commercial group’s stock holdings to entities organized in Delaware after wrongfully moving them from Ecuador to the British Virgin Islands. According to the complaint, the stocks were part of the siblings’ inheritance and did not belong outright to the brother. The plaintiff alleged numerous claims against his siblings. The plaintiff’s claims against his brother included breach of fiduciary duty regarding the jointly owned stock and inheritance assets, common law fraud, conversion/wrongful possession of the inheritance stock, and civil conspiracy.
Interestingly, the defendant-sister had previously filed a complaint in the same court in Delaware against her brothers which made substantively the same allegations. The sister and the other brother eventually settled the sister’s complaint and she dismissed the other brother and his companies from the lawsuit. This settlement then became the basis for the plaintiff’s lawsuit against his sister. His claims against his sister involved claims for breach of fiduciary duty and civil conspiracy, among others, for wrongfully entering into a settlement agreement with the brother.
Court Grants Brother’s Motion to Dismiss U.S. Lawsuit
The defendant-brother then moved to dismiss the plaintiff’s claims against him and his companies for lack of subject matter jurisdiction and lack of personal jurisdiction. The court granted the brother’s motion to dismiss on these grounds. The court held that in order to resolve the plaintiff’s claims against his sister, the court would have to first determine if the settlement agreement between the sister and the defendant brother should be nullified, which would require the court to delve into issues concerning whether or not the defendant brother wrongfully removed the subject inheritance stock. Doing so, the court held, would require the court to reconsider matters already decided by courts in Israel and Ecuador, and “decide predicate factual and legal questions in a manner that conflicts with rulings from tribunals…that have already ruled on those matters.”
The court also found that it did not have personal jurisdiction over the defendant brother. The court held that it was undisputed that the alleged fraud was performed outside of Delaware when the brother allegedly transferred the stock from Ecuador to the British Virgin Islands entities. Thus, the fraud alleged in the complaint occurred before the defendant brother incorporated the Delaware-based entities. In other words, the Delaware entities did not even exist when the brother committed the alleged fraud. The court also held that the facts of the case involved the application of Ecuadorian law, nor Delaware law, as the issue of whether the stocks were wrongfully removed from Ecuador turned on whether or not they ever properly belonged to the parents’ estate.
The court also took issue with the fact that the plaintiff waited five years in which to bring a lawsuit against his siblings. The court noted that the plaintiff did not file a lawsuit until it became apparent that his siblings would be settling the underlying lawsuit between them. The court ultimately found the plaintiff’s delay in filing suit to be unreasonable and held that the plaintiff’s claims were barred by the three-year statute of limitations.
The case is Danny David Czarinski Baier v. Upper New York Investment Co., et al., Court No. 6896-VCS decided on April 16, 2018 in the Court of Chancery of the State of Delaware.
Contract provider of multilingual legal translation services All Language Alliance, Inc. to obtain certified translation of documentary evidence from Spanish, German, Hebrew, Simplified Chinese, Norwegian, Hungarian, Swedish, French, Portuguese, Russian, Polish and other languages for inheritance litigation.
***This legal translation blog should not be construed as legal advice. You should always consult an attorney regarding your specific legal needs.***
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