In re the Estate Obregon

230 A.D.2d 47, 662 N.Y.S.2d 750, 1997 N.Y. App. Div. LEXIS 3091
CourtAppellate Division of the Supreme Court of the State of New York
DecidedApril 3, 1997
StatusPublished
Cited by8 cases

This text of 230 A.D.2d 47 (In re the Estate Obregon) is published on Counsel Stack Legal Research, covering Appellate Division of the Supreme Court of the State of New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re the Estate Obregon, 230 A.D.2d 47, 662 N.Y.S.2d 750, 1997 N.Y. App. Div. LEXIS 3091 (N.Y. Ct. App. 1997).

Opinion

OPINION OF THE COURT

Nardelli, J.

In this case, we deal with the jurisdiction of the Surrogate’s Court to adjudicate with respect to properties of nondomiciliaries of the State of New York which are located outside the State. While the facts herein may justify further investigation by the Mexican administrator of decedent’s estate into the financial dealings of this Mexican domiciliary in other venues, the small bank account he had in this State and the transfer of monies through financial institutions in this State is insufficient under the circumstances to confer jurisdiction over foreign bank accounts and trusts outside this State to the Surrogate’s Court.

In June of 1988, the decedent Oscar Obregon, a domiciliary of Mexico with residences in Texas and New York, contacted a friend Eugene Gonzalez, then employed by Morgan Stanley International in New York, for investment advice. Gonzalez introduced Obregon to Michael Cowan, an investment manager at Morgan Stanley International in London and, thereafter, Obregon opened an account with Morgan Stanley in London which was to be governed by English law and subject to the exclusive jurisdiction of the United Kingdom’s courts. Obregon deposited monies to the account in the total amount of $1,453,338.50 through the Mellon Bank in New York where Morgan Stanley International of London maintained an account. Obregon confirmed a procedure transmitted by Gonzalez whereby account statements would be sent to his New York apartment and to Gonzalez and he returned to Gonzalez an executed "Certificate of Foreign Status” in which he indicated that he was not a resident alien of the United States. Thereafter, Obregon and Cowan had regular monthly telephone and written communications about the account regarding the investments, returns and portfolio values. Gonzalez was not [49]*49involved in managing Obregon’s account and all instructions regarding it came from Obregon, although occasionally Gonzalez would forward instructions from Obregon to Cowan in London. Up until the end of 1989 or the beginning of 1990, Obregon had designated his son Oscar, born of his marriage, as the beneficiary of his London account. At that time, he contacted Gonzalez, who was now employed with Barclays Bank, said he needed estate planning and asked for a recommendation. He told Gonzalez that he wanted to use the money in the account to provide for another son, Christian, who was living in Canada. Gonzalez referred Obregon to a trust officer at Barclays in Miami named Nelson Ramirez. In either February or March 1990, Obregon contacted Ramirez and told him he was interested in establishing an off-shore trust. Ramirez described the types of trusts Obregon could establish in the Cayman Islands with a Barclays subsidiary, Barclays Private Bank and Trust (Cayman) Limited (Private Bank). In a number of subsequent telephone conversations, Ramirez and Obregon discussed the details of establishing a discretionary inter vivos trust in the Cayman Islands, and Ramirez got in touch with Kevin Brown, the Deputy Manager of Private Bank, to inform him of Obregon’s desire to establish a trust in the Cayman Islands to hold some of his nonMexican assets (i.e., the monies held in the Morgan Stanley account in London). Obregon then executed a letter of wishes directed to Private Bank, a nonbinding instruction under the law of the Caymans given to assist trustees of discretionary trusts. Obregon also informed Cowan that he intended to transfer his assets being managed in his Morgan Stanley account in London to a trust being created with Private Bank. On April 19,1990, the day before his death, Obregon executed the letter of wishes and also signed an asset transfer letter instructing Morgan Stanley in London to transfer the monies in his account to Private Bank to be held in the "Faygate Trust”. On that same day, Obregon faxed copies of both letters to Ramirez in Miami and sent the originals to Ramirez by courier. Obregon telephoned Ramirez on April 19 to confirm that he had received the faxed copies. Private Bank had executed the declaration of trust which established the Faygate Trust by this time. Obregon also telephoned Cowan in London the same day to advise him the Trust had been established and that he (Obregon) had executed an asset transfer letter and that Cowan should immediately transfer all the assets in the London account to Private Bank as trustee of the Faygate Trust. Obregon committed suicide by jumping [50]*50from a hospital window on April 20, 1990, in Houston. At the time of his death, he was a Mexican domiciliary residing in Texas and only had a bank account in New York City of somewhat over $1,000. From April 19, 1990 until the transfer of the value of the trust assets by Morgan Stanley-London to Private Bank, Morgan Stanley-London held the assets in London in trust for Faygate Trust, and on June 14, 1990, Private Bank and Morgan Stanley-London entered into a written agreement whereby Morgan Stanley-London agreed to manage the assets of the Faygate Trust on behalf of the Trustee. Thereafter, at the direction of Private Bank, Morgan Stanley-London liquidated the Trust assets it had been managing in London and transferred the proceeds to Private Bank, as the Trustee of Faygate Trust. This was done by the purchase by Morgan. Stanley-London of a cashier’s check drawn on Citibank, N. A. in New York, made payable to Private Bank and transmitted to Private Bank in the Cayman Islands.

Manuel Reyero Conejo (Reyero), the husband of Obregon’s former wife and stepfather of Oscar, was the Mexican administrator of Obregon’s estate and made inquiries as to the transferred assets. On April 2, 1991, Reyero petitioned the Surrogate’s Court in New York seeking ancillary letters of administration, alleging that the estate’s only New York asset was a bank account with a balance under $1,500, but that the purpose in obtaining ancillary letters was to trace the assets transferred from the account at Morgan Stanley in London to the Private Bank in the Cayman Islands. Upon the request of Reyero, his attorney, Joel Stern, was appointed ancillary administrator on May 16, 1991. The Surrogate’s Court, in response to Stern’s request, ordered discovery and Gonzalez, Ramirez and Cowan, who had been voluntarily produced by their employers, were deposed.

Thereafter, the ancillary administrator sought further discovery and also an order directing Barclays, Private Bank, Morgan Stanley and Morgan Stanley-London to turn over to him an amount equal to the trust assets as of April 19, 1990, the day prior to Obregon’s death. Barclays and Morgan Stanley moved to dismiss the petition for lack of subject matter jurisdiction or, alternatively, on the ground of forum non conveniens. The Surrogate’s Court denied the motions to dismiss.

Initially, we note that lack of personal jurisdiction is raised only by Barclays Private Bank and Trust (Cayman) Limited. However, while in personam jurisdiction is uncontested by Barclays and Morgan Stanley, the court’s right to assert [51]*51personal jurisdiction is limited by the subject matter jurisdiction conferred upon the Surrogate’s Court by our State Constitution and statute. Thus, the Constitution of the State of New York, in article VI (12 [d]), states, in pertinent part: "The surrogate’s court shall have jurisdiction over all actions and proceedings relating to the affairs of decedents, probate of wills, administration of estates and actions and proceedings arising thereunder or pertaining thereto, guardianship of the property of minors, and such other actions and proceedings, not within the exclusive jurisdiction of the supreme court, as may be provided by law.”

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Cite This Page — Counsel Stack

Bluebook (online)
230 A.D.2d 47, 662 N.Y.S.2d 750, 1997 N.Y. App. Div. LEXIS 3091, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-the-estate-obregon-nyappdiv-1997.