De Beeck v. Costa

• Decision Date: 24 January 2013
• Citation: 959 N.Y.S.2d 628,2013 N.Y. Slip Op. 23024,39 Misc.3d 347
• Parties: Maria Del Carmen Onrubia de BEECK, Plaintiff, v. Gaspar Roberto Lopez COSTA, Defendant, and Williamsport Capital Ltd., Additional Defendant.
• Court: New York Supreme Court

39 Misc.3d 347

959 N.Y.S.2d 628

2013 N.Y. Slip Op. 23024

Maria Del Carmen Onrubia de BEECK, Plaintiff,

v.Gaspar Roberto Lopez COSTA, Defendant, and Williamsport Capital Ltd., Additional Defendant.

Supreme Court, New York County, New York.

Jan. 24, 2013.

Kathleen Kundar of Fox Horan & Camerini LLP, for Plaintiff.

Defendant pro se.

MARTIN SCHOENFELD, J.

Plaintiff Maria del Carmen Onrubia de Beeck, a citizen of Peru, filed a summons and complaint in February 2006 ¹ seeking a declaratory judgment that she is the owner of the bearer shares of Williamsport Capital, LTD, a British Virgin Island company, and as such, that she controls its Israeli Discount Bank account, located in New York. She also brought claims against her former psychologist, Defendant Gaspar Roberto Lopez Costa, a citizen of Argentina, for fraud, breach of fiduciary duty, unjust enrichment, constructive trust and an accounting seeking over ten million dollars in damages and interest. She has since discontinued the constructive trust and accounting claims.

Over the last six years, there has been much discovery and several motions decided in this action. The case was slated for trial in the summer of 2011. However, in July of that year the Court granted a motion on behalf of Defendant's attorneys, to be relieved of their duties as counsel because they were owed in excess of $140,000. In the same order the Court directed that the case proceed to trial after a 30 day stay. Defendant failed to appear on the date scheduled for the trial to begin, September 12, 2011. As a result, Defendant was defaulted by the Trial Assignment Part Judge, and the case was transferred to IAS Part 28 for inquest.

Plaintiff now asks this Court for a declaratory judgment regarding ownership of the Williamsport Capital, LTD bearer shares and its Israel Discount Bank account; a judgment regardingPlaintiff's claims against Defendant for fraud, breach of fiduciary duty and unjust enrichment; and an assessment of damages thereof in the amount of $7,498,562 plus interest. In support, Plaintiff has filed numerous documents, including several expert attorneys' affidavits concerning the relevant laws of Argentina, Peru and the British Virgin Islands, as well as affidavits from an Argentinian psychologist and ethicist, a psychiatrist who examined Plaintiff, a forensic accountant and an Argentinian public accountant.

The Court has also received several letters via Federal Express written in Spanish from the now pro se Defendant, who appears to still be living in Argentina. Along with these letters, Defendant has enclosed attempted English translations, apparently made by using a computer program. As best the Court can decipher from the imprecise and often unintelligible translations, Defendant indicates that he does not have the means to travel to New York, but appears to be contesting Plaintiff's claims. However, other than by these letters, Defendant has not filed any legal papers regarding this inquest proceeding.

The case is now slated for a hearing. Prior to holding such hearing, however, there are several matters that should be addressed. First, the Court must consider whether there needs to be an evidentiary hearing with regard to the request for a declaratory judgement. Second, because ownership of the Williamsport bearer shares implicates the laws of Argentina, New York, and the British Virgin Islands, the Court must determine which law to apply. Third, the Court should addresses whether Plaintiff has made out a case with regard to her causes of action for fraud, unjust enrichment, and breach of fiduciary duty. In doing so, there is a need to decide the choice of law issues that are raised by each of these causes of action. Finally, with regard to these claims, the Court must review the evidence presented in the papers concerning damages and determine, pursuant to CPLR 3215, what, if any, damages, may have been proven on the papers alone.

BACKGROUND²

Plaintiff is a member of the Romero family which is apparently a well-known wealthy family in Peru. She is married and has four adult children Mari, Willy, Javier and Gerardo. Defendant, as noted above, is an Argentinian citizen and a psychotherapist. In 1986, while living in Peru, he began treating Plaintiff and her husband, as well as their then teenage daughter Mari and their son Gerardo. In 1988, Defendant moved back to Buenos Aires. Soon thereafter he convinced Plaintiff, and her son Gerardo, to follow him to Argentina to continue treatment. By that time, Mari was in college in the United States.

In Argentina, Plaintiff visited Defendant five days a week for two hours a day for therapy. Gerardo went three days a week. Plaintiff's other children were also sometimes treated by Defendant when visiting Buenos Aires. During treatment, Defendant emphasized that each member of the family not tell the other about what was happening in therapy. As such, Plaintiff's family was kept ignorant of her complicated relationship with Defendant.

Once Plaintiff moved to Argentina, she claims that Defendant began to control most aspects of her life. Defendant told Plaintiff that she was sexually repressed. He then, under the guise of therapy, began having intercourse with her once a week on the floor of his office. Years later Plaintiff learned that Defendant also at some point had sex with her daughter, Mari.

In addition, Defendant began asserting financial control over Plaintiff. Plaintiff had confided in Defendant that she believed her cousins, who ran the family company, were unfair to her with regard to awarding dividends. By the early 1990s, Defendant was encouraging Plaintiff to allow him to “invest” her money, as a way of asserting her independence from her wealthy family. Plaintiff contends that at Defendant's direction, she gave him millions of dollars between 1992 and 2004 with the belief that he was investing it on her behalf, and that she would receive it back, plus a return on the investment. However, Plaintiff claims to have received only a small portion of this money back. This is discussed in more detail below.

Plaintiff claims she provided money to Defendant in several ways. Much of it she gave to him in the form of “investment” checks. These checks were paid in increments of $10,000, $12,000 or $13,000. Plaintiff signed, dated and wrote the amount on these checks, but left the payee portion blank. She provided these checks to Defendant multiple times throughout any given month. Apparently, Defendant cashed many of these checks in money exchange houses in South America and in the United States, including the Beacon Hill Service Corporation in New York. That company was later the subject of a criminal investigation for money laundering and for transmitting funds without a license. Plaintiff claims that between 1992 and 2004, she wrote checks to Defendant for “investments” in the amount of $7,579,500.

Plaintiff also gave Defendant bi-monthly checks in the amount of $20,000 to $30,000 as his fees for therapy services. From 1992 to 2004, she calculates that she paid Defendant $1,958,650 for his services.

In addition, most months Plaintiff claims that she wrote personal checks of $15,000 to a blank payee which Defendant or his assistant helped her cash. This money was suppose to be used for her family's personal expenses. Plaintiff estimates, however, that she gave 20% of this cash to Defendant to use as additional investment money. She estimates that she gave Defendant $243,600 in cash from these personal expenses between 1995 and 2004.

To support her damage claims, Plaintiff offers the Expert Financial Report of Christopher A. Welde, dated September 21, 2007. Mr. Welde is a public accountant who works in the field of forensic accounting. He reviewed bank transaction statements from three bank accounts in Plaintiff's name, cancelled checks from these accounts, and transaction statements from two of Defendant's accounts. Mr. Welde did not receive any bank information for the years 1992 to 1994 and, therefore did not provide any figures for that period. Moreover, although he offers an estimation for the years 1995 to 2004, he did not receive any cancelled checks for the years 1998 and 1999, which he calls the “gap years.”

For the years 1995 to 1997, and 2000 to 2004, Mr. Welde categorized the cancelled checks that he was given to review as either “investment” checks, “personal funds,” or “professional fees”. This was based upon information he received from Plaintiff's attorneys, and from reviewing the transcripts of both Plaintiff's and Defendant's depositions. He concludes that Plaintiff provided a total of $4,997,000 to Defendant for investments during that time, paid $1,358,150 in professional fees, and wrote checks for personal expenses in the amount of $1,020,000. For the “gap years” of 1998 and 1999, where cancelled checks were not provided, Mr. Welde used his “professional judgment” extrapolating from the amount of money that went into Defendant's banks accounts and using ratios of expected investments, professional fees and personal fees based on the other years to estimate the amount Plaintiff paid to Defendantas such: investments $1,083,000; professional fees $301,000 and personal expenses $198,000.

It should be noted that Plaintiff's damage request includes the amounts discussed by Mr. Welde, for all of the years, including the “gap years,” and for the years 1992 to 1994, for which Mr. Welde provides no analysis. Plaintiff estimates that in these years she gave Defendant $500,000 per year in investments and $150,000 in professional fees. She provides no documentary evidence, only her affidavit, to support these amounts.

Plaintiff also states that in about 1992 she transferred $500,000 of her money to a bank account controlled by Defendant, which he used to make additional investments. Plaintiff, however, does not provide documentary proof of this transaction. In fact, she notes that she does not have...