BARASH v. NORTHERN TRUST CORPORATION

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Supreme Court, Appellate Division, Second Department, New York.

Philip BARASH, Executor of the Estate of Celia Kates, et al., appellants, v. NORTHERN TRUST CORPORATION, respondent.

Decided: August 19, 2008

WILLIAM F. MASTRO, J.P., PETER B. SKELOS, ROBERT A. LIFSON, and JOHN M. LEVENTHAL, JJ. Philip Barash, Executor of the Estate of Celia Kates, and Beneficiary of Irving G. Kates New York Trust, Sandra Barash, Muttontown, N.Y., appellants pro se. Katten Muchin Rosenman, LLP, New York, N.Y. (Jay W. Freiberg and Julia Chung of counsel), for respondent.

In an action to recover damages for fraud based on alleged mismanagement and waste, the plaintiffs appeal from an order of the Supreme Court, NassauCounty (Feinman, J.), dated September 15, 2006, which granted the defendant's motion to dismiss the complaint on the ground of res judicata.

ORDERED that the order is affirmed, with costs.

The Northern Trust Bank of Florida, N.A. (hereinafter Northern Florida), a subsidiary of the defendant, Northern Trust Corporation (hereinafter Northern Trust), was appointed the sole trustee of a testamentary trust (hereinafter the Trust), created under the will of the decedent Irving G. Kates under a 2001 agreement.   The Trust established a lifetime income interest for the decedent's wife, Celia Kates, with the remainder interest to pass to their daughters, the plaintiff Sandra Barash and her sister, Gloria Kates, on Celia's death.

The Trust terminated when Celia died on August 10, 2004.   The plaintiff Philip Barash became the executor of Celia's estate, and Northern Florida commenced a proceeding in the Probate Division of the Circuit Court in and for Palm Beach County, Florida (hereinafter the Florida Probate Court) to judicially settle its account as the trustee of the Trust.   The Florida Probate Court approved Northern Florida's account, after trial, in a judgment dated January 27, 2005.

The plaintiffs commenced this action against Northern Trust, asserting various causes of action alleging fraud and mismanagement in connection with the administration of the Trust.   Northern Trust moved to dismiss the complaint on the ground of res judicata, and the Supreme Court granted the motion.   We affirm.

 Under the doctrine of res judicata, a disposition on the merits bars litigation between the same parties, or those in privity with them, on a cause of action arising out of the same transaction or series of transactions as a cause of action which was or could have been raised in a prior proceeding (see Matter of Hunter, 4 N.Y.3d 260, 269, 794 N.Y.S.2d 286, 827 N.E.2d 269;  Barbieri v. Bridge Funding, 5 A.D.3d 414, 415, 772 N.Y.S.2d 610).   Prior to this action, the plaintiffs asserted identical claims in an attempt to remove the accounting proceeding from the Florida Probate Court to the United States District Court for the Eastern District of New York, in moving to set aside the judgment in the Florida Probate Court, and in an action they commenced against Northern Trust and two of its officers in the Eastern District of New York. All such issues could have been or were raised in the proceeding before the Florida Probate Court, which entered the judgment approving Northern Florida's account, which the plaintiffs admit they failed to appear in, while having received proper notice (see Matter of Hunter, 4 N.Y.3d at 269, 794 N.Y.S.2d 286, 827 N.E.2d 269;  cf. Parker v. Blauvelt Volunteer Fire Co., 93 N.Y.2d 343, 347, 690 N.Y.S.2d 478, 712 N.E.2d 647;  Abraham v. Hermitage Ins. Co., 47 A.D.3d 855, 851 N.Y.S.2d 608;  Town of New Windsor v. New Windsor Volunteer Ambulance Corps, Inc., 16 A.D.3d 403, 404-405, 791 N.Y.S.2d 159;  Citizens Bank of Appleton City, Mo. v. C.L.R. Brooklyn Realty Corp., 5 A.D.3d 528, 772 N.Y.S.2d 870).

The plaintiffs' remaining contentions are without merit.

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