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Swezey v. Merrill Lynch, Pierce, Fenner & Smith, Inc – Case Brief Summary (New York)

Swezey v. Merrill Lynch, Pierce, Fenner & Smith, Inc. (87 AD3d 119, 926 NYS2d 415 [1st Dept 2011], affd 19 NY3d 543, 973 NE2d 703, 950 NYS2d 293 [2012]), provides further support for the proposition that account joint tenants must be joined as necessary parties in turnover proceedings.

In Swezey, the Appellate Division, First Department, considered whether the Republic of the Philippines was a necessary party to a turnover proceeding. The proceeding was commenced by a class of people whose human rights had been violated by the Marcos regime.

The class sought to seize funds held by Merrill Lynch in the account of a "Panamanian entity formerly owned by Marcos" (id. at 123).

Two intervening parties asserted that the Republic of the Philippines was a necessary party because a Philippine court had ruled in a separate proceeding that the Republic was the true owner of the funds in the Merrill Lynch account.

The Court held that "the Republic is a person that . . . 'possesses an actual, current interest in the property in question,' " and that the Republic was a necessary party to the proceeding because the Republic " 'might be inequitably affected by a judgment disposing of the assets in its absence' " (id. at 126, quoting CPLR 1001 [a]).