Case Update (25 June 2026): Barboza v. Jiron; Costa Rican Judgment and Issue Preclusion in New York
The parties were subject to a December 2024 court order from the U.S. District Court for the SDNY that stayed a Husband’s request for conversion and accounting of some $10M of his inheritance, transferred to his Wife’s name during their marriage, and presumably held in an account in NY. That opinion resulted in a stay pending further rulings by the courts in Costa Rica, where they had a divorce suit pending.
On January 7, 2026, the Husband moved to lift the stay in the SDNY, arguing that the Costa Rican family court issued its judgment in the divorce proceeding. The Costa Rican court held, in part, that it had no jurisdiction to determine allocation of the inherited funds because the funds were not marital property. It held, more specifically, that the portion of the funds transferred after November 20, 2020 were not marital because they were transferred to the Wife during the de facto separation of the parties. For the funds transferred before that date, the Costa Rican court stated that transfer “never served an onerous purpose; rather, on the contrary, they were made free of charge.” The Costa Rican Family Code (Art. 41) states that marital property does not include assets “brought into the marriage or acquired during the marriage, free of charge or for random reasons.” Therefore, these funds were also not marital property. Accordingly, the Costa Rican court declined to exercise jurisdiction. The SDNY lifted its stay, and the Wife then filed a motion to dismiss the Husband’s request for conversion and accounting of the $10M. At issue is whether the Costa Rican divorce judgment is entitled to recognition by the SDNY and, if so, to what extent it has preclusive effect over the conversion and accounting claims.
The court first looked at whether to recognize the Costa Rican judgment as a matter of comity. Given that no one argued fraud, or any public policy issues, the SDNY recognized the Costa Rican judgment. The next question, however, is whether the judgment precludes the Husband’s conversion claim. The Wife argued that the Costa Rican court held that the Husband intended the funds to be a gift, which would defeat the conversion claim.
The SDNY may invoke issue preclusion (the Wife did not argue claim preclusion) only if: (1) the identical issue was raised in the Costa Rican proceeding, (2) the issue was actually litigated and decided in the Costa Rican proceeding, (3) the parties had a full and fair opportunity to litigate the conversion claim in Costa Rica, and (4) the resolution of that issue was necessary to support a valid and final judgment on the merits. The SDNY is sitting in diversity, and applied the law of the forum state (New York) to determine the preclusive effect of the Costa Rican judgment on state law claims. To establish a cause of action for conversion under NY law, the Husband must show: (1) legal ownership or an immediate superior right of possession to a specific identifiable thing (i.e., the money he transferred), and (2) that the Wife exercised unauthorized dominion over the thing in question, to the detriment of the Husband’s rights.
The Wife here argued that the Costa Rican judgment saying that the funds were given to her “free of charge” equate to giving her the money as a gift, which defeats the conversion claim. The SDNY noted that the post-separation funds were not found to be transferred “free of charge”, so this is not an argument over those funds. As for the pre-separation funds, the SDNY notes that neither party explained how Costa Rican law defines consideration or the concept of being free of charge. This may, therefore, not equate to a gift. Since the issues must be identical to be precluded, issue preclusion does not apply here. There is no holding by the Costa Rican court that the pre-separation funds were intended to be a gift (intent being an element of an inter vivos transfer). If the funds had been a gift, the Husband argued that there were still defenses, like undue influence or fraud, which the Costa Rican court did not consider.
The Wife’s motion to dismiss is denied.
