Squire Patton Boggs Wins Summary Judgment for Republic of Ecuador in Multi-Million Dollar Embezzlement Suit

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    The Third District Court of Appeal of Florida issued an opinion reversing and remanding a lower court’s decision granting Roberto and William Isaias summary judgment, thereby allowing Squire Patton Boggs’ client, the Republic of Ecuador (the Republic), to pursue its claims for $200 million against the brothers.

    In a highly publicized, cross-border case, two bankers, Roberto and William Isaias, caused the insolvency of Ecuador’s largest bank before fleeing to the United States in 2003, still owing millions of dollars to the Republic. Squire Patton Boggs’ client filed suit in Miami where the brothers now reside. (The Republic of Ecuador v. Roberto Isaias Dassum and William Isaias Dassum, Case No. 09-34950, Circuit Court for Miami-Dade County, FL.) The brothers counterclaimed, seeking to invalidate certain seizures in Ecuador, and attempted to have 16 other companies also challenge the seizures, acting as interveners in the US-based legal action. The Squire Patton Boggs team defeated both efforts.

    In March 2013, the Isaias brothers moved for final summary judgment. The primary basis for the defendants’ motion was the extraterritoriality exception to Act of State Doctrine. In late March 2014, the trial court ruled in favor of the brothers finding that the exception to the Act of State Doctrine permitted the court to look behind the actions of the Republic to determine if they complied with US concepts of due process. In part, the defendants argued that the Republic was a “foreign sovereign . . . acting beyond its territorial dominion” in its attempt to seize their property in the US. The Republic authorized Squire Patton Boggs to pursue an appeal of that ruling. On July 2, 2014, the Third District Court of Appeal’s opinion came down, thereby allowing the Republic to proceed with trial on damage claims against the defendants in its efforts to recoup the hundreds of millions of dollars owed.

    In its decision, the Third District Court of Appeal determined that the Republic was not attempting to seize or confiscate the defendants’ US property, but instead, was seeking a money judgment for the balance of the brothers’ liability to the Country, which it has a right to do. Specifically, the Appellate Court held that “[t]he order granting summary judgment in the present case was based on an erroneous predicate advanced by counsel for the Isaiases, who characterized the Florida complaint as an effort to “seize the [Isaiases’] property in the U.S.” through an “executive fiat” within Ecuador. In fact, however, the complaint seeks a judgment for money damages which, if further proceedings warrant, could only then be used to execute upon property in the United States.”

    The Squire Patton Boggs team representing the Republic of Ecuador is led by Alvin Davis, Digna French, Rafael Langer-Osuna, with Rita Patel and John Henslee.

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