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 UBS Financial Services Inc of Puerto Rico was negligent in
releasing the accounts to David Efrón, a Puerto Rico lawyer who
withdrew all but $1.2 million from the account during a nine-month
period, U.S. District Judge Pedro Alberto Delgado-Hernández in San
Juan wrote in an opinion on March 31.
Efrón on Monday said that most of those funds were negotiable
instruments that UBS was holding as collateral.
Efrón and the plaintiff in the case, Madeleine Candelario del Moral,
had been locked in a post-divorce dispute when UBS released the
accounts to Efrón in 2007, according to the opinion. About $800,000
of the remaining $1.2 million was used to repay a loan UBS made to
Efrón.
The long-running federal court case, filed in 2008, hinged on a 2006
oral ruling by a local Puerto Rico superior court judge in the
couple's post-divorce litigation. That judge said from the bench
that he was setting aside a previous superior court order to freeze
the accounts, which were at issue in the couple's divorce.
 The oral ruling, however, was not a valid order because a transcript
of the judge's remarks had not been signed or certified, the U.S.
federal court ruled.
"UBS respectfully disagrees with the court's decision in this
matter," a UBS spokesman said, adding that the firm intends to
appeal. The case "arose out of a divorce proceeding that had nothing
to do with UBS." The firm's employees acted "entirely properly in
response to specific instructions from a Puerto Rico court," the
spokesman said.
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But there were other signs that the oral ruling and the 23-page
transcript of the ruling that Efrón presented to the firm were not
sufficient for releasing the accounts, Delgado-Hernández wrote. The
parties, for example, did not receive formal notice of the ruling,
or a transcript the judge had signed, as Puerto Rico superior court
rules required.
Efrón was not a party in the federal proceeding and was not alleged
to have engaged in wrongdoing.
"Any lawyer will tell you that anytime a judge orders something from
the bench, it's as strong as if it were a written order," Efrón said
on Monday.
Delgado-Hernández declined to impose sanctions on UBS, after
Candelario del Moral alleged the firm's conduct caused the case to
drag on. The eight years of proceedings were the result of "factors
not uncommon in complete litigation" and not because of misconduct
by UBS, Delgado-Hernández wrote.
(Reporting by Suzanne Barlyn; Editing by Dan Grebler)
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