An ex-mother-in-law’s claim for repayment of a loan to her former son-in-law was barred by her daughter’s divorce judgment under principles of res judicata, law-of-the-case and privity doctrines. So held Westchester County Supreme Court Justice William J. Giacomo in his November 6, 2025 decision in Ortiz v. Kliszus.

The complaint of the former mother-in-law (“MIL”) alleged that prior in May 2021, prior to his divorce, her former son-in-law asked the MIL to loan him $48,000. The MIL agreed and the husband promised to repay this amount. On the check to the husband, the MIL wrote “loan” on the memo line. The complaint also alleged that the parties executed a loan agreement but did not specify a time period for the loan to be re-paid.

The husband then made monthly payments of $1,000 but stopped in September 2022 after 15 months. Although the MIL then demanded that the husband pay the remaining $33,000, he refused to do so.

In October 2022, the husband filed for divorce (against the MIL’s daughter) in the State of Florida [Note: Jurisdiction for both the divorce action in Florida and this action in New York was proper.] The MIL was not a party to the divorce action. The March 2025 divorce judgment did not address the $48,000 loan.

The husband moved to dismiss the complaint. On this motion to dismiss, the Husband argued that the mother-in-law’s contract and unjust enrichment claims were barred by res judicata and collateral estoppel, as the underlying $48,000 financial transaction was raised and examined during the divorce proceedings that had culminated in a final judgment.

The husband argued that the MIL’s claim was directly linked to the divorce action and was already litigated. The husband attached exhibits involved in the divorce proceedings, including a trial exhibit list that included “Check made by Laurel Ortiz (Wife’s Mother) dated 05-11-21 for Loan to Husband.” He also a divorce-action worksheet submitted by the wife that listed a $30,000 loan to her from her mother to pay for attorneys’ fees. It also listed as a liability, the $33,000 balance of the loan from her mother. The divorce judgment directed the wife to pay the husband $48,650.64 as an equalizer payment.

The husband also claimed that there was no enforceable contract between himself and the MIL; that the $48,000 was not considered a loan. Rather, he claimed that the money resolved a shared marital tax debt and was considered a gratuitous familial contribution rather than an arm’s length commercial transaction. The MIL purportedly never documented any expectation of repayment, such as a note, and the partial repayment by the husband was voluntarily made.

The husband in the divorce case submitted into evidence bank statements showing that the $48,000 was used to pay the IRS and NYS for marital tax debts. Justice Giacomo states that the husband submitted documents in the divorce action that indicated that he voluntarily reimbursed the MIL $15,000/ [Note: Those documents were not specified.]

The Husband argued that, although the MIL was not a named party in the Florida divorce case, her financial involvement was addressed during the trial in connection with the loan and the MIL’s contribution towards her daughter’s legal fees. At no point did the MIL file a creditor’s notice or file an independent claim in the divorce action.

In opposition, the MIL argued that res judicata was inapplicable, as she was never a party to the divorce action. Moreover, the husband failed to submit any documentation to support his claim that the loan was adjudicated against the MIL and the divorce judgment did not mention the $48,000 loan.

Justice Giacomo noted that, “Under the doctrine of res judicata, a final adjudication of a claim on the merits precludes relitigation of that claim and all claims arising out of the same transaction or series of transactions by a party or those in privity with a party.” As was relevant here, parties in privity to parties of record in the prior action may include, “those who are successors to a property interest, those who control an action although not formal parties to it, those whose interests are represented by a party to the action, and possibly coparties to a prior action.” Moreover, the Court noted that “[u]nder New York’s transactional analysis approach to res judicata, once a claim is brought to a final conclusion, all other claims . . . are barred, even if based upon different theories or if seeking a different remedy.”

The Court also raised the doctrine of law of the case; a rule of practice that when an issue is once judicially determined, that should be the end of the matter. The law of the case doctrine is applicable “only to legal determinations that were necessarily resolved on the merits in [a] prior decision, and to the same questions presented in the same case.”

Justice Giacomo found that res judicata and the law of the case doctrines barred the MIL’s claims. The MIL’s loan was considered in the Florida divorce action. The $48,000 “loan” check was in evidence and the wife had submitted her equitable distribution worksheet that listed a $30,000 loan from her mother for her legal fees as well as the $33,000 loan to the husband. The husband, in the divorce case, submitted documentary evidence that he used the $48,000 to pay a joint marital tax. He also submitted a record of his 15 $1,000 payments.

Justice Giacomo concluded that all of these documents and related testimony were considered in resolving the marital debt. However, the Court ultimately determined that wife owed the husband $48,650.64 as an equalizer payment; “at no point did the Court find that the husband owed [the wife], or owe on a note due to [the wife’s] mother. Further, at no point during the divorce proceedings did the MIL attempt to assert a claim for an alleged loan. [Note: Justice Giacomo did not include the worksheet calculations or other basis that would show whether the Florida court found that the $48,000 either was or was not a loan.]

For the purposes of res judicata, although the plaintiff was not a party in the underlying divorce action, she is a party in privity with the prior parties.

Justice Giacomo concluded that the underlying financial transaction between the husband and his MIL had already been litigated in the divorce proceedings and was now barred by res judicata. “For the purposes of res judicata, although the plaintiff was not a party in the underlying divorce action, she is a party in privity with the prior parties.”

Further, the Court held that it could not re-examine these issues as they are now the law of the case, and reexamination of an issue previously determined is foreclosed

Alternatively, the Court here held that documentary evidence “utterly refutes” the MIL’s factual allegations, conclusively establishing a defense as a matter of law. The Court found that here, “defendant has produced documentary evidence conclusively establishing the lack of a contract between plaintiff and defendant. As noted, defendant has submitted bank statements and other documentary evidence indicating that the $48,000 was used to pay marital debt and was not a loan.”

The MIL argued that on this motion to dismiss, the Court must accept the husband’s allegations as true that there was a contract between the parties. Also, she argued that she and her former-son-in-law were not members of the same family warranting a presumption that the money was a gift and noted that the memo line of the check stated “loan.” “However, contrary to plaintiff’s contentions, Defendant has submitted documentary evidence conclusively establishing a defense as a matter of law. In addition, at the time of the alleged loan, the parties were family members, as the husband was married to the MIL’s daughter. Also, although the complaint alleged that, upon information and belief, the parties executed an agreement, no loan agreement was attached to the complaint.

Accordingly, the husband’s motion to dismiss the complaint was granted.

It may also be noted that the husband moved to disqualify the mother-in-laws counsel because he had also represented the wife in the divorce action and possessed “confidential information” about the husband. Further, the husband had recently obtained a temporary order of protection against his ex-wife prohibiting the ex-wife from contacting the husband directly or through third parties. The husband charged that the mother-in-law’s action was a means to circumvent that order.

Questions: Without the equitable distribution offset calculations, the finding of the Florida divorce court is not clear. The money was given. It was used to pay marital tax debts. The check memo said it was a loan. “Repayments” were made until the husband decided to start the divorce action. The wife acknowledged the debt. Did the Florida court find that it was a gift?

Did the Florida allocate the debt to the wife? Is such allocation binding on the mother-in-law? Was the mother-in-law, a New York resident, bound to intervene in the Florida divorce action? Did the wife, no less the husband virtually represent the mother-in-law in the divorce action such that she was in privity with both parties and bound by the divorce court findings?

Must the parents of divorce action parties with move to intervene when the parents’ property or other financial interests are being considered?

Peter Schuyler, of Kitson & Schuyler P.C., of Croton-on-Hudson, represented the Plaintiff. The Defendant appeared pro se.