Fiduciary Duty

Harm caused by professional negligence

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In Betz v Blatt, 211 AD3d 1004 [2d Dept 2022], the court held:

Although an attorney representing the executor of an estate, generally, is not liable to the beneficiaries of the estate (see Kramer v. Belfi, 106 A.D.2d 615, 616, 482 N.Y.S.2d 898), as the attorney does not represent the estate itself (see Betz v. Blatt, 116 A.D.3d at 816, 984 N.Y.S.2d 378; Matter of Hof, 102 A.D.2d 591, 593, 478 N.Y.S.2d 39), when fraud, collusion, malicious acts, or other special circumstances exist, an attorney may be liable to those third parties, even though not in privity with them, for harm caused by professional negligence (see Davis v. Farrell Fritz, P.C., 201 A.D.3d 869, 871, 163 N.Y.S.3d 82; Betz v. Blatt, 160 A.D.3d at 698, 74 N.Y.S.3d 75).

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Richard A. Klass, Esq., maintains a law firm engaged in civil litigation at 16 Court Street, 28th Floor, Brooklyn, New York. He may be reached at (718) COURT●ST or RichKlass@courtstreetlaw.comcreate new email with any questions.

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No single statute of limitations for causes of action alleging breach of fiduciary duty

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In Jadidian v Goldstein, 210 AD3d 969, 969-70 [2d Dept 2022], the court affirmed the dismissal of a claim against an attorney based on the statute of limitations, holding:

Contrary to the plaintiffs’ contention, the Supreme Court properly granted that branch of the defendants’ motion which was to dismiss the cause of action alleging breach of fiduciary duty. There is no single statute of limitations for causes of action alleging breach of fiduciary duty (see IDT Corp. v Morgan Stanley Dean Witter & Co., 12 N.Y.3d 132, 139, 879 N.Y.S.2d 355, 907 N.E.2d 268; Matter of Hersh, 198 A.D.3d 766, 769, 156 N.Y.S.3d 243). “Where the relief sought is equitable in nature, the statute of limitations is six years, and where the relief sought is purely monetary, the statute of limitations is generally three years” (Matter of Hersh, 198 A.D.3d at 769, 156 N.Y.S.3d 243). However, “regardless of the relief sought, ‘where an allegation of fraud is essential to a breach of fiduciary duty claim, courts have applied a six-year statute of limitations under CPLR 213(8)’ ” (id., quoting IDT Corp. v Morgan Stanley Dean Witter & Co., 12 N.Y.3d at 139, 879 N.Y.S.2d 355, 907 N.E.2d 268; see McDonnell v. Bradley, 109 A.D.3d 592, 594, 970 N.Y.S.2d 612). A cause of action alleging breach of fiduciary duty “accrues at the time of the [alleged] breach, even though the injured party may not know of the existence of the wrong or injury” (Matter of Hersh, 198 A.D.3d at 769, 156 N.Y.S.3d 243 [internal quotation marks omitted]; see Sternberg v Continuum Health Partners, Inc., 186 A.D.3d 1554, 1557, 131 N.Y.S.3d 356).

Here, the cause of action alleging breach of fiduciary duty was subject to a three-year statute of limitations since the relief sought was monetary in nature and the complaint failed to allege all the requisite elements of fraud, including justifiable reliance (see Eurycleia Partners, LP v. Seward & Kissel, LLP, 12 N.Y.3d 553, 562, 883 N.Y.S.2d 147, 910 N.E.2d 976; IDT Corp. v Morgan Stanley Dean Witter & Co., 12 N.Y.3d at 140, 879 N.Y.S.2d 355, 907 N.E.2d 268; Oppedisano v. D’Agostino, 196 A.D.3d 497, 499, 151 N.Y.S.3d 150). As the plaintiffs maintain, the cause of action alleging breach of fiduciary duty began to run, at the latest, on January 11, 2016, when the defendants allegedly commenced the prior legal malpractice action “to cover up their … negligence.” Thus, since the plaintiffs did not commence the instant action until March 24, 2021, more than three years later, the cause of action alleging breach of fiduciary duty was time-barred.

Richard A. Klass, Esq.
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Richard A. Klass, Esq., maintains a law firm engaged in civil litigation at 16 Court Street, 28th Floor, Brooklyn, New York. He may be reached at (718) COURT●ST or RichKlass@courtstreetlaw.comcreate new email with any questions.

Prior results do not guarantee a similar outcome.

© 2023 Richard A. Klass

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Plaintiffs’ Judiciary Law Section 487 cause of action was properly dismissed.

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In dismissing the plaintiff’s claim against an attorney for violating Judiciary Law Section 487, the New York State Court of Appeals held:

Here, viewing the facts in the light most favorable to plaintiffs (see De Lourdes Torres v Jones, 26 NY3d 742, 763 [2016]), defendants established prima facie entitlement to judgment as a matter of law on the Judiciary Law Section 487 (1) claim by demonstrating that plaintiffs failed to allege that defendants engaged in deceit or collusion during the course of the underlying federal intellectual property lawsuit against GM and EMI [FN2]. In response, plaintiffs failed to satisfy their burden to establish material, triable issues of fact (id.). The affidavits plaintiffs submitted in opposition to summary judgment did not allege that defendants committed any acts of deceit or collusion during the pendency of the underlying federal lawsuit. To the extent defendants were alleged to have made deceitful statements, plaintiffs’ allegation that defendants induced them to file a meritless lawsuit based on misleading legal advice preceding commencement of the lawsuit is not meaningfully distinguishable from the conduct we deemed insufficient to state a viable attorney deceit claim in Looff (97 NY at 482). The statute does not encompass the filing of a pleading or brief containing nonmeritorious legal arguments, as such statements cannot support a claim under the statute [FN3]. Similarly, even assuming it constituted deceit or collusion, defendants’ alleged months-long delay in informing plaintiffs that their federal lawsuit had been dismissed occurred after the litigation had ended and therefore falls outside the scope of Judiciary Law Section 487 (1). Thus, plaintiffs’ Judiciary Law Section 487 cause of action was properly dismissed.

Bill Birds, Inc. v Stein Law Firm, P.C. 2020 NY Slip Op 02125 Decided on March 31, 2020 Court of Appeals DiFiore, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law Section 431. This opinion is uncorrected and subject to revision before publication in the Official Reports.

Decided on March 31, 2020
No. 19

[*1]Bill Birds, Inc. et al., Appellants,
v
Stein Law Firm, P.C. et al., Respondents.

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Probate/Administration: a guide to probate or administration proceedings in New York State.

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Upon a person’s death, a proceeding may be brought in the Surrogate’s Court of the county in which the person formerly resided. The proceeding will seek to collect and administer assets of the deceased person, and distribute them to his/her heirs.

There are two basic types of proceedings: Probate and Administration.

Probate:

Where the deceased executed a “Last Will and Testament,” a proceeding will be filed to “probate” [or “prove”] the Will. The deceased, known as the “testator” will have designated an “executor” [someone selected to carry out the deceased’s wishes], who may or may not receive a commission for such services. The deceased will also have designated beneficiaries to receive portions of his/her estate. The deceased may indicate specific bequests of property (such as “to my brother, I leave my guitar”) or general bequests (such as “to my three siblings, I leave them each one-third of my net estate”).

Administration:

Where the deceased did not execute a Will, the person is referred to having died “intestate.” Contrary to popular belief, the assets of that person’s estate do not automatically go to the State. Rather, there is a section of law which specifies the manner in which an intestate’s assets are distributed. Depending on who the survivors of the intestate are (such as a spouse, child, parent, or cousin), the law will tell the “administrator” to whom the net assets of the estate must be paid. The “administrator” serves a similar duty to the deceased’s estate as the “executor” mentioned above, and may be appointed by the Surrogate of the county upon proper application.

Collection of assets

After appointment, the executor/administrator will have the duty to locate and collect the various assets of the deceased. An account may be opened in which the assets will be deposited; non-liquid assets, such as cars, houses, stocks, or furniture may be sold at auction or otherwise converted to money. Actions may be brought on behalf of the deceased to collect moneys due to the estate or for wrongful death/personal injury actions.

Tax returns

After all of the assets have been collected, the executor/administrator will determine whether federal and/or state estate tax returns must be filed. Various banks or institutions may require “tax waivers” or “releases of tax lien” from the State in order to release funds to the executor/administrator.

Accounting

The final duty of the fiduciary is to file with the court an “accounting” of what that person did during his term as executor/administrator.

Professional fees

The fiduciary will retain and pay professionals in connection with the estate proceeding, including attorneys, accountants, brokers, auctioneers, and appraisers.

copyr. 2014 Richard A. Klass, Esq.
The firm’s website: www.CourtStreetLaw.com
Richard A. Klass, Esq., maintains a law firm engaged in civil litigation in Brooklyn Heights, New York.
He may be reached at (718) COURT-ST or e-ml to RichKlass@courtstreetlaw.comcreate new email with any questions.
Prior results do not guarantee a similar outcome.

R. A. Klass
Your Court Street Lawyer

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Continuing Wrongs Doctrine and the Statute of Limitations

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“This Action Is Not Barred By the Statute of Limitations”

” This action is not barred by the statute of limitations, and should be permitted to proceed. As laid out in the Complaint, there have been a series of wrongs on the part of Defendants, over the course of years, which establish their bad faith and lack of fair dealing with Plaintiff. Based upon the continuing wrongs, the causes of action were properly brought within the statute of limitations period. “

Breach of fiduciary duty may constitute a continuing wrong that “is not referable exclusively to the day the original wrong was committed.” Kaymakcian v. Board of Managers of Charles House Condominium, 49 AD3d 407, 854 NYS2d 52 [1 Dept. 2008]  (denying dismissal of the breach of fiduciary duty claim as time-barred where board had a continuing duty to repair leaks in building’s limited common elements); 1050 Tenants Corp. v. Lapidus, 289 AD2d 145, 146, 735 NYS2d 47 [1 Dept. 2001].

The continuing wrong doctrine applied to breach of fiduciary duty limits monetary damages to three years from the commencement of the action. See Kaufman v. Cohen, 307 AD2d 113, 118, 760 NYS2d 157 [1 Dept. 2003]; CPLR 214[4].

R. A. Klass
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