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THE FIDUCIARY TOLLING RULE TOLLED THE STATUTE OF LIMITATIONS IN THIS CONSTRUCTIVE TRUST ACTION AGAINST AN EXECUTOR (WHO WAS REMOVED BY THE COURT) UNTIL THE SUCESSOR FIDUCIARY WAS APPOINTED (THIRD DEPT).

The Third Department, reversing Surrogate’s Court, determined the constructive trust action based upon alleged self-dealing by an executor who was removed by the court was not time-barred. The fiduciary tolling rule applied:

Under the fiduciary tolling rule, a claim alleging wrongful conduct by an individual in his or her fiduciary capacity does not accrue until there is an open repudiation of the fiduciary obligation or a judicial settlement of the fiduciary’s account … . This rule tolls the statute of limitations “for all misconduct committed by the fiduciary prior to repudiation of its obligation or termination of the [fiduciary] relationship” … since, absent either repudiation or removal, the aggrieved parties “were entitled to assume that the [fiduciary] would perform his [or her fiduciary] responsibilities” … , and it is highly unlikely that a sitting fiduciary would assert a constructive trust claim against himself or herself. …  Under this rule, the toll continues until a successor fiduciary is appointed … . Matter of George, 2021 NY Slip Op 03231, Third Dept 5-20-21

 

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