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Legal Memorandum: Breach of Fiduciary Duty Claims

Issue: What is the Statute of Limitations for a Partner’s Action Against Other Partners for Breach of Fiduciary Duty in an Estate Matter Under New York Law?

Area of Law: Business Organizations & Contracts, Estate Planning & Probate
Keywords: Statute of limitations; Breach of fiduciary duty
Jurisdiction: New York
Cited Cases: 838 N.Y.S.2d 581; 624 N.Y.S.2d 390; 307 A.D.2d 113
Cited Statutes: None
Date: 11/01/2007

New York law does not provide any single limitations period for breach of fiduciary duty claims.  Generally, the applicable statute of limitations for breach of fiduciary duty claims depends upon the substantive remedy sought.  Wiesenthal v. Wiesenthal, 40 A.D.3d 1078, 838 N.Y.S.2d 581, 583 (2d Dep’t 2007).  A cause of action for breach of fiduciary duty is governed by the six-year statute of limitations where the relief sought is equitable in nature or by a three-year statute of limitations where the only relief sought is money damages.  Id.  A six-year limitations period applies to a cause of action by two partners against a third partner for breach of fiduciary duty arising from the misappropriation of a partnership business opportunity where the complaint alleges actual fraud by the third party and seeks both legal and equitable relief.  Kaufman v. Cohen, 307 A.D.2d 113, 117, 760 N.Y.S.2d 157, 164 (1st Dep’t 2003).  However, if fraud is alleged only incidental to the claim asserted or is not essential to the cause of action pleaded, the three-year statute of limitations applies. Id. at 165.  The fraud “discovery” rule provides that a cause of action in fraud must be commenced within six years from the date of the act or two years from the date the discovered the fraud or could, with due diligence, have discovered it.  Id. at 167 (citing Ghandour v. Shearson Lehman Bros., 213 A.D.2d 304, 305, 624 N.Y.S.2d 390 (1st Dep’t 1995)).

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