Legal Memorandum: Co-trustee's for Failure to its Execute Duties

Issue: Under New York law, may one trustee may sue another trustee for failing to execute his or her duties properly when the charging trustee was under his or her own obligation to prevent such misbehavior?

Under New York law, one trustee may not sue another trustee for failing to execute his or her duties properly when the charging trustee was under his or her own obligation to prevent such misbehavior.  In Zimmerman v. Pokart, 242 A.D.2d 202, 203, 662 N.Y.S.2d 5, 7 (1^st Dep’t 1997), the appellate division stated the following rule:  “Where a fiduciary party has an obligation, he cannot prevail in a cause of action against co-fiduciaries for breach of the same obligation,” citing the early cases of Jones v. Blun, 145 N.Y. 333, 341, 39 N.E. 954, 956 (1895) (“the creditor trustee being equally with the other trustees charged with the duty of seeing to it that the annual report is made … cannot … pursue a remedy which, if enforced, would enable him to profit by his own wrong or negligence”), and Knox v. Baldwin, 80 N.Y. 610, 612 (1880) (“That Van Dresar could not, either alone, or with his associates, pursue a remedy which if enforced would enable him to profit by his own wrong or negligence, is too plain for argument.”). 

In Jones, the court rejected the plaintiff co-trustee’s argument that his co-executor should have considered and applied for a certain exemption, reasoning that the plaintiff had just as much of an obligation to familiarize himself with the exemption as the defendant.   242 A.D.2d at 203, 662 N.Y.S.2d at 7.  “No greater burden can be imposed on the defendant co-fiduciary.”  Id.

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