Legal Memorandum: Statute of Limitations and Fiduciary Breaches in NY

Issue: What is the statute of limitations for actions relating to fiduciary breaches arising out of contractual relations or for tortious injury to property in New York?

Six-year limitations period applies to fiduciary breaches arising out of contractual relations. 

Frank Mgmt., Inc. v. Weber, 145 Misc. 2d 995, 549 N.Y.S.2d 317 (Sup. Ct. 1989) (action by Billy Joel’s manager against his former manager (and ex-wife); ex-wife made counterclaim for breach of fiduciary duty (the “Frank” of Frank Management was ex-wife’s brother); court concluded six-year period applied, but held that period began to run from date of breach; discovery rule could not apply and claim was not tolled under doctrine of continuous representation because, under facts of case trust, confidence, reliance and disparity of professional knowledge were minimal, and wrongs alleged related to several separate, independent business decisions)

Ferber v. Ehrlich, No. 93 CIV. 818 (MGC) (S.D.N.Y. Apr. 14, 1994) (court declined to apply Frank to breach of fiduciary duty claim in accounting context; “[g]iven the special nature of a fiduciary relationship, the statute of limitations . . . does not begin to run until plaintiff’s discovery of the breach”; cases cited in Frank to support conclusion that discovery rule should not apply do not actually support proposition”)

In re Mueller, 19 Misc. 3d 536, 853 N.Y.S.2d 245, 248-49 (Surr. Ct. 2008) (claim against attorney-in-fact for breach of fiduciary duty is subject to six-year limitations period; period does not commence until fiduciary openly repudiates obligation or renders an account; case contains Judge Cardozo’s famous “punctilio of an honor most sensitive” language describing fiduciary duty; fiduciary drafted POA using form found on internet, […]