WHAT IS THE STATUTE OF LIMITATIONS FOR BREACH OF FIDUCIARY DUTY OF A TRUST IN A TRUST ACTION?
“Man must cease attributing his problems to his environment, and learn again to exercise his will – his personal responsibility in the realm of faith and morals.” Albert Schweitzer
When a trustee is appointed, the trust instrument and Florida law direct and authorize the trustee to perform their duties as fiduciaries. When a trustee breaches his fiduciary duty, what is the statute of a limitations time frame in which to bring a lawsuit against the trustee? Florida law (section 736.1008 and chapter 95) provides specific time-frames within which lawsuits can be filed against a trustee.
The law first imposes a short, six-month limitation period for bringing an action against a trustee for a breach of trust if the beneficiary has received a final, annual, or periodic account “fully disclosing the matter”. Florida Statute 737.307; Taplin v. Taplin, 2012 WL 1605253 (Fla. App. 3 Dist.). Second, there is the imposition of a four-year limitation period for bringing an action against a trustee for a breach of trust if the beneficiary “has received a final account or statement” and the trustee “has informed the beneficiary of the location and availability of records.” Id.
The distinguishing characteristic between the two limitation provisions is whether the account or statement “fully discloses the matter” to the beneficiary. Id. The four-year limitation applies to a trustee when a “final account” or “statement” provided by a trustee does not satisfy the “full disclosure” threshold required of the first, but the trustee also makes pertinent trust records available as required by the statute. Importantly, a precondition to the commencement of either limitation period is the receipt by the beneficiary of an “account” or “statement”, whether it is final, annual, or periodic. Id., Davis v. Monahan, 832 So.2d 708, 711 (Fla. 2002)(articulating the Florida Legislature’s statute codifying the limitations period for claims against a trustee under Florida Statute 737.307 is triggered after the beneficiary receives an accounting).
Florida Statute 95.11(3)(o) states that actions other than for recovery of real property shall be commenced as follows: . . .(3) within four years . . .(o) an action for assault, battery, false arrest, malicious prosecution, malicious interference, false imprisonment, or any other intentional tort . . . (emphasis added). A breach of trust is an intentional tort under Florida Law. Patten v. Winderman, 965 So.2d 1222, 1225 n.1 (Fla. 4th DCA 2007). But it has long been recognized at common law that a statute of limitations is inapplicable to shield trustees from their responsibilities to their beneficiaries. (Emphasis added). Nayee v. Nayee, 705 So.2d 961, 963 (Fla. 5th DCA 1998).
As the Florida Supreme Court stated before the turn of the last century: “[I]n cases of continuing trusts that are strictly such, and recognized and enforced in courts of equity only, so long as the relation of trustee and cestui que trust continues to exist, no length of time will bar the cestui que trust of his rights in the subject of the trust as against the trustee [subject to certain exceptions not relevant here].” Taplin v. Taplin, 2012 WL 1605253 (Fla. App. 3 Dist.); Anderson v. Northrop, 30 Fla. 612, 12 So. 318, 324 (Fla. 1892); Sewell v. Sewell Props., 30 So.2d 361, 362-63 (Fla. 1947)(“Where the trustee by fraud or deception, or even by keeping quiet when he should speak and account to his cestui, causes the cestui to be ignorant of the rights of the cestui and of the duties of the trustee, laches will not be imputed to the cestui until the discovery of the true condition.”).
In fact, when the Legislature created Chapter 95 in 1872, a statute-denominated “limitations on actions,” the Legislature expressly precluded the applicability of the statute to cases against a trustee of an express trust. See Florida Statute 95.02 (1892)(“This chapter shall not apply to any action . . . with respect to any sums of money or property held or collected by any officer or trustee or his sureties.”). In the same legislative session in which section 95.02 was repealed, section 737.307, Florida Statutes was created.
So absent the fulfillment by a trustee of the two conditions set forth in Florida Statute 737.307, the common law remains in full force and effect with respect to actions brought by a beneficiary against a trustee of a trust. To hold otherwise would be contrary to the express language of the law provided to us by the Legislature. Taplin v. Taplin, 2012 WL 1605253 (Fla. App. 3 Dist.); Butler v. State, 838 So.2d 554, 556 (Fla. 2003).
The elements of a cause of action against the trustee for breach of fiduciary duty are: 1) the existence of a duty; 2) breach of that duty; and 3) damages flowing from the breach of that duty. Crusselle v. Mong, 59 So.3d 1178 (Fla. 5th DCA 2011). In the event you believe a trustee or successor trustee has breached their fiduciary duty which resulted in damages flowing from the breach of fiduciary duty, it is imperative that you contact competent counsel to review the trust document and any amendments to the trust document as soon as possible, so that the statute of limitations issues can be addressed and to seek the appropriate relief, including but not limited to filing the appropriate action against the trustee to impose personal liability upon the trustee, to compensate the beneficiaries for the breach of fiduciary duty, and to ensure that the trust assets are preserved and properly maintained.
If you have a question about the statute of limitations for a breach of fiduciary duty claim, contact the attorneys at Adrian Philip Thomas, P.A. for a free initial consultation.