IN RE: Gustave MEYER

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Supreme Court, Appellate Division, Second Department, New York.

IN RE: Gustave MEYER, deceased. Gail Ellen Meyer, Respondent; Jean Meyer, Appellant.

Decided: March 24, 2003

SONDRA MILLER, J.P., WILLIAM D. FRIEDMANN, DANIEL F. LUCIANO and BARRY A. COZIER, JJ. Solomon, Zauderer, Ellenhorn, Frischer & Sharp, New York, N.Y. (Leonard S. Baum, Steven H. Holinstat, and Andre K. Cizmarik of counsel), for appellant. Hoffinger Stern & Ross, LLP, New York, N.Y. (Stephen R. Stern and Philip S. Ross of counsel), for respondent.

In a proceeding to compel an accounting, Jean Meyer appeals, as limited by her notice of appeal and brief, from so much of an order of the Surrogate's Court, Queens County (Nahman, S.), dated August 10, 2001, as granted the motion of Gail Ellen Meyer for summary judgment dismissing Jean Meyer's affirmative defenses based on the statute of limitations and laches, and directing her to judicially settle her account as executor and trustee.   Justice Luciano has been substituted for the late Justice O'Brien (see 22 NYCRR 670.1[c] ).

ORDERED that the order is affirmed insofar as appealed from, with costs.

Gustave Meyer died in 1971, leaving behind his wife, the appellant, Jean Meyer, and their three children, including the petitioner, Gail Ellen Meyer, then age 20.   The decedent and the appellant owned a number of properties through various corporations.   In his will, the decedent created a testamentary trust, the income to be distributed to the appellant during her lifetime and, upon her death, to be divided equally among the petitioner and her siblings.   The appellant was the executor of the will and a trustee;  however, the trust was never funded.

In 2001 the petitioner commenced the instant proceeding to compel an accounting by the appellant.   The appellant asserted various affirmative defenses in her answer, including the statute of limitations and laches.   Thereafter, the Surrogate granted the petitioner's motion for summary judgment dismissing the appellant's affirmative defenses and directing the appellant to judicially settle her account as executor and trustee.

A proceeding to compel an accounting by a fiduciary is governed by a six-year statute of limitations (see CPLR 213[1] ).   The claim does not begin to accrue until there is either an open repudiation of the fiduciary's obligation or a judicial settlement of the fiduciary's account (see Matter of Rodken, 270 A.D.2d 784, 705 N.Y.S.2d 429;  Matter of Winne, 232 A.D.2d 956, 649 N.Y.S.2d 210;  see also Matter of Barabash, 31 N.Y.2d 76, 334 N.Y.S.2d 890, 286 N.E.2d 268).

 The Surrogate properly concluded that the proceeding is not barred by the statute of limitations since the appellant neither judicially settled her account nor openly repudiated her fiduciary obligation.   The appellant contends that the Federal estate tax return filed in 1973 constituted a repudiation because it revealed that there were no assets in the estate to fund the trust.   However, “[t]he law requires proof of a repudiation by the fiduciary which is clear and made known to the beneficiaries” (Matter of Barabash, supra at 80, 334 N.Y.S.2d 890, 286 N.E.2d 268 [emphasis in original];  see Matter of Behr, 191 A.D.2d 431, 594 N.Y.S.2d 314).   The appellant failed to establish that by filing this tax return, she clearly made known to her children that she was repudiating her fiduciary obligation.   Furthermore, we reject the appellant's contention that the statute of limitations governing a fraud cause of action should be applied to bar this proceeding.

 The appellant's defense of laches was properly dismissed as that defense also requires proof of an open repudiation of her fiduciary obligation (see Matter of Barabash, supra at 82, 334 N.Y.S.2d 890, 286 N.E.2d 268;  Matter of Rodken, supra).

The appellant does not raise any issue on appeal with respect to the Surrogate's dismissal of her remaining affirmative defenses.   As the petitioner established her entitlement to an accounting, the Surrogate properly granted her motion for summary judgment and directed the appellant to judicially settle her account as executor and trustee.

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