Accounting Claim Based on Breach of Fiduciary Duty Has Three-Year Limitations Period

On May 10, 2024, Justice Borrok of the New York County Commercial Division issued a decision in Idi v. Sela, 2024 NY Slip Op. 31679(U), holding that an accounting claim based on a breach of fiduciary duty has a three-year limitations period, explaining:

Although an accounting claim is generally subject to a six-year statute of limitations, where a plaintiff primarily seeks monetary damages for breach of fiduciary duty and pursues an accounting merely to determine the amount of such damages, a three-year limitations period applies. The accounting claim is in favor of 1961 and L-Hostels which are corporations not partnerships, and these claims sounding in breach of fiduciary duty arose when then the breach first occurred. Thus, the appropriate statute of limitations period is three years, not six. The limitations period begins to run when the fiduciary has Openly repudiated his or her obligation or the relationship has been otherwise terminated. The gravamen of Mr. Idi’s claim is that Mr. Sela breached his fiduciary duties by late 2011. Under the open repudiation rule, the statute of limitations on claims against a fiduciary for breach of its duty is tolled until such time as the fiduciary openly repudiates the role. Mr. Idi asserts Mr. Sela openly repudiated his fiduciary obligation with regard to 1961 and L-Hostels in late 2011 when he made clear to plaintiff on the phone that plaintiff
should stop calling him, thus by Mr. Idi’s own claims, Mr. Sela had openly repudiated his role as a fiduciary. The claim was not asserted until Mr. Idi filed his Statement of Claim in the arbitration on July 1, 2016. Taking the allegations as true as the Court
must at this stage of the litigation and giving Mr. ldi every favorable inference, the latest such claims accrued was in late 2011, i.e., five years before the claims were asserted. As such, it is untimely and dismissed.

(Internal quotations and citations omitted).

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