MHL ARTICLE 81 - New York State Unified Court System

Matter of Gerald J. Friedman, NYLJ, 12/28/01 (Sup. Ct., NY Cty.)(Lowe, J.)
Court finds no breach of fiduciary duty where:
(1) guardian created trust and named himself trustee because there was no self dealing-trust
expressly provided that if trustee was the same person as the guardian, there could be no double fees
paid-also inclusion in trust of exculpatory clause wasn’t a breach of the guardian’s duty
(2) guardian was overzealous and intrusive in protecting the ward by being intrusive and by
exceeding the authority granted to him-his action were motivated by desire to protect IP not increase
fees paid to him.
Reliance Insurance Company of New York v. Chemical Bank, NYLJ, 9/5/96, p. 21, col. 1, (Sup.
Ct., NY Cty.)
Guardian withdrew and misused IP’s funds. Plaintiff insurance company, as surety, sued bank
alleging breach of contracts and fiduciary duty with IP. Court entered summary judgment for bank
and entered default judgment against former guardian, holding that although funds belonged to IP,
there was never contractual relationship between bank and IP, only with guardian. Therefore, there
was no breach of contract. There was also no breach of fiduciary duty because 1) there is no
fiduciary relationship between bank and IP as “relationship of debtor to creditor that exists between
a bank and its customer does not change merely because the funds on deposit are those of a
fiduciary,” as well as fact 2) that bank had no concrete reason to believe that money was being
misappropriated.
Matter of Wingate (Mascalone), 169 Misc.2d 874: 647 N.Y.S.2d 433 (Sup. Ct., Queens Cty.,
1996)
Court finds breach of fiduciary duty by attorney-in- fact, revokes power of attorney and appoints
special guardian in Article 81 proceeding where AIP is unable to make any type of decisions
regarding her property management based on fact that she resides in nursing center and suffers from
Alzheimer's disease and dementia, and attorney-in-fact refuses to sell AIP's cooperative apartment
to render her Medicaid eligible and enable her to remain in nursing home.
Matter of Heagney, NYLJ, 4/24/00, p. 21 (Sup. Ct., Westchester Cty.)(Friedman, JHO)
Court found that although guardian did not violate fiduciary duties towards IP, because of
"negligence and sloppiness" in not filing required designations and in not filing annual reports, no
fee was to be awarded.
st
Matter of Morris Honig, 213 A.D.2d 229, 623 N.Y.S.2d 862, (1 Dept., 1995)
Burden of proof lies with conservator to prove that he did not breach fiduciary duty.
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