January 2014

IMO the Restated Revocable Trust of Lawrence F. Conlin, deceased C.A. No. 8052-ML (January 21, 2014)

Master in Chancery LeGrow found that the undisputed facts showed that the beneficiary was on inquiry notice of any alleged wrongdoing by the trustee no later than January 2008. The beneficiary began receiving monthly statements for the trust in January 2008, at which point the Master found that the beneficiary was aware of what assets the trustee held in the trust. Further, the beneficiary had started asking questions about the trust and the assets that comprised the trust corpus no later than 2007. The Master noted that although the beneficiary retained counsel and requested documents from the trustee during that time period—and apparently believed the documents the trustee provided did not fully satisfy her requests—the beneficiary took no further steps to assuage her concerns until 2012, when she finally hired a forensic accountant. The beneficiary didn’t file this case until November 21, 2012. The Master found that the beneficiary’s receipt of the monthly statements and the beneficiary’s own conduct in raising questions about assets she believed were missing from the trust demonstrates she was aware or should have been aware of the conduct she alleges constituted a breach of the trustee’s fiduciary duties.

The Master applied the three year statute of limitations under 10 Del. C. § 8106, and noted that the three years begins to run at the time of the alleged wrongful act, even if a party is ignorant of the cause of action or harm suffered.  The Master also found that there was no basis to toll the statute of limitations. As a result, the Master recommended dismissal of the beneficiary’s claims alleging breaches of fiduciary duties, seeking removal of the trustee and an accounting, and for damages for failure to properly account.