News

First Department Unanimously Reverses Denial of Summary Judgment on Breach of Fiduciary Duty and Negligence Claims.

LLFW prevailed on appeal to the Appellate Division, First Department, from the denial of a motion for summary judgment dismissing claims for negligence and breach of fiduciary duty in a private banking case brought against its client, a money center investment bank.

In the decision, the plaintiff, the administrator of the estate of a private banking customer, alleged that the bank had breached its fiduciary duty to him by not forwarding statements, received by the bank, regarding dividend reinvestment accounts that the decedent had maintained with transfer agents unaffiliated with the bank.

As a result, the plaintiff claimed, he had been unable to manage the dividend reinvestment accounts, losing as much as $5 million in capital gains that would have been generated had the accounts been sold earlier than they ultimately were.

The First Department held that the bank had no fiduciary duty to forward the statements to the plaintiff, and that the plaintiff was in any event deemed to have been on constructive notice of the accounts because he had signed the decedent's tax returns, which showed separate dividend income from the accounts.

Back to Top