01.15.2021

To Recover From a Fiduciary for Breach of Duty, the Loss Must be a Result of the Breach

In re Estate of Cenaffra, No. A-5731-17T1 (N.J. Super. App. Div. Sept. 9, 2020)

Defendant was the executrix under the decedent’s last will and had also been the decedent’s agent under a power of attorney.  The trial court granted plaintiff’s request to require defendant to provide an accounting for both roles.  At trial, defendant invoked her Fifth Amendment right and declined to testify.  The trial court ultimately granted judgment against defendant for $200,000 in damages.  Defendant appealed.

The Appellate Division explained that, to recover from a fiduciary for breach of duty, a party must prove that the loss resulted from the breach, although that need not be proven with certainty.  The fiduciary then has the burden of proving clearly that there was no causal connection between the breach and the loss.

The Appellate Division saw no basis to overturn the trial court’s judgment, finding that plaintiff submitted substantial credible evidence to prove that the challenged transactions were not legitimate expenses.  However, the case was remanded because the appeals panel was unable to determine how the trial court had computed the amount of the judgment.