NY appeals court revives sibling lawsuit

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A state appeals court has reversed a lower court decision and reinstated a lawsuit filed by a man accusing his sister of abusing her power of attorney for him.

Cyrus Ardalan filed the petition in state Supreme Court in Erie County against Azita Safaie seeking a financial accounting and accusing her of breach of fiduciary duty.

Ardalan alleged that Safaie abused her power of attorney when she acted on his behalf to sell property that they owned jointly in Iran.

Specifically, he alleged that she deprived him of the total proceeds from the sale of the property when she failed to inform him that part of the compensation for the sale of the property included an apartment in Iran.

The apartment significantly depreciated in value between the time of the sale of the jointly held property and the time of the sale of the apartment.

Ardalan conceded that he received a portion of the proceeds of the sale of the jointly held property when it was initially sold. He also received his share of the value of the apartment when it was ultimately sold years later.

But he alleged that his sister should have informed him that part of the compensation for the sale of the jointly held property included title to the apartment.

He claims that, as a result of her failure to tell him immediately that the apartment was part of the compensation, he was deprived of the ability to sell his interest in the apartment before it significantly depreciated in value.

Safaie filed a pre-answer motion to dismiss the petition and sought sanctions. State Supreme Court Justice Daniel Furlong granted the motion, to dismiss the petition, but he did not impose any sanctions.

Ardalan appealed and the Appellate Division of state Supreme Court, Fourth Department, unanimously reversed the decision and reinstated the petition.

“Here, none of the documentary evidence submitted by respondent refutes petitioner’s allegations regarding the accounting cause of action,” the court wrote.

The panel also ruled that Safaie failed to establish her claim that the statute of limitations had expired inasmuch because there was no “open repudiation” of her fiduciary duties or a “judicial settlement of the fiduciary’s account.”

“We conclude that petitioner sufficiently pleaded all of the requisite elements for a cause of action for an accounting. We therefore conclude that the court erred in dismissing that cause of action,” the court wrote.

“With respect to petitioner’s cause of action for breach of fiduciary duty …Petitioner sufficiently alleged that there was a fiduciary relationship, that respondent engaged in misconduct, and that petitioner suffered damages as a result,” the Fourth Department ruled.

“We agree with petitioner that the documentary evidence submitted by (Safaie) does not conclusively establish a defense to the action as a matter of law. Furthermore, we agree with petitioner that respondent failed to establish that the proceeding was untimely,” the court wrote.

“A cause of action for breach of fiduciary duty accrues when the fiduciary openly repudiates his or her obligation or the fiduciary relationship has otherwise been terminated,” the court explained.

Safaie “failed to establish as a matter of law that the statute of limitations had expired inasmuch as she failed to establish if and when the relationship was openly repudiated or terminated,” the court found.

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