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Ciccone v. Hersh
Citation: 320 F. App'x 48Docket: No. 08-0702-cv
Court: Court of Appeals for the Second Circuit; April 7, 2009; Federal Appellate Court
Plaintiffs-appellants Laurence and Christine Ciccone appeal a January 8, 2008 decision by Judge Victor Marrero of the Southern District of New York, which granted defendants-appellees’ motions for summary judgment and dismissed their amended complaint for breach of fiduciary duty against their broker, Mitchell Hersh. The court assumed for the appeal that a genuine issue of fact existed regarding whether Hersh owed the Ciccones a fiduciary duty, despite the nondiscretionary nature of their investments. It acknowledged that fiduciary obligations may arise in certain "special circumstances," including a closer-than-arms-length relationship. The court also accepted that the claim did not begin to accrue until Hersh openly repudiated his obligations or the relationship terminated. However, it ruled that the Ciccones' complaint, filed on January 27, 2006, was barred by the three-year statute of limitations for breach of fiduciary duty claims. The limitations period commenced when the fiduciary relationship ended or when there were no clear indicators of an ongoing relationship. The Ciccones failed to demonstrate that their relationship with Hersh continued beyond 2002, supported by Mr. Ciccone's testimony that they lost faith in Hersh towards the end of that year and their lack of communication with him since early 2002. The court affirmed the district court's judgment, noting that the Ciccones did not clearly allege any special circumstances in their amended complaint and did not invoke any other relevant exceptions. Furthermore, New York law was accepted as governing the breach of fiduciary duty claim, while the defendants cited a non-precedential New Jersey case to argue against the claim’s validity.