January 4, 2017
Authored by: Luke Lantta
Whether a plaintiff needs an expert witness in a breach of fiduciary duty case to testify on the standard of care is a frequently debated topic. In Heisinger v. Cleary, the Supreme Court of Connecticut weighed in on one side of that debate when it determined that no expert testimony was appropriate on the standard of care applicable to executors who seek professional advice to value the assets of an estate for preparation of estate tax returns.
A plaintiff brought claims that the executors of an estate breached their fiduciary duties to him, the decedent’s sole heir and the only beneficiary of a trust established under the decedent’s will, by, among other things, failing to supervise the work of others. More specifically, the plaintiff claimed that the appraisers hired by the executors overvalued stock that led to an excessive assessment of estate taxes. The decedent’s will gave the executors all the powers conferred under the Connecticut Fiduciary Powers Act. The Fiduciary Powers Act, in turn, gives executors the power to employ and compensate certain persons in the administration of the estate without liability for any neglect, omission, misconduct or default of such person provided the person was selected and retained with due care on the part of the fiduciary.
This language of the Fiduciary Powers Act proved pivotal. A fiduciary could only be held liable for problems arising from the work of a professional hired to assist with estate settlement if the fiduciary failed to use “due care” in the selection and retention of that professional. “Due care” is an ordinary negligence standard that contemplates whether an ordinary person – not a professional with a specialized skill set – would do under the circumstances. This is not the sort of inquiry that needs the help of an expert to understand.
The Connecticut Supreme Court made clear that it was not deciding the circumstances under which expert testimony might be necessary to prove a breach of fiduciary duty – only that it was not necessary here. Where the fiduciary was a professional, such as a corporate fiduciary, there may be a different result because, in those circumstances, the fiduciary is a professional with a specialized skill set.