We determine in this case when a cause of action accrues on a claim for breach of fiduciary duty predicated
A judge in the Superior Court allowed the defendants' motions for summary judgment on all claims, concluding that, because Doe knew or should have known by November, 1993, at the latest, that she had been harmed by Freeman's conduct, her suit was untimely. See Malapanis v. Shirazi, 21 Mass.App.Ct. 378, 383 (1986) ("On an appropriate record, summary judgment may be granted on the question whether a particular statute of limitations has run"). The Appeals Court affirmed the judgment except as to the claim for "negligent breach of fiduciary duty." Doe v. Harbor Schs., Inc., 63 Mass.App.Ct. 337, 350 (2005). See note 4, supra. The Appeals Court held that the proper standard to apply to that claim was not the discovery rule but the more subjective "actual knowledge standard," which provides that "a cause of action for breach of fiduciary duty does not accrue until the beneficiary has actual knowledge of the fiduciary's breach. Constructive knowledge is insufficient." Lattuca v. Robsham, 442 Mass. 205, 213 (2004). See Demoulas v. Demoulas Super Mkts., Inc., 424 Mass. 501, 519 (1997) ("An actual knowledge standard applies to a plaintiff who argues that a breach of fiduciary duty of disclosure constitutes fraudulent concealment under G. L. c. 260, § 12").
We affirm the decision of the Superior Court judge on the
1. Facts. We summarize the facts in the light most favorable to Doe. See Kourouvacilis v. General Motors Corp., 410 Mass. 706, 716 (1991). Jane Doe was born on November 13, 1974, and spent most of her childhood in various temporary residences of relatives and foster parents. Some of Doe's caretakers were sexually or physically abusive to her. In April, 1992, when she was seventeen years of age and in the legal custody of the Department of Social Services (department), Doe was placed in a group residential home for young women transitioning to independence. The group home was operated by Harbor, a nonprofit organization, under the auspices of the department.
On the first day of Doe's placement, Freeman, a supervisor at the home, introduced himself as her "one-on-one counselor."
From the outset of the relationship, Freeman attempted to gain Doe's trust and develop an intimacy with her. Although he initially told Doe that he was supposed to meet with her weekly, he soon began meeting with her two or more times a week. In these meetings, Freeman encouraged Doe to reveal highly personal matters to him, including the details of a past rape. Doe testified at her deposition that Freeman told her: "Because he was my counselor I had to tell him [these] things in order to work on my issues." Further blurring their formal relationship, Freeman confided in Doe that he was unhappy with his marriage and that his wife would not have sexual relations with him.
Freeman showered Doe with special favors. He often took her to dinner outside of the group home, took long drives with her, taught her to drive, and picked her up from school in his automobile.
By the fall of 1992, around the time Doe turned eighteen years of age, Freeman told Doe that he loved her. He sent her flowers, gave her $2,000 toward the purchase of an automobile, and bought jewelry and other gifts for her. Freeman told Doe not to tell anyone about the gifts or he would "get in trouble." At about this time, he also began massaging her shoulders and back when she was upset. In April or May, 1993, Freeman kissed Doe on the lips for "[a]bout a minute." Doe testified that she felt "uncomfortable with the situation" because Freeman "was my counselor and he was married." She did not tell anyone about the incident because she was afraid that she would not be believed (as she had not been when she had complained of abuse in the past) and that she would be expelled from the home. Toward the end of May, 1993, Freeman managed to be
In June, Doe moved out of the group home and into a more independent living situation, also run by Harbor. Although the move ended Freeman's role as her counsellor, he continued to contact her. Several weeks after the move, however, Doe was informed by Maureen Crowley, her Harbor social worker, that she could not see Freeman any more. Crowley also told Doe that Freeman had been instructed to end his relationship with her but had refused to do so. Doe testified that, even though she knew at the time that Freeman "was taking advantage of me," she was distraught at the prospect of losing him because he was "the only person I had." In June, 1993, Doe attempted suicide by consuming a large quantity of medication and by slitting her wrist. While she was hospitalized, Freeman telephoned her almost every day. He blamed her because he had been fired for continuing to see her, and asked her not to reveal the relationship to anyone.
After the suicide attempt, Doe's feelings for Freeman began to change.
In July, 1994, Doe told Joseph and her roommate about the sexual relationship with Freeman. Doe testified that she first became angry at Freeman and realized that he had taken advantage of her some time after her disclosures to Joseph. On September 14, 1994, Doe began seeing Laurel A. Heyman, a licensed clinical social worker, for emotional problems that included depression and panic disorder. A treatment summary prepared by Heyman in August, 1999, nearly two years after Doe commenced her action against Freeman, stated that although Doe recognized at the time of the sexual acts with Freeman that "it was morally wrong to have sex with a married man and to have sex with [her] counselor," Doe was only able to recognize that the relationship was an abusive one over "the last two years."
Against the factual background just summarized, we now consider whether, as a matter of law, the defendants were entitled to summary judgment on Doe's claim against them for breach of fiduciary duty.
2. Discussion. As noted above, in reviving Doe's claim for breach of fiduciary duty, the Appeals Court determined that triable
a. Fiduciary duty. With full deference to the Appeals Court, we discern no serious dispute concerning Freeman's fiduciary obligations to Doe. A fiduciary duty exists "when one reposes faith, confidence, and trust in another's judgment and advice." Van Brode Group, Inc. v. Bowditch & Dewey, 36 Mass.App.Ct. 509, 516 (1994), quoting Fassihi v. Sommers, Schwartz, Silver, & Tyler, P.C., 107 Mich.App. 509, 515 (1981). Its central tenet is the "duty on the part of the fiduciary to act for the benefit of the other party to the relation as to matters within the scope of the relation." 1 A.W. Scott & W.F. Fratcher, Trusts § 2.4 (4th ed. 1987). See Restatement (Second) of Trusts § 2 comment b (1959) ("A person in a fiduciary relation to another is under a duty to act for the benefit of the other as to matters within the scope of the relation"). Although some fiduciary relationships, such as that between guardian and ward, are created by law, others arise from the nature of the parties' interactions. The "circumstances which may create a fiduciary relationship are so varied that it would be unwise to attempt the formulation of any comprehensive definition that could be uniformly applied in every case." Warsofsky v. Sherman, 326 Mass. 290, 292 (1950) (and listing examples of fiduciary relationships). See Patsos v. First Albany Corp., 433 Mass. 323, 335-336 (2001) (specific circumstances determine whether fiduciary or arm's-length relationship exists between investor and broker).
Where the fiduciary relationship is not one created by law, the existence of the relationship ordinarily is a mixed question of law and fact for which the party asserting the relationship bears the burden. See Akin v. Warner, 318 Mass. 669, 674 (1945). This general rule, however, does not preclude determination on a motion for summary judgment record that a fiduciary relationship does or does not exist. See, e.g., Patsos v. First
The undisputed record in this case leaves no doubt concerning the existence of a fiduciary relationship between Freeman and Doe. Freeman was in a formal position of authority over Doe, and responsible, among other things, for her practical education in independent living. Freeman, while denying the existence of a fiduciary relationship, acknowledged in his answer to Doe's complaint that he was required to act in Doe's best interests. See note 4, supra. He testified at his deposition that as Doe's "one-on-one counselor," he was required to "gear [himself] according to the needs of [Doe]." It is clear that Freeman understood that Doe would repose "faith, confidence, and trust in [his] judgment and advice," Van Brode Group, Inc. v. Bowditch & Dewey, supra at 516, that she did so, and that he acted accordingly. The nonexistence of a counselling license or of psychological training does not relieve Freeman of the fiducial obligations that his position and his conduct gave rise. See Warsofsky v. Sherman, supra.
That Freeman breached his fiduciary obligations to Doe also is apparent. Viewed indulgently toward Doe, see Kourouvacilis v. General Motors Corp., 410 Mass. 706, 716 (1991), the record demonstrates that, far from acting with the "utmost good faith," Akin v. Warner, supra, or highest regard for Doe's best interests, see Restatement (Second) of Trusts, supra at § 2 comment b, Freeman indulged in a series of acts that exploited Doe's considerable legal and emotional vulnerabilities.
b. Statute of limitations. The Superior Court judge applied the discovery rule to Doe's claim for breach of fiduciary duty, and held the claim to be outside of the statute of limitations. The Appeals Court, applying the actual knowledge standard, concluded that material issues remained for trial. As we explain below, the Appeals Court applied the correct standard to determine when Doe's cause of action for breach of fiduciary duty began to run, but application of that standard to the facts confirms the motion judge's conclusion that Doe's fiduciary claim fails as a matter of law. We turn first to the standard that must be applied to determine when a plaintiff's claim for breach of fiduciary duty accrues for limitations purposes.
(i) Standard of inquiry. Although the statute of limitations in tort actions generally runs for three years following the date of the injury, G. L. c. 260, § 2A, our courts have long held that, in certain circumstances, and in the absence of legislation to the contrary, basic fairness dictates a more flexible approach. See Riley v. Presnell, 409 Mass. 239, 243 (1991) (where Legislature has not defined when cause of action accrues for limitations purposes, that determination has been left to courts); Bowen v. Eli Lilly & Co., 408 Mass. 204, 205-206 (1990) (courts have developed "discovery rule" to mitigate rigidity of statute of limitations in cases where plaintiff could not have discovered her injuries in timely manner). For the tort of breach of fiduciary duty, we toll the statute of limitations until a plaintiff has "actual knowledge" that she has been injured by the fiduciary's conduct. See, e.g., Lattuca v. Robsham, 442 Mass. 205, 213 (2004) ("We consistently have held that a cause of action for breach of fiduciary duty does not arise until the beneficiary is aware that repudiation has occurred"); Demoulas v. Demoulas Super Mkts.,
Having clarified that the actual knowledge standard governs Doe's claim for breach of fiduciary duty, we now consider what the beneficiary must "actually know" to start the limitations clock running.
(ii) Triggering events. We reject Doe's contention that her fiduciary claim does not accrue until she first understood that she had been legally harmed, i.e., that she could sue Freeman for her injuries. See Doe v. Harbor Schs., Inc., 63 Mass.App.Ct. 337,
Our prior decisions do not compel such a result. We have held that a cause of action accrues for limitations purposes when a plaintiff knows (or in the case of the discovery rule, should know) facts sufficient to make a causative link between the fiduciary's conduct and the beneficiary's actual injury. See, e.g., Bowen v. Eli Lilly & Co., supra at 205-206 (discovery rule "prescribes as crucial the date when a plaintiff discovers, or any earlier date when she should reasonably have discovered, that she has been harmed or may have been harmed by the defendant's conduct"); Stuck v. Schumm, 290 Mass. 159, 165 (1935) ("the statute of limitations is not applicable until and unless the trust is terminated by the defendant by adequate repudiation through speech or conduct"); Sheila S. v. Commonwealth, 57 Mass.App.Ct. 423, 428 (2003), quoting Krasnow v. Allen, 29 Mass.App.Ct. 562, 568-569 (1990) ("Massachusetts does not require discovery of each of the elements of the cause of action — duty, breach, causation, and damages before the limitation clock ... starts ticking").
(iii) Actual knowledge. Whether the fiduciary breaches her trust by fraudulent misrepresentation, see Demoulas v. Demoulas Super Mkts., Inc., supra, or by repudiating the trust, see Lattuca v. Robsham, supra at 214,
In Riley v. Presnell, supra, for example, the plaintiff initiated a malpractice suit in 1985 against his psychotherapist for treatment that took place from 1975 through 1980. During that treatment, the defendant had sexual relations with the plaintiff, introduced drugs and alcohol into the therapy sessions, and told the plaintiff that the treatment was "special" and should not be revealed to others. Id. at 241. In 1981, the plaintiff was told by a subsequent psychotherapist that the defendant's conduct had been "substandard, bad, and essentially `nontreatment,'" as well as "totally inappropriate." Id. at 241-242.
When the defendant sought to interpose the three-year statute of limitations, the plaintiff claimed his case was timely because he did not learn of the connection between his current emotional problems and the defendant's treatment until 1984, when he met a former patient of the defendant who had been similarly abused. Id. at 242. We noted that the psychotherapist-patient relationship had "fiduciary aspects" and concluded that on the record before us, a material issue of fact remained "as to when the plaintiff knew or should have known that he may have been harmed by the defendant's wrongful conduct." Id. at 250, 251.
The Riley case does not, as the defendants claim, establish that the discovery rule rather than the actual knowledge standard applies to Doe's claim for breach of fiduciary duty. There, an open question remained whether Riley's substance addiction and other emotional problems, some of which allegedly had been caused by the defendant, impaired his actual knowledge of the connection between the defendant's conduct and Riley's own harm. Id. at 244-245. See Ross v. Garabedian, 433 Mass. 360, 366 (2001) (in claim of childhood sexual abuse pursuant to G. L. c. 260, § 4C, material issue of fact existed as to when plaintiff was capable of making causal connection between
We now turn to the merits of Doe's claim that the statute of limitations on her claim for breach of fiduciary duty did not begin to run until late in 1994.
3. Merits. We are unconvinced by Doe's attempt to cast the record in the factual mold of the Riley case.
Especially damning to Doe's claim for breach of fiduciary duty is her own deposition testimony. It is replete with specific evidence that she knew she was harmed by Freeman well before January 23, 1994, the outermost date for the timely filing of her complaint. See Bowen v. Eli Lilly & Co., 408 Mass. 204, 211
Doe correctly points out that elsewhere in her deposition testimony she claims that she did not realize Freeman's conduct had harmed her until July, 1994, when she revealed the sexual nature of the relationship to her boy friend, Joseph. Her assertion is buttressed by the four-paragraph "treatment summary" submitted by her therapist at the summary judgment stage. In the context of the entire record, however, these statements lack the detail and force of Doe's self-defeating testimony elsewhere, as the judge concluded. See O'Brien v. Analog Devices, Inc., 34 Mass.App.Ct. 905, 906 (1993) (plaintiff cannot use her own conflicting deposition testimony to create material issue of fact to surmount summary judgment).
Because the record before us establishes, primarily in Doe's own words, that she was actually aware of Freeman's wrongful, injurious conduct toward her by November, 1993, at the latest, her claim for breach of fiduciary duty, filed in January, 1997, was untimely, and the motion judge correctly entered summary judgment for the defendants on that count.
Q.: "At some point in time did you realize that your relationship with Glen was a negative thing, a bad thing?"
Q.: "Okay. What point in time was that?"
A.: "Sometime in late `93 we ended the relationship. . . ."
Q.: "Can you pinpoint a time when you stopped loving him?"
A.: "`93. . . . Before the fall, before I decided to leave the program. . . . Yes, that's when I realized that [the relationship with Freeman] wasn't healthy."
Q.: "Did you know in 1993 that if you had continued to see Glen Freeman, that it would not be healthy?"
Q.: "Why was that?"
A.: "Because I ended up in the hospital and all that."
For example, a beneficiary is entitled to approach without skepticism a fiduciary's representation that the fiduciary is investing the beneficiary's money on the beneficiary's behalf and is not required to ascertain the absence of foul play. However, once the beneficiary learns that the money has never been invested, he is required to act reasonably to ascertain whether, as a beneficiary, he has been harmed. See Stetson v. French, 321 Mass. 195, 198-199 (1947); Akin v. Warner, 318 Mass. 669, 675 (1945).