Brief Fact Summary. Mark Rothko (Rothko) was a famous expressionist painter whose paintings were of substantial value. The issue underlying this matter is the manifestly improper behavior of his three executors. Appellant executors appeal a lower court ruling removing them as executors of the estate.
Synopsis of Rule of Law. Executors retain a fiduciary duty that prohibits dealings of self-interest.
Issue. Should executors who engage in self-dealing that jeopardizes the value of an estate be removed as executors of the estate?
Held. Yes. Executors retain a fiduciary duty that prohibits dealings of self-interest. Those who engage in such dealings should be removed as executors of the estate. Due to the conflict of interest of two of the executors between the estate and the galleries, there is a breach of fiduciary duty and trust to the estate. Although the third executor did not have the same interest in the galleries, he still breached hid fiduciary duty because he failed to exercise ordinary prudence and attempt to prevent, in some regard, his co-executors’ manifestly wrong behaviors. Moreover, the lower court was correct in using appreciation damages where assets of an estate were sold below value as a result of a conflict of interest.
This is particularly so where the conduct of wrongdoers has rendered it difficult to ascertain the damages suffered with the precision otherwise possible.View Full Point of Law