Wills and trusts – Court applied incorrect statute of limitations to breach of trust claims

Where the circuit court applied the catch-all limitations period for personal actions, rather than the limitations period in the Virginia Uniform Trust Code, to breach of trust claims, reasoning that the plaintiff had brought “common law” claims for breach of trust, rather than “statutory” claims, it erred.

Background

The Virginia Uniform Trust Code provides a two-track statute of limitations for claims by a trust beneficiary “against a trustee for breach of trust.” Rather than apply one of those statutes of limitations, the trial court here dismissed the plaintiff’s breach-of-trust claims as time-barred under Code § 8.01-248—the catch-all limitations period for personal actions for which “no limitation is otherwise prescribed.”

Even if the one-year limitations period in Code § 64.2-796(A) applied, moreover, the circuit court held the time to sue had expired a year after a previous trustee in 2009 had disclosed potential breaches by his predecessors. It also held that the plaintiff’s claims were barred by laches.

Code § 8.01-248

The trial court ruled that the catch-all provision controls because Dorothy brought “common law” claims, not “statutory” claims under the Virginia Uniform Trust Code. In so holding, it erred.

By its terms, the limitations period set forth in Code § 64.2-796 applies to “a proceeding against a trustee for breach of trust.” It leaves no room for a different limitations period to apply depending on the remedy sought for breach of trust. Likewise, nothing in Code § 64.2-796 suggests that the applicable statute of limitations turns on whether the remedy for breach of trust is available under the statute or the common law.

The Virginia Uniform Trust Code is not a separate legal system from the common law. Rather, it “codifies those portions of the law of express trusts that are most amenable to codification.”

The trial court also erred in assuming that Dorothy’s request for compensatory damages showed that she was not suing under the Virginia Uniform Trust Code. In fact, money damages are specifically authorized by that statute. The trial court also erred in concluding that, by requesting punitive damages, Dorothy converted her breach-of-trust claim into a common-law claim that was not subject to the express statute of limitations in Code § 64.2-796.

Code § 64.2-796(C)

The trial court alternatively ruled that Dorothy’s claim was barred because subsection A of that statute required that her predecessor-in-interest sue the trustees no later than one year after Schumann’s 2009 disclosure that his predecessors (Vess and Easterling) had breached their duties. Even assuming that Schumann’s 2009 filing “adequately disclosed the existence of a potential claim for breach of trust,” and Schumann served a copy of his report on Dorothy’s predecessor-in-interest, the trustee’s report had to disclose “the time allowed for commencing a proceeding.” Because the defendants failed to show that Schumann provided that disclosure, the one-year limitations period does not apply.

The defendants argue that “[e]ven if the Schumann petition . . . did not explicitly disclose the time period to bring suit under Virginia law, the five-year statute of limitations contained in . . . Code § 64.2-796(C)(1)” applied. They say that the five-year period commenced “either in 2008 when Messrs. Vess and Easterling resigned as Trustees or in October 2009 when Mr. Schumann resigned.” But Easterling resumed his co-trustee role in 2009, joined for the first time by Rogers. While Easterling’s earlier resignation started the five-year clock for any claims based on his past misdeeds, it did not immunize him to breach his fiduciary duties going forward.

While John “was never appointed or designated a trustee and/or quasi-trustee of the QTIP Trust,” Dorothy alleged that Rogers and Easterling allowed John to act in their place as trustees, making John a “quasi-trustee” or “delegatee” or “agent of the trustees.” Since Dorothy sued John within five years of the trust’s dissolution, Dorothy’s claim against John was timely under Code § 64.2-796(C).

Laches

The relevant period for considering laches began upon Mildred’s death in 2019, when the trust terminated and the remainder beneficiaries became entitled to what was left. If Charles and then Dorothy had engaged in unreasonable delay after Mildred died, and if that delay had sufficiently prejudiced the defendants, then the defendants could plausibly assert laches as a bar to Dorothy’s claim despite that the statutory limitations period had not yet expired.

But the defendants offered no facts on their pleas in bar to prove that. This court also agrees with Dorothy that the allegations in the complaint suffice to show that the defendants’ unclean hands prevent them from asserting a laches defense.

Amend

Because the trial court committed an error of law when it found Dorothy’s claims to be time-barred, the court necessarily erred in denying her leave to file the amended complaint.

Reversed and remanded.

Fulks v. Fulks, Case No. 0780-25-2, May 19, 2026. CAV (Raphael). From the Circuit Court of King William County (Bondurant). J. Tyler Mayhew (Bowles Rice LLP, on briefs), for appellant. Colin D. Neal (Dennis J. Quinn; Andrew K. Clark; Eliza J. Unrein; William D. Bayliss; Joseph E. Blackburn; Carr Maloney, P.C.; Hirschler Fleischer, P.C.; Williams Mullen, on brief), for appellees. VLW 026-7-201. 21 pp.

Full-Text Opinion
VLW 026-7-201