We hold that collateral estoppel does not prevent relitigation of a
ruling that was an alternative basis for a trial-level decision, where
an appellate court affirmed the decision without addressing that
ruling. We also hold that, when a trustee resigns, the statute of
limitations governing an action to compel her to account runs from the
date the trusteeship is [*5]turned over to a successor trustee.
The parties agree that an accounting proceeding against a former
trustee is governed by CPLR 213 (1), which lists "an action for which
no limitation is specifically prescribed by law" among actions that
"must be commenced within six years." The disputed question here is:
within six years of what? We answered this question nearly a century
ago, when we said, speaking through Judge Cardozo:
"While an express trust subsists and has not been
openly renounced, the Statute of Limitations does not run in favor of
the trustee. But after the trust relation is at an end, and the trustee has yielded the estate to a successor, the rule is different. The running of the statute then begins, and only actual or intentional fraud will be effective to suspend it"
(Spallholz v Sheldon, 216 NY 205, 209  [citations omitted] [emphasis added]).
We see no reason to depart from the rule of Spallholz. It is easy to understand and easy to apply, and gives the successor trustee and the beneficiaries six full years to bring an [*14]accounting
proceeding after the former trustee's role has come to an end. In this
case, Tydings turned over the trusteeship to a successor on January 1,
1997, and the accounting proceeding was brought more than six years
later, on August 20, 2003. It was brought too late.
GSS argues for a different rule, contending that the statute
does not start to run until the former trustee is asked to give an
accounting and refuses to do so. That rule is an impractical one; its
effect would be that the statute would not start to run for years,
perhaps decades, if the former trustee was never asked for an
accounting and had no occasion to say that she would not give one. GSS
claims, however, that its rule is supported by Matter of Barabash (31 NY2d 76 ). We disagree.
Barabash is a different kind of case. The fiduciary there
was the administrator of a decedent's estate, and was also the
decedent's nephew. The administrator had distributed the entire estate
to himself, ignoring the rights of the decedent's children. The
children sued for an accounting some 17 years later. It was not
suggested in Barabash that the administrator had resigned, or
turned over his office to a successor. We held that, on those facts,
the statute did not begin to run until the administrator openly
repudiated his obligation to account. Until that repudiation occurred,
the beneficiaries of the estate were entitled to assume that the
administrator would perform his trust responsibilities. But here,
Singer knew on January 1, 1997 that her brother had replaced Tydings as
trustee. Knowing that Tydings was no longer her fiduciary, she was not
justified in waiting indefinitely to demand an accounting.
The Surrogate in the Singer
accounting proceeding did not adopt GSS's present theory, but held that
the "statute of limitations can begin to run on the beneficiary's right
to an accounting only where the former fiduciary has failed to have
accounted after a reasonable time to do so has passed" (12 Misc 3d at
625). The Surrogate's theory, as we understand it, is that the
beneficiaries or the successor trustee cannot or should not bring
action to compel an accounting until a reasonable time after the
resignation, and that the statute should not start running before suit
can be brought.
The Surrogate's theory would leave the courts with the problem
of deciding what a reasonable time is. In this case, for example, the
accounting proceeding was brought six years, seven months and nineteen
days after Tydings turned the trusteeship over to her successor — so
that, on the Surrogate's reasoning, it would be necessary to decide
whether seven months and nineteen days was more or less than a
reasonable time to account. We prefer the clearer and simpler rule that
the time starts running when a successor trustee is put in place. This
rule does not give Singer less than six years to sue, for she could
have sought to compel an accounting the day after Tydings's resignation
if she had wanted to. Under Surrogate's Court Procedure Act § 2205 (1),
"the court may at any time, upon it appearing that it is for
the best interests of the estate, make an order . . . requiring a
fiduciary to file an intermediate or final account . . ." (SCPA § 2205
 [a] [emphasis added]).
For all these reasons, we reaffirm the rule of Spallholz:
running of the statute of limitations on a proceeding to compel an
accounting begins when "the trust relation is at an end, and the
trustee has yielded the estate to a successor" (216 NY at 208).