Escrow Agent Has Fiduciary Duty to Persons With a Beneficial Interest in the Escrowed Property

On December 14, 2016, the Second Department issued a decision in Sasidharan v. Piverger, 2016 NY Slip Op. 08387, holding that an escrow agent has a fiduciary duty, explaining:

An escrow agent not only has a contractual duty to follow the escrow agreement, but additionally becomes a trustee of anyone with a beneficial interest in the trust with a duty not to deliver the property held in escrow to anyone except upon strict compliance with the conditions imposed in the escrow agreement. Thus, an escrow agent can be held liable for breach of the escrow agreement and breach of fiduciary duty as escrowee. Here, the complaint, as supplemented by the evidentiary material submitted by the plaintiffs in opposition to the motion, set forth cognizable causes of action to recover damages for breach of the escrow agreement and breach of fiduciary duty insofar as asserted against the defendants.

(Internal quotations and citations omitted).