Commission of tort by trustee or predecessor: Prerequisites to suit and collection from trust property; plaintiff not required to prove certain matters; entry of judgment; notice; intervention; personal liability of trustee; nonalteration of certain existing law.
1. If a trustee or his predecessor has committed a tort in the course of his administration of the trust, the trustee in the capacity of representative may be sued and collection had from the trust property, if the court determines in the action that:
(a) The tort was a common incident of the kind of business activity in which the trustee or his predecessor was properly engaged for the trust;
(b) That, although the tort was not a common incident of such activity, neither the trustee nor his predecessor, nor any officer or employee of the trustee or his predecessor, was guilty of personal fault in incurring the liability; or
(c) That, although the tort did not fall within paragraph (a) or (b), it increased the value of the trust property.
Ê If the tort is within paragraph (a) or (b), collection may be had of the full amount of damage proved, and if the tort is within paragraph (c) above, collection may be had only to the extent of the increase in the value of the trust property.
2. In an action against the trustee in the capacity of representative under this section, the plaintiff need not prove that the trustee could have secured reimbursement from the trust fund if the trustee had paid the plaintiff’s claim.
3. A judgment may not be entered in favor of the plaintiff in the action unless he proves that, within 30 days after filing the action, or within 30 days after the filing of a report of an early case conference if one is required, whichever is longer, or within such other period as the court may fix, and more than 30 days before obtaining the judgment, he notified each of the beneficiaries known to the trustee who then had a present interest of the existence and nature of the action. The notice must be given by mailing copies to the beneficiaries at their last known addresses. The trustee shall furnish the plaintiff a list of the beneficiaries and their addresses, within 10 days after written demand therefor, and notification of the persons on the list constitutes compliance with the duty placed on the plaintiff by this section. Any beneficiary may intervene in the action and contest the right of the plaintiff to recover.
4. Subject to the rights of exoneration or reimbursement provided in NRS 163.130, the trustee may also be held personally liable for any tort committed by him, or by his agents or employees in the course of their employments only if the trustee, agent or employee is personally at fault.
5. This section does not change the existing law with regard to the liability of trustees of charitable trusts for torts of themselves or their employees.
Last modified: February 25, 2006