Delaware General Assembly


CHAPTER 409

FORMERLY

HOUSE BILL NO. 542

AN ACT TO AMEND TITLE 12 OF THE DELAWARE CODE RELATING TO FIDUCIARIES.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE :

Section 1. Amend Title 12, Delaware Code, by adding a new section to read as follows:

Ҥ 3408. Limitation on personal liability of fiduciary.

(a) Except as otherwise provided in the contract, a fiduciary is not personally liable on a contract properly entered into in a fiduciary capacity if the fiduciary in the contract discloses the fiduciary capacity.

(b) The debts, obligations and liabilities incurred by a fiduciary by reason of the ownership or control of property held in a fiduciary capacity, including, but not limited to, liability incurred as a general or limited partner or for violation of environmental law, shall be enforceable solely against the fiduciary fund and no fiduciary shall be obligated personally for any such debt, obligation, or liability solely by reason of owning or controlling the fiduciary fund.

(c) A fiduciary is personally liable for torts committed in the course of administering a fiduciary fund only if the fiduciary is personally at fault on account of the fiduciary’s own willful misconduct proven by clear and convincing evidence in the Court then having primary jurisdiction over the fiduciary.

(d) A claim based on a contract entered into by a fiduciary in the fiduciary’s fiduciary capacity, on an obligation arising from ownership or control of the fiduciary fund, or on a tort committed in the course of administering a fiduciary fund, may be asserted in a judicial proceeding against the fiduciary in the fiduciary’s fiduciary capacity, whether or not the fiduciary is personally liable on the claim.

(e) This section shall have no application to any action brought by, or on behalf of, a beneficiary for violation of a fiduciary’s fiduciary duties.

(f) Notwithstanding any other provision of this chapter or other Delaware law, for purposes of this section, the term ‘fiduciary’ means only trustees, personal representatives, guardians, custodians under the Uniform Transfers to Minors Act (Chapter 45 of this Title), and advisors (including, but not limited to, investment advisors and distribution advisors) serving as co-fiduciaries in conjunction with trustees, personal representatives, guardians and custodians under the Uniform Transfers To Minors Act.”.

Section 2. Amend Title 12, § 3401(b) by deleting the word “All” appearing therein and substituting the following words in lieu thereof: “Except as otherwise expressly provided herein, all”.

Section 3. Amend Title 12, § 3589 by deleting said section in its entirety and amend Title 12, §§ 3590 and 3591 by redesignating them as §§ 3589 and 3590 respectively.

Section 4. Amend Title 12, § 3581(b)(8) by deleting the reference therein to § 3590 and inserting in lieu thereof a reference to § 3589.

Approved July 10, 2002