New York's Fourth Department Appellate Division has laid down the marker for a trustee's fiduciary responsibility in
Capital Heat, Inc. v. Michael R. Blatner Family Trust reported at
882 N.Y.S.2d 632. This matter involved a life insurance agreement made by the plaintiff with the defendant trust when the trustee was also a shareholder and an employee of the plaintiff. In reversing a motion for summary judgment granted by the lower court against the trust for the value of the policy premium, the court ruled that "a fiduciary's duty requires 'not honesty alone but the punctilio of an honor the most sensitive'" with ' "undivided and undiluted loyalty to those whose interests the fiduciary is to protect' ".