Equitable Accounting as a Remedy in New York

Equitable accounting is a court-ordered remedy used when one party manages money or property that belongs, at least in part, to someone else, and there is a need to determine exactly how those assets were handled. In New York, this remedy helps ensure transparency in financial relationships where one side owes the other a duty of trust. Courts may grant equitable accounting when someone has a right to an explanation of how their funds or shared property were used, but cannot get that information through normal legal channels.

To succeed in a request for equitable accounting, a plaintiff must show that three main requirements are met.

A Fiduciary or Confidential Relationship

The first requirement is that the parties share a fiduciary or confidential relationship. This means one party had a legal obligation to act in the best interest of the other in matters involving money or property. Common examples include business partners, trustees and beneficiaries, attorneys and clients, or corporate officers and shareholders. The relationship must go beyond a basic business deal or arms-length transaction. The person managing the funds or property must have held a position of trust and responsibility.

A Breach of Duty Related to Shared Property or Money

The second element is a breach of duty by the person holding the money or property. This breach does not need to be fraud or theft, but rather the failure to properly account for how the funds were handled. If one partner has control over a joint bank account, for instance, and refuses to provide records or explanations, this could qualify. The plaintiff must have a real interest in the money or property being managed and must show that the other party failed to meet their responsibility to account for it.

No Adequate Remedy at Law

Equitable accounting is only available when ordinary legal remedies, like a lawsuit for money damages, are not enough. If the plaintiff cannot determine how much money was mishandled without first seeing the financial records, then the court may step in and order a detailed accounting. This is what makes the remedy “equitable” — it is based on fairness and is designed to get information, not just a check.

Conclusion

Equitable accounting is a powerful tool in situations where one person or party has control over another’s money or property, and the full picture of how those assets were handled is unclear. In New York, courts will grant this remedy only when there is a relationship of trust, a breach of that trust, and no simple way to get the information needed through ordinary legal means. If successful, the court may compel the person in control of the funds to open the books and provide a full explanation. This remedy ensures transparency and helps protect the rights of those who depend on others to handle financial matters honestly and fairly.

Find the Law

“To demonstrate entitlement to equitable accounting, a plaintiff must establish (i) the existence of a confidential or fiduciary relationship between the plaintiff and the defendant and (ii) the defendant’s breach of the duty imposed by that relationship with respect to money or property in which the plaintiff has an interest (Adam v Cutner & Rathkopf, 238 AD2d 234, 242 [1st Dept 1997]). The plaintiff must also demonstrate that there is no adequate remedy at law (Unitel Telecard Distribution Corp. v Nunez, 90 AD3d 568, 569 [1st Dept 2011]).” Shanghai Nonobank Fin. Info. Serv. Co. v. Jie, 2019 N.Y. Slip Op. 32043 (N.Y. Sup. Ct. 2019).