Breach of Fiduciary Duties
A fiduciary duty exists where there is a relationship between the person holding the fiduciary duty and the person entitled to be the beneficiary of it. A fiduciary is required to act in the highest good faith toward his or her principal and not seek to obtain any advantage over him or her by the slightest misrepresentation or concealment. Full and complete disclosure of all important information is required even if the relationship between them becomes strained or is in conflict.
To pursue a claim for breach of fiduciary duty, the elements of the cause of action are: (1) existence of a relationship giving rise to a fiduciary duty; (2) existence of a fiduciary duty; (3) the breach of the fiduciary duty; (4) damages caused by the breach of fiduciary duty.
A fiduciary duty exists where there is a formal relationship, which involves an element of trust. A fiduciary is a person who undertakes the duty to act in the interest of another person or entity. The primary characteristics of a fiduciary relationship involves trust and the confidence that one person places in another. There are various elements to the principle duties that a fiduciary owes to another. The first is loyalty; the second is a duty of obedience; and, third is a duty of high care. Sometimes a duty of disclosure of key or material information is said to be a fourth duty. When a violation of these duties occurs, it gives rise to a claim for breach of fiduciary duties. In asserting a claim for breach of fiduciary duties, there are a number of elements. These include proof of the existence of the duty, proof that it was owed to the party asserting the claim, a breach of the duty, and injury caused by the breach. Fiduciary duties can involve multiple actors or entities and they can vary according to the specific facts involved.
In the corporate context, shareholders, officers and directors can owe fiduciary duties to the corporation.
In a partnership, partners owe a duty to the partnership and to each other. In joint ventures, the joint venturers owe fiduciary duties to each other.
A fiduciary duty is owed by a financial adviser or stockbroker to a customer. Insurance companies owe fiduciary duties to their insured. In contractual relationships, fiduciary duties can be owed to the other party. In some contracts, informal relationships cannot result in fiduciary duties such as full disclosure regarding contract and parties.
A succession representative owes a fiduciary duty to the heirs of the estate.
A parent owes a fiduciary duty to its child.
With fiduciary duties, it is important to examine the relationship involved very closely and determine your duties and understanding involving the relationship.
If you feel that a party with a special duty to act in your best interests has breached their fiduciary duties, you may be able to obtain damages for your losses. Please contact us to speak with a qualified and experienced attorney who can determine the best way to protect and maximize your legal interests. The Lamothe Firm has experience handling cases of a similar nature and is prepared to protect your legal interest. Frank Lamothe won a substantial judgment involving the break up of an LLC. He has lectured to lawyer groups on breach of fiduciary duties in Louisiana.