West Palm Beach Breach of Fiduciary Duty Attorney
In simple terms, a fiduciary is someone with “discretionary power” over the interests of other people, in circumstances that provide incentive and opportunity to abuse that position. A trustee is the prototypical fiduciary, but there are many other relationships that fall into that category, especially in modern society with increasingly complex business relationships and the growing use of advisers and other professionals claiming special expertise.
There doesn’t have to be a legal relationship for a fiduciary duty to arise. In Florida, it’s a long established principle that a fiduciary relationship can derive from a social, personal, domestic, or even moral responsibility. The essence of it is that any person who undertakes to advise and act for someone who is in a considerably weaker position―forced to depend on that advice and action—should be held to a very high standard of conduct.
Apart from trustees, fiduciary duties are imposed in many businesses relationships, including partnerships, limited liability corporations, and principal-agent relationships.
Duty of a Fiduciary
A fiduciary’s basic duty is to act in the interests of the people to whom he owes the duty: the beneficiaries. This means that the fiduciary must be loyal, in the sense of putting the beneficiary’s interests above his own, and must exercise care in carrying out his duties to the beneficiary. What these rather vague statements mean is that the fiduciary must:
- Avoid conflicts of interest (situations where his interests are opposed to those of the beneficiary).
- Avoid self-dealing.
- Disclose pertinent information to the beneficiary in a timely and effective manner.
- Carry out his duties in the manner that a reasonably prudent person would.
Only the trustee’s imagination limits the kinds of misconduct that may occur. Some of the most common forms of trustee misconduct include:
- Outright theft of money or other property.
- Mingling the beneficiary’s assets with the fiduciary’s assets.
- Conducting transactions on behalf of the beneficiary that benefit the fiduciary directly (dealing with a business in which the fiduciary has an interest) or indirectly (such as benefiting people from whom the fiduciary expects future business).
- Making financial decisions that reflect poor judgment (that a reasonably prudent investor would not make) or lack of care (such as failing to make a reasonable investigation of the transactions).
Florida Treats Breach of Fiduciary Duty as a Tort
In Florida, breach of fiduciary duty is an intentional tort. Recovery depends on establishing three elements:
- That a fiduciary duty existed under the circumstances.
- That the defendant’s actions breached that strict duty.
- That the breach caused the damages claimed by the plaintiff.
The tort claim is civil, but in some cases the fiduciary’s actions would also support criminal charges by the state.
Remedies for Breach
Once a breach of fiduciary duty has been proven, the injured party is entitled to collect an amount of damages that will fully compensate for the harm suffered. The nature of the harm varies considerably from case to case, and can be difficult to prove. In appropriate cases, punitive damages can also be recovered.
Depending on the type of harm, equitable remedies like injunctions, constructive trusts, requiring the fiduciary to give up profits earned by the breach, and accountings can be ordered.
Get Help in West Palm Beach, Florida
If you are involved in a business or investment relationship that has blown up, and are facing or bringing a breach of fiduciary duty claim, we can help you determine:
- Whether the nature of the relationship meets the criteria for being a fiduciary.
- If so, whether the actions of the fiduciary fell below the high standard of conduct required of a fiduciary.
- If so, what amount of damage can fairly be said to have been caused by that breach.
These cases are always complex, and the more complex the business in which the parties were engaged, the more complex the case becomes. Most of the relationships that create a fiduciary status involve very specialized activities that your attorney must understand in depth, and be able to explain in detail.
Todd A. Zuckerbrod understands exactly what kinds of evidence and activity will meet the fiduciary standard, and what kinds and amount of evidence will establish or refute claims of a breach. Mr. Zuckerbrod has worked in the financial sector for decades, and understands all aspects of fiduciary law. Call today for a free consultation.