Businesses and individuals regularly entrust other people to act as their agents. From mortgage brokers to real estate agents, these people are hired or appointed by a principal to act on their behalf with honesty and loyalty. These agents are legally referred to as “fiduciaries” and can be appointed to handle matters such as operations, finances, property management, or other tasks. Fiduciaries have a basic duty to act in the best interests of the principal and avoid using their relationship or information gained as a result of the relationship for personal gain. In the event that a fiduciary should purposefully abuse their position of power or fail to satisfy their legal obligations, they can be considered to be in breach of their fiduciary duty and be sued for any resulting damages.
WHAT ARE THE ELEMENTS OF A SUCCESSFUL BREACH OF FIDUCIARY CASE?
Individuals and businesses who believe they have been betrayed by a fiduciary must be able to prove several different elements in order to prevail in court. These requirements are as follows:
1. A fiduciary relationship existed: A fiduciary is anyone who has both the power and the obligation to act for the benefit of another party, usually in accordance with an employment agreement or contract of some kind. A fiduciary can be an agent, employer, broker, accountant, partner, or associate. If there is a mutual understanding of trust and dependence between two parties, then a fiduciary relationship exists.
2. The fiduciary breached their duty: Fiduciaries may not engage in self-dealing, have conflicts of interest, or withhold material information from the principal to the principal’s detriment or for personal gain.
3. The breach of duty caused harm to the plaintiff or a benefit to the defendant: The fiduciary’s actions must have either caused the principal to suffer real damages, such as a drop in stock prices or financial losses, or caused the fiduciary to gain some sort of benefit they otherwise would not have received.
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If you believe a fiduciary has breached their duty to act in your business’ best interests, a knowledgeable Houston business litigation lawyer from Patterson, P.C. can advocate on your behalf help you pursue legal action against the responsible parties. We may be able to help you recover lost profits, punitive damages, and compensatory damages resulting from this breach.