Decades Of Experience Handling Breach Of Fiduciary Duty Lawsuits
A fiduciary relationship exists when one party owes obligations to the other that are based on a level of trust. Often, the fiduciary is a professional who the other party relies on for guidance and advice.
Examples of fiduciaries include:
- Real estate agents or brokers,
- Business partners,
- Stockbrokers,
- Financial advisors and money managers,
- Insurance agents,
- Attorneys, and
- Accountants.
Additionally, corporations owe fiduciary duties to shareholders, and business partners owe fiduciary duties to one another.
A wide range of legal and equitable remedies are available in a breach of fiduciary duty lawsuit. As a consequence, a breach of fiduciary duty can be costly to the aggrieved party. Likewise, the exposure of the party allegedly in breach of their fiduciary relationships can be considerable.
If you are a potential plaintiff or defendant in a breach of fiduciary duty lawsuit, contact a breach of fiduciary duty attorney at the law firm of King & Jones. Our lawyers have decades of experience handling fiduciary duty cases in Chicago and nationwide. You can count on King & Jones to represent your interests and work to achieve a satisfactory resolution regarding fiduciary duty claims.
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What Are Fiduciary Duties?
Fiduciary duties typically arise in a professional or contractual relationship where one party relies on the superior knowledge or expertise of the other or where both parties owe reciprocal duties of trust to one another. Common fiduciary duties include:
- Acting in the best interest of the beneficiary – for example, an estate representative has a legal duty to administer the estate to ensure the heirs receive the maximum inheritance possible.
- Behaving honestly on behalf of the beneficiary – which may include the obligation to disclose all relevant information and opportunities available.
- Loyalty to the beneficiary – a fiduciary cannot take action that would benefit other parties instead of the beneficiary or harm the beneficiary.
- Avoiding situations that create conflicts of interest between the fiduciary and the beneficiary – the beneficiary’s interests must always have priority over the fiduciary’s rights or needs.
- Refraining from self-dealing to benefit the fiduciary at the beneficiary’s expense.
Consider the following examples, which might help explain the nature of fiduciary relationships in certain circumstances:
- A group of individuals forms an LLC or partnership for the purpose of identifying potentially lucrative real estate investments. One member becomes aware of an opportunity and invests privately outside of the company without letting the other partners know about the transaction. That member breached their fiduciary duty to the other partners by not disclosing the opportunity in good faith.
- A Family Trust trustee mismanages trust assets or acts in ways that are contrary to the best interests of a family member. Or a trustee who is also a beneficiary acts to enrich themself at the other beneficiaries’ expense.
- A stockbroker recommends unsuitable investments to a client or engages in excessive trading solely to generate more commissions for the broker. This breach of fiduciary duty could be grounds for a professional negligence legal claim as well.
Is A Breach Of Fiduciary Duty Claim The Same As Professional Malpractice?
Breach of fiduciary duty could form the basis of a malpractice lawsuit or complaint against a lawyer, accountant, or other professionals. However, there are other breaches or misconduct that could give rise to a malpractice complaint as well.
For example, if a lawyer misses a filing deadline or misrepresents a settlement offer, an injured client may have grounds to bring a legal malpractice claim. Similarly, an accountant might violate a fiduciary relationship by miscalculating financial records or falsely reporting information to the IRS on behalf of a client.
You can learn more about legal malpractice claims and other professional malpractice issues by speaking with a legal malpractice lawyer at King & Jones. As experienced business litigators who handle breach of fiduciary matters as well as cases alleging legal malpractice or accounting malpractice, the fiduciary duty attorneys at King & Jones are equipped to analyze your dispute and determine the appropriate steps to take.
What Remedies Or Damages Are Available For A Breach Of Fiduciary Duties?
Breach of fiduciary duty claims allow the injured party to request a variety of damages and remedies. Even if the fiduciary relationship is based on a contractual relationship between the parties, the wronged party can recover money damages as in a business tort as opposed to a breach of contract claim.
Depending on state law in the jurisdiction governing the dispute, punitive or exemplary damages might be available as well. Tort damages are often considerably higher than contract damages, thus raising the stakes for both plaintiffs and defendants in a breach of fiduciary duty case.
Equitable relief might also be appropriate in a breach of fiduciary duty matter. Equitable remedies can include:
- Rescission or avoidance of a contract,
- Disgorgement of profits,
- Forfeiture of fees,
- Injunctions,
- Reformation of contract terms, or
- Imposition of a constructive trust on a piece of property at the center of a dispute.
Judges generally have broad authority to fashion an equitable remedy they deem fair under the given circumstances.
