When it comes to businesses, one of the most common reasons an individual may be sued is for having breached his or her fiduciary duty.
A business owner may entrust his or her company's bookkeeping to an accountant who ends up misappropriating funds. Or, the owner of a hotel may rely on his or her manager to protect the safety of the guests. Any situation in which one person puts his or her trust or confidence to protect his or her business on another, with his or her prior knowledge, is considered a fiduciary relationship.
To be able to wage a claim of a breach of fiduciary duty, it's necessary for such a relationship of trust to be formalized in accordance with state laws. It may include business owners, partners or board members drafting a contact that explicitly states what a specific individual's responsibilities are and what the company's are in kind.
Once such a relationship is formalized, any action that is taken for the sole benefit of the fiduciary or that is otherwise not in the best interest of the company could be considered a breach. A fiduciary that neglects to reveal potential conflicts of interest could be accused of violating his or her fiduciary duty as well.
There are three components to breach of fiduciary duty civil lawsuit cases. First, the onus falls on the plantiff to enumerate the duties that the fiduciary was expected to carry out. The plantiff must also demonstrate precisely how the breach occurred. Finally, damages that were suffered from the impropriety must be documented. A winning plaintiff may be entitled to both actual and punitive damages caused by the fraud.
If you believe that your fiduciary has breached his or her duties, then a Torrance business litigation attorney can advise you of the next steps you may wish to take in your legal matter.
Source: FindLaw, "Breach of fiduciary duty," accessed Feb. 02, 2018