An action for breach of fiduciary duty arises when a party in a fiduciary position breaches one of the party’s fiduciary duties, resulting in damages to the other party.
When parties engage in certain relationships such as attorney and client, principal and agent, trustee and beneficiary, or partners, a fiduciary or confidential relationship arises as a matter of law. Even in the absence of such traditional categorizations, the relationship will be found to exist as a matter of fact when one party reposes trust and confidence in another who thereby gains a resulting influence and superiority over the first.
Who can breach a fiduciary duty?
A breach of fiduciary duty in a nutshell: A party who assumes a fiduciary role and owes a fiduciary duty to another as a result of that position, and fails to carry out the obligations of that fiduciary duty, is said to have breached his or her fiduciary duty. Who can breach a fiduciary duty?
Elements of a Breach of Fiduciary Duty Claim
In order to establish an action for breach of fiduciary duty, the following elements must be alleged in the plaintiff’s complaint:
A fiduciary duty existed between plaintiff and defendant;
The defendant owed a certain fiduciary duty to the plaintiff as a result of the defendant’s fiduciary position;
The fiduciary duty was breached by the defendant; and
The defendant’s breach of its fiduciary duty proximately caused the injury of which the plaintiff complains.
The factors to consider in determining whether or not a fiduciary relationship exists are degree of kinship, disparity in age, health, mental condition, education, and business experience between the parties, and the extent to which the allegedly subservient party entrusts the handling of his or her business and financial affairs to the other and reposes faith and confidence in the other. The mere existence of a confidential relationship prohibits the dominant party from seeking any selfish benefit.