Breach of Fiduciary Duty Claims
Serving Clients in Houston, Throughout Texas & Across the Nation
Whenever one party places trust and confidence in a second person with that second person’s knowledge, a fiduciary relationship is often created. In business law, fiduciaries are held to a high legal standard that must act in good faith, with integrity, refraining from any self-dealing. A breach of fiduciary duty occurs when an individual or entity with a fiduciary obligation acts in any manner contrary to the best interest of the client.
- Actions done out of the fiduciary's own self interest, or conduct that falls below the standard imposed on them when acting from a position of trust
- Misrepresentation, or failure to disclose pertinent information including a conflict of interest
- Usurpation of business or corporate opportunity
- Negligent management, including imprudent investments
- Willful acts of fraud, theft, embezzlement or other illegal acts
- Breach of confidentiality
Common Fiduciary Relationships:
- An agent has a fiduciary duty to the principal (the principal is the individual seeking out the service or advice, while the agent is the professional performing the work. Principals or agents can be sole-individuals, corporations, nonprofits, or a government agency and often-times involve lawyers, accountants and contractors)
- A trustee has a fiduciary duty to the beneficiary
- A corporate officer has a fiduciary duty to the shareholder
- A business partner has a fiduciary duty to the partnership
- An employee has a fiduciary duty to the employer
If you suspect a breach of fiduciary duty - contact the experienced business attorneys of Hendershot, Cannon & Hisey, P.C. Our lawyers can help you investigate your claim and potential causes of action, pursue available damages and remedies, and advise on the legal strategies most appropriate to move forward intelligently.
To request an attorney consultation, call (713) 909-7323 or complete an online form.
What To Do If A Breach of Fiduciary Duty Has Occurred
Depending on the circumstances of your case, there may be a number of damages and remedies available when a breach is found to have occurred. A claimant can pursue actual damages directly associated and lost profits (disruption to third party customer relationships) that stem from the breach of duty. Punitive damages may also be sought in addition to other awards, particularly if the plaintiff proves that the defendant’s breach was due to malice or fraud. When monetary damages are difficult to ascertain or do not adequately compensate for the loss, equitable remedies are often imposed.
Possible equitable remedies vary and may include:
- A "hold" on proceeds, funds, or other property obtained as a result of the breach - the court controls the property and ultimately decides what happens to it.
- Fee forfeiture - the fiduciary forfeits his or her fees.
- Profit disgorgement - the defendant (fiduciary) is ordered to return any profits that were obtained as a result of the breach.
- An Accounting - an action taken against a defendant to recover profits taken as a result of the breach of duty, in order to prevent unjust enrichment.This remedy can be complex in practice, and often requires the assistance of a forensic accountant to determine what portion of the gross profits were derived to the wrongful act in question.
- A rescission - the court nullifies or cancels the transaction. This generally places the parties in the position they were prior to the contract.
- A court-appointed receiver or the removal of a trustee - in applicable cases, such as those involving trust funds.
- An injunction - including a temporary restraining order (TRO), preliminary injunction and permanent injunction. Generally speaking, an injunction compels the defendant to take an action or to stop taking a certain action which helps prevent irreparable damage from occurring during the litigation process and thereafter.
A fiduciary owes a certain standard of loyalty or care toward another. If you believe that you've been taken advantage of by a person, or entity with a fiduciary responsibility, or if you have been accused of a breach of fiduciary duty, contact the business litigators of Hendershot, Cannon & Hisey, P.C. to discuss your options for moving forward.
Our law firm represents both those who claim a breach and those who must defend themselves against such accusations. We invite you to contact our firm to discuss your business legal matters in a confidential consultation. (713) 909-7323
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