Breach of Fiduciary Duties
REQUEST A FREE CONSULTATIONBreach of Fiduciary Duties | Civil Lawsuits
Fiduciaries have a serious responsibility. People in a fiduciary role must act honestly and knowledgeably to manage the financial interests of the parties they serve. When this duty is breached and trust is broken, individuals and businesses can experience significant financial losses.
The most common fiduciaries are:
- Bankers
- Business partners
- Executors and administrators
- Investment firms
- Shareholders, directors, and executives
- Stockbrokers
- Trustees
Steve represents plaintiffs and defendants in breach of fiduciary duty claims. Breaches can include fraud, conflict of interest, negligence, and embezzlement. These claims can be complex and involve multiple parties. Whether representing the plaintiff or defendant, he knows how to win these cases before a judge, jury, mediator, or arbitration panel.
For more than 20 years, Steve Crane has successfully litigated and defended against legal actions, and has achieved client objectives through arbitrations and negotiated settlements. As an experienced lawyer, he can gauge when it makes sense to go to court. He knows that a letter or phone call — with proper wording and timing — can be more effective or cost-efficient than suing for damages or injunctive relief. For those cases that must be presented to a judge or jury, he is eminently qualified to assert your interests.
Steve handles all disputes involving Breach of Fiduciary Duties, from all stages of litigation, including pre-trial orders, summary-disposition orders, jury, and non-jury trial judgments, and post-trial orders.
Steve represents businesses and individuals in lawsuits involving a variety of areas, including complex business and commercial litigation, arbitration, real estate disputes, employment law, probate litigation, and criminal defense.
If you have a dispute involving a Breach of Fiduciary Duty, you should contact Steve. He and his team can assess the facts of your case and help you determine the best course of action to move forward.
To schedule a discrete and confidential consultation about your matter, email or call Steve at (248) 963-6300.
What is the Corporate Duty of Care and Duty of Loyalty?
As part of the duty of care, corporate directors are required to discharge their duties: (1) in good faith, (2) with the care that an ordinarily prudent person in a like position would exercise under similar circumstances, and (3) in a manner the director reasonably believes to be in the best interests of the corporation. This includes a duty not to waste corporate assets by overpaying for property or services.
Directors who meet this standard generally will not be liable for decisions that later result in negative consequences to the company. At common law, this was known as the “business judgment” rule.
A director also owes a duty of loyalty to the corporation and is not allowed to profit at its expense. He or she may not have a personal interest in a financial transaction that gives rise to a conflict of interest with the corporation, nor engage in a business that directly competes with the company.
Directors’ duty of loyalty also prohibits them from taking personal advantage of a business opportunity in which their company has an interest without first giving the company an opportunity to act. As the commercial litigation lawyer, attorney Steve Crane understands this is sometimes known as a “usurpation of a corporate opportunity.”
The directors also have a duty to disclose the material corporate information to other members of the board.
What is a Partner’s Duty of Loyalty under the RUPA?
The fiduciary duties of partners in a general partnership are slightly different from those of corporate officers.
Under the Revised Uniform Partnership Act (“RUPA”), a partner’s duty of loyalty is threefold: (1) to account for profits, property, opportunities, or other benefits derived by the partner; (2) to refrain from dealing with the partnership as or on behalf of a party having an adverse interest to the partnership; and (3) to refrain from competing with the partnership. Commercial litigation attorney Steve Crane can guide Michigan clients in investigating whether a partner may have violated this duty.
A partner’s duty of care to the partnership and the other partners is limited to refraining from engaging in grossly negligent or reckless conduct, intentional misconduct, or knowing violation of the law.
A partner must also provide complete and accurate information concerning the partnership.
What is a Partner’s Duty of Obedience under the RUPA?
A third duty of partners under the RUPA is known as the duty of obedience. A partner is considered an agent of the partnership and has a duty to obey all reasonable directions of the partnership. A partner must refrain from acting outside the scope of his or her actual authority (for example, making purchases the partner was instructed not to make). A partner is liable to the partnership for breaches of the duty to obey. Attorney Steve Crane can help you bring or defend against a claim on this basis.
What are the Remedies for Breach of Fiduciary Duty?
Remedies available for claims for breach of fiduciary duty provide include:
- lost profits, as the natural and probable consequence of the breach;
- out-of-pocket losses, as the difference between the value paid and the value received;
- mental anguish damages, which must be separate from the consequence of economic losses and must be a foreseeable result, such as a mental anguish from a breach by a physician to his patient; and
- exemplary damages to punish rather than compensate, which are generally imposed only when actual damages are awarded and which may require a unanimous liability finding by the jury and unanimous agreement as to the amount.
Equitable relief also is available and includes:
- avoidance or rescission of a contract that is the basis of a breach of fiduciary duty claim (but note that rescission requires mutual restoration);
- profit disgorgement to obtain the defendants’ ill-gained profits resulting from breach;
- fee forfeiture (often confused with profit disgorgement) to protect fiduciary relationships by discouraging disloyalty through forfeiture of the fiduciary’s compensation;
- receivership;
- injunction;
- accounting;
- reformation; and
- constructive trust, which requires tracing of the property (including money) at issue.
Steve represents businesses and individuals in lawsuits involving a variety of areas, including complex business and commercial litigation, arbitration, real estate disputes, employment law, probate litigation, and criminal defense.
If you have a dispute involving a breach of fiduciary duty, you should contact Steve. He and his team can assess the facts of your case and help you determine the best course of action to move forward.
To schedule a discrete and confidential consultation about your matter, message or call Steve at (248) 963-6300.