Fiduciary Duty and Disgorgement

Breach of Fiduciary Duty- Disgorgement

A fiduciary is a person who owes a degree of care to a client based on a position of special trust. Examples of fiduciary relationships include:

–         Attorney/Client

–         Agents

–         Officers of a Corporation

–         Holders of a Power of Attorney

–         Executors of Estates

–         Trustees of a Trust

–         Mineral Rights Owners (in some cases).

There are a number of Texas cases that deal with the duties of fiduciaries and the forfeiture by the fiduciary of fees and/or profits that resulted from that breach. These cases include the forfeiture of a real estate commission where a broker failed to disclose the existence of an interested buyer (Southern Cross v. Martin); recovery by limited partners against a general partner even in the absence of actual damages (Watson v. Limited Partners of WCKT); forfeiture of a management fee by a manager for failure to disclose an agreement to share profits from construction (Russell v. Truitt).

These are just a few examples. The point is that you should determine whether your client is involved in a fiduciary relationship when you are evaluating a case. A fiduciary obligation exists when a person is acting for someone else’s benefit while subordinating one’s personal interests to those of the other.

This area is a potential minefield for Plaintiffs and Defendants. If you would like to discuss the specific aspects of your fiduciary claim, call me.


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