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:
– 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.