Breach of Fiduciary Duty Explained by Cleveland Business Attorney
A fiduciary duty is a legal obligation for one party to act solely in the best interests of another. The person owing the duty is commonly referred to as the fiduciary, and the person to whom the duty is owed is referred to as the benefactor. Any number of relationships can give rise to a fiduciary duty since to this date the court has not placed any limitations on what types of relationships can be considered fiduciary in nature. However, certain relationships are without question considered to be fiduciary in nature. These relationships include the relationship between a lawyer and client, the relationship between a trustee and a beneficiary, the relationship between the executor of an estate and the heirs who stand to inherit from the estate and the relationship between a director and a shareholder. Persons in a fiduciary relationship place an extreme amount of trust in one another. This is why is can be extremely damaging when one party chooses to violate the trust of the relationship. Persons who are on the receiving end of this violation would be well advised to consult with a Cleveland business attorney to help with the resolution of their business affairs.
What Exactly Constitutes as a Breach of Fiduciary Duty
Legally, a breach of fiduciary duty occurs when the benefactor violates the duties of the relationship. All fiduciary relationships are comprised of four specific duties:
1) The duty of loyalty;
2) The duty of obedience;
3) The duty of care; and
4) The duty of disclosure.
Because parties can also enter a fiduciary relationship by written agreement, any other specified duties of the relationship that are violated can also give rise to a breach of fiduciary claim. It is important to note that not all relationships are fiduciary in nature. Fiduciary relationships are unique in that they are characterized by one party placing complete trust and confidence in another. If a fiduciary relationship does not exist, you will not be able to bring a claim for breach of fiduciary duty. It is important to consult with a Cleveland business attorney who understands the law concerning fiduciary relationships prior to making any determination as to how to proceed with your case.
Bringing a Claim for Breach of Fiduciary Duty
If a party chooses to bring a claim for breach of fiduciary duty, the courts will generally make a determination based on the following five factors:
- Whether a duty existed;
- Whether the duty extended to the party bringing the complaint;
- Whether the party being sued violated the duty;
- Whether the party being sued caused the breach; and
- Whether the party bringing the complaint suffered an injury.
All five of these criteria must be satisfied in order for your claim for breach of fiduciary duty to be successful. Because these cases can be extremely complicated, you would be well advised to consult with a Cleveland business lawyer prior to filing any type of lawsuit.
Our Cleveland Business Attorney Can Help
If you are concerned about a violation that has occurred, our office may be able to help. While not every relationship gives rise to a fiduciary duty, courts have recognized certain non-traditional business relationships as being fiduciary in nature. Our Cleveland business attorney can investigate your case to help you determine whether or not a fiduciary duty existed, whether a violation occurred and whether or not you suffered an injury that would give rise to a breach of fiduciary duty claim. After consulting with our attorney, you will be armed with the knowledge you need to make an informed decision as to whether or not you should proceed with a lawsuit and what steps you will need to take for your claim to be successful.
Contact our Cleveland Business Attorney
If you are involved in a business dispute, contact the Law Office of Shapero & Green at 216-831-5100 to schedule an initial consultation with our Cleveland business lawyer.