As business lawyers, we understand the significance of relationships between investors, partners, and shareholders. We know that any claims of fiduciary liability will be complex and require a lawyer experienced in both defending against and pursuing these claims. Because a fiduciary duty is the highest duty imposed by law, if you believe a breach of fiduciary duty has occurred, or have been accused of a breach, hiring an experienced breach of fiduciary duty lawyer will best help you protect your financial interests.
At Burford Perry, our fiduciary liability attorneys have over 55 years of combined experience both helping clients pursue breach of fiduciary duty claims and recouping damages, as well as defending those accused of breaching their fiduciary duty.
In D Bobbitt Noel Jr. v Chief Energy and Devon Energy Holding, L.L.C., Robert Burford (co-counsel with Gibbs & Bruns) represented Vinson & Elkins attorney D. Bobbitt Noel in a fraud and breach of fiduciary duty case against billionaire Trevor Rees-Jones, Chief Energy, and Devon Energy. Noel alleged an old friend, Rees-Jones, cheated him when he bought out Noel’s stake in a highly successful shale gas company, Chief Energy. After a several-week breach of fiduciary duty trial culminating in a favorable jury verdict, the trial court entered a $196 million judgment for Noel.
In Collins v. Martinez and CAROL Crane, Brent Perry prosecuted shareholder oppression and fiduciary duty claims for the minority owner of a construction services company. The two friends and owners were divided over whether to accept a $27 million buyout from a private equity firm. Brent Perry was able to settle the case for most of the claimed damages on the day before trial.
It is impossible to give a comprehensive definition of fiduciary duties; but generally, individuals who take on fiduciary duties are usually officers, directors, agents, executors, administrators, or trustees and are referred to as the fiduciary. When a fiduciary duty arises out of an agency relationship, the party on whose behalf the fiduciary acts is called a principal.
Fiduciaries, or the parties owing this duty, have a special relationship with the principals, or the parties to whom they owe the duties, wherein they act on the principal’s or parties’ behalf. Fiduciaries may not benefit from the relationship with their principals unless they have the principals’ consent. Additionally, fiduciaries have a duty to avoid any conflicts of interest between themselves and their principals or between the principals and any of the fiduciary’s own clients.
The fiduciary duty holds that a corporate officer or director must act in good faith and must not allow their personal interest to prevail over the interests of the corporation. Also, the duty of loyalty places restrictions on a governing person’s ability to participate in transactions on behalf of a company when the person has a personal interest in the transaction.
A fiduciary relationship is typically formed between trustees and beneficiaries, guardians and wards, executors of estates and heirs, and directors/officers and shareholders, although there are other relationships that qualify as well, such as between lawyers and clients and in business partnerships among partners.
A fiduciary duty arises from a relationship of trust and confidence. The fiduciary relationship can be formal or informal. Facts indicating greater control by one party can be the basis for an informal relationship. Fiduciaries are expected to act in the utmost good faith, and with perfect candor, openness, honesty, and a total absence of any concealment or deception.
The duties of loyalty, care, and good faith are all elements of a fiduciary duty that can be breached:
Breaches of fiduciary duty occur when a fiduciary, such as an officer, director, agent, executor, administrator, or trustee, obtain profit through self-dealing or causes losses through a breach of their duty. A breach of fiduciary duty can take many forms, some of which are apparent, while others require a detailed examination of accounts and transactions. Whether or not a fiduciary duty has been breached is not always cut and dry, because many such relationships involve complex financial and business matters. A careful examination of the details of fiduciary accounts and transactions is required to establish whether a breach of this duty has occurred.
(1) a fiduciary duty existed at the time of the dispute in question;
(2) the breach was within the scope of the fiduciary’s relationship and duty; and
(3) the breach caused the principal to suffer a loss and/or resulted in a wrongful benefit to the fiduciary.
If a breach occurred, court proceedings may be necessary to remedy the breach or to remove a fiduciary from their position. Remedies for a breach can include economic damages, such as “out of pocket” losses and lost profits. Additionally, your lawyers can ask for damages for mental anguish in some cases, and exemplary damages (also known as punitive damages) if fraud and gross negligence were involved.
Sometimes, a fiduciary accused of breaching their duty needs a dogged defense team to protect their best interests. Fiduciary liability cases should never be handled without a lawyer.
The attorneys at Burford Perry LLP have extensive experience both as plaintiff and defense counsel in breach of fiduciary duty cases. Our experience allows us to thoroughly evaluate a fiduciary’s actions to determine whether or not a breach occurred, and what, if any, damages would remedy the situation.
While our attorneys have successfully obtained out-of-court settlements in fiduciary liability cases, we also have a proven track record of success in the courtroom as well. If you suspect a breach of fiduciary duty occurred, or if you have been accused of a breach, contact us today for a confidential consultation.