Breach of Fiduciary Duty and Business Law
Hiring a professional, such as an accountant or attorney, or entering into a business partnership, requires a great deal of trust. We expect that our partners or hired professionals will act in a way that furthers our best interests or those of the business. A betrayal of these interests could lead to permanent harm to our business or to our legal or financial well-being. This is the essence of the fiduciary duty.
When a business relationship is formed, legal duties come with them. When those duties are breached, it isn’t merely a moral lapse—these breaches come with potential legal consequences in the form of money damages or specific performance. The California business litigation attorney Andrew Ritholz can help you determine whether litigation is the right solution after a business relationship has soured or caused you to suffer a loss. Contact our Pasadena offices today to learn more about filing a lawsuit for a breach of a fiduciary duty.
What Is the Fiduciary Duty?
Fiduciary duties are rarely included explicitly in contracts, but most of us instinctively understand the obligations to act honestly and loyally when acting in a professional capacity. A fiduciary duty exists where one or both parties in a professional or contractual relationship rely on the honesty, loyalty, and commitment of the other to act in their best interests or in those of the business. The partner or client trusts that the other will use the full extent of their knowledge and expertise when making decisions on behalf of the client or business. For example, attorneys have a fiduciary relationship to their clients, as do accountants, real estate agents, or financial managers. Additionally, partners in a business have a fiduciary duty to their business partners to act in a way that furthers the best interests of their partners and the business.
What Is Considered a Breach of Fiduciary Duty Under California Law?
Persons with a fiduciary duty may not act in a way that would harm the best interests of their client or partners or that would further their own interests to the detriment of those of their client or partners. For example, let’s say a partner in a real estate investment venture found what he considered to be an excellent investment opportunity in a new mixed-use development. Rather than bringing it to his partners, he invested his own funds as an individual into the development and tried to conceal it from his partners. This could be considered a breach of his fiduciary duty to his partners, since it denied what could have been a lucrative investment opportunity for the venture in the aim of furthering his own interests individually.
Breach of fiduciary duty litigation can be complex and fact-intensive, and proving what damages you’re owed as a victim of a breach can involve complex market research. It is important to choose an attorney with decades of experience in California business litigation to represent you in a breach of fiduciary duty claim. Pasadena business litigation attorney Andrew Ritholz has the years of experience and in-depth knowledge of the law that you need on your side. Get an evaluation of your claim and find out what steps to take next by contacting Los Angeles business dispute attorney Andrew Ritholz today.