Phoenix Breach of Fiduciary Duty Attorneys
Many professional relationships are built on a foundation of trust. In some cases, this foundation is even legally enforceable. Holding a position that requires you to follow fiduciary duties is a great responsibility. Breaching your duties can lead to severe consequences. To the victims, a breach of fiduciary duty can be highly damaging.
Whether someone has accused you of a breach of fiduciary duties or you believe you are the victim of a violation, getting an experienced lawyer on your side is essential. The Phoenix breach of fiduciary duty lawyers at Shields Petitti & Zoldan, PLC, deeply understand fiduciary duty lawsuits from both sides of litigation. We know how to defend against accusations of a breach effectively.
With over five decades of litigation experience, our attorneys also excel at representing victims of breaches by fiduciaries. Our firm is results-oriented and has a strong track record of producing results for our clients. Contact Shields Petitti & Zoldan today to schedule a consultation.
What Is a Fiduciary Duty?
A fiduciary duty is a legally enforceable requirement that someone who holds a position of trust, otherwise known as a fiduciary, must act in the best interests of their beneficiary. A beneficiary, also called a principal, is usually the fiduciary’s client. They are the person owed the fiduciary duty.
Different relationships give rise to different types of fiduciary duties. Depending upon the relationship, there are several duties that a fiduciary must uphold.
Duty of Care
To uphold the duty of care, a fiduciary must act with the caution and thoughtfulness of a reasonably prudent person under similar circumstances. The court determines how a reasonably prudent person would act in the context of the specific circumstances at issue. This context includes the type of fiduciary relationship that exists.
Different fiduciary relationships might be judged differently. For example, the care that a reasonably prudent lawyer would demonstrate could be different from the care a reasonably prudent financial advisor must live up to. Learn more about the duty of care.
Duty of Loyalty
To uphold the duty of loyalty, a fiduciary must act in the best interests of their principal. This standard required that the fiduciary put their beneficiary’s interest above everyone else’s, including the fiduciary’s own. The duty of loyalty thus requires that a fiduciary avoid conflicts of interest and disclose them to their principal when they arise. Using a position as a fiduciary for personal benefit at the expense of a client is a common breach of the duty of loyalty. Learn more about the duty of loyalty.
Duty of Good Faith
To uphold the duty of good faith, a fiduciary must act honestly and make decisions they genuinely believe are in the beneficiary’s best interest. Part of this duty is to disclose any material fact to the principal. In many cases, a fiduciary must fully and accurately account for their dealing on behalf of a principal. This accounting must be easily accessible to the client. Learn more about the duty of good faith.
Other Fiduciary Duties
Depending on the fiduciary relationship, other duties might explicitly arise. For example, corporate directors have a responsibility to act lawfully. They breach this duty if they break the law or cause the corporation to break it. Different fiduciary relationships can carry additional responsibilities.
Who Has a Fiduciary Duty?
In Arizona, there are two types of fiduciary relationships. The first type includes fiduciary relationships created by statutory law or through contracts. The second type is fiduciary relationships that are implied based on the relationship between the parties and the transaction they are engaged in.
Trustees are an example of a class of fiduciary whose obligations come directly from Arizona statute. Corporate directors also have fiduciary duties based on Arizona statute. Other common examples of fiduciaries in Arizona include:
- Attorneys,
- Guardians,
- Conservators,
- Corporate officers,
- Personal representatives,
- Accountants,
- Financial advisors,
- Bankers, and
- Real estate agents.
If a professional relationship is built on a foundation of trust, it has the potential to be a fiduciary relationship. An experienced lawyer from Shields Petitti & Zoldan can help you determine when a fiduciary relationship might exist.
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Breach of Fiduciary Duty
Proving a breach of fiduciary duty differs on a case-to-case basis based on the fiduciary relationship and the circumstances surrounding it. In most cases, a plaintiff must prove four elements to win a breach of fiduciary duty claim:
- A fiduciary relationship existed between the plaintiff and the defendant.
- The defendant breached their fiduciary duty towards the plaintiff.
- The plaintiff suffered an injury.
- The defendant’s breach of fiduciary duty caused the plaintiff’s injury.
In some cases, the plaintiff must overcome additional legal requirements. For example, a plaintiff alleging a breach of fiduciary duty by a board of directors must overcome the business judgment rule. The business judgment protects corporate decision-makers from liability for honest mistakes that turn out wrong.
Though fiduciary duties create a broad range of requirements, several common types of breach of fiduciary duty claims exist. Common examples include:
- Self-dealing,
- Business malpractice,
- Failure to disclose relevant information,
- Failure to follow the principal’s instructions,
- Sharing an employer’s trade secrets,
- Fraud,
- Embezzlement,
- Failure to disclose a conflict of interest,
- Negligent decision-making,
- Misuse of employer funds,
- Refusing to let beneficiaries access records, and
- Commingling assets.
The Phoenix breach of fiduciary duty attorneys at Shields Petitti & Zoldan can help you determine when a fiduciary duty has been breached.
Remedies for a Breach of Fiduciary Duty
A plaintiff can recover several types of remedies for a breach of fiduciary duty. Usually, a plaintiff will seek compensatory damages for breach of fiduciary duty. Compensatory damages are designed to make the plaintiff whole for the harm they suffer. Typical forms of compensatory damages include:
- Lost profits,
- Actual damages,
- Economic damages,
- Profit disgorgement,
- Monetary damages, and
- Equitable relief,
Plaintiffs can also argue that punitive or exemplary damages are warranted. Punitive damages punish the defendant for egregious breaches of their fiduciary duties.
Beyond damages, courts can punish a breach of fiduciary duty by imposing professional consequences on the defendant. For example, a fiduciary found liable for a breach can face a professional suspension or lose their right to practice.
Reach Out to Shields Petitti & Zoldan for Fiduciary Duty Breach Assistance Today
If you are the victim of a breach of fiduciary duty or have been accused of breaching your own fiduciary duties, contact Shields Petitti & Zoldan today. We have extensive trial experience and are not afraid to fiercely defend our client’s interests. When Shields Petitti & Zoldan is on the case, you can rest assured that you are in the hands of the best.
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