Any relationship between two parties in a transaction where at least one of the parties is required to act in good faith and for the benefit of the other party is said to be a fiduciary relationship. One of the most common examples of this is that a lawyer retained by a client, the attorney has a fiduciary duty to act in the client’s best interests in matters pertaining to the reason the lawyer was hired.
While an attorney/client relationship is one of the most common fiduciary relationships, being bound by fiduciary duty can exist in any number of ways.
- Business partnerships
- Joint ventures
- Husband and wife
- Officers in a corporation
- A trustee and beneficiaries
- A guardian and their ward
- An executor of an estate
- Pension fund trustees
- Contractual relationships
When a person does not live up to their responsibilities in these roles, they are said to be in breach of fiduciary duty. This breach generally falls into three categories, including breach of reasonable care (aka negligence), breach of duty of loyalty, or a breach of confidentiality. In other cases, fraud is also considered a violation and is commonly referred to as fiduciary fraud.
It is possible to file a claim against someone who has breached their fiduciary duty. An experienced attorney must be able to prove that a fiduciary duty existed, that it was breached, that there was harm or damages, and that the breach was the cause of the damages.
Raun Muntz O-Grady LLP serves clients in Los Angeles, Hollywood, West Los Angeles, Santa Monica, Beverly Hills, Anaheim, Orange County and communities throughout Southern California.