Virginia Breach of Fiduciary Duty Attorneys
A fiduciary duty is a legal duty to act solely in another person’s or organization’s best interests. The individual charged with such duty is known as a fiduciary. This tradition goes back to Roman law, which recognized the duties of a “fiduciary” to deliver an inheritance to the lawful heirs. Today, a fiduciary duty is the strictest duty of care recognized in our legal system.
Generally speaking, the law governing fiduciary obligation addresses two questions. First, in what circumstances does a fiduciary obligation apply? Second, what does the fiduciary obligation require a person to do?
As to the first question, a fiduciary obligation can arise when a fiduciary relationship is established by terms of a contract, such as a trust agreement, election to a corporate board, or the establishment of a legal guardianship. A fiduciary may be an agent, a broker, an attorney, or a legal guardian who has a responsibility to supervise matters on behalf of someone else.
Where a fiduciary relationship is found to exist, and, therefore, a fiduciary duty is owed, the next point of inquiry is what exactly does that duty require? A fiduciary duty requires more than simply fairness and honesty; it obliges the fiduciary to act in a manner that furthers the beneficiary’s best interests. A fiduciary may not profit from the relationship with their beneficiary unless they have the beneficiary’s express informed consent. A fiduciary also has a duty to avoid any conflicts of interest between themselves and their beneficiaries or between their beneficiaries and the fiduciary’s other clients. If a fiduciary relationship is created through contract or another written agreement, it may specify the duties of the fiduciary, the compensation for the service, if any, and the recourse that each party has in the case of a violation of the agreement.
Business relationships often bring several layers of fiduciary duties and responsibilities. Regardless of the structure of a particular company, it is likely that some fiduciary duty exists between the members or partners. The company’s organizational documents typically stipulate these duties.
In a partnership, the partners each have a fiduciary duty to each other, including a duty of loyalty, duty to fully disclose any information regarding the partnership and its affairs, and a duty to operate in good faith and fair dealing. It is a violation of a partner’s fiduciary duty to engage in outside transactions that might conflict with the interests of the partnership.
Similarly, in a limited liability company (LLC), the manager owes to the members of the company the highest duty of care, loyalty, and disclosure, and the members owe such duties to the LLC. Each party is expected to always act in the best interests of the company and avoid any potential conflicts of interest with the company.
If a fiduciary duty is breached, there are various remedies available. Depending on the nature of the breach and the harm that results, monetary damages may be awarded, officer positions may be relinquished, or a specified performance may be ordered by a court.
If you have suffered harm due to a fiduciary’s breach, or you have been accused of breaching a fiduciary duty, please contact the Virginia Fiduciary Duty attorneys at MartinWren, P.C. We can analyze the nature of the relationship, the duty owed, and whether conduct violated that duty. Call Robert E. Byrne, Jr. or John B. Simpson of MartinWren, P.C. at 434-817-3100, and we can discuss the best way to proceed to protect your interests.