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Business Torts: Fiduciaries, Unfair Practices, & Trade Secrets: Establishing A Fiduciary

Breach of Fiduciary Duty

In basic business torts, the most common cause of action is for breach of fiduciary duty in state courtGenerally, the elements of a breach of fiduciary duty claim are: (1) a fiduciary relationship must exist between the plaintiff and defendant; (2) the defendant must have breached his fiduciary duty to the plaintiff; and (3) the defendant's breach must result in injury to the plaintiff or benefit to the defendant. The biggest challenge normally is establishing whether or not one is a fiduciary. On this page you will find primary and secondary sources in support of how the fiduciary is defined. From here you can springboard into just about any business tort claim. Find below some of the most referenced case law and secondary sources to help jump start your research. For lawsuit considerations and strategies, visit this subpage. 

Fiduciary is not limited to the legal setting

A leading case at common law is where a family placed their deceased father's best friend known as Uncle Key in a position of trust giving him rights to the land for the purpose of defending it from harassment. However, he took advantage of that trust and tricked the family into deeding over the property. The court held Uncle Key was in fact a fiduciary as he was placed in a position of trust. 

Aiding and Abetting

It is interesting to note that one can also be held liable for aiding an abetting breach of fiduciary duties. 

Violation of the Duty

Much of the case law you are going to see will in some way reference or relate to the restatement of torts. Specifically Section 874.

Preemption by Statute

These are a few examples of when one may run into trouble when trying to pursue a state claim.

Harm From Third Party

As you read through the next page, it is also important to understand that many employers are responsible for the acts of their agents. The Restatement (third) of agency will help familiarize you with why sometimes the company rather than the person is being sued. More often than not, it is because the company has more money than the employee. 

Joint TortFeasors

This section of the restatement provides guidance for when multiple tort feasors act to harm one person.