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Breach of Fiduciary Duty

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Houston Breach of Fiduciary Duty Attorney

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At Arnold & Itkin, we represent clients in complex business litigation matters, including breach of fiduciary duty. We know business relationships, and your business itself can be quickly threatened when one party fails to uphold his or her duty, and we believe you have a right to experienced representation to protect your business interests.

Understanding Fiduciary Duty

The term "fiduciary" means holding something in trust or good faith—usually money.

Therefore, a fiduciary duty is a legal relationship of confidence between at least two parties. Take, for example, a person's relationship with a bank. One party, the bank or trust company, has the fiduciary duty and is bound to the person who is entrusting their money to them. The bank or trust company has the responsibility of always acting in good faith toward the person entrusting money to them and must always act in their best interest. An accountant is also another good example of someone you would enter into a fiduciary relationship with.

The fiduciary duty falls under the part of the law called "equity." When a fiduciary relationship is agreed upon, it is illegal to act in a way contrary to the best interest of the client. Those who have a fiduciary duty are held to the highest standards of care. A fiduciary relationship may be difficult to define because they can be based on the subjective assumption of trust or objection necessity of trust. Those who have a fiduciary responsibility must always disclose necessary, relevant information to clients within the scope of that relationship. In other words, fiduciaries are not allowed to withhold relevant information and cannot guarantee their client's finances will go well. They can only do their best to provide their clients with the best possible care. This includes being honest, not withholding information, accurately advising, remaining confidential, etc.

If you do wish to file, you will need to prove the following:

  • That a fiduciary relationship existed;
  • That the fiduciary breached a specific duty that was owed to you; and
  • That the said breach entitles you to some sort of remedy.

Our Houston Business Law Attorney Can Help

A breach of fiduciary duty occurs when one individual fails to uphold his or her financial obligation to another individual or entity. A fiduciary duty is an obligation; an example of such is the duty of an accountant to review and report the financial statements of a client honestly. A fiduciary duty also implies a certain level of trust; you trust that your CPA will perform the accounting duties you have agreed to pay for in your contract or agreement. When that trust is violated, the duty has been breached, and typically, financial loss happens as a result.

Some examples of breach of fiduciary duty include the following:

  • The trustee of an estate taking or mismanaging money on behalf of a beneficiary
  • A business partner taking a business opportunity away from the company for his or her own profit
  • A board of directors taking action that goes against the interest of the company for their own financial gain

The bottom line is if you have suffered financial damage because someone else took advantage of your trust and violated the terms of your business relationship, you can pursue a claim for damages.

Breach of Fiduciary Duty FAQ

What are the elements of a claim alleging a breach of fiduciary duty?

A lawsuit alleging a breach of fiduciary duty must include four key elements. The first is that a fiduciary duty existed. The second is that it was breached. The third is that the plaintiff suffered quantifiable harm. The fourth brings it all together and shows causation: that the defendant’s breach of fiduciary duty was the cause of the plaintiff’s losses. For a breach of fiduciary lawsuit in Houston, TX, cause may be established through a preponderance of the evidence. Unlike criminal cases that require guilt to be proven beyond a reasonable doubt, the burden in civil cases is based on a majority of evidence—a more than 50 percent chance that the claim is true.

In which business relationships do fiduciary duties apply?

Fiduciary duties apply in many different types of business relationships. They apply to individuals and organizations that have the power and responsibility to act in the interests of another.

The following are examples of fiduciary relationships:

  • Employee to employer
  • Trustee to beneficiary
  • Agent to principal
  • Broker to client
  • Director of a corporation to shareholders
  • Financial advisor to client
  • Attorney to client

When a fiduciary relationship exists and it is breached in any way, the party who has suffered harm as a result can turn to the courts to recoup their losses. A civil lawsuit can be filed against the party that committed the alleged breach. The wronged party will have the burden of proving that the breach occurred and caused their losses.

What damages may I be entitled to in a breach of fiduciary duty lawsuit?

The purpose of a lawsuit alleging a breach of fiduciary duty is to allow the wronged party the chance to recoup his or her losses. This may include lost profits, lost income, out-of-pocket losses, and all financial losses caused by the breach now and into the future. This may also include non-economic damages, such as mental anguish or pain and suffering. In some cases, punitive damages may be awarded to punish the responsible party for their wrongdoing. The value of a case will depend on the extent of damage the breach caused and what it will take to help the wronged party rebuild.

Pursuing a Breach of Fiduciary Duty Claim in Houston

Arnold & Itkin LLP knows how to prepare extensive and effective cases. We conduct thorough investigations and work with qualified industry experts to evaluate the details of the breach and the damage it caused. We will clearly present the business relationship between your company and the person or company against whom you are filing a claim and present an organized, persuasive argument of evidence on your behalf. If you have been the victim of a breach of fiduciary duty, you deserve the opportunity to recover compensation for your losses.

The Houston business litigation lawyers at our firm are experienced and ready to handle your case. If you need representation or have questions, we can help provide you with the right recommendations to protect your company. At Arnold & Itkin, we have ample experience in dealing with cases such as breach of contract, securities fraud, and breach of fiduciary duty. In fact, many of our attorneys have degrees in business law, graduating at the top of their class and then going on to work in the business world. With this type of comprehensive understanding of commercial litigation should ensure you that by seeking the help of our firm, you are getting the best quality of care available.

Learn more about seeking financial damages caused by a breach of fiduciary duty. Contact us today.

Case Results

Check Out Our Victories

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  • $12.5 Million Settlement for Economic Losses Following Oil Spill Arnold & Itkin represented individuals who suffered catastrophic economic losses after the Deepwater Horizon oil spill. We were successful in navigating the complexities of the case and recovered $12.5 million.
  • $9 Million Record Settlement Reached Days Before Trial Attorneys Kurt Arnold, Caj Boatright, Tara Arnold, and Adam Lewis represented a client who had been trying to reach a settlement on their own for years. Our firm took on the case and was able to achieve a $9 million settlement just days before trial, ...
  • $3.45 Million Settlement Reached in Breach of Contract Claim Arnold & Itkin LLP successfully helped an IT company recover $3.45 million in a breach of contract claim that involved a contract for the management of information technology operations. The case was resolved very early in the discovery ...
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