Fiduciary Litigation Overview
Florida Fiduciary Litigation
What is a fiduciary?
A “fiduciary” obligation exists whenever one person – – the client – – places special trust and confidence in another person – – the fiduciary – – relying upon the fiduciary to exercise discretion or expertise in acting for the client; and the fiduciary knowingly accepts that trust and confidence and thereafter undertakes to act on behalf of the client by exercising the fiduciary’s own discretion and expertise.
Of course, the mere fact that a business relationship arises between two persons does not mean that either owes a fiduciary obligation to the other. If one person engages or employs another and thereafter directs or supervises or approves the other’s actions, the person so employed is not a fiduciary. Rather, as previously stated, it is only when one party places, and the other accepts, a special trust and confidence – – usually involving the exercise of professional expertise and discretion – – that a fiduciary relationship comes into being.
When one person does undertake to act for another in a fiduciary relationship, the law forbids the fiduciary from acting in any manner adverse or contrary to the interests of the client, or from acting for the fiduciary’s own benefit in relation to the subject matter of their relationship. The fiduciary thus has a responsibility to disclose any conflicts between the fiduciary’s interests and the principal’s interests which might make the fiduciary act in the fiduciary’s own best interest at the expense or the detriment of his principal. The client is entitled to the best efforts of the fiduciary on the client’s behalf, and the fiduciary must exercise skill, care and diligence when acting on behalf of the client.
Examples of Fiduciaries:
A fiduciary can be anyone, but when most people think of fiduciaries they think of the following individuals and entities:
- Attorney-in-fact under a Power of Attorney
- Personal Representatives / Executors
- Charitable organizations
- Educational institutions
- Trust Departments
- Officers and Directors
The Florida Bar has a very helpful article titled Understanding Fiduciary Duty, which provides helpful guidance on fiduciary duty claims in Florida.