A fiduciary duty is a legal obligation to act in the best interests of another person. This duty arises in relationships where one party trusts another to act with honesty and loyalty. These duties can arise by operation of law (de jure) or based on the facts and circumstances of a relationship (de facto). Common fiduciary relationships include those between attorneys and clients, trustees and beneficiaries, and partners in a partnership.
To establish a breach of fiduciary duty, a plaintiff must demonstrate four key elements:
- the existence of a fiduciary duty
- a breach of that duty
- that the plaintiff suffered damages due to the breach
- the breach caused the plaintiff’s damages
The breach occurs when the fiduciary acts in a manner contrary to the interests of the party to whom the duty is owed, often involving a failure to act in good faith or with due care.
When someone in a position of trust breaks that trust, the harmed party can take legal action to recover damages and any unfair profits the wrongdoer made. Additionally, North Carolina courts have recognized that constructive fraud claims often overlap with breach of fiduciary duty claims, as both involve a breach of trust and confidence.
Determining whether a breach of fiduciary duty has occurred requires an analysis specific to the facts of each relationship. If you have any questions about a breach of fiduciary duty, please call Lord & Lindley, PLLC, at (704) 457-1010. For more information regarding our firm, attorneys, and practice areas, please visit our website at www.lordlindley.com.