In business and life, you may rely on another person to serve in a capacity that protects your interests. These relationships can sometimes create claims where fiduciaries don't uphold their obligations (i.e., a breach of duty). A breach of fiduciary duty Florida statute of limitations is 4 years, and below, you'll find more information about these claims in Florida.
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What is a breach of fiduciary duty in Florida?
A breach of fiduciary duty in Florida is when a person violates their responsibilities to serve the best interests of another party, usually out of the fiduciary's self-interest. Fiduciaries are people who, while acting in good faith, agree to uphold duties of loyalty and care for the benefit of another.
Fiduciary relationships arise in several personal and business roles and engagements such as:
- members and managers of an LLC (as stated in a Florida LLC operating agreement)
- executives and board members of a corporation
- trustees
- personal representatives (i.e., in a probate proceeding)
- business partners
What are the breach of fiduciary duty elements in Florida?
In order to have a legitimate cause of action for a breach of fiduciary duty claim, a plaintiff must show the existence of several elements. Failure to meet one of the elements would likely result in a dismissal of the case. We will explain the elements as they may apply to LLC fiduciary duties and other similar type of relationship.
Existence of a fiduciary duty
The first element for a breach of fiduciary duty claim is to have a relationship with a fiduciary duty. Many fiduciary relationships (such as the examples listed above) are expressly written in various agreements and legal document.
However, it is also possible to have a fiduciary relationship through less formal means via Florida common law. Under the common law, a plaintiff may be able to prove the existence of a fiduciary relationship if it can show that a defendant accepted the trust and assumed a duty to protect a weaker party.
A breach of fiduciary duty
In addition to the existence of a fiduciary duty, a plaintiff must also show a breach of that duty. As mentioned above, a fiduciary's duties include two main responsibilities.
The first is maintaining a duty of care with respect to the fiduciary's position. In other words, what constitutes a breach of the fiduciary duty of care may look different in the context of a corporate officer versus a personal representative in probate. In reality, the duty of care generally translates to a duty to act reasonably (i.e., in a way that others would act in similar position and under similar circumstances).
The other fiduciary responsibility is the duty of loyalty, which means the fiduciary must act in the interest of the protected party. A breach of the duty of loyalty is most likely in situations where the fiduciary has a personal stake in a matter. These situations can create an opportunity for the fiduciary to breach their duty by self-dealing or acting in their own interest.
Breach of fiduciary duty damages
The final element is that the breach of fiduciary duty must cause some harm or damage to the protected party (e.g., weaker party, beneficiary, shareholder, partner, etc.). You may be able to show damages through financial statements showing a loss, proof of a fiduciary's gain at the protected party's expense, etc.
Breach of fiduciary duty remedies
The remedies a plaintiff may be able to recover as damages of a fiduciary duty claim are often in one of two forms. One is monetary compensation to recover losses from the breach. The other is preventative relief which may include stopping or rewinding a transaction, and in many cases, removal of the fiduciary.
Who can sue for breach of fiduciary duty?
Florida law generally limits who can sue under a claim for breach of duty to those who are a part of the fiduciary relationship (i.e., the beneficiary or other protected party).
Affirmative defenses to breach of fiduciary duty in Florida
The affirmative defenses to breach of fiduciary duty will depend on the nature of the alleged misconduct and the nature of the fiduciary relationship. With relationships formalized via contract or other legal writing, the most common defense may be showing that the fiduciary had the authority to take certain action under the terms.
A fiduciary may also have other equitable defenses at their disposal. For example, you may be able to defend against a breach of duty of loyalty by showing a fiduciary properly informed the protected party of the potential self-dealing and that the protected party waived their rights in the matter.
Need help with Florida breach of fiduciary duty claims or defenses?
As a business law firm, the attorneys at Cueto Law Group are familiar with Florida litigation when it comes to breach of fiduciary duty claims. Located in Coral Gables, the firm represents parties throughout Miami and South Florida on either side of a dispute concerning a claim for breach of fiduciary duty. That means we defend wrongfully accused fiduciaries and also advocate for parties harmed by a breach of duty.
Contact our law firm to schedule a consultation about a breach of fiduciary duty claim.
FAQs
Is breach of fiduciary duty a tort in Florida?
Yes, a breach of fiduciary duty is a type of intentional tort claim under Florida common law (and sometimes Florida State law depending on the context). This means plaintiffs must pursue remedies through civil trial court, or even an FLA court of appeals, such as the Supreme Court.
Is breach of fiduciary duty an equitable claim?
A breach of fiduciary duty can be both an equitable claim and a legal claim. An equitable claim is one where the plaintiff requests the court to award a judgment for injunctive relief. A breach can also have legal claims seeking recovery of financial losses to make the plaintiff “whole.”
Is breach of fiduciary duty a crime in Florida?
Breach of fiduciary duty creates a civil claim and is not itself a crime in Florida. However, a breach may extend beyond civil liability to a violation of criminal law if the underlying activity is illegal. For example, a fiduciary breach with a corporate officer insider trading on company information.
