Fiduciary duties give rise to the most-strict duty set by law. A fiduciary duty creates a duty to act in another’s best benefit, subordinating one’s personal interests to that of another person. Sometimes fiduciary duties exist as a matter of law (e.g. a trustee and his or her beneficiaries, a corporate officer and their shareholders, an attorney and his or her clients, or a real estate agent and his or her clients) and sometimes they arise when a party relies on another and they share a special relationship (e.g. an insurer-insured, agent-principal, financial institution-customer). For example, you may have a claim against your real estate agent if he or she did not act in your best interest. Or you may have a claim against the trustee of the trust of which you are a beneficiary for commingling funds. These are just a few of the hundreds of examples of what a breach of fiduciary duty could be.
What Is a Claim for Breach of Fiduciary Duty?
A claim for breach of fiduciary duty is a claim arising in tort. To make a case for breach of fiduciary duty, a party must prove:
- The existence of a fiduciary relationship between the parties
- Breach of the fiduciary duty
The party to whom a fiduciary duty is owed generally has standing to sue for breach of fiduciary duty. The statute of limitations for a breach of fiduciary duty claim is five years in Missouri but only two years in Kansas. See R.S.Mo. § 516.120; K.S.A. § 60-513(a)(4).
Damages Available in Breach of Fiduciary Duty Cases
A plaintiff may recover damages for breach of fiduciary duty in an amount that will compensate the plaintiff for the losses of which the breach of fiduciary duty is a legal cause. Damages do not need to be established with absolute certainty, but rather reasonable certainty as to the amount and existence. Punitive damages may be awarded in certain breach of fiduciary duty cases upon a clear showing that the defendant acted with evil motive and was recklessly indifferent to the plaintiff’s rights. However, punitive damages are an extraordinary remedy and sparingly given. In most cases, whether the evidence is sufficient to warrant a punitive damages instruction lies in the discretion of the trial court. Contact our corporate lawyers today if you believe you have a claim for breach of fiduciary duty.