Life presents many instances when we must place our trust and confidence in a knowledgeable advisor such as a lawyer, corporate director, real estate broker, or executor. By doing so, we often put our financial well-being on the line.
Because courts and legislators recognize the risk inherent in these relationships, the law requires these trusted individuals to act in the best interests of the people they serve. This obligation is called a fiduciary duty. And depending on the fiduciary relationship, it comes with specific additional responsibilities such as a duty of care, a duty of loyalty, or a duty to act in good faith.
What Is a Breach of Fiduciary Duty?
When fiduciaries fail to put the client’s or other dependent party’s interests above their own, they have breached their duty. For example, if a corporate director mismanages a corporation or votes to pay the directors excessively, the director likely breached a fiduciary duty to the corporation. Similarly, executors breach their obligations by keeping estate assets for themselves instead of maintaining them for the benefit of the estate beneficiaries.
If these violations of trust cause losses to the plaintiff or benefit the defendant fiduciary, the victim may bring a legal action for breach of fiduciary duty. In Texas, the law provides various remedies for such breaches.
What Damages Can I Recover?
So how are damages calculated in a breach of fiduciary duty case in Texas? The amount you may recover depends on the type of relationship and the nature of the breach. The following damages are possible forms of recovery. An attorney can clarify which options are appropriate in your case.
Courts often award economic damages for a breach of fiduciary duty in Texas. Economic damages are the kinds of losses that are easy to calculate. This includes things like lost profits, decreased value of trust assets, legal fees, and other out-of-pocket expenses.
Noneconomic damages compensate a claimant for losses that are more subjective and difficult to put a price tag on. Examples in a breach of fiduciary duty context include:
- Mental or emotional pain or anguish,
- Inconvenience, and
- Injury to reputation.
A jury generally determines how much it thinks these losses are worth.
Exemplary damages, also called punitive damages, punish wrongdoers who act with fraud, malice, or gross negligence. The intent behind these damages is to penalize fiduciaries who behaved particularly egregiously in harming those who trusted them. Courts also seek to deter future bad behavior by awarding punitive damages.
In some breach of fiduciary duty cases, monetary damages will not right the wrong. Instead, courts may craft equitable remedies to put the plaintiff back in the position they were before the breach. Just a few of the possible remedies include:
- Requiring the fiduciary to disgorge or return the profits,
- Rescinding or canceling a contract,
- Issuing an injunction, and
- Removing an executor.
The appropriate solution depends on the specific facts of the case. An experienced attorney can help you determine which form of relief to request.
What Is the Statute of Limitations for a Texas Breach of Fiduciary Duty Action?
The statute of limitations is the length of time you have to bring a lawsuit for a specific type of claim. For a breach of fiduciary duty, Texas requires you to bring the case within four years after the cause of action accrues. Because it can sometimes be difficult to figure out exactly when the breach occurred, it is best to consult an attorney as soon as possible after discovering the harm.
Contact an Attorney for Assistance with Your Claim
Many people think breaches of fiduciary duties happen only in million-dollar corporate dealings or complex interactions with attorneys. But these breaches in trust also occur when regular families are settling a loved one’s estate, managing a family business, or working with a real estate broker to buy a house.
Contact a seasoned attorney to protect your rights if you believe a fiduciary failed to act in your best interest. The lawyers at the Robbins Estate Law graduated at the top of their classes from prestigious law schools, and are experienced litigators. They will work to attain the highest possible compensation on your claim. When you are ready to speak with an attorney about your options, contact Robbins Estate Law.