Business Litigation In New Mexico
Breach of Fiduciary Duty in New Mexico
The law recognizes the existence of fiduciary duties resulting for special relationships of trust or confidence in certain individuals. Fiduciary duties can arise out of formal relationships, such as a lawyer or partner, or even informal relationships, if the specific facts or circumstances require the imposition of fiduciary duties.
Courts in New Mexico have commonly recognized the existence of fiduciary duties in the following relationships: Attorneys, employees, agents, escrow agents, insurance agents, holders of a power of attorney, corporate officers, joint venturers, executors and trustees, securities brokers, taxpayers, class representatives, mineral-rights holders, and condominium board members—just to name a few.
A fiduciary owes duties of loyalty and utmost good faith, the duty to refrain from self-dealing, a duty to act with fairness and honesty, and a duty of full disclosure. When these duties are breached, the victims of the breach often need to act swiftly to seek legal action to reverse course. A breach of fiduciary duty not only gives rise to a tort, it gives rise to special damages and remedies that are unique to fiduciary cases apart from common economic loss damages, such as disgorgement of ill-gotten gains or a constructive trust. In the case of misapplication of fiduciary property, many states, including Texas, recognize potential criminal exposure for these torts.
New Mexico Breach of Fiduciary Duty Attorneys in Santa Fe
Businesses in Santa Fe and throughout New Mexico rely on other parties—from partners and shareholders to employees and agents—to act in the best interests of the business. Certain parties have a fiduciary duty, which means that they have a duty to act in the best interests of another person or entity. Fiduciary relationships and fiduciary duties exist in many different areas of the law, from corporate and business law relationships to those in trusts and estates law. When it comes to fiduciary duties in business law, it is important to understand who owes a fiduciary duty and what that relationship entails. If you or your business sustained economic harm as a result of a breach of fiduciary duty, you should seek advice from our Santa Fe breach of fiduciary duty attorneys as soon as possible to learn more about obtaining a just remedy.
Learning More About Fiduciaries and Fiduciary Responsibilities
The person who has a responsibility or a duty to act in another party’s best interests is known as a “fiduciary,” and a “fiduciary relationship” is created when the fiduciary takes on the responsibility of acting in the best interests of the other person or entity in the relationship. When the fiduciary fails to live up to this duty through an act or omission, there may be a “breach of fiduciary duty” that can result in a breach of fiduciary duty claim.
Generally speaking, a fiduciary is tasked with a responsibility for intangible or tangible assets, which can include money, real estate, investments, and other assets. In a business context, a fiduciary is responsible for protecting the assets of the business and the individual business owners. Once a fiduciary relationship is established, there is an expectation of trust. Accordingly, any action (or lack of action) taken by the fiduciary that results in economic loss or other legal harm can lead to a fiduciary duty claim in which the fiduciary can be held accountable for those losses.
It is important to know that a breach of fiduciary duty claim can arise regardless of whether the fiduciary intended to breach his or her duty. In some cases, breach of fiduciary duty claims in business contexts might arise when a partner or shareholder engages in intentional actions designed to enrich themselves to the detriment of other business owners. At the same time, breach of fiduciary duty claims can also arise when an employer unintentionally fails to carry out his or her expected work duties and ends up costing the business money.
Elements of a Breach of Fiduciary Duty Claim
What are the elements of a fiduciary duty claims? While it will be essential to work with a business law attorney to determine the specific elements you must prove to win a breach of fiduciary duty claim, you must be able to show the following four elements:
- Duty: a fiduciary relationship existed between the parties resulting in a fiduciary duty;
- Breach: the fiduciary breached his or her duty by acting, or failing to act, in a manner that was contrary to your interests;
- Causation: the breach of fiduciary duty caused the harm for which the plaintiff is filing a claim; and
- Damages: the plaintiff suffered actual damages as a result of the breach of fiduciary duty.
To be clear, to be able to win a fiduciary duty claim, the plaintiff must show that the fiduciary’s act or omission caused a harm that resulted in damages. Without any kind of legal harm—even if the fiduciary acted in a way that was in opposition to your interests—you will not be eligible to obtain compensation by filing a civil lawsuit.
Common Examples of Fiduciary Duty Claims in New Mexico
There are many different ways a fiduciary can violate his/her duties. The following are some common examples:
- Partner failing to disclose conflict of interest to other business partners;
- Partner damaging the business’s goodwill through negligent or criminal actions;
- Business partner mismanaging assets of the business;
- Board members of a corporation preventing shareholders from voting;
- Board members failing to pay shareholder dividends;
- Board members attempting to unlawfully force out minor shareholders;
- Employee failing to carry out job duties to the economic detriment of the business; or
- Employee taking any action that results in that employee profiting at the expense of the business.
Seek Advice From a Santa Fe Business Law Attorney
If you have questions about filing a breach of fiduciary duty claim, you should get in touch with an experienced business law attorney in Santa Fe who can assist you. Contact Slate Stern Law today for more information.
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