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What is a Breach of Fiduciary Duty and What Can I Do About it?

What is a Breach of Fiduciary Duty and What Can I Do About it?

Business litigation in New Mexico can involve many different types of disputes, as well as many different options for resolving those disputes — including cases involving a breach of fiduciary duty. While you might assume business litigation requires taking a case to court, our experienced Santa Fe business litigation lawyers are committed to working with you to resolve a dispute in the quickest and most cost-effective way possible. While litigation may be necessary in some circumstances, you may be able to resolve a dispute without turning to litigation. In order to understand potential options for resolving a breach of fiduciary duty case, it is important to understand what a breach of fiduciary duty involves and what steps you may be able to take. 

What is a Fiduciary Duty?

In order to understand how a breach of fiduciary duty occurs, it is essential to understand what types of parties have fiduciary duties to other parties. The term “fiduciary duty,” as the Cornell Legal Information Institute (LII) explains, means a situation where “someone has a fiduciary duty to someone else, [and] the person with the duty must act in a way that will benefit someone else, usually financially.” Fiduciary duties are established through different types of relationships, and they can include various types of duties to another person or party. The LII identifies the following as some types of fiduciary duties:

  • Duty of care when making business decisions;
  • Duty of loyalty;
  • Duty of good faith;
  • Duty of prudence; and/or
  • Duty of disclosure.

When there is a fiduciary between two parties or among multiple parties, the party who has the fiduciary duty is known as the “fiduciary.” Then, the person or party who is owed the fiduciary duty is usually known as either the “principal” or the “beneficiary.” Some of the following are common examples of fiduciary relationship:

  • One business partner to other business partners;
  • Corporation board members to the corporation and to shareholders;
  • Accountants to their clients;
  • Stockbrokers to their clients;
  • Trustee to beneficiaries of the trust; and
  • Executor of a will to the beneficiaries of a will.

How Do Breaches of Fiduciary Duty Occur?

A breach of fiduciary duty can occur anytime the fiduciary fails to live up to the duty that they owe to the principal or the beneficiary. In general, in order to be able to prove that a breach of fiduciary duty has occurred, you will need to be able to prove that the fiduciary relationship existed because the fiduciary owed you a duty, that the fiduciary did not abide by that duty (either by putting their own interests first in some cases or failing to consider your interests when making a decision). Then, you will need to show that you suffered damages as a result of the breach. Under New Mexico law, the burden is on the plaintiff to prove that a breach of fiduciary duty occurred.

Depending upon the breach, it may be possible to resolve the issue without turning to litigation. Our firm may be able to engage in discussions with the other party in order to resolve the harm caused by the breach. Otherwise, we are prepared to move on to litigation.

Contact a Santa Fe Breach of Fiduciary Duty Lawyer

If you have questions or concerns about a breach of fiduciary, you should get in touch with a Santa Fe business litigation lawyer at our firm for assistance. Contact Slate Stern Law to learn more about how we can help you.