Breach of fiduciary duty claims are the center of almost every single partnership dispute and business-divorce lawsuit in New York. In New York, a breach of fiduciary duty cause of action arises when a person or entity, who owes a fiduciary duty to another, fails to act in the best interests of that person or entity. A fiduciary duty can arise in various relationships, including between business partners, attorneys and clients, trustees and beneficiaries, and agents and principals.
To prove a breach of fiduciary duty cause of action, the plaintiff must establish the following elements:
- The existence of a fiduciary duty: The plaintiff must demonstrate that the defendant owed a fiduciary duty to the plaintiff. This can be established through a legal relationship or an informal relationship where there is a duty of trust and confidence.
- Breach of the fiduciary duty: The plaintiff must prove that the defendant breached the fiduciary duty owed to the plaintiff. This can include actions such as self-dealing, fraud, misappropriation of funds, misuse of funds, failing to disclose information, and other actions that demonstrate a failure to act in the best interests of the plaintiff.
- Causation: The plaintiff must demonstrate that the defendant’s breach of fiduciary duty caused the plaintiff harm or damages.
- Damages: The plaintiff must prove that they suffered damages as a result of the defendant’s breach of fiduciary duty. This can include financial harm or other types of harm, such as loss of opportunity.
If the plaintiff can prove all of these elements, they may be entitled to damages, which can include monetary compensation for the harm suffered as a result of the breach of fiduciary duty.
