What Is a Fiduciary Duty?

A fiduciary duty is a legal obligation requiring one party (the fiduciary) to act in the best interests of another party (the beneficiary). Common fiduciary relationships include:

• Business Partners: Duties to act in the best interest of the partnership.
• Executors or Trustees: Obligations to manage estates or trusts responsibly.
• Corporate Officers and Directors: Duties to act in the best interest of shareholders and the corporation.
• Financial Advisors or Attorneys: Responsibilities to prioritize the client’s interests.

A breach occurs when the fiduciary fails to fulfill these obligations, whether through negligence, misconduct or self-dealing.

Unique Considerations in Massachusetts

Massachusetts has distinct legal standards that shape how breach of fiduciary duty claims are evaluated. A few unique aspects that can significantly impact your case include:

• Statute of Limitations: Claims must be filed within three years, though this may be extended for concealed breaches.
• Comparative Negligence in Damages: Courts may reduce damages if the beneficiary’s actions contributed to their losses.
• Equitable Remedies: Courts often impose remedies like constructive trusts or profit disgorgement to address wrongdoing.
• Unique Application of Chapter 93A: Breaches of fiduciary duty in a business context involving unfair or deceptive practices may fall under Chapter 93A, leading to double or treble damages and attorneys’ fees.

Understanding these and other state-specific factors is essential for your success. An experienced attorney can effectively guide you through this highly nuanced legal landscape.

Elements to Prove a Breach of Fiduciary Duty

To succeed in a breach of fiduciary duty claim, Massachusetts law generally requires proof of three key elements:

The Existence of a Fiduciary Relationship

You must first establish that a fiduciary relationship existed between you and the other party. This relationship can arise from formal agreements, circumstances where one party relied on another’s expertise and guidance or roles, such as trustees or business partners.

Breach of the Fiduciary Duty

Next, you must demonstrate how the fiduciary failed to meet their obligations. Some common breaches include:

• Mismanagement: Failing to handle assets or responsibilities with due care.
• Self-Dealing: Acting in their own interest instead of prioritizing the beneficiary’s interests.
• Failure to Disclose Information: Withholding material facts or conflicts of interest.
• Misappropriation of Funds: Using assets for unauthorized purposes.

Damages Resulting from the Breach

Finally, you must prove that the breach directly caused you harm. This harm can include financial losses, reputational damage or missed opportunities due to the fiduciary’s misconduct.

Evidence to Support Your Claim

Gathering strong evidence is critical to proving a breach of fiduciary duty. Key evidence might include:

• Contracts or Agreements: Documents outlining the fiduciary’s duties and responsibilities.
• Financial Records: Bank statements, transaction logs, financial reports and other documents showing misconduct.
• Communications: Emails, text messages or meeting notes that reveal negligence or self-dealing.
• Expert Testimony: Opinions from financial, legal or business experts to demonstrate wrongdoing.

Defenses to Breach of Fiduciary Duty Claims

It’s important to anticipate potential defenses the fiduciary might raise, such as:

• No Fiduciary Relationship: Arguing that no fiduciary duty existed.
• Good Faith Actions: Claiming their decisions were made in good faith and with reasonable care.
• Lack of Causation: Asserting that your damages were not caused by their actions.

A skilled attorney can counter these defenses and strengthen your case.

The Role of a Legal Professional

Proving a breach of fiduciary duty requires navigating complex legal principles and presenting compelling evidence. At Tempus Fugit Law, we provide personalized legal strategies tailored to your situation. We apply our understanding of Massachusetts law and fiduciary relationships to hold the responsible parties accountable.

Whether you’re dealing with a dishonest business partner, a negligent trustee or a corporate officer’s misconduct, we’re here to help. Call (617) 752-2371, email team@tflawllc.com or contact us here on our website to get started with a complimentary legal consultation today.