A fiduciary is someone who holds a legal or ethical relationship of trust with another party. Thus, a fiduciary relationship entails being bound both legally and ethically to act in another party’s best interests. A breach of fiduciary duty occurs when a fiduciary fails to comply with his or her legal or ethical duties. In this article, we discuss the penalties for breach of fiduciary duty.
Fiduciary Duty Penalties
In the state of Florida, breach of fiduciary duty is not a criminal offense (although a breach of fiduciary duty may also involve criminal behavior). Rather, it is a civil cause of action. Thus, if a beneficiary can prove that a fiduciary caused him or her harm by breaching a fiduciary duty, then the beneficiary can file a lawsuit in court against the fiduciary to recover damages.
The damages available in a breach of fiduciary duty claim come in two primary forms. The first is monetary compensation to compensate the fiduciary for losses caused by the breach. And the other is preventative relief which may include reversing or stopping a transaction.
Proving Breach of Fiduciary Duty
If a fiduciary breaches any of his or her duties, the beneficiary can file a lawsuit in court seeking monetary compensation for any losses suffered due to the breach. In addition, the beneficiary may seek equitable remedies, such as removal of the fiduciary from his or her position. To succeed in a lawsuit for breach of fiduciary duty, a party must prove the following three elements:
- There was a fiduciary relationship
- The fiduciary breached his or her duty
- The breach caused the fiduciary to suffer harm of some kind
Defending Breach of Fiduciary Duty
Fiduciaries who are accused of breaching their duties may have several defenses available. The main defense in any breach of fiduciary duty lawsuit involves proving that the fiduciary’s actions were within the bounds of the applicable documents and the laws of Florida. Additional defenses that may be available to fiduciaries in Florida include:
- Statute of limitations: If a lawsuit is time-barred by law, the fiduciary may assert this as a defense.
- Equitable defense of laches: A fiduciary may assert this defense if the plaintiff is tardy in asserting the claim.
- Situation-specific defenses: Finally, other defenses may be available depending on the specific situation.
Breach of Fiduciary Duty Examples
Examples of breach of fiduciary duty include:
- Conflicts of interest
- Mismanagement of assets
- Failure to file required paperwork
- Failure to keep beneficiaries informed
- Embezzlement or misappropriation of trust or estate property
- Payment of excessive compensation
Contact a Florida Civil Litigation Attorney
Gueronniere, P.A. provides civil litigation services to clients in Wellington and throughout the state of Florida. Founding civil litigation attorney Grace de la Gueronniere has the knowledge and experience necessary to assist you with your breach of fiduciary claim. If you need legal assistance in Florida, please contact us today to schedule a free consultation with our talented Florida breach of fiduciary duty attorney.