Can You Get Punitive Damages for Breach of Fiduciary Duty in California?
Business relationships can go sour for a variety of reasons, and sometimes it is no one’s fault; the business projects that become profitable and remain that way are the exception to the rule. When one party intentionally causes financial harm to the other in a business relationship, the party that has suffered financial losses because of the other’s actions can sue the party that caused the losses. In some cases, the court can award you even more money than the amount that you lost because of the tortfeasor’s actions. If you have emerged from a business dispute in a worse financial position than you started, and it was not a simple case of difference of opinion among business partners or of economic circumstances beyond your control, you could have grounds to sue a former employee or business associate for breach of fiduciary duty. The first step is to contact a Pasadena breach of fiduciary duty and business law attorney.
What is Breach of Fiduciary Duty?
A breach of fiduciary duty is not the same as a breach of contract. A breach of contract occurs when the parties have signed a written agreement outlining their rights and obligations, and one party, intentionally or unintentionally, fails to fulfill those obligations. Fiduciary duty is when a person or company explicitly or implicitly (by virtue of its relationship to another party) agrees to act in the other party’s best interest. For example, employees and trustees are, necessarily, fiduciaries of their employers and their trusts. An agent in a power of attorney relationship also has a fiduciary duty, and banks have a fiduciary duty to account holders. The following are examples of breaches of fiduciary duty:
- An employee embezzling from an employer
- An employee sharing trade secrets with an employer’s competitor
- A trustee using funds in a trust in unauthorized ways
- A decision-maker at a company making financial decisions that are so risky, they amount to negligence
- An employee intentionally failing to perform his or her work duties (such as by being absent from a meeting with a client, where the employee was assigned to be the employer’s sole representative)
What Remedies are Available to Parties Harmed by Breach of Fiduciary Duty?
Breach of fiduciary duty is a tort, meaning that it is an intentional act that causes another party to suffer financial losses. Therefore, a person or company that suffers losses has the right to file a civil lawsuit and seek compensatory damages equal to the amount of money that the defendant caused the plaintiff to lose. In cases such as Cleveland v. Johnson and Hudson v. Wells Fargo Bank, the California Supreme Court has ruled that plaintiffs in breach of fiduciary duty cases also have the right to seek punitive damages in addition to compensatory damages.
Contact a Pasadena Business Litigation Lawyer About Breach of Fiduciary Duty
A breach of fiduciary duty lawyer can help you recover damages if a former employee or business associate has intentionally caused your company to suffer financial losses. Contact Andrew Ritholz in Pasadena, California, or call (626)844-7102.
