If someone fails to live up to their fiduciary duties, then they may be held liable for the harm they caused. However, the process for proving a breach of fiduciary duty can be complex.

In Maryland, you can sue for breach of fiduciary duty if you can prove that a fiduciary relationship existed, a fiduciary duty was breached, and that you were harmed because of that breach. If your claim for breach of fiduciary duties succeeds, you may obtain monetary damages and the defendant may face penalties such as revocation of their business license.

If you need to sue for breach of fiduciary duty in Maryland, contact our experienced Maryland fiduciary litigation attorneys by calling the Heyman Law Firm today at (410) 305-9287.

Suing for Breach of Fiduciary Duty in Maryland

When suing for breach of fiduciary duty, you must first establish that a fiduciary relationship existed between you and the defendant. A fiduciary relationship generally is established when someone places their confidence and trust in another to exercise expertise or discretion on their behalf. There are several examples of fiduciary relationships. For example, such a relationship will be present between officers and directors of a corporation. Further, a fiduciary relationship is established under a trust between the beneficiary and their trustee. Lastly, attorneys also have fiduciary relationships with their clients.

A fiduciary owes a duty of care and a duty of loyalty to their client or principal. If a fiduciary breaches their duty by failing to act in their client or principal’s best interests, then they may be sued. In many cases, a breach of fiduciary duty occurs when a defendant promotes the interests of a third-party client whose goals are adverse to the plaintiff.

Finally, for your breach of fiduciary duty claim to be successful, you must show that you suffered actual damages like monetary loss as a result of the defendant’s conduct. Guidance from our Maryland fiduciary litigation lawyers can be very valuable when seeking compensation for a breach of fiduciary duty.

Evidence Used to Prove a Breach of Fiduciary Duty in Maryland

The type of evidence you use to prove a breach of fiduciary duty will likely depend on the role of the defendant in your case. For example, fiduciaries can breach their duties by committing fraud. A business partner may commit fraud by making material misrepresentations regarding assets, debts, contracts, and daily business activities. No matter the reasoning behind the lie, if an act of fraud results in monetary loss, then it will be considered a breach of fiduciary duty. To prove that a defendant committed fraud, you may provide email records that show the lies they made.

Embezzlement is another offense that can constitute a breach of fiduciary duty. Embezzlement happens when someone within a company improperly appropriates funds for their personal use. Forged financial records along with unexplained gaps in accounting are all indications that embezzlement has occurred. To prove that embezzlement has occurred, you may offer bank account statements and other financial data that shows the defendant siphoned funds away from their company for personal use.

Fiduciaries can also breach their duties by committing insider trading. Insider trading occurs when people with access to non-public business information inappropriately use that information for their own financial gain. In many cases, statements from whistleblowers can be very helpful when establishing that insider trading occurred. Whistleblowers are informants who reveal information regarding inappropriate activity within public or private organizations. For cases involving insider trading, whistleblowers are often disgruntled employees or competitors.

Finally, another example of how a fiduciary can breach their duty is by failing to disclose a conflict of interest. Fiduciaries must avoid conflicts of interest. If potential conflicts exist, then they must be exposed. For example, a real estate agent may breach their fiduciary duty by failing to disclose that they represent both the buyer and the seller in a specific transaction. You may use a wide array of evidence including records of communication, signed contracts, and various financial records.

Examples of Fiduciary Duties that Exist Between Business Partners in Maryland

There are several fiduciary duties that business owners owe to fellow partners. You may be able to sue a business partner if they breached any of the following duties in your case:

Duty of Care

Business partners owe a duty of care to each other. This encompasses the duty to be reasonably prudent in all decisions that will affect their businesses. If they do not live up to this duty, and their actions or inaction caused monetary losses, then they may be held liable for breach of fiduciary duty.

Duty of Loyalty

The duty of loyalty is also an important fiduciary duty that exists between business partners. If a business owner executes a transaction, dealing, or other business decision that is adverse to their partners’ interests, then they have violated their duty of loyalty. Issues regarding the duty of loyalty often arise when conflicts of interest develop between partners.

Duty of Disclosure

Furthermore, business partners owe a duty of disclosure to each other. This means that they must be fully transparent with each other regarding the state of their business. If a partner attempts to cover up their failures or withhold positive developments, then their business can be harmed.

Duty of Confidentiality

Fiduciaries have to maintain the confidentiality of all information relating to their principal or client. Fiduciaries may not use confidential information for their personal gain.

Duty of Prudence

Fiduciaries also have to make decisions and administer matters concerning the interests of their principals and clients with the highest degree of caution, critical awareness of risk, and professional skill. This is referred to as the duty of prudence.

Duty of Good Faith and Fair Dealing

Finally, business partners also owe a duty of good faith and fair dealing to each other. This generally refers to the duty to act genuinely, honestly, and fairly in every aspect of their dealings with each other.

If You Need Help Proving that a Breach of Fiduciary Duty Occurred, Call Our Law Firm

If you wish to file a lawsuit for breach of fiduciary duty, get in touch with our experienced Baltimore fiduciary litigation attorneys at the Heyman Law Firm by calling (410) 305-9287 today.