How To Prove A Tennessee Breach of Fiduciary Duty Claim
In Tennessee, a claim of Breach of Fiduciary Duty is defined as:
A Breach of Fiduciary Duty occurs when one party fails to uphold their obligations to act in best interests of another in which there is a fiduciary relationship.
It simply means:
When one party has a legal obligation to act in the best interests of another party but fails to do so.
There are 3 elements of the claim:
- Element 1. A fiduciary relationship existed between the plaintiff and the defendant. A fiduciary relationship means that one person, the fiduciary, has a special duty to act in the best interest of another person, the principal, often involving trust and reliance, like a lawyer with a client or a trustee with a beneficiary.
Facts that might support this element look like:
* The plaintiff entrusted the defendant with significant financial decisions, relying on the defendant’s expertise and judgment.
* The defendant had access to the plaintiff’s confidential information and was responsible for managing the plaintiff’s investments.
* The plaintiff and defendant had a long-standing relationship built on trust, where the defendant acted as a financial advisor.
* The defendant explicitly agreed to act in the best interests of the plaintiff, acknowledging their fiduciary duty.
* The plaintiff relied on the defendant’s advice and recommendations, believing the defendant would prioritize the plaintiff’s interests above their own. - Element 2. The fiduciary duty arising from the relationship was breached. A breach of fiduciary duty occurs when someone in a position of trust, like a lawyer or financial advisor, fails to act in the best interest of the person they are supposed to protect, leading to potential harm or loss for that person.
Facts that might support this element look like:
* The fiduciary failed to disclose a conflict of interest that influenced their decision-making on behalf of the client.
* The fiduciary engaged in self-dealing by profiting from a transaction that was not disclosed to the principal.
* The fiduciary neglected to act in the best interest of the client, resulting in significant financial losses.
* The fiduciary did not provide the necessary information for the client to make informed decisions regarding their investments.
* The fiduciary ignored the client’s expressed wishes and acted contrary to their interests without justification. - Element 3. The breach caused an injury to the plaintiff or a benefit to the defendant. In a breach of fiduciary duty claim, this element means that the wrongdoing either harmed the person who was wronged (the plaintiff) or gave an unfair advantage or gain to the person who acted improperly (the defendant).
Facts that might support this element look like:
* The defendant’s failure to disclose a conflict of interest resulted in the plaintiff making an investment that led to significant financial losses.
* The defendant misappropriated funds from the plaintiff’s account, directly reducing the plaintiff’s available capital for business operations.
* The defendant’s actions allowed them to gain a substantial profit at the expense of the plaintiff’s financial interests.
* The plaintiff incurred additional legal fees due to the defendant’s breach, which could have been avoided with proper fiduciary conduct.
* The defendant’s negligence in managing the plaintiff’s assets resulted in a decrease in the overall value of the plaintiff’s investment portfolio.
(See In re Estate of Potter, No. W2016-01809-COA-R3-CV (TN Court of Appeals 2017).)
If you’re in court without a lawyer and plan to assert a Claim of Breach of Fiduciary Duty, having a Personal Practice of Law at Courtroom5 is essential. You’ll need to make informed decisions about what to file at each phase of your case and prepare legal documents supported by thorough legal research and a strong analysis of the facts. Equip yourself with the tools and knowledge to effectively navigate your legal journey.
Prove Your TN Breach of Fiduciary Duty Claim
U.S. Civil Cases Only