How To Prove A Texas Breach of Fiduciary Duty Claim

 

 

In Texas, 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 duty arose from a fiduciary relationship between the plaintiff and the defendant. A duty arose from a fiduciary relationship when one party, trusted to act in the best interest of the other, had a responsibility to prioritize that person’s needs and well-being over their own, creating a legal obligation to act honestly and loyally.
  

  Facts that might support this element look like:

  * The plaintiff entrusted the defendant with significant financial assets, expecting the defendant to act in the plaintiff’s best interest.
  * The defendant had specialized knowledge and experience in managing investments, which the plaintiff relied upon for guidance.
  * The plaintiff and defendant had a long-standing relationship built on trust, where the defendant was aware of the plaintiff’s financial goals.
  * The defendant actively solicited the plaintiff’s business, promising to prioritize the plaintiff’s interests above all else.
  * The defendant had access to confidential information regarding the plaintiff’s financial situation, further establishing a fiduciary duty.

• Element 2. There was a breach of that duty. A breach of that duty means the person in a position of trust failed to act in the best interest of another, such as misusing confidential information or making decisions that benefit themselves instead of the person they are supposed to protect.
  

  Facts that might support this element look like:

  * The fiduciary failed to disclose a conflict of interest that directly affected the decision-making process.
  * The fiduciary engaged in self-dealing by entering into a transaction that benefited them personally at the expense of the principal.
  * The fiduciary neglected to act in the best interest of the principal, resulting in significant financial losses.
  * The fiduciary did not seek the principal’s consent before making a major investment decision that was outside the agreed-upon strategy.
  * The fiduciary failed to provide regular updates and reports, leaving the principal uninformed about critical developments.

• Element 3. The plaintiff suffered damages as a direct cause of the defendant’s breach. The plaintiff experienced harm or losses directly because the defendant failed to fulfill their trusted responsibilities, meaning the defendant’s actions or inactions led to the plaintiff’s negative outcomes.
  

  Facts that might support this element look like:

  * The plaintiff incurred significant financial losses after the defendant mismanaged the investment portfolio, resulting in a 30% decrease in value.
  * Due to the defendant’s failure to disclose critical information, the plaintiff made uninformed decisions that led to substantial economic harm.
  * The plaintiff was forced to sell assets at a loss because the defendant’s breach caused a liquidity crisis in the investment account.
  * The defendant’s negligence in handling the plaintiff’s trust resulted in missed opportunities for profitable investments, directly impacting the plaintiff’s financial stability.
  * As a result of the defendant’s breach, the plaintiff experienced emotional distress and anxiety over their financial future, leading to additional costs for counseling services.

^{(See Cuidado Casero Home Health of El Paso, Inc. v. Ayuda Home healthcare Servs., LLC, 404 S. W. 3d 737 (T.X. Court of Appeals 2013).)}
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 TX Breach of Fiduciary Duty Claim

U.S. Civil Cases Only