Fiduciary Duties Attorney in Houston, Texas

What’s an example of a breach of fiduciary duty?

More In This Category

View Transcript

Fiduciary duties come up along. I mean fiduciary duties are obligations of trust and in a lot of the business cases I involve, we’re dealing with colleagues, partners, longtime friends, and there is a lot of trust. One memorable breach of fiduciary duty case involved foreign oil executives who began at some point to suspect that a colleague was siphoning off revenues from a US affiliate. And so they came to us wanting us to investigate. They brought some of the information that led them to believe that some of the money was being stolen from the US affiliate.

We looked at the information. Unfortunately, the information was somewhat dated, that is they had sat on their hands a little bit in bringing us the information, but it was still enough for us to make out the claim. We filed suit on behalf of the entity whose funds were stolen. The case was prosecuted over a, probably an 18-month period. We finally got to trial. It was a two-week trial on the matter.

And just, by the way, the culture of these foreign executives was not such that any pretrial resolution, any alternative, dispute resolution was an option. This was a case that was going to be tried just because of the culture of the individuals involved. The case was tried. On some of the claims we prevailed, on other claims we didn’t, and we talked to the jury afterward and what the jury focused on was the fact that the – our clients had waited too long to bring some of the claims, and this is a problem that’s common in breach of fiduciary duty cases, is that at the heart of these claims is trust, and so because our clients were more trusting of their colleague who was obviously a friend to all of them, a mentor to some of them, they did not perform the due diligence that they would have otherwise performed. They did not exercise the routine supervision that they would have otherwise done had this been an arm’s length transaction.

And because of that relationship it compromised our ability to assert their claims within the timeframes available to do so. And so that’s the lesson learned, is that whenever there is any suspicion, it makes sense, even if it’s a relationship, a longtime relationship, a relationship of trust, there needs to be some investigation taken right away.

Houston, TX commercial litigation attorney Dwaine Massey shares an example of a breach of fiduciary duty.

More Videos From This Lawyer