Breach of Fiduciary Duty in Florida: What You Need to Know

In Florida law, certain relationships carry special legal obligations known as fiduciary duties. A fiduciary is someone who has accepted a position of trust and confidence, and the law requires them to act in the best interests of the party they serve. When that trust is broken, the result can be a breach of fiduciary duty claim.

This type of legal dispute often arises in business, professional, and estate contexts, and the consequences can be serious.

What Is a Fiduciary Duty?

A fiduciary duty arises when one party relies on another’s loyalty, honesty, and good faith in managing affairs, property, or decision-making. Common fiduciary relationships in Florida include:

• Business settings: corporate directors, officers, managing partners, and majority shareholders.
• Financial relationships: trustees, investment advisors, and agents under power of attorney.
• Professional roles: attorneys, real estate agents, and sometimes doctors or other professionals.
• Estate and trust matters: personal representatives, guardians, and trustees managing assets for beneficiaries.

These duties are stricter than ordinary contractual obligations because the fiduciary must put the other party’s interests ahead of their own.

Types of Fiduciary Duties

While the exact obligations can vary, Florida courts commonly recognize three primary duties:

1. Duty of Care
   Fiduciaries must act with the diligence, prudence, and skill that a reasonably careful person would exercise in similar circumstances. In practice, this means making informed decisions, researching adequately, and avoiding reckless or uninformed conduct.
2. Duty of Loyalty
   Fiduciaries must put the beneficiary’s interests first. They cannot use their position for personal gain, compete unfairly, or engage in conflicts of interest. Examples include misappropriating business opportunities or self-dealing in transactions.
3. Duty of Good Faith and Candor
   Fiduciaries must act honestly and disclose material facts. Concealing conflicts of interest, withholding critical information, or misleading the beneficiary can constitute a breach.

In some contexts, other duties may also apply, such as the duty to account, duty of impartiality among beneficiaries, or a duty to follow instructions in agency or trust matters.

What Constitutes a Breach?

A breach of fiduciary duty occurs when the fiduciary fails to uphold these obligations and, as a result, harms the person or entity to whom the duty is owed. Examples include:

• Diverting corporate opportunities for personal benefit.
• Misusing or commingling funds held in trust.
• Failing to disclose conflicts of interest in a business deal.
• Neglecting responsibilities, such as failing to manage assets prudently.
• Favoring certain beneficiaries over others in estate administration.

Proving a Breach of Fiduciary Duty in Florida

To successfully bring a claim for a breach of fiduciary duty in Florida, a plaintiff must prove four key elements:

1. Existence of a Fiduciary Relationship: The plaintiff must first establish that a fiduciary relationship existed between them and the defendant. This is often the first and most critical hurdle.
2. Breach of that Duty: The plaintiff must then show that the defendant violated one or more of their fiduciary duties, such as the duty of loyalty or care. Examples of a breach could include self-dealing, mismanagement of assets, or failing to disclose a conflict of interest.
3. Damages: The plaintiff must demonstrate that they suffered a loss or injury as a result of the breach. This could be a financial loss, the loss of an opportunity, or some other form of harm.
4. Causation: The plaintiff must prove that the defendant’s breach was the direct cause of their damages.

Legal Remedies in Florida

Florida courts treat breach of fiduciary duty as a civil cause of action. Depending on the case, remedies may include:

• Compensatory damages: reimbursement for financial losses.
• Disgorgement: forcing the fiduciary to return profits gained through the breach.
• Punitive damages: awarded in cases of fraud, malice, or extreme misconduct.
• Equitable relief: such as injunctions, accountings, rescission of contracts, or removal of the fiduciary from their role.

For trustees, corporate officers, or personal representatives, removal is often sought if their continued role would further endanger assets or beneficiaries.

Why Fiduciary Duty Matters

Fiduciary duties are essential to maintaining trust in relationships where one party is vulnerable and relies on the integrity of another. Breaches can lead not only to financial loss but also to significant disruption of business, family, or estate matters.

Florida courts hold fiduciaries to one of the highest standards in the law. As famously stated by Judge Benjamin Cardozo, fiduciaries must observe “not honesty alone, but the punctilio of an honor the most sensitive.” That high bar reflects the importance of protecting trust at the heart of these relationships.

Conclusion

Breach of fiduciary duty is a serious cause of action in Florida, designed to protect individuals and organizations from those who abuse positions of trust. The law imposes a high standard of conduct on fiduciaries, and those who fail to meet it can be held liable for the harm they cause. If you believe you have been a victim of a breach of fiduciary duty, consult with an experienced Florida attorney at Johns Law Group to understand your rights and legal options.