When someone owes a fiduciary duty
Some relationships carry a legal duty to act in another person's interest, not one's own. Trustees, executors, guardians, and agents acting under a power of attorney are common examples, as are partners and corporate directors and officers. Whether managers of an LLC or a financial advisor owe such duties can depend on the agreement and the nature of the relationship. Outside these familiar roles, whether a fiduciary relationship exists at all is often the first dispute. The duties usually center on loyalty and care, which means avoiding self-dealing and acting with reasonable diligence. Directors' good-faith business decisions generally receive deference from courts, even when they turn out badly.
Documents and accounts
These disputes are usually built from records. Gather trust instruments, wills, operating agreements, partnership agreements, and bylaws that define the role. Bank and brokerage statements, closing documents, and correspondence can show how money or property was handled. In estate and trust matters, a beneficiary can usually ask the court to require the fiduciary to account for what was done. For a business dispute, keep your own messages and records, but ask before copying company files into personal accounts, since that can create problems of its own.
Where these cases go
In New York, disputes over estates and trusts typically belong in Surrogate's Court, while business disputes are generally heard in Supreme Court, sometimes in its Commercial Division. A claim that belongs to a corporation rather than to an individual shareholder may need to be brought on the company's behalf, with procedural steps first. Remedies can include damages, return of profits, removal of the fiduciary, or an accounting. The time to bring a claim can depend on the relief sought, whether fraud is alleged, and when the fiduciary's role ended or was openly repudiated. In a first meeting we identify the relationship, the governing documents, and the forum.
