Usually, the first step in determining if there was a breach of fiduciary duty between any two Louisiana business entities is to first establish that there was a fiduciary duty to begin with. Determining if there was a fiduciary obligation is primarily dependent on the nature of the relationship between the two entities in question. Some relationships have fiduciary obligations imputed between the entities involved as a matter of business law.
Some examples of such relationships are relationships involving trustees and beneficiaries, professionals such as attorneys and accountants, real estate agents and brokers, stockbrokers and financial advisers, and agents and their principals. In these types of business relationships a fiduciary duty is implied legally, and it’s generally not a matter that is up for debate.
Once a duty, such as a duty of care, confidentiality, loyalty, fairness, or full disclosure, is established, a party who feels that an owed duty was breached can often file a breach of fiduciary duty action and seek damages. However, the majority of fiduciary relationships tend to be informal in nature. In these types of relationships it is the duty of the plaintiff to prove that there was a fiduciary duty that existed between the parties.
For example, in the business world it is common for two entities to form a partnership. Partnerships can be formal or informal. However, in a partnership, both parties owe each other a duty such as duty of loyalty, equal control and profit sharing. If one partner breaches the duty owed to the other partner, there may be a legal course of action. Business litigation can get complex rather quickly for those not entirely familiar with the legal definitions. It is important to work with a law firm who can closely evaluate business disputes and determine business entities’ rights and obligations.
Source: American Bar Association, “Breach of Fiduciary Duties,” Accessed August 10, 2015