An archetypal fiduciary relationship is that between attorney and client, and the handling of client funds is a potential hornets’ nest of fiduciary-duty liability for attorneys. In Lin v. Lau, 210 A.D.3d 817 (2d Dep’t 2022), the Appellate Division, Second Department, refused to dismiss a lawsuit against an attorney arising from the attorney’s alleged mishandling…
Lin v. Lau:
Neurological Surgery, P.C. v. MLMIC Ins. Co.: When Being a Policy Holder Is Not Enough to Impose Fiduciary Duties on An Insurance Company
In certain situations, an insurance company owes its policyholders fiduciary duties. Specifically, when an insured calls upon its carrier to defend it in a lawsuit, the carrier generally will owe fiduciary duties to the insured. But in other scenarios, policyholders face an uphill battle in proving that they have the requisite “special relationship” with their…
Mohinani v. Charney:
Revisiting Derivative Claims and Damages in Real-Estate Investment Disputes
It is somewhat rare for a business dispute to be litigated all the way through trial. Protracted litigation is costly, time-consuming, and unpredictable. When that does happen, however, the results can be illuminating—especially when the trial court’s decision is upheld on appeal. That is what happened in the recent decision of the Appellate Division, First Department,…
Hahn v. Stone House Properties LLC: The Duty of Loyalty and Fiduciary Relationships
Loyalty is perhaps the quintessential characteristic of a fiduciary relationship. Indeed, someone who occupies the role of a fiduciary is expected to be loyal above all else. For that reason, the phrase “duty of loyalty” is often bandied about in relation to fiduciary-duty claims. In the abstract, merely stating that a fiduciary has a “duty of…
Ilan Properties, Inc. v. Benishai: Breach of Fiduciary Duty Claims and the Continuing Wrong Doctrine
This blog previously has addressed the statute of limitations, a concept that has special significance for breach of fiduciary duty claims. Whether a fiduciary-duty claim is timely is highly fact-dependent and not always clear-cut. For that reason, plaintiffs’ lawyers often get creative in trying to salvage an otherwise viable fiduciary-duty claim that is on the brink…
Jeremias v. Toms Capital LLC:
Fiduciary Duties in Partnerships and
Joint Ventures
Frequently, two or more people will combine their financial resources, efforts, skill, and knowledge in furtherance of some business enterprise and in the hope of generating a profit. These co-venturers may choose not to form a corporation or limited-liability company, but instead operate along less formal lines. They may choose to bind themselves to some…
Manipal Educ. Americas, LLC v. Taufiq: Fiduciary Duties of Employees to Employers
Breach of fiduciary duty claims frequently arise within the employment context. As a general matter, employees owe their employers basic fiduciary duties in certain circumstances. A potentially fertile area of litigation involves employees who are disloyal to their employers. A recent decision of the Appellate Division, First Department, contains an informative analysis of fiduciary-duty claims…
Apollo Mgt., Inc. v. Cernich: The Flexibility of Breach of Fiduciary Duty Claims
An interesting and easily overlooked decision of the Appellate Division, First Department, shows just how flexible fiduciary duty claims can be. In Apollo Mgt., Inc. v. Cernich, 202 A.D.3d 527 (1st Dep’t 2022), the court allowed the plaintiffs to seek money damages on a fiduciary-duty theory of liability for misconduct that really fell under an…
Matter of Hersh: Fiduciary Duty Claims and the Statute of Limitations
Regardless of the merits of a plaintiff’s claim, she will be unable to have her day in court if she fails to file suit before the statute of limitations expires. This principle is especially important to breach of fiduciary duty claims, because the statute of limitations governing such claims is elusive and highly dependent on…
Newman v. Newman: Fiduciary Duties in Small, Closely-Held Family Corporations
This blog previously has discussed fiduciary duty claims in the shareholder-derivative context. Courts in derivative suits frequently address fiduciary duty questions, especially where the dispute involves a small, closely-held family corporation. Yet another recent decision of the Appellate Division, First Department, deals with fiduciary duties in a derivative action: Newman v. Newman, 202 A.D.3d 442…