Breach of fiduciary duty is a cause of action or claim in civil litigation (lawsuits) that provides the legal basis for a person or entity to recover its damages/losses when there is a special relationship based on trust and confidence (attorney and client or trustee and beneficiaries) and the party who owes the fiduciary duty breaches its duty of loyalty (conflict of interest) or duty of care (informed judgment in decision-making).
In Texas, a breach of fiduciary duty is recognized as a cause of action in civil litigation when an individual or entity, who has a special relationship of trust and confidence with another party, fails to uphold their obligations. This special relationship can exist between attorneys and clients, trustees and beneficiaries, corporate directors and shareholders, or partners in a partnership, among others. The fiduciary duties include a duty of loyalty, which requires the fiduciary to act without any conflict of interest, and a duty of care, which mandates that the fiduciary make decisions with informed judgment. When these duties are breached, the injured party may seek damages for the losses incurred. Texas courts may also impose constructive trusts, profit disgorgement, or equitable remedies in addition to actual damages to address the breach. The statute of limitations for breach of fiduciary duty claims in Texas is generally four years, but it can vary depending on the specific circumstances of the case.
