In California civil litigation, a breach of fiduciary duty occurs when a party in a position of trust or responsibility fails to act in the best interests of the person or entity they owe that duty to. A fiduciary duty is the highest standard of care in the law and typically arises in relationships such as between a trustee and beneficiary, corporate officers and shareholders, or attorneys and clients. To prove a breach of fiduciary duty claim, the plaintiff must show that a fiduciary relationship existed, the defendant failed to fulfill their duty of loyalty or care, and the plaintiff suffered harm as a result. For example, a corporate officer who uses insider information for personal gain at the expense of the company could be found in breach of fiduciary duty.
California law provides a variety of remedies for a breach of fiduciary duty, which may include compensatory damages to make the harmed party whole, and in some cases, punitive damages if the defendant’s conduct was particularly egregious or fraudulent. The duty typically involves obligations such as acting in good faith, avoiding conflicts of interest, and fully disclosing any material information. In cases involving financial transactions, the fiduciary must also act prudently and in the best interest of the other party. A breach can lead to significant legal consequences, including the potential for a court to impose an accounting or restitution, forcing the fiduciary to return any profits or gains obtained through the breach.
