Are You My Fiduciary? Informal Fiduciary Litigation in Texas
My work as business litigator and parent collided one evening while reading "Are You My Mother?" a popular children's book by P.D. Eastman. Plaintiffs in business litigation—sometimes less earnestly—ask a similar question of defendants with whom they may share a business, or even familial relationship. The Question: Are you my fiduciary?
June 15, 2017 at 03:00 AM
13 minute read
My work as business litigator and parent collided one evening while reading “Are You My Mother?” a popular children's book by P.D. Eastman. As the story goes, a newly-hatched baby bird earnestly asks a series of creatures—none birds—if they are his mother. Baby bird's story ends happily, but not before asking a boat, a plane, and an ornery bulldozer if each—however impossibly—might be his mother. When mother reunites with baby bird, each recognizes the other for who she is. The pairing is both obvious and natural for both characters and the reader.
Plaintiffs in business litigation—sometimes less earnestly—ask a similar question of defendants with whom they may share a business, or even familial relationship. The Question: Are you my fiduciary?
The informal fiduciary duty case pattern is predictable: A plaintiff asserts a breach of fiduciary duty claim in an attempt to stretch a case, and the parties' relationship, into something greater or even unrecognizable. Because there is ordinarily a lack of any formal fiduciary relationship at law (ie. a trustee and her beneficiary, or an attorney and her client), the plaintiff seeks to create an “informal” duty. He may invent nonexistent, “informal” fiduciary duties, and allege that the defendant has taken improper advantage of a relationship of trust and confidence. Ordinarily, the parties' relationship does not indicate the type of extraordinary, extra-contractual relationship plaintiff seeks to impose. Instead, a plaintiff seeks to unwind an unfavorable—usually timeworn—transaction.
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