A fiduciary is someone the law requires to put the interests of another party ahead of their own. In a business, that usually means the officers and directors of a corporation, the managers and members of an LLC, and partners. A breach of fiduciary duty occurs when one of them breaks that obligation, whether through self-dealing, hiding information or running the company for personal gain. Fiduciary duty claims against corporate officers, directors and managers are among the most common reasons owners come to us.
These cases are different from an ordinary contract dispute. The claim does not depend on a particular clause being broken. It depends on the role the person held, the trust that came with it and what they did with it. Our firm approaches them as business litigation, which is where most of them belong. If the main question is how business partners separate, our partnership break up lawyers handle that side of the dispute.
Have questions? We have answers. Call Legal Counsel, P.A. at 407-982-4321 for a free consultation about your business dispute.
Florida law spells out the standard for each type of business.
Partners owe one another similar duties. This page covers the claim itself, which can arise in any of these business forms.
Most claims we see fall into a few patterns:
An insider does not always breach a duty just because they benefit. The LLC Act says a manager or member does not violate a duty solely because the conduct furthers the manager’s or member’s own interest. In our experience, the facts of each transaction matter, which is why we begin with the records.
A claim generally requires showing that the defendant owed a fiduciary duty, that the defendant breached it, and that the breach caused a loss to the company or to the owner who is suing. The proof usually comes from documents: the operating agreement or bylaws, bank statements, tax returns, board and member minutes, emails and the accounting records.
Florida gives owners ways to get those records, and a shareholder dispute lawyer will often send a written demand for them before any lawsuit is filed. What the records show shapes everything that follows, including whether the case should settle or go to court.
Who brings the claim depends on who was harmed.
A direct claim belongs to the owner. Under the Business Corporation Act, a shareholder who sues directly must plead and prove an actual or threatened injury that is not solely the result of an injury suffered by the corporation, or an injury from violation of a separate duty owed to the shareholder.
A derivative action belongs to the company, and an owner sues on its behalf. For a corporation, the complaint must be verified and allege with particularity the demand, if any, made on the board of directors, and either that the board refused, rejected or ignored it before 90 days passed, or why waiting 90 days would cause irreparable injury or the waste of corporate assets causing material injury, or the reasons the shareholder made no effort to obtain the desired action from the board. An LLC member generally must first make a demand on the other members or managers, and may sue if they do not act within a reasonable time not to exceed 90 days, or if a demand would be futile or irreparable injury would result from waiting.
Choosing the wrong type of claim, or skipping the demand step, can end a case before it begins. This is one of the first decisions we make with a client.
The right remedy depends on what happened and what the owner wants from the business. Depending on the facts, a court may be asked for:
On the last point, a Florida circuit court may dissolve a corporation in a shareholder’s proceeding if the directors or those in control have acted, are acting, or are reasonably expected to act in a manner that is illegal or fraudulent. That ground does not apply to large or publicly traded corporations. In that kind of proceeding, the corporation may elect or, if it fails to elect, one or more shareholders may elect to purchase all shares owned by the petitioning shareholder at the fair value of the shares. A buyout can also be negotiated without a court order.
Florida sets different limitation periods for different types of claims, and a catch-all provision covers any action not specifically provided for in the statutes. Which period applies, and when the clock started, depends on the facts, including when the owner discovered the conduct. If you suspect an insider has been acting against the company, talk with a lawyer before you confront them. Delay can limit your options, and a warning can lead to missing records.
A claim for breach of fiduciary duty sits where corporate documents meet litigation. Our firm handles both, so we understand how the operating agreement, the shareholder agreement and the company’s records were put together, as well as how a court will read them. If your agreement was weak or never signed, our contract disputes lawyers can pursue a breach of contract claim alongside the fiduciary claim.
Michele Diglio-Benkiran founded the firm and has practiced business and real estate law since 1999. Richard Sierra is a commercial litigation and bankruptcy lawyer with more than three decades of experience, which matters when a fiduciary dispute involves an insolvent company or a partner’s bankruptcy. Results matter, and so does knowing when to settle. We offer a free consultation, and pay later options are available for clients who qualify.
We represent shareholders, LLC members, officers and business owners throughout Florida from our Winter Garden, Orlando and Seminole offices. See our overview of business litigation in Orlando for the full range of disputes we handle.
Think someone running your company has put their own interests first? A short conversation with a breach of fiduciary duty attorney will tell you what the records need to show and what your options are. The first consultation is free.
Yes. A shareholder, LLC member or partner may bring a claim against an officer, director, manager or co-owner who has breached a duty owed to the company or to the owner. Whether the claim is direct or derivative depends on who was harmed, and that choice has procedural requirements.
A breach of contract claim depends on an agreement being broken. A fiduciary claim depends on the position a person held and the duties of loyalty and care that come with it. Many business disputes involve both, and we often plead them together.
A claim for breach of fiduciary duty has pleading rules, demand requirements and strict timing, and a mistake can cost you the claim. A shareholder dispute lawyer reviews the records, picks the right claims and tells you what a realistic outcome looks like before you commit to a lawsuit.
Majority owners who control the board and the company’s decisions can be sued for how they use that control. Courts look at the specific conduct, such as self-dealing or freezing out a minority owner, and at the company’s agreements.
Often, yes. A demand letter, a records request, mediation or a negotiated buyout resolves many disputes. We pursue those routes first where they serve you and litigate when they do not.
Yes. Legal Counsel, P.A. offers a free initial consultation, and virtual consultations are available.
If someone you trust with your business has put their own interests first, talk with us before you make your next move. Call 407-982-4321 or reach out online to arrange a free initial consultation.
WE VALUE RELATIONSHIPS
Most of our clients come to us by referral and word of mouth (not advertising).
COMMITMENT TO EXCELLENCE
The Legal Counsel team is committed to serving all clients with excellence and professionalism.
EXPERIENCE MATTERS
Decades of Representation.
CUTTING EDGE TECHNOLOGY
View your entire case, communicate with us 24/7, review billing statements, documents, etc. on our bank secure, online client portal.
