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 Washington State, a breach of fiduciary duty occurs when an individual or entity, who is obligated to act in the best interest of another party due to a relationship of trust and confidence, fails to do so. This breach can be due to a conflict of interest, where the fiduciary acts in their own interest rather than in the interest of the party to whom the duty is owed, or due to a failure to make informed decisions, which is a lapse in the duty of care. Common relationships involving fiduciary duties include those between attorneys and clients, trustees and beneficiaries, corporate directors and shareholders, and partners in a partnership. When a breach of fiduciary duty is alleged, the injured party may file a civil lawsuit seeking damages for losses incurred as a result of the breach. The specific elements that must be proven in court include the existence of a fiduciary relationship, the breach of duties owed by the fiduciary, and damages resulting from that breach. Washington courts will evaluate the circumstances of the case, including the nature of the fiduciary relationship and the actions of the fiduciary, to determine if a breach has occurred.