Fiduciary duty will be an ongoing topic of this blog, because the duty is typically imposed by law on executors, administrators, and trustees. Hence, it is an important concept in probate litigation.
In Texas, the term "fiduciary" generally applies to any person who occupies a position of peculiar confidence to another. It refers to "integrity and fidelity" and contemplates "fair dealing and good faith." Daniel v. Falcon Interest Realty Corp., 190 S.W.3d 177, 185 (Tex.App.-Houston 2005, no pet.). One who occupies a fiduciary relationship to another must measure his conduct by high equitable standards, and not by the standards required in dealings between ordinary parties. Simply put, a fiduciary must put the interests of the other party above his own. Abetter Trucking Co. v. Arizpe, 113 S.W.3d 503, 509 (Tex.App.-Houston [1st Dist.] 2003, no pet.).
In certain circumstances, a fiduciary duty is imposed due to a formal relationship between the parties. Typical examples are relationships between an executor and beneficiary, trustee and beneficiary, attorney and client, agent and principal, and partners.
Fiduciary duties can also arise in more informal relationships of trust between parties typically described as a "confidential relationship." However, Texas courts are often reluctant to impose fiduciary duties in such informal circumstance. In these situations, Texas courts will closely scrutinize the relationship between the parties at issue.
The concept of fiduciary duty will be a recurring topic of Texas Probate Litigation blog. While I can't give legal advice on this blog, I will consider particular topics of interest posted or emailed by readers. J. Michael Young
Collin, Dallas, Grayson County Fiduciary Litigation Attorneys
My 13 year old daughter, SC, was seriously injured in an accident a year ago. As a result she lost 80% of her left arm. While we were still at the hospital, a friend (LC) established an account "LC for the benefit of SC".
Several times over the past year I have asked my friend about getting copies of statements on this account. Though she provided me with 25 checks on this account, she managed to avoid giving me the copies that I requested. I have been so preoccupied with my daughter's care that until recently I blindly trusted that the account was secure.
About a month ago, LC and I had a disagreement over issues not related to my daughter's account. After this she insisted that I accompany her to the bank to close the account. I advised that one check was still possibly out and that if she desired to close the account she should wait for the check to clear, mail the balance and copies of the statements and the cancelled checks to me and my daughter. A week later, I recieved an envelope from my bank addressed to my daughter containing a blank piece of paper and a cashier's check for almost $400.00. Because this account had been used to pay medical bills for my daughter I left messages for my friend asking for copies of bank statements. Three weeks later, no bank statements. My husband called and made contact with her last week. She flatly refuses to provide us with these documents. Am I right to assume that by titling this account as she did that she has a fiduciary responsibility to account to my daughter and to us as her guardians? What should I do? I do not suspect that she has taken funds, but her actions bring me to no other conclusion.
Thanks,
Melanie C
Posted by: Melanie C | May 19, 2008 at 01:06 PM