Partnership Disputes In Florida: Your Guide To Breach Of Fiduciary Duty Claims
A fiduciary duty is the highest standard of care in the American legal system. Investopedia defines a fiduciary simply as a person or organization with whom “trust, confidence, and reliance” has been placed on. This raises an important question: Do business partners owe each other a fiduciary duty? In Florida, the answer is “yes”—but only in certain circumstances. Here, our Miami partnership dispute lawyers explain the key things to know about business partnership and fiduciary duties under Florida law.
Florida Law: Business Partners Owe Each Other Limited Fiduciary Duties
You will often hear the term fiduciary duty used to refer to a situation in which there is a relationship between a professional and their client. For example, certain registered investment advisers (RIAs) owe fiduciary duties to their clients. Of course, with a business partnership, neither party is a “client” of the other. That being said, Florida law still imposes certain fiduciary responsibilities. Under Florida Statutes § 620.8404, business partners owed each other the following fiduciary duties:
- Duty of Loyalty: First and foremost, business partners owe each other a limited duty of loyalty. In effect, this means that business partners have some obligation to look out for the best interests of the business. Florida law highlights three specific circumstances in which the duty of loyalty applies in business partnerships: 1) Business partners should hold in trust any funds/property held by the partnership, 2) Partners should avoid self-dealing with the partnership to the detriment of the business, and 3) Partners should avoid direct competition with the business.
- Duty of Care: In Florida, business partners also owe a general duty of care to the partnership. In effect, this means that business partners have an obligation to carry out any professional conduct without gross negligence or extreme recklessness. To be clear, this duty is not as high as the duty of care owed by a financial professional to their clients. Nonetheless, a business partner could potentially be held personally liable for damages caused by gross negligence or extreme recklessness.
Breach of trust, confidence, or reliance by a business partner can cause serious damage to your financial interests. As breach of fiduciary duty cases are complicated, you should always be ready to seek professional help. If you are considering filing a breach of fiduciary duty claim against a business partner or if you are facing allegations that you breached your fiduciary responsibilities, an experienced Florida commercial litigation attorney will protect your rights.
Contact Our Miami-Dade County Partnership Law Attorneys for Immediate Help
At Pike & Lustig, LLP, our Miami partnership lawyers are skilled, trustworthy advocates for our clients. Our law firm is committed to getting results. If you have any questions or concerns about breach of fiduciary duty in a partnership lawsuit, we are here to help. Contact us right away to get immediate attention from an experienced attorney. With offices in Miami and West Palm Beach, our firm handles partnership disputes throughout Southeastern Florida.