Yesterday, the Maryland Court of Appeals issued a major decision that clearly establishes a cause of action for breach of a fiduciary duty in the case of LLCs. The opinion is also significant because of the "fee shifting" attorneys' fee provision in the contract.
As to the fiduciary duty issue, the Court stated:
This Court recognizes an independent cause of action for breach of fiduciary duty. To establish a breach of fiduciary duty, a plaintiff must demonstrate: (1) the existence of a fiduciary relationship;
This Court recognizes an independent cause of action for breach of fiduciary duty. To establish a breach of fiduciary duty, a plaintiff must demonstrate: (1) the existence of a fiduciary relationship;
(2) breach of the duty owed by the fiduciary to the beneficiary; and (3) harm to the beneficiary. Under our Kann analysis, a court should consider the nature of the fiduciary relationship and possible remedies afforded for a breach, on a case-by-case basis.
If a plaintiff describes a fiduciary relationship, identifies a breach, and requests a remedy recognized by statute, contract, or common law applicable to the specific type of fiduciary relationship and the specific breach alleged, a court should permit the count to proceed.
The cause of action may be pleaded without limitation as to whether there is another viable cause of action to address the same conduct. To be clear, this does not mean that every breach will sound in tort, with an attendant right to a jury trial and monetary damages.
The remedy will depend upon the specific law applicable to the specific fiduciary relationship at issue.
The case is Plank v. Cherneski and I have posted it here:
slnews.us/pbgl071520a
The case is Plank v. Cherneski and I have posted it here:
slnews.us/pbgl071520a
