Case Notes: Fiduciary Duty

• » Moross Ltd. Partnership v. Fleckenstein Capital, Inc.
  Nos. 05-2280/2312 (6th Cir. October 24, 2006)
  Investor must demonstrate that manager engaged in “cherry-picking””to support investor’s claim of violation of Michigan’s Uniform Securities Act, fraud, and breach of fiduciary duty.
• » d’Elia v. Rice Development, Inc.
  ___ P.3d ___, Case No. 20050247-CA, October 13, 2006 (Utah Ct. App.)
  Utah Court of Appeals finds sole member-manager of LLC personally liable for LLC’s tortious acts regardless of lack of evidence of self-dealing.
• » McGlawn v. Pennsylvania Human Relations Commission
  891 A.2d 757 (Pa. Commw. 2006)
  The fiduciary duties of mortgage brokers include ensuring that potential borrowers are not completely unable to pay back debt. Pennsylvania Human Relations Act (“PHRA”) prohibits reverse redlining by mortgage brokers.
• » Terra Venture, Inc. v. JDN Real Estate-Overland Park, L.P.
  443 F.3d 1240 (10th Cir. 2006)
  The Tenth Circuit Court of Appeals has ruled that the fiduciary duties inherent in a joint venture do not necessarily arise if parties’ agreement is not really a joint venture even though the parties have agreed to publicly call the transaction a “joint venture.”
• » ATC Dist. Group, Inc. v. Whatever It Takes Transmissions & Parts, Inc. | 
  2005 U.S. App. LEXIS 5059 (6th Cir. March 30, 2005)
  Kenny Hester, an employee of ATC Distribution Group, Inc., left ATC to form his own company. In doing so, Hester hired away several of ATC’s employees, created a transmission parts catalog that was virtually identical to ATC’s catalog, and obtained ATC’s customer list.
• » Layne v. Bank One, Kentucky, N.A. | 
  395 F.3d 271 (6th Cir. 2005)
  The plaintiffs had two loans with Bank One that were secured by shares in a company called PurchasePro. Alleging claims for breach of fiduciary duty and breach of contract, the plaintiffs sued.
• » Natsource, LLC v. GFI Group, Inc. | 
  2004 U.S. Dist. LEXIS 16696 (S.D.N.Y. Aug. 18, 2004)
  Luring competitor’s employees away, combined with breaches of confidentiality or loyalty, can give rise to antitrust liability but fails to do so where defendant lacks market power.
• » Smith v. Fairfax Realty, Inc. | 
  2003 UT 41, 82 P.3d 1064, 483 Utah Adv. Rep. 15 (2003)
  Prejudgment interest is awarded where damages are complete and can be measured by fixed rules of evidence and known standards of value, and must be calculated using accurate interest rates; intentionally deceptive business dealings and violation of fiduciary duty support large punitive damages award.
• » Willens v. 2720 Wisconsin Ave. Cooperative Ass’n | 
  2004 D.C. App. LEXIS 67 (2004)
  The business judgment rule does not apply to bar a breach of fiduciary duty claim when the alleged conduct constituted a clear violation of the defendant’s duty of loyalty.
• » Bolandz v. 1230-1250 Twenty-Third Street Condominium Unit Owners Ass’n, Inc. | 
  849 A.2d 1010 (D.C. 2004)
  In considering a claim for breach of fiduciary duty brought by a condominium owner against an owners’ association, the trial court should not have deferred to the business judgment of the association.
• » CarrAmerica Realty Corp. v. Kaidanow | 
  321 F.3d 165, petition for rehearing denied in supplemental opinion, 331 F.3d 999, (D.C. Cir. 2003)
  Delaware law bars a claim for breach of a corporate director’s fiduciary duty to shareholders when the plaintiffs were not shareholders at the time of the alleged wrongful acts.
• » >Taita Chem. Co., Ltd. v. Westlake Styrene, L.P. | 
  351 F.3d 663 (5th Cir. 2003)
  Under Delaware law, damages is an essential element of aiding and abetting breach of fiduciary duty and therefore must be included in a jury instruction on that claim.
• » Groob v. Key Corp. | 
  155 Ohio App. 3d 510, 801 N.E.2d 919, 2003-Ohio-6915 (2003)
  A bank and its employees have a fiduciary duty to keep confidential information transmitted by loan applications; additionally if an agent’s position aided the agent in committing an intentional tort, that agent’s principle is liable under the theory of respondent superior.
• » Dodson International Parts, Inc. v. Hiatt | 
  2003 U.S. Dist. LEXIS 17979 (D. Kan. September 25, 2003)
  A plaintiff cannot maintain a tortious interference with a prospective business advantage claim unless there is a clear showing of a business relationship and cannot maintain a fraud by silence claim without evidence of a contractual duty or fiduciary duty by the defendant.
• » Rademeyer v. Farris
  284 F.3d 833 (8th Cir. 2002)
  Generally, for purposes of applying the statute of limitations, a fraud claim accrues when the fraud is discovered or reasonably could have been discovered. In the case of a fiduciary relationship, a cause of action for fraud accrues when it is discovered, as there is no duty of inquiry.