Texas Causes of Action & Affirmative Defenses

Texas Causes of Action & Affirmative Defenses

Need a little legal ammo? Search for caselaw on legal theories and defenses here:

Thursday, April 19, 2012

Does employee who does book-keeping have a fiduciary duty?

  
EXISTENCE OF FIDUCIARY DUTY AS ELEMENT OF BREACH OF FIDUCIARY DUTY CLAIM
  
A fiduciary duty is an extraordinary duty which will not be lightly created. Gillum v. Republic Health Corp., 778 S.W.2d 558, 567 (Tex. App.-Dallas 1989, no writ). Fiduciary duties arise as a matter of law in certain formal relationships, including attorney-client, partnership, and trustee relationships. Ins. Co. of N. Am. v. Morris, 981 S.W.2d 667, 674 (Tex. 1998).
 
Appellees do not argue that there was a formal fiduciary relationship between the parties; rather, they argue an informal, confidential relationship existed between appellant and Woube and appellant and S-W Transportation.
   
In some circumstances, informal relationships may also give rise to a fiduciary duty. See Crim Truck & Tractor v. Navistar Int'l Transp. Corp., 823 S.W.2d 591, 594 (Tex. 1992). These informal relationships, termed “confidential relationships,” may arise “where one person trusts in and relies upon another, whether the relation is a moral, social, domestic, or merely personal one.” Id. A confidential relationship exists in those cases in which “influence has been acquired and abused, in which confidence has been reposed and betrayed.” Id. (quoting Tex. Bank & Trust Co. v. Moore, 595 S.W.2d 502, 507 (Tex. 1980)).
  
A person is justified in placing confidence in the belief that another party will act in his best interest only where he is accustomed to being guided by the other party's judgment and advice and there exists a long association in a business relationship as well as a personal friendship. Esty v. Beal Bank S.S.B., 298 S.W.3d 280, 304 (Tex. App.-Dallas 2009, no pet.). “The existence of the fiduciary relationship is to be determined by the actualities of the relationship between the persons involved.” Id. (quoting Thigpen v. Locke, 363 S.W.2d 247, 253 (Tex. 1963)). Although we recognize the existence of a confidential relationship is ordinarily a question of fact, when the issue is one of no evidence, it becomes a question of law. Crim Truck, 823 S.W.2d at 594.
  
SOURCE: DALLAS COURT OF APPEALS - 05-10-01119-CV – 4/19/12 (finding no fiduciary duty and reversing judgment for plaintiff)   
  

With respect to Woube, no evidence was presented to support the existence of a long and special relationship between Woube and appellant, that Woube and appellant had a moral, social, domestic, or personal relationship, or that Woube was ever guided by appellant's judgment and advice. Instead, the evidence established only that appellant worked for Woube's company for three years. Other evidence showed that Habte oversaw his and Woube's real estate investment account, and that appellant assisted Habte. We conclude the evidence presented was legally insufficient to establish the sort of “confidential” relationship that would give rise to a fiduciary duty between appellant and Woube.

As for S-W Transportation, the only evidence in the record shows that appellant started as an employee and was switched to contract labor in late 2004. She received customers' checks, made deposits, and prepared the checks to pay S-W Transportation's bills. She did not, however, have check-signing authority.

Appellees rely on Paschal v. Great Western Drilling, Ltd., 215 S.W.3d 437, 451 (Tex. App.-Eastland 2006, pet. denied), to support a finding of fiduciary duty. In Paschal, the employer sued the wife of a deceased employee to recover money stolen by the employee. Paschal, 215 S.W.3d at 442. The employee, Alan Paschal, was a senior revenue accountant who had worked for Great Western for twenty years.

The evidence showed Paschal was in charge of disbursing revenue received by the company to various working interests and royalty owners who owned interests in leases operated by the company. Paschal set up the lists of payees and payments in the company computer system, printed the checks to be issued, and forwarded them for mailing by another person. No other officer examined the checks, and the checks contained preprinted signatures (and were not signed by an actual person). In other words, Paschal essentially was in control of the entire process. During his employment, he stole $1.5 million from the company by diverting revenue payments received by the company to a fictitious royalty owner that he created in the company computer system and then depositing the checks into his own account. Paschal, 215 S.W.3d at 442, 451. The court concluded that “[t]he responsibilities that Great Western assigned to [Paschal] to distribute millions of dollars of revenue to the appropriate recipient is some evidence that he occupied a position of peculiar confidence toward Great Western and owed Great Western a fiduciary duty.” Id. at 451.

The facts in Paschal vary greatly from those in this case as outlined above. Unlike Paschal, who was charged with the responsibility of distributing millions of dollars and essentially had control of the process, appellant was essentially a bookkeeper with no check-signing authority, which is no evidence that she occupied a position of peculiar confidence toward S-W Transportation.

We conclude the evidence is legally insufficient to support a finding that appellant was a fiduciary of either Woube or S-W Transportation. Therefore, we sustain the second issue as it relates to this complaint. Our disposition of this issue makes it unnecessary to address the remaining issues.

We reverse the trial court's judgment and render a take-nothing judgment on appellees' claims.

SOURCE: DALLAS COURT OF APPEALS - 05-10-01119-CV – 4/19/12