Elements of breach-of-fiduciary-duty claim under Texas law

"The elements of a breach of fiduciary duty claim are: (1) a fiduciary relationship between the plaintiff and defendant, (2) a breach by the defendant of his fiduciary duty to the plaintiff, and (3) an injury to the plaintiff or benefit to the defendant as a result of the defendant's breach." Lundy v. Masson, 260 S.W.3d 482, 501 (Tex. App.-Houston [14th Dist.] 2008, pet. denied).

Fiduciary duties may arise from formal and informal relationships and may be created by contract. Cotten v. Weatherford Bancshares, Inc., 187 S.W.3d 687, 698 (Tex. App.-Fort Worth 2006, pet. denied) disapproved on other grounds by Ritchie v. Rupe, 443 S.W.3d 856, 866 (Tex. 2014). 

Fiduciary duties arise as a matter of law in certain formal relationships, including attorney-client and trustee relationships. Meyer v. Cathey, 167 S.W.3d 327, 330-31 (Tex. 2005). But an informal fiduciary duty may arise from a moral, social, domestic, or purely personal relationship of trust and confidence, and these types of relationships are generally called a confidential relationship. Hubbard v. Shankle, 138 S.W.3d 474, 483 (Tex. App.-Fort Worth 2004, pet. denied). 

A confidential relationship exists where influence has been acquired and abused and confidence has been extended and betrayed. Cotten, 187 S.W.3d at 698. The existence of a confidential relationship is ordinarily a question of fact. Id.

SOURCE: FORT WORTH COURT OF APPEALS - No. 02-14-00294-CV. - 1/16/2017 

Fraud and Fraud by Nondisclosure

In order to recover on an action for fraud, a party must prove that: (1) a material representation was made; (2) the representation was false; (3) when the speaker made the representation, he knew it was false or made it recklessly without knowledge of the truth as a positive assertion; (4) the speaker made it with the intention that it should be acted upon by the party; (5) the party acted in reliance upon it; and (6) the party thereby suffered injury. Soluntioneers Consulting, Ltd. v. Gulf Greyhound Partners, Ltd., 237 S.W.3d 379, 385 (Tex. App.-Houston [14th Dist.] 2007, no pet.).

Fraud by nondisclosure is a subcategory of fraud. Id. Failure to disclose information is actionable only when there is a duty to disclose. Id. The duty to disclose may arise: (1) when the parties have a confidential or fiduciary relationship; (2) when one party voluntarily discloses information; (3) when one party makes a representation which gives rise to the duty to disclose new information that the party is aware makes the earlier representation misleading or untrue; or (4) when one party makes a partial disclosure and conveys a false impression, which gives rise to the duty to speak. Id. Whether such a duty exists is a question of law. Bradford v. Vento, 48 S.W.3d 749, 755 (Tex. 2001).

In regard to Lombana's assertion that she had a "special relationship" with AIG that required disclosure of any additional requirements for reinstatement of the Policy, we note that an informal fiduciary relationship, which may arise from "a moral, social, domestic or purely personal relationship of trust and confidence," is generally called a "confidential relationship." Associated Indem. Corp. v. CAT Contracting, Inc., 964 S.W.2d 276, 287 (Tex. 1998). A confidential relationship exists in cases in which "`influence has been acquired and abused, in which confidence has been reposed and betrayed.'" Id. (quoting Crim Truck & Tractor Co. v. Navistar Int'l Transp. Corp., 823 S.W.2d 591, 594 (Tex. 1992)). However, an insurer generally does not have a fiduciary relationship giving rise to a duty to an insured. See Rice v. Metro. Life Ins. Co., 324 S.W.3d 660, 678-79 (Tex. App.-Fort Worth 2010, no pet.). Here, Lombana has presented no evidence that she had a confidential or fiduciary relationship with AIG.

Likewise, Lombana presented no evidence that the AIG call representative made a material misrepresentation during the January 22, 2009 telephone conversation with her with knowledge of its falsity, or that the AIG call representative made a misrepresentation with the intent that Lombana rely on it.

Accordingly, we hold that the trial court did not err in granting AIG summary judgment on Lombana's claim for fraud and fraudulent nondisclosure.

SOURCE: HOUSTON COURT OF APPEALS - No. 01-12-00168-CV. - 2/27/2014

In her eleventh issue, Lombana argues that the trial court erred in granting AIG summary judgment on her claim that AIG committed fraud or fraud by nondisclosure because she presented evidence that AIG had "voluntarily disclosed" some information about reinstatement of the Policy to her, but failed to disclose additional requirements. She asserts that the parties had a "special relationship," requiring disclosure of "any additional requirements [AIG] would impose to reinstate" the Policy, and AIG had a duty to disclose "the whole truth concerning what it would require to reinstate the Policy." In its summary-judgment motion, AIG argued that Lombana's claim for fraud and fraud by nondisclosure failed as a matter of law due to a lack of justiciable reliance and because she provided no evidence of a material misrepresentation, made with knowledge of its falsity or without knowledge of the truth upon which AIG intended that she rely.

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)   

  

Fiduciary Relationships: Formal vs. Informal Fiduciary Relationship

Breach of fiduciary duty requires the existence of a fiduciary relationship. Without such a relationbship, there cannot be the requisite duty, and hence no breach. As explained by the Dallas Court of Appeals, a fiduciary duty can arise in different contexts: There are two types of fiduciary relationships: formal fiduciary relationships that arise as a matter of law, such as partnerships and principal-agent relationships, and informal fiduciary relationships or “confidential relationships” that may arise from moral, social, domestic, or personal relationships. Crim Truck & Tractor Co. v. Navistar Int'l Transp. Corp., 823 S.W.2d 591, 593-94 (Tex. 1992). But a fiduciary relationship is an extraordinary one and will not be created lightly. In re Estate of Kuykendall, 206 S.W.3d 766, 771 (Tex. App.-Texarkana 2006, no pet.). The mere fact that one party to a relationship subjectively trusts the other does not indicate the existence of a fiduciary relationship. Id.; see also Crim Truck & Tractor Co., 823 S.W.2d at 595 (“[M]ere subjective trust alone is not enough to transform arms-length dealing into a fiduciary relationship.”). A person is justified in believing another to be his fiduciary “only where he or she is accustomed to being guided by the judgment and advice of the other party, and there exists a long association in a business relationship, as well as a personal friendship.” Pabich v. Kellar, 71 S.W.3d 500, 505 (Tex. App.-Fort Worth 2002, pet. denied). The marital relationship is a fiduciary one, Solares v. Solares, 232 S.W.3d 873, 881 (Tex. App.-Dallas 2007, no pet.), but we have already concluded that Smith and Deneve were not spouses. The question is whether the evidence of their longstanding cohabitation, their joint bank account, and their sharing of expenses is sufficient to raise a fact issue as to the existence of an informal fiduciary relationship. SOURCE: Dallas Court of Appeals opinion in No. 05-07-01407-CV