Some business relationships carry an obligation that goes beyond the contract. A managing member, an officer, a director, or a partner is not merely required to perform. They are required to put the company ahead of themselves.
When they do not, the claim is breach of fiduciary duty, and it reaches conduct no written agreement ever addressed.
The Law Offices of Aaron Resnick, P.A. has litigated ownership and management disputes in Miami since 1998.
Who actually owes the duty
This is the threshold question and it is frequently assumed rather than analyzed.
Duties typically arise for managing members and managers, officers and directors, general partners, and majority owners in their dealings with minority owners. They can also arise from a relationship of trust and confidence even without a title.
Where it gets less obvious: a passive member of a manager-managed company generally owes far less than the manager does. Two co-owners of a closely held company usually do owe each other, particularly where one controls the information. And an operating agreement can modify the scope of these duties, which is why the document has to be read before the claim is framed.
> Read the operating agreement first. Florida permits significant contractual modification of default duties. A well-drafted agreement may expressly permit a member to pursue outside ventures that would otherwise be a diverted opportunity.
The two core duties
Loyalty. Do not use the position for personal benefit at the company's expense. This covers self-dealing, diverted opportunity, competing against the company, and using company assets or information for yourself.
Care. Act with the diligence a reasonable person would use in the same role. This is not a guarantee of good outcomes. A decision that was informed, considered, and made in good faith is generally protected even when it turns out badly.
Most cases worth bringing are loyalty cases, because the care standard gives management substantial room to be wrong.
What breach usually looks like
- Self-dealing. The company transacts with an entity the fiduciary owns, on terms no independent party would accept.
- Diverted opportunity. Business that belonged to the company routed to something the fiduciary owns personally.
- Competing while serving. Building a competitor while still managing the company, often using its resources.
- Excessive compensation. Paying themselves in a way that functions as a substitute for distributions owed to everyone.
- Concealment. Withholding material information from the people entitled to it, which is often what makes everything else possible.
- Asset transfers. Property or contracts moved to an affiliate for inadequate consideration.
Who owns the claim
Breach of fiduciary duty claims usually belong to the company, not to you personally, which means they proceed derivatively. You bring the claim on the company's behalf because the people who would normally decide whether to sue are the ones who did the harm. Recovery generally goes back to the company.
Some claims are direct, particularly where the harm fell on you specifically rather than on the entity. Getting this classification right shapes standing, procedure, and where the money ends up.
Third parties can be liable too
Florida recognizes aiding and abetting a breach of fiduciary duty. Where an outside party knowingly participated, for example a business partner on the other side of a self-dealing transaction who knew exactly what was happening, they can be brought in. That matters when the fiduciary has no money and the counterparty does.
If you are the one accused
These claims are often filed alongside every other claim in a business divorce, sometimes as leverage rather than because the elements are met.
Real defenses exist. The duty may not have applied to your role. The operating agreement may have modified or waived it. The transaction may have been disclosed and approved. The decision may be protected as an informed business judgment. And the claim may belong to the company rather than to the person suing you, which is a standing problem, not a merits problem.
Preserve the approvals, the disclosures, and the contemporaneous record of what you told the other owners and when.
Common questions
Do business partners owe each other a fiduciary duty in Florida? Often yes, particularly in closely held companies and where one holds control or the information. The specific structure and the governing document determine the scope.
What is a self-dealing transaction? One where the fiduciary is on both sides, or benefits personally, and the terms would not have been agreed to at arm's length.
How do I defend against a breach of fiduciary duty claim? Establish the scope of any duty you actually owed, show disclosure and approval where it exists, and press whether the claim is direct or derivative.
Can a condo board member breach a fiduciary duty? Yes. Board members owe duties to the association, and self-dealing and concealment claims arise in that context as well.
The record is built before the lawsuit
These cases turn on documents showing what was disclosed, when, and to whom. Whichever side you are on, the contemporaneous record is worth far more than a later explanation.
Call the Law Offices of Aaron Resnick, P.A. to discuss a breach of fiduciary duty claim.
