Business Blog Round Up

Posted on February 5, 2010 by N. Kane Bennett

Here are some quick hits on business blogs:

The Wall Street Journal blog reports on two restaurants involved in a lawsuit to determine who is most harmful to your health.  Well, sort of.  The Heart Attack Grill, an Arizona eatery, filed a federal lawsuit against the owners of Heart Stoppers Sports Grill, a Florida restaurant, accusing them of stealing the idea for an unhealthy menu.  

Victoria Pynchon of the Settle It Now blog is trying to decide on a cover for her conflict resolution book entitled "A is for Asshole, the ABC's of Conflict Resolution."  If the cover is anything like the title, it should be a hit seller.

Edward McNally of the Delaware Business Litigation Blog has a helpful post that links to a new Delaware case for anyone looking for ways to calculate money damages or breach of a non-compete agreement.  Many times, these cases are resolved with injunctions or temporary restraining orders.  It is not very common to actually get to the issue of monetary damages for breach of a non-compete agreement.   This new case provides some ideas on how to calculate damages.

Megan Erickson's Social Networking Blog discusses Facebook's concerns over identifying its responsibilities for privacy of its 350 million users.

 Maxwell Kennerly's Litigation and Trial Blog digests recent Third Circuit law in two different cases involving first amendment and privacy rights for students creating fake MySpace pages.

 The Business Law Prof Blog has an interesting post about turning a simple contractual relationship into a fiduciary relationship.  Once a fiduciary relationship is established, it can have significant implications on the outcome of litigation.  A mere contractual relationship is not significant enough to form a fiduciary relationship absent other special factors.  One of my prior posts covers breach of fiduciary duty in Connecticut.

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Breach of Fiduciary Duty In Connecticut

Posted on November 29, 2009 by N. Kane Bennett

Here is a quick summary of another of the so called "business torts" in Connecticut known as breach of fiduciary duty.  A fiduciary duty can arise in a number of contexts in business including relationships with partners, lawyers, accountants, trustees, investment advisers, brokers and employees.  When one party in a relationship is a fiduciary, it requires the party to act with the utmost good faith, fair dealing and loyalty. 

Many times, breach of fiduciary lawsuits are filed in Connecticut when the relationship breaks down over lost or mismanaged money.  Frequently, business partners are also found to be fiduciaries with respect to each other.  A fiduciary relationship may be formed when the following factors exist:

  • unique degree of trust and confidence between the parties
  • one party has superior knowledge and skill
  • the party with superior knowledge has a duty to represent the interests of the other part

Connecticut's common law on breach of fiduciary duty law is flexible in that it will not exclude new situations, but is also clear that not all business relationships are fiduciary relationships. For example, courts will not recognize a fiduciary relationship for parties that are dealing at arm's length for transactions.  This is because the relationship lacks a dominance by one party or dependence by the other, or the lack of a special relationship.

The legal recognition of a fiduciary relationship is very significant in a lawsuit in Connecticut.  If a plaintiff proves that a fiduciary relationship exists, the standard and burden of proof changes.  A plaintiff has to prove that a fiduciary duty exists by a preponderance of the evidence. Once established, the burden shifts to the fiduciary as a defendant to prove good faith and fair dealing.  Further, the fiduciary must prove good faith by clear and convincing evidence.

Because of the burden shifting and higher standard, fiduciary cases are often won or lost on the legal characterization of the relationship. 

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