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Ch. 4 Breach of Fiduciary Duty A. Changing Language of Duty Contrast: measured language of negligence with demanding language of fiduciary duty. Demanding language: “ puntilio of an honor most sensitive” vs. practical realities; need to re-ground in tort & contract common law standards
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Demanding language: “puntilio of an honor most sensitive” vs. practical realities; need to re-ground in tort & contract common law standards
Essential fiduciary duties: preserve confidences, avoid impermissible conflicts (loyalty), honesty & fair dealings, safeguard property. See Rstmt §16(3)
Tort: negligent, reckless or intentional breaches of fiduciary duties
Equity: accounting, injunction, constructive trust, forfeiture; “equity does what needs to be done” & malleable equitable doctrines (unclean hands, estoppel, etc.)
Agency: Client is Principal, with authority to control & direct conduct of Agent (including Lawyer) See, e.g., Rstmt §20: Duty to inform & consult with Client
Informed consent doctrine?
Recall: Prob. 3-6 Summer Associate’s Memo. C should make settlement decision with Informed Consent (IC), after full disclosure of material risks & relevant alternatives.
See Rstmt §20, RPC 1.0(e) “agreement …to proposed course of conduct after L communicated adequate info. & explanation about mat’l risks of & rsnbly avail. alts. to proposed course of conduct. (used in RPC 1.2, 1.6-1.9)
Highest disclosure obligations apply when adversity in interests of lawyer & client, especially lawyer self-interest (e.g., fees, business transactions; sex; confidential information; other preferred clients)
Text at 105-111
Burrow v. Arce, 997 S.W.2d 229 (Tex. 1999) (text pp. 112-16)
∙Alleged breaches; procedural posture; disposition
·Reciprocal influence of Restatement tentative drafts & judicial decisions; conversion table (Tent. Draft § 49 > as adopted in 2000 §37)
∙Judicial discretion to consider total or partial forfeiture, even in absence of actual harm to client
∙Standard: “clear and serious” violation of duty owed client; TX: public interest (protect integrity of L/Cl relationships by discouraging agents’ disloyalty)
∙Jury: disputed fact questions
Judge: questions of law, amount of forfeiture