By Jihee Ahn, Attorney @ Harris Bricken
Welcome back to our litigation series on California cannabis claims. We’re continuing today with a cause of action we unfortunately commonly see in cannabis litigation: the breach of fiduciary duty.
A fiduciary relationship exists between parties when at least one of the parties is, in duty, bound to act with the utmost good faith for the benefit of the other party. Meaning, if you’re classified as a fiduciary (either under statute, or by virtue of an agreement you have signed), you MUST act in good faith for the benefit of the other party on any matter within the scope of your relationship. This encompasses sub-duties, like managing the subject matter with “due care,” providing an account to the beneficiary, or keeping the beneficiary fully informed.
Statute of Limitations
Subject to certain exceptions, the California statute of limitations on a breach of fiduciary duty claim is four years. One exception we see often, and is worth mentioning here, is when the essence of the claim is that the defendant’s act constituted actual or constructive fraud – in that case, the claim is actually subject to California Code of Civil Procedure s. 338’s three-year statute of limitations period.
Elements of a Breach of Fiduciary Duty Claim
The elements of a breach of fiduciary duty cause of action are: (1) the existence of a fiduciary relationship, (2) breach of the same, (3) damage (4) caused by that breach.
Under a valid breach of fiduciary duty claim, both legal and equitable remedies are available:
Stay tuned next week, when I plan to cover one of the sexier claims: fraud. Part one of this series covered breach of contract, and you can find that here.
Re-published with the permission of Harris Bricken and The Canna Law Blog
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