Breach of Fiduciary Duty in Maryland: The 23-Year-Old Question

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October 25, 2021 | Business Litigation

Breach of Fiduciary Duty in Maryland: The 23-Year-Old Question

What is a Breach of Fiduciary Duty Generally?

Breaches of fiduciary duties can occur from administering estates to running businesses.  A fiduciary relationship can include both formal, business fiduciary relationships and informal relationships in which one person places trust in, and relies upon, another for his or her affairs.  Maryland courts have long held that in order to successfully maintain a claim for breach of fiduciary duty, a party must prove “(1) the existence of a fiduciary relationship, (2) a breach of [that duty] owed by the fiduciary to the beneficiary, and (3) harm resulting from the breach.”  Alleco Inc. v. Harry & Jeanette Weinberg Found., 340 Md. 176, 192 (1995).

Breach of Fiduciary Duty Claim Post-Kann v. Kann

The lawyers at Bowman Jarashow Law are respected for their experience in both business and estate/trust litigation. One of the many overlaps in these two areas of law are the fiduciary duties that are routinely at issue.  Despite the routine presence of fiduciary claims, Maryland for over twenty years, had unclear landscape on how to present a claim when such breaches were present.   Maryland courts juggled the various interpretations of the Court of Appeals of Maryland’s ruling in Kann v. Kann, regarding one’s right to maintain an individual cause of action for breach of fiduciary duty.  For example, the Court of Appeals of Maryland in Plank later stated that “Maryland appellate courts have not spoken uniformly on this issue.  Indeed, this Court has made seemingly inconsistent pronouncements . . . .”  Plank v. Cherneski, 469 Md. 548, 558 (2020).  In fact, the Court of Appeals of Maryland, in 2002, “[made] a blanket assertion that ‘Maryland does not recognize a separate tort action for breach of fiduciary duty.’”  Id. at 558-59 (citations omitted).


Breach of Fiduciary Duty Claim Post-Plank v. Cherneski

Recently, in Plank v. Cherneski, the Court of Appeals clarified the law.  Id. (“Courts and commentators have been asking this question for 23 years since this Court articulated its holding in Kann . . . .”).  In Plank, the Court reviewed the plaintiff’s independent claim for breach of fiduciary duty.  The Court began its opinion detailing Maryland’s jurisprudence following Kann, clarifying years of “inconsistent pronouncements.”  In concluding their opinion, the Court in Plank states that “a breach of fiduciary duty may be actionable as an independent cause of action.”  Id. at 625.


How We Can Help

If you believe another member of your corporation, LLC, etc., has breached their fiduciary duty and harm has resulted from this breach, you are entitled to protection through an independent cause of action for breach of this duty.  Bowman Jarashow Law LLC is recognized among top law firms in Maryland and provides the highest level of attention in pursuing claims for breach of fiduciary duty and various other business matters.

Contact Us Today for Immediate Assistance

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