If you have recently been affected by a fiduciary’s breach of duty in Maryland, you deserve to know what remedies are available to you, monetary and otherwise.
Equitable remedies available for breach of fiduciary duty include disgorgement of profits, creation of constructive trusts, injunctions to stop or commence specific activity, restitution, removal of a fiduciary, and forfeiture of fees. Monetary damages might also be available, as might punitive damages, if the breach of duty involved actual malice.
You can get a free case review by calling the Heyman Law Firm’s Maryland fiduciary litigation attorneys at (410) 305-9287.
What Equitable Remedies Are Available for Breach of Fiduciary Duty in Maryland?
Equitable remedies for breaches of fiduciary duty aim to restore the plaintiff to their original position before the breach of duty occurred, strip ill-gotten gains from the fiduciary, and prevent future duty breaches.
Disgorgement of Ill-Gotten Profits
If a fiduciary has made any profits from their breach of fiduciary duty when managing a trust, the judge may order disgorgement. This means the defendant must forfeit any profits from the breach of duty to the plaintiff, even if the plaintiff did not suffer any actual financial losses.
Constructive Trust
If a fiduciary breaches their duty and sells or transfers assets or property outside of a trust or estate or takes ownership of assets themselves, a judge may order the creation of a constructive trust. The purpose is to essentially force the wrongful owner to transfer ownership to the rightful owner.
Injunctions
Injunctions from the court may order the breaching fiduciary to cease certain activities or take specific action immediately. Injunctions can also freeze a fiduciary’s assets and the assets of a trust or estate.
Restitution
If a trust beneficiary suffers financial harm due to a breach of fiduciary duty, the court may order the breaching fiduciary to pay restitution. The goal of restitution is to restore the plaintiff to the financial position they held before the fiduciary’s misconduct occurred.
Full Accounting
In cases involving trusts, the court may order a full accounting, which would require the fiduciary to produce a complete list of trust assets, receipts for all distributions, records of trust income, a list of trust expenses, and other key information. Errors in accounting reports can reveal mishandling of assets or wrongful distribution, and may lead to the fiduciary’s removal from their position as a trustee.
Removal or Suspension
In response to a fiduciary’s breach of duty, the court may order their immediate suspension or removal. Fiduciaries may be removed to protect the remaining assets in a trust, especially if the misconduct was especially egregious and ongoing.
Fee Forfeiture
The court may also order financial advisors, lawyers, or trustees who breach their fiduciary duty to forfeit any fiduciary fees they received for their services.
What Monetary Damages Are Available for Breach of Fiduciary Duty in Maryland?
Trust beneficiaries and others who rely on fiduciaries sometimes incur actual damages for a breach of duty.
Economic Damages
In addition to equitable remedies, monetary damages may be available for breach of fiduciary duty in Maryland. You might be compensated for lost financial opportunities, lost profits, and other economic damages.
Punitive Damages
If fiduciaries show actual malice in their breach of duty, Maryland courts might award additional punitive damages to plaintiffs that aim to punish the fiduciary for their egregious misconduct.
How Long Do You Have to Seek Remedies for Breach of Fiduciary Duty in Maryland?
You only have a limited amount of time to seek equitable remedies and monetary compensation for a fiduciary’s breach of duty in Maryland, so do not waste any time and see whether you have a case immediately.
General Statute of Limitations
The general statute of limitations for an independent breach of fiduciary duty claim in Maryland is 3 years. The 3-year countdown begins on the date the breach occurred or the date you should have reasonably discovered the breach.
Statute of Limitations for Cases Involving Trusts
If your case involves a breach of fiduciary trust and a trust or a trustee, you only have 1 year from the date you receive a report or accounting that reveals the breach to seek equitable remedies and monetary damages.
Cases involving trusts and trustees can be very complicated, and 1 year is not much time for our Maryland fiduciary litigation attorneys to prepare and bring a case.
FAQs About Remedies for Breach of Fiduciary Duty in Maryland
What is a Fiduciary’s Duty?
A fiduciary’s duty is to act solely in the best interests of another party in mind, such as a trust beneficiary.
What Are Equitable Remedies for Breach of Fiduciary Duty in Maryland?
Equitable remedies are court orders that require fiduciaries who have breached their duties to do something or to stop doing something, rather than only compensating the plaintiff. Common equitable remedies include removal of fiduciary, restitution, and the creation of constructive trusts.
What Compensatory Damages Are Available for Breach of Fiduciary Duty?
You can get financial compensation for the economic damages you have incurred due to a fiduciary’s breach of duty in Maryland.
What Compensatory Damages Are Not Available for Breach of Fiduciary Duty?
Non-economic damages for pain and suffering are typically not available for breach of fiduciary duty in Maryland.
Are Punitive Damages Available for Breach of Fiduciary Duty in Maryland?
Punitive damages may be awarded for breaches of fiduciary duty that involve actual malice. Punitive damages are relatively rare in these cases, so don’t assume they are a guarantee in yours.
What Are Common Examples of Breach of Fiduciary Duty?
Self-dealing, violating trust terms, commingling funds, failure to disclose conflicts of interest, failure to disclose kickbacks, and misappropriation of funds are common examples of breaches of fiduciary duty that may warrant equitable remedies and monetary damages.
Call Us About a Breach of Fiduciary Duty in Maryland
Call the Maryland fiduciary litigation attorneys of Heyman Law Firm at (410) 305-9287 for a free case assessment.