Breach of Fiduciary Duty
We’re trial lawyers. Our core competency – above everything else – is trying cases to juries. And we specialize in beating giants.
Breach of Fiduciary Duty
Madia Law Represents Shareholders in Breach of Fiduciary Duty Cases
Madia Law represents minority shareholder employees across the State of Minnesota against some of the largest employers in the country.
What is a breach of fiduciary duty?
Shareholders in closely held corporations owe one another a fiduciary duty. In a fiduciary relationship, the law imposes the highest standards of integrity and good faith in dealings with one another. Owing a fiduciary duty includes dealing openly, honestly, and fairly with other shareholders.
Minnesota courts have repeatedly found breaches of the fiduciary duty when shareholders threatened or deceived other shareholders into selling their shares. Further, shareholders breach their fiduciary duty by failing to disclose material facts.
You May Be Entitled to Actual Damages, Expectation Damages, Punitive Damages, and Attorney Fees
If you have been the victim of a breach of fiduciary duty or shareholder oppression, you may be entitled to actual damages, expectation damages, punitive damages, and your attorney fees and costs.
Contact Our Shareholder Dispute Lawyers Today
You must act quickly when it comes to bringing a claim for breach of fiduciary duty. If you wait, there may be strict statutes of limitation that will bar you from filing your claim. Call Madia Law today to discuss your case.
Representative Case
Dr. Sam Deweese worked as a family practice physician for nearly twenty years at his clinic and earned high praise from his patients. He devoted his entire working life to the institution, committed himself to a high standard of excellence in his profession, and committed a large capital contribution in order to secure his partnership. Dr. Deweese alleged that his clinic’s relationship with him changed after he was diagnosed with bipolar disorder in summer 2007.
Dr. Deweese alleged that his clinic’s leadership pressured, manipulated, and deceived him into relinquishing his shareholder status after his diagnosis. Minnesota law imposes a fiduciary duty on fellow shareholders in closely held corporations – each shareholder must act with loyalty and care toward their fellow shareholders.
Dr. Deweese further alleged that his clinic refused to increase his hours as it had previously promised in exchange for his shareholder status. In Minnesota, people are not allowed to make false promises that they have no intention of fulfilling in order to get others to enter into agreements – that’s called fraudulent inducement.
Dr. Deweese alleged that shortly after he complained to the Minnesota Department of Human Rights of disability discrimination, his clinic removed him from his position and ordered a fitness for duty evaluation. He was terminated shortly thereafter. He therefore alleged disability discrimination and retaliation under the Minnesota Human Rights Act.
Madia Law represented Dr. Deweese through nearly two years of litigation and a two week jury trial. The jury found that Dr. Deweese’s clinic breached its fiduciary duty toward him, frustrated his reasonable expectations of continued employment, and fraudulently induced him to sell his shares back to the clinic. The jury additionally found that Dr. Deweese’s complaint of disability discrimination to the Minnesota Department of Human Rights was a motivating factor in his clinic’s termination of his employment. Ultimately, the jury awarded Dr. Deweese $1,285,384.00 in damages.
Please note that every case is different, with its own unique facts. Just because Dr. Deweese won a large jury verdict in his case does not mean that you will obtain the same result in your case. You should contact Madia Law to discuss your breach of fiduciary duty case in detail and get an accurate assessment of its value.
THE MADIA LAW WAY
We have a process that works in getting exceptional results for our clients.
We are trial lawyers who prepare every case for trial from Day 1. Investigation and legal research are the first things we do, and we spend a lot of time on them. Because we haven’t filed the case yet, we have complete control – the defendant has no say and we want to use this time wisely. We interview witnesses that can help us prove the case. We’ll ask you for all relevant documents in your possession and review those carefully as well. We also will spend some time conducting legal research about unique issues in the case. We pull the jury instructions that the judge will ultimately charge the jury with after closing arguments at trial.
Our next step is typically to send a demand letter to the defendant. In the letter, we thoroughly lay out: the facts surrounding the defendant’s misconduct; the applicable law (including statutory and case citations) that make clear that the defendant broke the law; an analysis of your damages and the defendant’s monetary exposure; a demand for a monetary amount to settle the claim; and an instruction to preserve all relevant evidence, including electronic evidence. The point of this letter is to give the defendant a chance to do the right thing and pay a fair amount before litigation, and to give the defendant an opportunity to present any defenses or evidence it wants us to consider before moving forward. Sometimes we skip the demand letter if there are strategic reasons to move straight to filing, but we typically give defendants a chance to do the right thing.
If early negotiations fail, great – we file a Complaint and serve the defendant with it. A Complaint is a legal document that states the facts of what happened and alleges how the defendant broke the law. It formally starts the lawsuit. Many lawyers draft complaints in a general and relatively vague way, just to get it done and filed – because that’s all that’s really required. We take a different view. We view the Complaint as our first chance to tell your story to the judge, and we take it seriously. So we draft detailed complaints and include legal citations to statutory and judicial authority on unique points. Sometimes we’ll include a number of exhibits, diagrams, or other demonstrative aids to help the Court understand our claims. A secondary benefit of this approach is that defense lawyers reading the Complaint can become educated on the problems of their case and the state of the law – sometimes this leads them to reach out to us shortly after service of the Complaint to re-initiate settlement negotiations. Of course, by that time, the price for settlement has gone up.
Some lawyers view written discovery as a necessary evil – something to get done and out of the way before depositions. Not us. Written discovery is a gift and an opportunity. We spend a great deal of time crafting requests for documents and interrogatories (questions for the defendant to answer in writing) that are specific, detailed, and tailored to get what we need to prove our case. Many lawyers – even great ones – think written discovery is a waste of time because defense lawyers typically answer them on behalf of their clients and can try to stonewall with legalese and objections. We view this as a wonderful opportunity. In our experience, most defense lawyers can’t help themselves when answering discovery: they over-state their defenses and make assertions that their clients will not be able to support in testimony. So we get to commit the defendant to defenses that they can’t back up, leading to contradictions, confusion, and chaos in their depositions later on. We also use Requests for Admission – which many lawyers don’t. The Federal Rules and Minnesota Rules of Civil Procedure allow us to ask defendants to “admit” certain facts. We send them RFAs that are very difficult for them to deny. Of course, they do it anyway, but that sets them up later for cost and fee-shifting, which the Rules mandate for defendants that deny RFAs that are later proven true. And usually, we can get the defendants’ own witnesses to admit facts that their defense lawyers denied in RFA. That’s a great situation that leads to more chaos and confusion on the defense side.
One last point on written discovery – we send multiple waves of it throughout discovery. We typically send 3 or 4 sets of written discovery requests to defendants throughout discovery. This compounds the problems for them, because the defense lawyers continue to overstate their defenses, but now run into contradictions from not just the defendant witnesses’ deposition testimony, but also their own previous discovery responses. This makes for a great record that we can present to the judge at dispositive motions, and use for impeachment at trial.
This is our chance to question relevant witnesses, on the record with a court reporter (we typically videotape important depositions as well). We get to confront the defense witnesses with all of the evidence we’ve developed through written discovery and document production. By this time, the defendant put its witnesses in an impossible position through its written defenses, which are often untrue and indefensible. So the witness has to either lie to support the defense, or admit it’s not true. That’s a dilemma that works for our clients either way, no matter which option the witness takes. We use depositions to expose contradictions, create a record for dispositive motions, lock witnesses into their stories so that we can impeach them later at trial, and sometimes, to show defense lawyers how hopeless their case is. We often calls from defense counsel shortly after depositions of their clients, seeking to re-start settlement negotiations.
The defendant will usually make a motion for summary judgment after discovery, asking the Court to throw out the case without having a jury trial. Because we’ve hit discovery so hard – both through written discovery and depositions – this is a tough motion for defense counsel to write in our cases. We draft our response for the Court and now get to bring everything together: the admissions, contradictions, nonsense, and obvious fact disputes that we’ve uncovered through discovery. We tell a compelling story that wraps everything together for the Court and makes clear that the defense motion has to be denied, and the defendant needs to face a jury for its conduct.
Sometimes, we’ll even make an affirmative motion for summary judgment, asking the Court to grant judgment in favor of our client without a trial. These motions are generally rare for plaintiffs to make, because the defendant can usually point to some fact dispute on its intent or some other factor that necessitates a trial. But we make affirmative summary judgment motions significantly more than is typical for plaintiffs, and that’s because the work we put in during discovery helps build a fantastic record to do so.
After the Court denies the defense motion for summary judgment, the defendant has only 2 options: 1) do the right thing and pay you a fair amount to our client to settle your claim (usually much, much more at this point than the defendant could have paid at the beginning of the case to settle); or 2) face a jury for its conduct and risk an enormous verdict. This is the dilemma that we have been creating and forcing the defendant into for the entire case. We’ll engage in settlement negotiations at this point from a position of extreme strength, mainly because most defendants are (rightly) terrified of facing a jury to defend their conduct.
This is, candidly, our favorite part of the case – why we went to law school: to hold the powerful accountable before juries. We prepare heavily for trial, including: detailed witness preparation, focus groups, and mock trials. At this point, the potential outcomes and consequences for the defendant are much more severe than if it simply did the right thing at the beginning of the case and paid a fair amount to compensate our client for its misconduct. As we advocate to the jury for our client, we’re also mindful of protecting the record so that defendants will be unsuccessful in attacking the verdict in post-trial motions or appeal.
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