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What Do You Mean I Cannot Take that Money? Duties, Responsibilities, and Ethics for Fiduciaries and the Attorneys Who Advise Them – Wealth Strategies Journal



By Lisa C. Henry & Francis J. Rondoni

Chestnut Cambronne PA

Minneapolis, Minnesota1 2

With the recent trend to sue anyone and everyone, practitioners should be aware of potential liability for their client’s acts.  Along with claims for malpractice, courts are coming around to considering a legal practitioner being liable for his or her role in the client’s breach of fiduciary duty.

I. INTRODUCTION

Without much thought, many individuals accept appointment as a fiduciary (whether it be personal representative, trustee, or attorney-in-fact) without being fully advised of their fiduciary duties and potential liability.  Even well-intentioned fiduciaries who need not worry about liability for financial exploitation or conversion, should be concerned about the potential liability for breach of a fiduciary duty.  A slighted child whose sibling was nominated as the primary fiduciary will be the first to point a finger if anything goes awry. 

II. FIDUCIARY LIABILITY – CIVIL

Despite the availability of civil remedies, the civil justice system struggles to efficiently and effectively hold fiduciaries fully accountable for abusing their authority because: (1) the victim may lack the capacity to pursue civil litigation, (2) the victim may not have the financial resources to fund the often-costly litigation (perhaps because the fiduciary has spent or dissipated the principal’s assets) and (3) efforts at restitution are likely to result in only partial recovery.3  Common civil causes of action include financial exploitation and breach of fiduciary duty.  

A. Financial exploitation.

While there is no federal civil cause of action for financial exploitation, many states have specific civil causes of action for financial exploitation of vulnerable adults. The practitioner should consult his or her state’s statutes to determine if a cause of action exists and the requisite standard of proof to prevail on a claim for financial exploitation. Some states require proof by a preponderance of evidence, while others require clear and convincing evidence. The practitioner should also be aware of the statute of limitations, which typically run from the later of the date of exploitation or date of discovery.

1. Elements

a. Vulnerable adult.

Although state statutes can differ on the definition, in general a “vulnerable adult” is an individual who due to a physical, mental, or developmental disability or infirmities of aging is unable to manage his or her own resources and is susceptible to mistreatment, self-neglect, or exploitation because the individual is unable to perform or obtain services necessary for his or her health, safety, or welfare. 

While most states require the individual be over 18 years of age, certain states, have different thresholds. For example, Indiana requires an individual be over 60 years of age,4 and South Dakota requires an individual be over 65 years of age.5

b. Financial exploitation.

“Financial exploitation” is typically defined as the illegal or improper expenditure, diminution, use, or withholding of a vulnerable adult’s property, income, assets, or resources without the express voluntary consent of that person or his or her legally authorized representative for another’s profit or advantage.

2. Remedies.

Most states allow an exploited individual to recover actual damages, court costs, and attorney’s fees. Mandating the award of attorney’s fees encourages practitioners to take on financial exploitation cases, and encourages perpetrators to settle. 

Some states award plaintiffs double or treble damages. In Minnesota, a vulnerable adult is entitled to recover the greater of three time the amount of compensatory damages or $10,000.6

3. Slayer statutes.

Certain states have extended their slayer statutes to prohibit perpetrators from inheriting from the victim.  For example, in Arizona a person who is in a position of trust and confidence to a vulnerable adult shall use the vulnerable adult’s assets solely for the benefit of the vulnerable adult and not for the benefit of the person who is in the position of trust and confidence to the vulnerable adult or the person’s relatives…7  The court may order a person who violates subsection A of this section forfeit all or a portion of the persons: (a) Interest in any governing instrument., (b) benefits under title 14, chapter 2 with respect to the estate of the vulnerable adult, including an intestate share, an elective share, an omitted spouse’s share, an omitted child’s share, a homestead allowance, any exempt property and a family allowance. If the vulnerable adult died intestate, the vulnerable adult’s intestate estate passes as if the person who violated subsection A of this section or § 13-1802, subsection B disclaimed that person’s intestate share to the extent the court orders that person to forfeit all or a portion of the person’s benefits under title 14, chapter 2.8

B. Breach of fiduciary duty.

A person standing in a fiduciary relation with another is liable to the other for harm resulting from the breach of duty imposed by such relation.9  From the outset, the practitioner should carefully examine: (1) the parameters of the fiduciary obligations, (2) the standard by which the fiduciary obligations are measured, (3) the burden of proof, and (4) any documents which may alter the fiduciary’s obligations.10

1. Elements.

a. A fiduciary relationship between the principal and fiduciary,

b. The fiduciary breached his or her fiduciary duty, and

c. The fiduciary’s breach resulted in damages to the principal or benefited the fiduciary.11

2. Burden of Proof.

Generally, plaintiffs have the burden of proving each element.12 However, the burden of proving a breach may shift where the defendant-fiduciary has profited or benefited from the transaction with the beneficiary. (See Keck, Mahin & Cate v. Nat’l Union Fire Ins. Co. of Pittsburgh, 20 S.W.3d 692, 699 (Tex. 2000) (finding that when a fiduciary profits or benefits in any way from a transaction with the beneficiary, a presumption of unfairness arises that shifts the burden of persuasion to the fiduciary to show that the transaction was fair and equitable to the beneficiary).

3. Standing.

It is important to note that typically the principal, the principal’s guardian, in some cases a beneficiary, and the personal representative of the principal’s estate are the only individuals who can bring an action for breach of fiduciary duty.13

4. Defenses to breach of fiduciary.

a. Lack of standing to sue, primarily in the case where the principal is not the plaintiff;

b. Statute of limitations, laches, or equitable estoppel;

c. Failure to plead a cause of action upon which relief can be granted;

d. The actions taken by the fiduciary fall within the scope of the powers granted in the governing instrument;

e. The actions taken by the fiduciary are consistent with the intent and directions of the principal, even if to the personal benefit of the fiduciary, such as in the event of a gift of the principal’s property to the attorney-in-fact accomplished by the fiduciary’s exercise of his or her powers in his or her own favor, (commonly known as the “Mom wanted me to have it because she loved me most” defense); and 

f. The principal suffered no detriment or adverse effect.14

5. Remedies.

a. Removal of the fiduciary,

b. Compelling or enjoining performance,

c. Damages, including attorney’s fees, and 

d. Reduction or denial of fees.

III. FIDUCIARY LIABILITY – CRIMINAL

While civil causes of action are aimed at making the victim whole, criminal causes of action are aimed at punishing the perpetrator.

A. Financial exploitation.

Thirty-six states include specific language in their statutes criminalizing financial exploitation, while fourteen states have Adult Protective Services financial exploitation laws but no criminal law equivalents.15 These laws differ significantly among jurisdictions, and punishments range from felony convictions in criminal codes to adverse agency findings in rules and regulations.16 Historically, states often omitted caregivers, attorneys-in-fact, and family members from these statutes and rules due to the presumption that family members and fiduciaries will care for the elder notwithstanding research to the contrary.17 Many states are quickly catching up to enact or amend statues to specifically address the growing problem of financial exploitation of vulnerable adults by family members and caregivers.  The practitioner should consult state statutes, case law, and criminal jury instruction guides to determine the elements of criminal financial exploitation.

To convict a perpetrator of financial exploitation the State must typically prove beyond a reasonable doubt: (1) the individual was a vulnerable adult, (2) the perpetrator knew the individual was vulnerable, (3) the perpetrator stood in a position of trust or confidence with the individual, and (4) the perpetrator knowingly and by deception or intimidation obtained control over the property of an individual or illegally uses the assets or resources of an elder. 

B. Undue influence.

Generally, there are four elements of undue influence: (1) a person is subject to influence, (2) a disposition to exert undue influence, (3) an opportunity to exert undue influence, and (4) a result indicating undue influence.18

Prominent cases of undue influence rising to the criminal level include those of Mark McCay in Texas and Randy Ray Richardson in Oregon. McCay was charged with, and convicted of, attempted theft after he induced an incapacitated 88-year-old woman to sign a death-bed Will written by McCay that benefitted him. The Texas Court of Appeals found the indictment of attempted theft against McCay was sufficient even though the State did not plead lack of testamentary capacity or undue influence.19 The court reasoned, “These terms [of “testamentary capacity” and “undue influence”] . . . are rooted in the civil law and are meaningful in probate proceedings. In a criminal proceeding, the State can prove the accused attempted to appropriate property unlawfully in many ways. One of those ways is by proving the owner did not give effective consent.” 

Similarly, Richardson was convicted by a trial court for first-degree aggravated theft and obtaining execution of a document by deception in another death-bed Will signing.20 However, the Oregon Court of Appeals reversed Richardson’s conviction because of a hearsay error committed by the lower court.21  Medical research and clinical data are catching up to the inverse relationship of dementia/cognitive decline to vulnerability to undue influence.

IV. ATTORNEY AIDER AND ABETTOR LIABILITY 

A growing trend in the last twenty years has been to find an attorney liable for aiding and abetting a breach of fiduciary duty.22 The critical distinction between a regular legal malpractice claim and a claim against an attorney for aiding and abetting his or her client’s breach of fiduciary duty is that “there need be no allegation that the attorney actually owed the plaintiff a direct duty of care.” 23 Because such claims do not require the attorney owe a duty to the plaintiff, motions to dismiss or motions for summary judgment based on the absence of a duty to the plaintiff are not useful and will likely fail.24 But see Anstine v. Alexander, 128 P.3d 249, 255 (Colo. Ct. App. 2005) (“A claim for legal malpractice requires proof of damages incurred by the plaintiff client and caused by the negligence of an attorney who owes a duty of care to the client.” (citing Temple Hoyne Buell Found. v. Holland & Hart, 851 P.2d 192, 198 (Colo. Ct. App. 1992))), rev’d, 152 P.3d 497 (Colo. 2007).

A. Restatements of the Law.

1. Restatement (Third) of the Law Governing Lawyers.

A lawyer who counsels a client to engage in conduct that violates the rights of a third person is subject to liability to the third person to the extent stated in §§ 51 and 56-57.25

Section 56 states, “In addition to liability under §§ 48-55, a lawyer is subject to liability to a client or nonclient when the nonlawyer would be in similar circumstances.”

Section 51(4) states “a lawyer owes a duty of care to certain “nonclients” if: 

(a) the lawyer is representing a trustee, guardian, executor or other fiduciary; 

(b) the lawyer knows that appropriate action by the lawyer is necessary with respect to a matter within the scope of the representation to prevent or rectify the breach of a fiduciary duty owed by the client to the nonclient, where:

  • (i) the breach is a crime or fraud or 
  • (ii) the lawyer has assisted or is assisting the breach;

(c) the nonclient is not reasonably able to protect its own rights; and 

(d) the duty “would not significantly impair the performance of the lawyer’s obligations to the client.”  

ACTEC Commentaries:

Illustration 5: Lawyer represents Client in Client’s capacity as trustee of an express trust for the benefit of Beneficiary. Client tells Lawyer that Client proposes to transfer trust funds into Client’s own account, in circumstances that would constitute embezzlement. Lawyer informs Client that the transfer would be criminal, but Client nevertheless makes the transfer, as Lawyer then knows. Lawyer takes no steps to prevent or rectify the consequences, for example by warning Beneficiary or informing the court to which Client as trustee must make an annual accounting. The jurisdiction’s professional rules do not forbid such disclosures (see §67 [Using or Disclosing Information to Prevent, Rectify, or Mitigate Substantial Financial Loss]). Client likewise makes no disclosure. The funds are lost, to the harm of Beneficiary. Lawyer is subject to liability to Beneficiary under [Restatement (Third) of the Law Governing Lawyers § 51].

Illustration 6: Same facts as in Illustration 5, except that Client asserts to Lawyer that the account to which Client proposes to transfer trust funds is the trust’s account. Even though Lawyer could have exercised diligence and thereby discovered this to be false, Lawyer does not do so. Lawyer is not liable to the harmed Beneficiary. Lawyer did not owe Beneficiary a duty to use care because Lawyer did not know (although further investigation would have revealed) that appropriate action was necessary to prevent a breach of fiduciary duty by Client.

Illustration 7: Same facts as in Illustration 5, except that Client proposes to invest trust funds in a way that would be unlawful, but would not constitute a crime or fraud under applicable law. Lawyer’s services are not used in consummating the investment. Lawyer does nothing to discourage the investment. Lawyer is not subject to liability to Beneficiary.

2. Restatement (Second) of Torts.

One standing in a fiduciary relation with another is subject to liability to the other for harm resulting from a breach of duty imposed by the relation.26

An individual is liable for harm resulting to a third party from the tortious conduct of another if he [or she]: (1) does a tortious act in concert with the other or pursuant to a common design with him or her, or (2) knows the other’s conduct constitutes a breach of duty and gives substantial assistance or encouragement to the other so to conduct himself [or herself].27

A person who knowingly assists a fiduciary in committing a breach of trust is himself  [or herself] guilty of tortious conduct and is subject to liability for the harm thereby caused.28

B. Elements.

There is no uniform standard for establishing civil liability for aiding and abetting because courts across the country disagree on the applicable test and analysis, as well as on the actual elements of the tort.29

While the elements necessary to qualify for this relatively new cause of action vary by jurisdiction, they generally consist of the following: (1) the presence of a fiduciary duty owed by the attorney’s client to a nonclient third party, (2) breach of that fiduciary duty by the attorney’s client, (3) the attorney’s fiduciary knowledge, and (4) substantial assistance provided by the attorney to his or her client in propagating the breach.30

1. Existence of fiduciary duty.

The threshold requirement in virtually all jurisdictions is for the plaintiff to demonstrate that defendant attorney’s client owed a fiduciary duty to the plaintiff.31 Whether the facts of a particular case support the existence of a fiduciary duty is a question of law.32

2. Breach of fiduciary duty.

The plaintiff can establish the existence of a fiduciary duty between himself or herself and the defendant attorney’s client, he or she then needs to prove that the client breached that duty.33 This issue usually comes down to a factual determination of whether a breach of fiduciary duty actually took place. 

3. Attorney’s fiduciary knowledge.

State courts differ as to the required degree of knowledge that an attorney must have of (1) the fiduciary relationship between his or her client and the nonclient injured party and (2) breach by her client of their fiduciary duty as a result of her legal advice.34

4. Substantial assistance in breach of fiduciary duty.

All states that reviewed the issue, except Colorado,35 require the attorney substantially assisted in his or her client’s breach of the fiduciary duty.36  To prove a lawyer “substantially assisted” his or her client, the plaintiff must show the lawyer engaged in affirmative conduct37 in terms of his or her participation in the breach of a fiduciary duty, rather than merely rendering legal services to his or her client who committed the breach.38

For example, providing specific advice to the client as to the necessary steps for breaching a fiduciary duty he or she owes to the plaintiff, as well as drafting certain documents to assist with the same may constitute evidence of a lawyer’s substantial assistance.39More specifically, “substantial assistance” in this context “means something more than the provision of routine professional services”40 and “[m]erely acting as a scrivener for a client is insufficient.”41

5. Actual damages.

Certain states, including Colorado and South Dakota have specifically stated that actual damages need to be sustained as a result of an attorney’s aiding and abetting her client’s breach of fiduciary duty.42

C. Case law.

1. Court found attorney liable.

In Tensfeldt v. Haberman, 768 N.W.2d 641 (WI 2009), the Supreme Court of Wisconsin held that an estate planning attorney who drafted a Will that the attorney knew violated the client’s obligations under a divorce decree, aided and abetted [Decedent] in his violation of a court judgment and consciously intended to do so, summary judgment is appropriate.

2. Court found possibility of attorney liability.

In Kahn v. Britt, 765 S.E.2d 446 (Ct. App. Ga. 2014), Debtor brought suit against attorney who represented the Trust in settlement, claiming attorney aided and abetted breach of Trust when proceeding with the settlement and selling the cattle ranch below value.  The Court recognized aider and abettor liability, but awarded summary judgment because all the elements were not met.

3. Qualified immunity.

In late 2005, the First Court of Appeals in Houston provided litigators with some relief from aiding-and-abetting liability — but did little to help transactional attorneys.43 The Houston court, in Alpert v. Crain, held that a non-client may not sue a litigator for aiding and abetting a breach of fiduciary duty based solely on the lawyer’s providing legal services to the alleged tortfeasor.44 In that case, Alpert alleged that the law firm assisted its client in the following breaches of fiduciary duties: (1) filing lawsuits, complaints, and other allegations; (2) reporting Alpert to the IRS; (3) misusing confidential information to file lawsuits and report Alpert to IRS; and (4) attempting to blackmail Alpert into paying money.45 The Houston court refused to “expand Texas law to allow a non-client to bring a cause of action for ‘aiding and abetting’ a breach of fiduciary duty, based upon the rendition of legal advice to an alleged tortfeasor client.”46

In September 2006, the Oregon Supreme Court signaled a retreat from Granewich, backing off from its prior assertion that a defendant’s status as an attorney “is irrelevant” in aiding and abetting a client’s breach of fiduciary duty.47 In Reynolds v. Schrock, the plaintiff sued an attorney and his client over their actions in connection with the client’s breach of a previously negotiated settlement agreement.48 The plaintiff alleged that the lawyer was jointly liable with his client because he had aided and abetted Schrock’s torts by giving her “substantial assistance and encouragement” and acting “in concert” with her commission of the torts.49 The Oregon Supreme Court held that a lawyer cannot be liable in such circumstances.50 Although the court did not expressly overrule Granewich, it severely limited Granewich‘s future application and ultimately created a qualified privilege against joint liability for a lawyer assisting a client’s breach of fiduciary duty.51 The court highlighted two features of the privilege that are particularly important.52 First, the privilege protects lawyers only for actions of the kind that are permissible in the course of representing their clients.53 It does not protect attorney conduct that is unrelated to the representation of a client.54 Second, the rule places the burden on the plaintiff to show that the lawyer was acting outside the scope of the lawyer-client relationship.55

4. Federal courts recognizing aider and abettor liability

Since 2008, several federal courts have recognized claims for aiding and abetting a client’s breach of fiduciary duty, even though state courts in the applicable jurisdiction have not.56 

In recognizing a cause of action for aiding and abetting a fiduciary breach, some federal courts provided a specific analysis, discussing why the pertinent state would have likely recognized the cause of action, and how the state court would have decided the issue–if given the opportunity.57 For example, in Reis v. Barley, Snyder, Senft & Cohen, L.L.C., 484 F. Supp. 2d 337 (E.D. Pa. 2007), rev’d on other grounds, 426 F. App’x 79 (3d Cir. 2011), the court predicted that, if given the opportunity, the “Supreme Court of Pennsylvania would recognize a cause of action for aiding and abetting breach of a fiduciary duty.” Id. at 350. In particular, the court set forth three elements for aiding and abetting breach of a fiduciary duty under Pennsylvania law: “(1) a breach of a fiduciary duty owed to another; (2) knowledge of the breach by the aider and abettor; and (3) substantial assistance or encouragement by the aider and abettor in effecting that breach.” Id. In a separate case and jurisdiction, the court stated that the “New Hampshire Supreme Court has yet to expressly consider whether to adopt the tort of aiding and abetting a breach of fiduciary duty … [but] would recognize the tort, and would adopt a version incorporating the principles of aiding and abetting liability set forth in the Restatement (Second) of Torts.” Invest Almaz v. Temple-Inland Forest Prods. Corp., 243 F.3d 57, 82-83 (1st Cir. 2001).

V. CONCLUSION

Practitioners representing fiduciaries should advise their clients of their fiduciary duties and potential liability for breach of duty.  The practitioner should also be aware of his or her personal liability and when the fiduciary is authorized to pay his or her fees out of the estate.


1 The content of this article was taken from material prepared for the 53rd  Annual  Heckerling Institute on Estate Planning sponsored by the University of Miami School of Law, and published by LexisNexis. It is republished with the permission of the Heckerling Institute and the University of Miami School of Law.

2 The authors wish to thank Ryan Prochaska for his invaluable assistance in writing this article.

3 John C. Craft. Preventing Power of Attorney Abuse – A Lawyer’s Role. 75 Ala. Law. 116. (March 2014).

4  I.C. § 35-46-1-12.

5 SDCL § 22-46-1.

6 Minn. Stat. § 626.557 subd. 20(a).

7 Ariz. Rev. Stat. Ann. § 46-456(A)

8 Id. at § 46-456(C).

9  Restatement (Second) of Torts § 874.

10 Michael W. Stockham and Mackenzie S. Wallace.  “Fiduciary Duty Litigation and Burden Shifting.  (March 2014).

11 37 C.J.S. Fraud § 15.

12 Model Jury Instructions: Business Torts Litigation (American Bar Ass’n Section of Litigation 4th ed. 2005).

13 Id.

14 Id

15 Hansen, Kevin E.; Hampel, Jonathan, Renolds, Sondra L.; and Freeman, Iris C. (2016) “Criminal and Adult Protection Financial Exploitation Laws in the United States: How Do the Statutes Measure Up to Existing Research?” Mitchell Hamline Law Review, Vol. 42: Iss. 3, Article 3.

16 Id.

17  Id.

18 36 Am. Jur. Proof of Facts 2d 109 § 2 (1983).

19 McCay v. State, No. 05-12-01199-CR, 2015 WL 5247081 (Tex. App. Sept. 9, 2015), petition for discretionary review filed (Oct. 2, 2015).

20 State v. Richardson, 288 P.3d 995 (2012).

21 Id.

22  Katerina P. Lewinbuk. “Let’s Sue all the Lawyers: The Rise of Claims Against Lawyers for Aiding and Abetting a Client’s Breach of Fiduciary Duty.” 40 Ariz. St. L.J. 135 (2008). States recognizing a cause of action against attorneys for aiding and abetting the breach of fiduciary duty include, among others: Colorado, see, e.g., Alexander v. Anstine, 152 P.3d 497, 503 (Colo. 2007); Illinois, see, e.g., Hefferman v. Bass, 467 F.3d 596, 601 (7th Cir. 2006); Minnesota, see, e.g., Witzman v. Lehrman, Lehrman & Flom, 601 N.W.2d 179, 188 (Minn. 1999); New Jersey, see, e.g., Morganroth & Morganroth v. Norris, McLaughlin & Marcus, 331 F.3d 406, 415 (3d Cir. 2003); New York, see, e.g., Weingarten v. Warren, 753 F. Supp. 491, 495-96 (S.D.N.Y. 1990); Oregon, see, e.g., Reynolds v. Schrock, 142 P.3d 1062, 1065-67 (Or. 2006); and South Dakota, see, e.g., Chem-Age Indus. v. Glover, 2002 SD 122, 652 N.W.2d 756, 774.

23 David Grossbaum, Partner, Hinshaw & Culbertson LLP, Conspiring to Commit or Aiding and Abetting a Client’s Breach of Fiduciary Duty: Defending Such Claims Against Attorneys, Presentation at Hinshaw’s 2006 Legal Malpractice & Risk Management Conference, at 3 (Mar. 2, 2006). 

24 Id. 

25 Restatement (Third) of the Law Governing Lawyers § 94.

26 Restatement (Second) of Torts § 874.

27 Restatement (Second) of Torts § 876(a)-(b).

28 Restatement (Second) of Torts § 874 cmt. c.

29 Katerina P. Lewinbuk. “Let’s Sue all the Lawyers: The Rise of Claims Against Lawyers for Aiding and Abetting a Client’s Breach of Fiduciary Duty.” 40 Ariz. St. L.J. 135 (2008).

30  Brinkley Rowe. “See no Fiduciary, Hear No Fiduciary: A Lawyer’s Knowledge Within Aiding and Abetting Fiduciary Breach Claims.  85 Fordham L. Rev. 1389.

31 See, e.g.Weingarten, 753 F. Supp. at 495; Witzman, 601 N.W.2d at 187; Chem-Age Indus., 2002 SD 122, 652 N.W.2d at 774 (all first addressing whether there was an initial duty owed by the client before determining whether attorney could be held liable).

32 Reynolds, 107 P.3d at 55.

33 Courts in Colorado, Illinois, Minnesota, New Jersey, New York, Oregon, and South Dakota have stated that a breach of fiduciary duty between plaintiff and attorney’s client is required to establish attorney liability for aiding and abetting her client’s breach of fiduciary duty. See Anstine v. Alexander, 128 P.3d 249, 255 (Colo. Ct. App. 2005) (“A cause of action for aiding and abetting a breach of fiduciary duty requires (1) breach by a fiduciary of a duty owed to a plaintiff ….”), rev’d 152 P.3d 497 (Colo. 2007); Hefferman, 2005 U.S. Dist. LEXIS 7414, at *9 (“In Illinois, to state a claim for aiding and abetting, … a plaintiff must allege: (1) the party whom the defendant aids must perform a wrongful act which causes an injury ….”); Witzman, 601 N.W.2d at 187 (“A claim for aiding and abetting the tortious conduct of another has three basic elements: (1) the primary tort-feasor must commit a tort that causes an injury to the plaintiff ….”); Briarpatch Ltd. v. Geisler Roberdeau, Inc., No. 99 Civ. 9623, 2002 U.S. Dist. LEXIS 20789, at *19 (S.D.N.Y. 2002) (“Under New York law, aiding and abetting breach of fiduciary duty requires plaintiffs to prove: (1) the existence of a violation committed by the primary (as opposed to the aiding and abetting) party ….”)), aff’d in part, vacated in part, 373 F.3d 296 (2d Cir. 2004); Chem-Age Indus., 2002 SD 122, 652 N.W.2d at 775 (“To establish a cause of action for aiding or assisting in the breach of a fiduciary duty, a plaintiff must prove that: (1) the fiduciary breached an obligation to plaintiff ….”).

34 Brinkley Rowe. “See no Fiduciary, Hear No Fiduciary: A Lawyer’s Knowledge Within Aiding and Abetting Fiduciary Breach Claims.  85 Fordham L. Rev. 1389.

35 See Anstine v. Alexander, 128 P.3d 249, 255 (Colo. Ct. App. 2005) (stating that the only three elements required for a claim of aiding and abetting a breach of fiduciary duty are: “(1) breach by a fiduciary of a duty owed to a plaintiff, (2) a defendant’s knowing participation in the breach, and (3) damages”), rev’d, 152 P.3d 497 (Colo. 2007).

36 See, e.g.Morganroth & Morganroth v. Norris, McLaughlin & Marcus, P.C., 331 F.3d 406, 415 (3d Cir. 2003); Hefferman, 2005 U.S. Dist. LEXIS 7414, at *9; In re Ticketplanet.com, 313 B.R. at 63; Reynolds v. Schrock, 107 P.3d 52, 59-60 (Or. Ct. App. 2005), rev’d, 142 P.3d 1062 (Or. 2006); Chem-Age Indus., 652 N.W.2d at 775 (all requiring substantial assistance in the client’s breach).

37 One court established that aiding and abetting claims cannot be valid absent a specific allegation of fraud, conspiracy to defraud, or any other independent tortious conduct of an attorney. See Alpert v. Crain, Caton & James, P.C., 178 S.W.3d 398, 405-06 (Tex. App. 2005).

38 Chem-Age Indus., 2002 SD 122, 652 N.W.2d at 775.

39 See Thornwood, Inc. v. Jenner & Block, 799 N.E.2d 756, 768 (Ill. App. Ct. 2003) (dictum).

40 Witzman, 601 N.W.2d at 189.

41 Chem-Age Indus., 2002 SD 122, 652 N.W.2d at 774.

42 (See Anstine v. Alexander, 128 P.3d 249, 255 (Colo. Ct. App. 2005), rev’d, 152 P.3d 497 (Colo. 2007); Chem-Age Indus., 2002 SD 122, 652 N.W.2d at 772).

43 Jessica Palvino.  “Aiding and Abetting Liability: Is Privity Making a Comeback?” Texas Bar Journal.

44 Alpert v. Crain, Caton & James, P.C., 178 S.W.3d 398 (Tex. App. — Dallas 2005, pet. denied).

45  Id. at 402-05.

46 Id. at 407.

47 Reynolds v. Schrock, 142 P.3d 1062 (Or. 2006).

48 Id. at 1063-64.

49 Id. 

50 Id. at 1071.

51 Id. at 1065-68.

52 Id. at 1071.

53 Id.

54 Id.

55 Id. 

56 Lewinbuk, Katerina P. (2018) “Keep Suing All the Lawyers: Recent Developments in Claims Against Lawyers for Aiding & Abetting a Client’s Breach of Fiduciary Duty,” St. Mary’s Journal on Legal Malpractice & Ethics: Vol. 8 : No. 1 , Article 4.

57 Id.





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