Chicago Business Litigation Attorney Blog

Illinois courts have held that to state a cause of action for breach of a fiduciary duty, a plaintiff must prove: (1) a fiduciary duty on the part of the defendant, (2) the defendant's breach of that duty, and (3) damages that were proximately caused by the defendant's breach. DOD Technologies v. Mesirow Ins. Services, Inc., 381 Ill.App.3d 1042 (1st Dist. 2008). An Illinois appellate court found that a fiduciary relationship is created when, by agency, or business association and experience, trust and confidence are placed by one party in another who, as a result, gains an influence and superiority over the other party. Illinois Non-Profit Risk Management Ass'n v. Human Service Center of Southern Metro-East, 378 Ill.App.3d 713 (4th Dist. 2008). Regardless of the level of trust between the parties, a fiduciary relationship requires one party to exert dominance and influence over the other party. Id. A fiduciary duty consists of a duty of exercising good faith, honesty, and fairness in the parties’ dealings. Illinois Jurisprudence, Business Relationships § 15:40.

A fiduciary relationship may be presumed, as a matter of law, from the relationship of the parties, such as an attorney-client relationship. Illinois Jurisprudence, Personal Injury and Torts § 13:36. Other examples of a fiduciary relationship are directors owe a fiduciary duty to their corporations and to their shareholders and principal-agent relationships. Crichton v. Golden Rule Ins. Co., 358 Ill.App.3d 1137 (5th Dist. 2005); and Illinois Non-Profit Risk Management Ass'n v. Human Service Center of Southern Metro-East, 378 Ill.App.3d 713 (4th Dist. 2008).

In determining whether the facts of a particular case establish a fiduciary relationship, courts look to the following factors: (1) the disparity in age, health, mental condition, education, and business experience between the parties; (2) the degree of kinship between the parties; and (3) the extent to which one party entrusted the other with the handling of its business affairs. Yokel v. Hite, 348 Ill.App.3d 703 (5th Dist. 2004). A party seeking to show that a fiduciary relationship existed, must prove that such a fiduciary duty arose by clear and convincing evidence. Id. However, a fiduciary relationship does not exist where one party to a business contract trusts the other to do no more than fulfill its obligations under the contract. Id.

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