Breach of fiduciary duty for poor management of endowment? If the board of trustees of a private university keeps investing the endowment through an expensive firm run by their friends, despite substandard performance, could a case be made for breach of fiduciary duty? The economists employed by the university have long urged the board to invest in index funds instead. I know I would need to consult a lawyer specializing in this area, but I'd like to know first if I would be laughed at or if this is a reasonable question.
could a case be made for breach of fiduciary duty? Yes, I think, although not every person or stakeholder would have standing to sue the board of trustees of the private university. The prima facie elements of breach of fiduciary duty are "(i) the existence of a fiduciary duty; (ii) a knowing breach of that duty; and (iii) damages resulting therefrom", Johnson v. Nextel Communications, 660 F.3d 131, 138 (2011) (I am not aware of any material differences in other jurisdictions). Absent any explicit disclaimers of fiduciary duty, (1) the element of existence of that duty is applicable because the trustees' relation with the university is not one of arms length; (2) in their deliberate --rather than negligent-- decision to do business with their friends, the trustees are knowingly and intentionally disregarding the advice from economists of the university, despite the evidenced financial detriment of that deliberate decision; and (3) the element of damages would be proved from the expenses as billed by the firm, coupled with any losses the friends' subpar performance may be causing to the university.
Yes. You go into the court of relevant jurisdiction, and file a lawsuit to &quot;quiet the question&quot;. Usually there is a counterparty who has something to say on the subject; sometimes not. If there is an apparent counterparty, they must be served notice of all aspects of the case. Let's say I manage a pipeline property management company; we are wholly owned by a pipeline company and we buy the land and lease it to said pipeline company. I need a parcel of land to complete a pipeline connection, and as part of my offer I gently remind the landowner, Beth, that we do have the legal right to take the property by eminent domain, with the hopes this will inspire them to a sensible price. Beth says &quot;Bunk! Your LLC doesn't run any pipelines! You don't have eminent domain rights! 500% market price, or go away.&quot; Well. So, for the sake of moving the negotiation along, I go to court and ask the judge to quiet the question of whether we have eminent domain rights. Mind you, I don't go any further than that; I don't want to actually take it by eminent domain if I can talk Beth out of a consensual sale. The judge will, of course, suspect this applies to an imminent case, and will ask... so I might as well disclose the Beth situation. As such, I will have to serve Beth and keep Beth fully in the loop, so that Beth has full right to make the other side of the argument. Since it could affect others as well, the judge will probably also require publication in whichever newspaper handles legal notices. (Many newspapers are propped up financially by being official legal-notice organs for their county. They have six pages of editorial content, and 18 pages of legal notices and other ads.) Most likely, the judge will cowardly refuse to rule on whether a pipeline's land holding company has eminent domain, and simply rule that the pipeline company itself does, and could simply buy the land itself then transfer it to my company as a trivial, taxless transaction. So the judge would grant eminent domain conditional on that transaction being done. Beth then offers 133% of market which we haggle to 120% of market + legal fees. Good enough! Or, Beth refuses, in which case we file an eminent domain action in the same court and before the same judge; being already aware of the facts of the situation, there is nothing left to litigate, and the gavel drops quickly and predictably. This is how &quot;quieting a question&quot; works. It is somewhat less confrontational with the counterparty, since you are going to court, sort-of together, to resolve a hypothetical question; once we know whether we are on solid legal footing, we then are able to continue negotiating. Courts love this, because they really want people to negotiate and make consensual settlements. And if a party insists on filing a suit to on the quieted matter, they can pay their filing fees and lawyer fees to get a lecture: &quot;we already resolved this.&quot; (Or alternately, to present new facts which mean the past ruling is no longer on-point; e.g., Beth discovers we don't want the land for a pipeline at all, but for an access road.) You can also do this with the IRS. This is called a Private Letter Ruling, and it will set you back a $750 filing fee (and legal costs, of course). You'll still get audited, but then you wave the Ruling in front of them and done. Doing this preemptively in a criminal matter would be adventuresome. Your biggest problem would be the press: it would be impossible to do this discreetly, as the case would be fascinating; and it would put every cop and prosecutor on notice that you have a mind to do the potentially illegal thing.
Until the estate is settled and the interest in the house is definitively resolved, the estate has to pay property taxes. There is no requirement for the house to be insured, unless there is a mortgage and insurance is mandated by the lender. The duties of the personal representative generally include taking reasonable steps to protect the assets of the estate, which would include reasonable insurance coverage -- which the estate would pay for. Necessary maintenance would also be included in the things that are to covered by the estate, for example the cost of repairing a broken water pipe (which can cause serious loss, if not repaired). Freshening up the paint in preparation for selling the house, assuming that the house is to be sold and the assets divided, would also be covered by the estate. Utilities, on the other hand, are not within the realm of things that need to be done to protect the interests of the beneficiaries: that is a benefit to whoever lives there, making it their responsibility. The question is foot-dragging is a separate issue, one that should be resolved with the aid of your lawyer. I do not understand why he would maintain that the estate is responsible for paying the utilities.
The attorney's responsibility is framed in terms of the interest of the client, which is not always money. If the trust has some social agenda, that rather than the dollar amount would be the attorney's responsibility. I would want my property to not be subdivided into smaller lots, and I would communicate that interest to my attorney, but that's just me. Since we don't know all of the facts (about you and the trust), all we can say is that &quot;interest&quot; and &quot;duty&quot; are not always about dollar amounts.
I belive you have misread the linked article: &quot;A Narrow Lane: Navigating Claims for Breach of the Duty of Good Faith and Fair Dealing&quot;/ It says thst all conrtreacts involve a duty of good faith: It is a settled principle of New York law that “all contracts imply a covenant of good faith and fair dealing in the course of performance.” 511 W. 232nd Owners Corp. v. Jennifer Realty Co., 98 N.Y.2d 144, 153 (2002) (collecting cases). Courts have described this covenant as a duty “encompassing any promises which a reasonable person in the position of the promisee would be justified in understanding were included and which are not inconsistent with the contract.” It goes on to say that it is tempting for a plaintiff to include a bad faith claim in any contract dispute: After all, most plaintiffs probably believe that the defendant did not act in good faith and/or that the result was unfair. But it says that courts are reluctant to honor such claims in ordinary contract disputes: ... courts are loath to make rulings that might vary the terms to which the parties agreed. A party’s conduct either breaches the terms of the agreement or it does not; if it does not, that is generally the end of the line for a breach of contract claim. A party seeking to impose an additional duty on the ground that it is “implied” bears a heavy burden. In short, claims for breach of the duty of good faith and fair dealing fail far more often than they succeed. This article explores some of the nuances that make such claims particularly thorny. ... “[t]he law encourages ‘efficient breaches’”; that is, breaches committed based on the breaching party’s calculated determination that it “will still profit after compensating the other party for that party’s expectancy interest.” 28A N.Y. Prac. Contract Law § 23.2. Absent a specific provision in the contract that requires good faith, a “bad faith breach” is no different from any other. ... although a claim for breach of the duty of good faith and fair dealing requires that the parties have a valid contract ..., such a claim will fail if it is based on the same alleged conduct that forms the basis for a cause of action for breach of the contract’s express terms. See Kim v. Francis, 184 A.D.3d 413, 414 (1st Dept. 2020). So the article explicitly says that a claim for breach of contract does not automatically imply a breach of good faith. To the contrary, something more is required.
In a civil rights action in which someone prevails (which is by no means certain in this case, but not impossible either), there is at a minimum an award of nominal damages (i.e. $1) and the reasonable attorney fees and litigation costs incurred in the lawsuit. A jury could also award a prevailing party non-economic damages, and/or exemplary damages (a.k.a punitive damages) in connection with a violation of civil rights. There might also be injunctive or declaratory relief stating that this was a violation of civil rights and requiring the government to adopt practices to prevent harm going forward. It is hard to see how there would be any economic damages at issue in this case, but it isn't impossible to imagine some circumstances in which they could be proven, perhaps.
I'm not going to comment on the specifics of this law; rather, I think this question shows a misconception of the way the legal system works in general. Here's the question: do you actually have "legally privileged" material on your phone? If not, what's keeping you from claiming that is that it's not true, and lying to a police officer is a bad idea. And just putting a letter from your lawyer on the phone doesn't mean you've established a legal privilege--attorney-client privilege is not a magic spell, it's a reasonable system of protection that only covers certain communications. The bottom line is: the statute in general, and that clause in particular, were included in the law to protect real, important, and substantial legal right. The courts interpret the law in light of that purpose. If the police officer finds a solution that protects your rights while still carrying out the purpose of the statute, the court will be unlikely to fault him or her. In this case, if you tell the officer that there is a letter from your attorney in a particular folder, the obvious solution is for the officer not to open that folder. Problem solved. In practice, in the United States at least, these cases are dealt with routinely; computers are seized, and attorneys and judges work together to ensure that privilege is protected while still allowing reasonable access to seized materials. I would imagine the same is true in the U.K. The bottom line is: the law is not a game, and technical "gotchas" are rarely effective. Common law systems allow judges enough leeway to avoid this sort of pointless technicality.
Attorney-Client privilege is a one-way duty: The Attorney has to maintain protected information in confidence. It's a professional duty supported in law. There is no corresponding duty for the Client to maintain anything in confidence. The client can waive the privilege at will. Some sample limitations to waivers are governed by Federal Rule Evidence 502. (Granted, in this scenario the concerned board member may be bound by some confidentiality agreement or fiduciary obligation as a consequence of service on the board, or membership in the association, but that's a different matter.) The ABA points out , in its article "How to Lose Attorney-Client Privilege" that: Either voluntary or inadvertent disclosure to outside or non-covered recipients, professional advisors outside the privilege, and experts and consultants, can result in waiver as a matter of law. In this "Ten Things" article the author points out: Business advice, however, is never privileged and – for in-house counsel in particular – the line between the two can appear blurry. ... If a document that is otherwise privileged is shared with third parties, then the privilege is lost. ... A common misperception among the business is that all confidential information is privileged or if they label the communication as privileged they can keep the documents out of the hands of third parties. As we’ve seen, this is not correct and the fact that there is a non-disclosure agreement or other type of confidentiality agreement in place will not make a document privileged nor will it preserve the privilege if it is disclosed to a third party.