4 Elements of a Breach of Fiduciary Duty Claim

Under Colorado law, there are four elements to a claim or cause of action for breach of fiduciary duty. The four elements are:

  1. The defendant was acting as a fiduciary of the plaintiff;
  2. The defendant breached a fiduciary duty to the plaintiff;
  3. The plaintiff suffered damages as a result of the breach; and
  4. The defendant’s breach of fiduciary duty caused the plaintiff’s damages.

SGS Acquisition Co. Ltd. v. Linsley, 2018 WL 4698614, at *6 (D. Colo. Sept. 30, 2018).


(1) Fiduciary Duty

The “fiduciary duty” element requires that the defendant owe a special duty to the plaintiff. Examples include the duty that a trustee owes to the beneficiaries of a trust, the duty owed by officers and directors of a corporation to the shareholders of such corporation, and the duty owed by a majority shareholder in their dealings with minority shareholders.


(2) Breach

The “breach” element goes to whether the person owing the fiduciary duty breached such duty. This is typically a fact-intensive question for the jury and is likely the most contentious issue at trial.


(3) Damages

Once a duty is established and breach can be shown, a plaintiff must show that the breach caused him or her damages.


(4) Causation

The plaintiff must show that the damages he or she suffered were actually caused (1) by the defendant and (2) because of their breach of fiduciary duty. “The element of causation is satisfied when the plaintiff proves that the defendant’s conduct was a substantial contributing cause of the injury.” Aller v. Law Office of Carole C. Schriefer, P.C., 140 P.3d 23, 26 (Colo. App. 2005)


How Does the Law Define Fiduciary Duty?

Black’s law dictionary (the dictionary used by attorneys), defines a fiduciary duty as:
A duty of utmost good faith, trust, confidence, and candor owed by a fiduciary (such as an agent or a trustee) to the beneficiary (such as the agent’s principal or the beneficiaries of the trust); a duty of utmost good faith, trust, confidence, and candor owed by a fiduciary (such as a lawyer or corporate officer) to the beneficiary (such as a lawyer’s client or a shareholder); a duty to act with the highest degree of honesty and loyalty toward another person and in the best interests of the other person (such as the duty that one partner owes to another). 

What is a Fiduciary?

“A fiduciary is a person having a duty, created by his or her undertaking, to act primarily for the benefit of another in matters connected with the undertaking.” Winkler v. Rocky Mountain Conference of United Methodist Church, 923 P.2d 152, 157 (Colo. App. 1995), as modified on denial of reh’g (Jan. 18, 1996).

What Duties Does a Fiduciary Owe?

“A fiduciary’s obligations include a duty of loyalty, a duty to exercise reasonable care and skill, and a duty to deal impartially with beneficiaries.” Id. (emphasis added). Fiduciaries also owe a duty of “utmost good faith.” See, e.g., Rupert v. Clayton Brokerage Co. of St. Louis, Inc., 737 P.2d 1106, 1109 (Colo. 1987). Under certain circumstances, fiduciaries owe special duties depending on the industry they are in or on the particular transaction involved. For example, scenarios involving majority and minority shareholders, real estate transactions, professionals, trustees, and other sorts of fiduciary relationships.

What Constitutes a Breach of Fiduciary Duty?

To constitute a breach of fiduciary duty, every one of the four elements must be proven by a preponderance of the evidence (more likely than not) and then the plaintiff must prove the amount of their damages.