aiding and abetting california civil law

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Aiding and abetting california civil law dota 2 lounge betting rules in blackjack

Aiding and abetting california civil law

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In a case with important lessons for business litigators, a California Court of Appeal recently clarified the distinction between aiding and abetting a breach of fiduciary duty and conspiracy to breach fiduciary duty, finding that a defendant can be liable for aiding and abetting even where that defendant owed no independent duty to the plaintiff.

Idanta Partners, Ltd. Plaintiff American Master Lease AML developed a business method wherein real property owners would sell their real estate to a larger entity and then buy interests in the larger entity as tenants in common, which allowed them to avoid certain adverse tax consequences. FPI proceeded to use the business method anyway and AML brought suit against Idanta for aiding and abetting breach of fiduciary duty, among other things. Idanta and its managing general partner unsuccessfully argued that they could not be liable for aiding and abetting a breach of fiduciary duty because they did not owe a fiduciary duty to AML.

These can all be difficult challenges to overcome, as few defendants admit, or are foolish enough to put in writing, they intended to deceive, intentionally concealed information or intentionally spoke falsely. This is why many experienced trial lawyers say fraud is one of the hardest claims to prove. To win a civil conspiracy claim, one must similarly muster and present evidence of the formation and operation of actual agreement to cause harm and damage resulting from act s performed in furtherance of that agreement.

Finally, each co-conspirator must have profited, or at least stood to profit, from the conspiracy. These factors can be as hard to prove as fraud. An even bigger challenge in the corporate or business law context lies in proving each co-conspirator shared the same duty. They secretly do so to enable Company Y, a business owned or controlled by one of their friends or cousins, to step in and pursue the same lucrative opportunity.

Company X lost the deal and Company Y made a substantial profit. A respected law, accounting or insurance firm has worked for Company X for over a dozen years. The professional firm therefore knows who within Company X owes whom fiduciary duties of care and loyalty. The CEO, wanting to avoid a boardroom battle or special election to replace the board, promises to pay the professional firm a bonus to help keep this information confidential.

The mere formation and performance of a secret agreement to cause harm was not enough.

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