Also known as: fiduciary capacities · fiduciary role · in a fiduciary capacity
Written by attorneys · grounded in primary & secondary sources — see below
A position or role in which a person manages property or affairs for the benefit of another and owes duties of loyalty and care. The role triggers special rules limiting personal liability on contracts when the fiduciary capacity is disclosed and permitting claims to proceed against the fiduciary in that capacity even when personal liability does not attach.
Felix Franco, trustee of the Franco Family Trust, signed a supply agreement with Flagship Logistics for trust property maintenance. The contract stated that Felix acted as trustee. When the trust later defaulted, Flagship sued only the trust assets. Because Felix disclosed his fiduciary capacity, he faces no personal liability on the contract.
Farid Farahani, trustee of the Farahani Trust, entered a lease for trust real estate. The landlord later sued for unpaid rent. The complaint named Farid solely in his fiduciary capacity. The suit may proceed against the trust assets regardless of whether Farid bears personal liability.
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Central Hanover Bank served as trustee of a common trust fund holding assets for many beneficiaries. The bank published notice of an accounting proceeding in a local newspaper. Because the trustee acted in a fiduciary capacity, due process required notice reasonably calculated to reach known beneficiaries.
A corporate officer secretly steered contracts to a company in which he held an undisclosed interest. Prosecutors charged honest-services fraud. The government must prove the officer acted in a fiduciary capacity toward the corporation when he concealed the conflict.
A trustee avoids personal liability on a contract properly entered in the course of trust administration if the contract discloses the fiduciary capacity. The claim may still be asserted against the trustee in that capacity and satisfied from trust assets.
Supporting sources
Yes. Under parallel provisions, a personal representative is not individually liable on a contract properly entered in a fiduciary capacity unless the representative fails to reveal the representative capacity and identify the estate in the contract.
Supporting sources
Yes. A judge must disqualify when the judge knows of an economic interest in a party that the judge holds as a fiduciary, even if the interest is small or passively managed, because the rule focuses on the existence of the known interest rather than its size or the judge's day-to-day involvement.
Supporting sources
…criminal act has hinged on a defendant's misappropriation of property in his/her lawful possession or care due to employment or fiduciary capacity. As in English common law, misappropriation by trespass supports the offense of larceny, not embezzlement, in North Carolina. Griffin , 239 N.C. at 44-45, 79 S.E.2d at 232-33. Therefore,…