A Breach of a Fiduciary Duty Claim May be Waived
A dispute arose between Band and Libby regarding the development and construction of a luxury condominium. Band, the managing general partner of the development and an attorney, contacted Libby to invite him to become an investor. Band and his former law firm had previously represented Libby on numerous matters. Libby made an initial investment of about $140,000 in exchange for a ten percent interest in the project. Libby received, signed, and returned conflict waiver/disclosure letters relating to the project from Band’s law firm.
After a few years and several issues with the project, Libby declined to pay his contribution to a capital call and in accordance with the partnership agreement, forfeited his initial investment and subsequent contributions totaling over $1,000,000. In Libby’s suit against Band seeking recovery of all contributions, Libby alleged breach of fiduciary duty. Band raised the affirmative defense of waiver. Although the jury believed Band breached his fiduciary duty to Libby, the jury found that Libby waived his claim for breach of fiduciary duty. Libby did not recover any damages from Band. After the trial, Libby filed a motion for judgment notwithstanding the verdict and motion for new trial. The trial court agreed “that as a matter of law, there can be no waiver of a breach of fiduciary duty” and awarded Libby a new trial limited to the issue of damages on the breach of fiduciary duty claim.
In Band v. Libby, No. 2D11-4942 (Fla. 2d DCA 2013), Band argued that the trial court erred in granting Libby a new trial on the issue of damages on the breach of fiduciary duty count. The trial court based its decision to grant relief because it ruled it had committed legal error in allowing the jury to consider Band’s affirmative defense of waiver with regard to Libby’s claim for breach of fiduciary duty. The Second District Court of Appeal was faced with the issue of whether a claim based on a breach of fiduciary duty may be waived.
Finding that a claim based on a breach of fiduciary duty, like any other claim, may be waived, the Second District Court of Appeal ruled in favor of the appellant. The Second District Court of Appeal further acknowledged that a party has the right to interpose the affirmative defense of waiver to a claim based on a breach of fiduciary duty. The trial court order granting a new trial on the issue of damages on the claim of breach of fiduciary duty was reversed, and the case was remanded for entry of a final judgment in accordance with the jury’s verdict.
