The Virginia Business Litigation Blog
To state a plausible breach-of-fiduciary-duty claim in Virginia, a plaintiff must allege enough facts to prove (1) the existence of a fiduciary duty, (2) the breach of that duty, and (3) resulting damages. The first element—existence of a fiduciary duty—is often the most difficult to prove. Fiduciary duties can arise in a number of different contexts, including between employee and employer, between corporate officer and corporation, and between principal and agent. The Western District of Virginia recently dealt with a case, Broadhead v. Watterson, in which agency was alleged as the basis for a breach-of-fiduciary-duty claim. The court reviewed the allegations and found them insufficient to state a valid claim.
The Virginia Supreme Court has defined agency as “a fiduciary relationship resulting from one person’s manifestation of consent to another person that the other shall act on his behalf and subject to his control, and the other person’s manifestation of consent so to act.” (See Reistroffer v. Person, 247 Va. 45, 48 (1994)). Such consent may be manifested expressly or may be inferred from the conduct of the parties and from the surrounding facts and circumstances. Independent contractors, as a rule, are not agents of any principal. The distinction between contractors and agents generally lies in the degree of control (or right to control) the methods or details of doing the work. There’s a presumption that a person acts on his own behalf and not as the agent of another, but this presumption can be rebutted with appropriate evidence.