How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask lwpat Your Own Question

lwpat
lwpat, Attorney
Category: Business Law
Satisfied Customers: 25384
Experience:  Attorney with over 35 years of business experience.
Type Your Business Law Question Here...
lwpat is online now
A new question is answered every 9 seconds

Duty of Loyalty I

Resolved Question:

Duty of Loyalty Ally is a member and a manager of a manager-managed limited liability company called Movers & You, LLC, a moving company. The main business of Movers & You, LLC, is moving large corporations from old office space to new office space in other buildings. After Ally has been a member-manager of Movers & You, LLC, for several years, she decides to join her friend Lana and form another LLC, called Lana & Me, LLC. This new LLC provides moving services that move large corporations from old office space to new office space. Ally becomes a member-manager of Lana & Me, LLC, while retaining her member-manager position at Movers & You, LLC. Ally does not disclose her new position at Lana & Me, LLC, to the other members or managers of Movers & You, LLC. Several years later, the other members of Movers & You, LLC, discover Ally’s other ownership and management position at Lana & Me, LLC. Movers & You, LLC, sues Ally to recover damages for her working for Lana & Me, LLC. Is Ally liable? (answer must be one to 2 paragraphs in length)
Submitted: 2 years ago.
Category: Business Law
Expert:  lwpat replied 2 years ago.
Ally is liable. I will work up the paragraphs and get back to you.
Expert:  lwpat replied 2 years ago.

Be sure to revise a put into your own words. My answers are just a guide.

 

It was said in Lappas v. Barker, 375 S.W.2d 248 (Ky.1964), that a fiduciary relationship exists when the parties are "`under a duty to act for or give advice for the benefit of another upon matters within the scope of the relation'. Restatement, Torts, Section 874. It exists where a special confidence is reposed in another who in equity and good conscience is bound to act in good faith and with due regard to the interests of the one reposing confidence." Id. at 251.

 

When persons enter into fiduciary relations each consents, as a matter of law, to have his conduct towards the other measured by the standards of the finer loyalties exacted by courts of equity. That is a sound rule and should not be whittled down by exceptions.

Id. 120 S.W.2d at 788.

Some examples of formal fiduciary relationships are: attorneys with their clients; partners with other partners, like in a limited partnership; agents with their principals; spouses, generally; agents in a power of attorney scenario with the principal; executors and trustees to devisees and beneficiaries; class representative in a class action suit to other class members; and employees to their employees during the employment period. Officers and directors of corporations have: the duty of loyalty; the duty to make full disclosure of personal interest in the business dealing of the corporation; and the duty not to usurp the opportunities of the corporation for personal gain.

Based on the same concepts of the previous question, Ally would be liable as she owed a duty of loyalty to Movers & You and they could seek to recover damages including lost profits directly attributable to Ally’s efforts at Lana & Me as well as the monies she collected for her work at Movers during the time she was working on Lana & Me.

Fiduciary Duties of Members

A fiduciary is one who acts legally on behalf and in the best interests of another. Members of a manager-managed LLC have no fiduciary duty to the company or to the other members solely by reason of being members, but they may agree to impose fiduciary duties on the members.

The members of a member-managed LLC owe fiduciary duties of loyalty and care to the company and its other members. Members in a member-managed LLC may restrict or even eliminate fiduciary duties as long as any such restriction or elimination is not unreasonable.

Fiduciary Duties of Managers

The managers of a manager-managed LLC, like members of a member-managed LLC, owe fiduciary duties of loyalty and care to the company and its other members.

Duty of Loyalty

The duty of loyalty includes the obligations to account to the company, to refrain from dealing with the company in a manner that is adverse to it and to refrain from competing with the company before the dissolution of the LLC.

Duty of Care

The duty of care is an obligation to act with the care that a person in a like position would reasonably exercise under similar circumstances and in a manner reasonably believed to be in the best interests of the company. Members and managers are not liable when they reasonably rely in good faith on the opinions and advice of competent professionals and other reliable sources.


http://business-law.lawyers.com/small-business-law/Fiduciary-Responsibilities-and-LLCs.html

lwpat, Attorney
Category: Business Law
Satisfied Customers: 25384
Experience: Attorney with over 35 years of business experience.
lwpat and 10 other Business Law Specialists are ready to help you

JustAnswer in the News:

 
 
 
Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.
 
 
 

What Customers are Saying:

 
 
 
  • Mr. Kaplun clearly had an exceptional understanding of the issue and was able to explain it concisely. I would recommend JustAnswer to anyone. Great service that lives up to its promises! Gary B. Edmond, OK
< Last | Next >
  • Mr. Kaplun clearly had an exceptional understanding of the issue and was able to explain it concisely. I would recommend JustAnswer to anyone. Great service that lives up to its promises! Gary B. Edmond, OK
  • My Expert was fast and seemed to have the answer to my taser question at the tips of her fingers. Communication was excellent. I left feeling confident in her answer. Eric Redwood City, CA
  • I am very pleased with JustAnswer as a place to go for divorce or criminal law knowledge and insight. Michael Wichita, KS
  • PaulMJD helped me with questions I had regarding an urgent legal matter. His answers were excellent. Three H. Houston, TX
  • Anne was extremely helpful. Her information put me in the right direction for action that kept me legal, possible saving me a ton of money in the future. Thank you again, Anne!! Elaine Atlanta, GA
  • It worked great. I had the facts and I presented them to my ex-landlord and she folded and returned my deposit. The 50 bucks I spent with you solved my problem. Tony Apopka, FL
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C. Freshfield, Liverpool, UK
 
 
 

Meet The Experts:

 
 
 
  • Law Pro

    Attorney

    Satisfied Customers:

    1426
    20 years experience in business law - sole proprietor, partnership, and corporations
< Last | Next >
  • http://ww2.justanswer.com/uploads/LA/lawpro/2012-6-25_171315_PT206740s.64x64.jpg Law Pro's Avatar

    Law Pro

    Attorney

    Satisfied Customers:

    1426
    20 years experience in business law - sole proprietor, partnership, and corporations
  • http://ww2.justanswer.com/uploads/DC/DCraneEsq/2012-8-14_14436_DCrane.64x64.jpg MShore Law's Avatar

    MShore Law

    Attorney

    Satisfied Customers:

    1233
    Drafted Negotiated and/or Reviewed Thousands of Commercial Agreements
  • http://ww2.justanswer.com/uploads/FL/FLAandNYLawyer/2012-1-27_14349_3Fotolia25855429M.64x64.jpg FiveStarLaw's Avatar

    FiveStarLaw

    Attorney

    Satisfied Customers:

    1162
    25 years of experience helping people like you.
  • http://ww2.justanswer.com/uploads/dkaplun/2009-05-17_173121_headshot_1_2.jpg Dimitry K., Esq.'s Avatar

    Dimitry K., Esq.

    Attorney

    Satisfied Customers:

    1142
    Run my own successful business/contract law practice.
  • http://ww2.justanswer.com/uploads/ohioatty/2009-1-22_185545_me.jpg J.Hazelbaker's Avatar

    J.Hazelbaker

    Attorney

    Satisfied Customers:

    393
    Experienced and trained in the area of business law.
  • http://ww2.justanswer.com/uploads/scottymacesq/2009-6-10_221523_small.jpg RGMacEsq's Avatar

    RGMacEsq

    Attorney

    Satisfied Customers:

    393
    Licensed Texas General Practice Attorney
  • http://ww2.justanswer.com/uploads/BA/barristerinky/2012-6-10_22423_office.64x64.jpg Barrister's Avatar

    Barrister

    Attorney

    Satisfied Customers:

    301
    13 years practicing attorney, MBA