PJC Business 2024

F IDUCIARY D UTY

PJC 104.1

PJC 104.1

Question and Instruction—Existence of Relationship of Trust and Confidence

QUESTION ______ Did a relationship of trust and confidence exist between Don Davis and Paul Payne ? A relationship of trust and confidence existed if Paul Payne justifiably placed trust and confidence in Don Davis to act in Paul Payne ’s best interest. Paul Payne ’s subjective trust and feelings alone do not justify transforming arm’s-length dealings into a relationship of trust and confidence. Answer “Yes” or “No.” Answer: _______________ COMMENT When to use. PJC 104.1 submits the existence of an informal fiduciary relation ship, commonly referred to as a “relationship of trust and confidence” or a “confiden tial relationship.” This relationship may arise from moral, social, domestic, or purely personal relationships. Ritchie v. Rupe , 443 S.W.3d 856, 874 n.27 (Tex. 2014); Meyer v. Cathey , 167 S.W.3d 327, 330–31 (Tex. 2005). Informal fiduciary duties are not owed in business transactions unless the special relationship of trust and confidence existed prior to, and apart from, the transaction(s) at issue in the case. Ritchie , 443 S.W.3d at 874 n.27. Informal fiduciary relationships are distinguished from technical or formal fiduciary relationships such as attorney-client, principal-agent, officer/direc tor-corporation, partner-partner, trustee–cestui que trust, or guardian-ward, which as a matter of law are relationships of trust and confidence. Thigpen v. Locke , 363 S.W.2d 247, 253 (Tex. 1962); see also Ritchie , 443 S.W.3d at 868 (holding that officers and directors, or those acting as such, owe a fiduciary duty to the corporation in their direc torial actions). The existence of an informal relationship of trust and confidence is usu ally a question of fact. Crim Truck & Tractor Co. v. Navistar International Transportation Corp. , 823 S.W.2d 591, 594 (Tex. 1992). If a director owes a formal duty, no question on informal duty should be submitted. As a matter of law, a director owes no “informal duty to operate or manage the corpo ration in the best interest of or for the benefit of an individual shareholder.” In re Estate of Poe , 648 S.W.3d 277, 289 (Tex. 2022) (reversible error to submit a jury question on the existence of an informal fiduciary duty). Poe further held that “a direc tor [of a closely held company] cannot simultaneously owe these two potentially con flicting duties”—that is, a fiduciary duty that is in fact owed by a director to the

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