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Can You File a Lawsuit Against a Partner for Fiduciary Breach in Georgia?

It is natural to trust your partner to act in the best interests of the business you both intend to succeed in. However, some partners abuse that trust and violate their fiduciary duties for personal gain.

Fortunately, you can file a lawsuit against a partner for breach of fiduciary duty. Partners in a business owe each other certain duties, chief among them the duty to act in the best interests of the partnership and not engage in self-dealing or prioritize personal gains over the partnership’s welfare. When they do, our team can help you hold them liable. We can determine the extent of the damages caused by the breach and which remedies will serve to correct the situation. We can also gather and organize the often numerous pieces of evidence you need to prove that a fiduciary relationship existed and your partner’s breach resulted in your losses.

Call Howe & Associates at (678) 680-6983 to get your case reviewed by our Atlanta breach of fiduciary duty lawyers.

Can You File a Lawsuit Against a Partner for Breach of Their Fiduciary Duty in Georgia?

At its core, fiduciary duty in a business partnership encompasses obligations of loyalty, care, and good faith. This means partners must prioritize the partnership’s interests above their own personal gains, make decisions with due care and diligence, and act honestly in their dealings with each other and the partnership.

Under O.C.G.A. § 14-9-108(b)(1), aggrieved partners have the right to file a lawsuit if they believe a breach of fiduciary duty has occurred. A breach of fiduciary duty in a partnership occurs when one of the partners fails to fulfill their obligations and responsibilities, resulting in actions that go against the interests of the partnership or other partners involved.

This kind of breach can take many forms, such as self-dealing, where a partner prioritizes their own interests over the partnership’s; misappropriation of partnership opportunities, where a partner takes advantage of opportunities that rightfully belong to the partnership; or neglect of duties, where a partner fails to fulfill their duties and responsibilities, leading to harm or loss to the partnership.

In any of these cases, a breach can have serious consequences for the partnership as a whole, as well as for individual partners. That is why our Georgia breach of fiduciary duty attorneys are here to help you get control of the situation and determine how to remedy the violation. Deceptive partners have ways of concealing their breaching conduct. Fortunately, our firm knows the best methods of bringing your partner’s breach of their fiduciary duties to light.

Examples of Breach of Fiduciary Duty by a Business Partner in Georgia

Recognizing the signs of a breach in your partner’s fiduciary duties is crucial for those who wish to protect their investments and the integrity of their business ventures. A breach can take many different forms, but each tends to leave a trail. The following are signs that your partner is not living up to the duties they are required to follow under Georgia law:


One of the most glaring signs of a breach of fiduciary duty is self-dealing, where a partner prioritizes their own interests over those of the partnership. This could mean diverting business opportunities to another business they own or making decisions that disproportionately benefit them at the expense of the partnership.

Misappropriation of Partnership Assets

Misappropriation involves using partnership assets for personal gain or for purposes unrelated to the partnership’s objectives. Evidence of misappropriation could include unauthorized withdrawals, personal use of partnership funds, or redirecting partnership resources.

Neglect of Duties

A partner’s failure to fulfill their responsibilities, leading to harm or potential harm to the partnership, signals a breach of the duty of care. This neglect could be because of inaction, incompetence, or indifference, resulting in financial losses or missed opportunities for the partnership.

Conflict of Interest

Engaging in activities that create a conflict between a partner’s personal interests and those of the partnership can also constitute a breach. This includes entering into transactions where the partner has a competing interest or can gain personally outside of their share in the partnership profits.

Lack of Transparency

A lack of transparency in decision-making processes can also indicate a breach of a partner’s duties. This includes withholding information or deceiving partners about the partnership’s financial status or business operations.

Remedies for When a Partner Breaches a Fiduciary Duty in Georgia

Fortunately for partners whose trust has been violated, a number of remedies are available that can help undo the damage to the business. The following are common remedies ordered in breach of fiduciary duty lawsuits in Georgia:

Monetary Damages

One of the primary remedies for a breach of fiduciary duty in a Georgia lawsuit is the awarding of monetary damages, according to O.C.G.A. § 29-5-93(a). The purpose of such compensation is to restore the aggrieved party to the financial position they would have been in had the breach not occurred.

In addition to recovering actual losses incurred from the breach, monetary damages can also include potential profits that were lost as a direct result of the fiduciary’s actions. This means that if a fiduciary has breached their duty, their actions might have caused the aggrieved party to miss out on future business opportunities or profits that they would have otherwise received had the breach not occurred.

Constructive Trusts

Under O.C.G.A. § 29-5-93(b), the courts have the authority to impose constructive trusts on assets that have been misappropriated or misapplied by a fiduciary. This remedy effectively transfers the ownership of the assets back to those rightfully entitled to them, providing a mechanism for recovery that goes beyond mere compensation.

Accounting and Injunctions

In cases where there is concern about ongoing breaches or the potential for further harm, the court might order a full accounting of the fiduciary’s actions. This process involves a detailed review of financial records and transactions to identify any discrepancies or instances of mismanagement.

Additionally, injunctions can be sought to prevent the fiduciary from continuing harmful activities or disposing of assets pending the resolution of the case.

Disgorgement of Profits

Disgorgement is another powerful remedy available, requiring the fiduciary to surrender any profits gained through their breach of duty. This not only serves to compensate the aggrieved party but also acts as a deterrent against future breaches, emphasizing the principle that fiduciaries should not benefit from their wrongful actions.

Rescission of Contracts

In situations where the breach involves contracts or agreements entered into under circumstances that violated fiduciary duties, rescission might be an appropriate remedy. This action nullifies the contracts in question, restoring the parties to their positions prior to the breach and preventing the fiduciary from benefiting from contracts procured through their misconduct.

Our Georgia Lawyers Can Help You Hold Your Partner Liable for Breaching Their Fiduciary Duty

For an assessment of your claim with our Columbus, GA corporate matters attorneys, contact Howe & Associates by calling (678) 680-6983.