A breach of fiduciary duty claim asks a Florida court to hold a manager, director or controlling owner responsible for putting personal gain ahead of the company and its owners. In an LLC manager breach of fiduciary duty Florida lawsuit, the central questions are whether the person owed a duty, broke it, and caused harm. This guide explains those rules in plain terms. It’s written for business owners and co-owners in Tampa, Hillsborough County and the wider Tampa Bay area who suspect something has gone wrong.
What a Breach of Fiduciary Duty Means and Who Owes It in Florida
Under Fla. Stat. § 605.04091, each manager of a manager-managed limited liability company and each member of a member-managed limited liability company owes fiduciary duties of loyalty and care to the limited liability company and its members, and does not violate a duty under that chapter or the operating agreement solely because the manager’s or member’s conduct furthers that person’s own interest. Under Fla. Stat. § 605.04091, each manager of a manager-managed LLC, and each member of a member-managed LLC, owes duties of loyalty and care. The Florida Department of State explains how these two management structures differ.
The duty of loyalty bars self-dealing (unless the transaction meets the conflict-of-interest requirements of Fla. Stat. § 605.04092), taking company opportunities for yourself, and competing with the company before it dissolves. The duty of care is narrower than ordinary negligence. It bars grossly negligent or reckless conduct, willful or intentional misconduct, and knowing violations of law.
Corporate directors follow a similar framework. Under Fla. Stat. § 607.0830, a director must act in good faith and in a way the director reasonably believes serves the corporation.
Not every decision that hurts the company is a breach. The focus is on how the person acted, including good faith, not only on how the decision turned out.
Situations That Give Rise to These Claims
These claims usually involve an insider who uses control of the business to benefit personally, often at the company’s or owners’ expense. Common examples include:
- Self-dealing: a manager signs a deal with an affiliated company or a relative on unfavorable terms, without proper disclosure or approval. Florida sets conflict-of-interest transaction rules for these deals.
- Diverting opportunities: steering customers or contracts to a competing business the manager controls.
- Taking money: unauthorized distributions, company funds used for personal expenses, or pay beyond what the company approved.
- Withholding records: refusing bank statements, financial statements or information owners are entitled to receive.
- Misstating finances: giving false numbers about the company’s value during a buyout or exit talk.
- Shutting out an owner: cutting a minority owner off from management, information or distributions while keeping control.
Each pattern raises different proof questions. Bank records, emails and the operating agreement are usually the starting point.
Direct or Derivative: Which Claim Fits the Harm
A direct claim fits harm to you personally. A derivative claim fits harm to the company, and you bring it on the company’s behalf. The label changes what you must plead and who benefits from any recovery.
Under Fla. Stat. § 605.0801, a member may bring a direct action against another member, a manager or the LLC. The member must plead and prove either an actual or threatened injury that is not solely the result of an injury suffered or threatened to be suffered by the company, or an actual or threatened injury resulting from a violation of a separate statutory or contractual duty owed by the alleged wrongdoer to the member, even if the injury is partly the same as the company’s injury.
The LLC derivative-action statute, Fla. Stat. § 605.0803, contains no demand step. What § 605.0803 sets out instead is who may bring the claim: a person who is a member when the action is commenced and who either was a member when the conduct occurred or received that membership status by operation of law or under the operating agreement from someone who was.
A derivative action may be brought by a person who is a member when the suit is commenced and who either was a member when the conduct occurred or whose membership devolved, by operation of law or under the operating agreement, from someone who was a member then. See Fla. Stat. § 605.0803. See Fla. Stat. § 607.0742.
Can the Operating Agreement Change These Duties?
An operating agreement can change some fiduciary duties, but Florida law sets firm limits. Under Fla. Stat. § 605.0105, the agreement may alter aspects of the duty of loyalty if the change is not manifestly unreasonable. A court decides that question as a matter of law.
The same statute says an operating agreement cannot relieve a person from liability for bad faith, willful or intentional misconduct, or a knowing violation of law. A clause that tries to excuse serious misconduct may be challenged.
Review the full paper trail. That includes the operating agreement, amendments, member consents and written approvals for the conduct in question. Bylaws and shareholder agreements matter too.
Remedies Available When a Fiduciary Breaks Faith
The remedy should match the harm. Common requests include:
- Money damages to cover losses the breach caused.
- An accounting, showing where company funds and profits went.
- Return of profits gained through self-dealing or diverted opportunities.
- Some business disputes involve a request that a court address ongoing conduct while the case is pending.
Records often come first. An LLC must keep, at its principal office or another location, a current list of the full names and last known business, residence, or mailing addresses of each member and manager, and copies of its financial statements, if any, for the three most recent years. If the company refuses inspection to a member, manager or other person who has met the inspection requirements of § 605.0410, Fla. Stat. § 605.0411 lets the circuit court order inspection at the company’s expense.
Personal liability is a separate question. Under Fla. Stat. § 605.0304, a member or manager is not personally liable for company debts solely because of that role.
How a Fiduciary Duty Case Typically Proceeds
A typical LLC manager breach of fiduciary duty Florida lawsuit moves through intake, document review, a written demand, and then negotiation or a filed case. The usual steps are:
- Intake: we discuss the company’s structure, the conduct in question and any deadlines that may already be running.
- Document review: the operating agreement, financial records, bank activity, emails and prior approvals.
- Demand letter: a written request for records or corrective action, plus notice to preserve evidence.
- Pre-suit options: negotiation, mediation or a standstill agreement, where it fits.
- Filing: a complaint in the appropriate Florida court, or arbitration if the governing agreement requires it. Florida generally enforces written arbitration agreements under Fla. Stat. § 682.02.
- Discovery and resolution: depositions, document exchange, motions, mediation and, if needed, trial.
Timing varies with the facts, the forum and the other side’s response, and no timeline is promised. Fees are discussed directly with the firm when you reach out.
Why Work With Ayala Law PA on Business Ownership Disputes
Ayala Law PA concentrates in business and commercial disputes in Florida courts and arbitration. Its practice areas include:
- Business litigation and commercial litigation
- Contract disputes and shareholder disputes
- Construction litigation and real estate litigation
- International trade litigation
Eduardo A. Maura is the responsible lawyer for this page. The firm also has assistants and office staff who support its work.
The firm’s office is at 1646 W Snow Ave in Tampa, Florida. The firm serves businesses and owners in Tampa, Hillsborough County, Brandon, Riverview, Plant City, Temple Terrace and the wider Tampa Bay area.
Some matters fit better with another lawyer or firm. When that is the case, the firm may refer the matter to them.
Common Questions About Fiduciary Duty Claims in Florida
Short answers to common questions about an LLC manager breach of fiduciary duty Florida lawsuit.
Understanding fiduciary duty disputes
Can you waive fiduciary duties in an LLC?
Not entirely. An operating agreement can change some duties, but it cannot excuse bad faith, willful misconduct or a knowing violation of law. How a specific clause is treated depends on the facts.
What is the difference between a direct and derivative claim?
A direct claim seeks relief for harm to you personally. A derivative claim seeks relief for harm to the company.
Is an LLC manager personally liable?
A member or manager is not personally liable for company debts solely because of that role. Other claims turn on the conduct involved.
Under Fla. Stat. § 605.0411, the court may order inspection and copying at the company’s expense. Fla. Stat. § 605.0411 reads: “If a limited liability company does not allow a member, manager, or other person who complies with s. 605.0410(2)(a), (3)(a), (3)(b), or (4), as applicable, to inspect and copy any records required by that section to be available for inspection.”
If a manager is moving company money or a partner is holding back records, you don’t have to sort it out alone. Call (305) 570-2208 or reach out through the firm’s contact page to talk about what you’re seeing.
