Opinion ID: 2252946
Heading Depth: 2
Heading Rank: 1

Heading: Preagency Fiduciary Duty

Text: We first address Heinold's contention that the appellate court erred in affirming the trial court's finding that Heinold owed plaintiffs a preagency fiduciary duty. Heinold argues: (1) plaintiffs did not prove such a duty; and (2) the appellate court erred in creating a new basis for the existence of a fiduciary duty in focusing on the complexity of the LCO transactions rather than on any relationship between the parties. In Martin, 117 Ill.2d 67, 109 Ill.Dec. 772, 510 N.E.2d 840, this court remanded the cause to the trial court to make a factual determination as to whether Heinold owed plaintiffs a preagency fiduciary duty at the time Heinold discussed its compensation with plaintiffs. In doing so, this court noted the general rule that an `agent is subject to no fiduciary duty in making the agreement by which he becomes [an] agent and may thereafter act in accordance with its terms.' (Restatement (Second) of Agency sec. 389, comment b (1958)   .) ( Martin, 117 Ill.2d at 78, 109 Ill.Dec. 772, 510 N.E.2d 840.) However, this court also adopted the exception to this rule found in the Restatement: [W]e are unwilling to conclude, as a matter of law, that a fiduciary duty can never be imposed upon a prospective agent prior to the formal creation of an agency relationship. Thus, while the general rule governing preagency contracts does not require disclosure of the terms of a prospective agent's compensation, we believe that facts could be established which would support imposition of a fiduciary duty upon a prospective agent applicable to preagency contracts.          We also note that, where the very creation of the agency relationship involves a special trust and confidence on the part of a principal in the subsequent fair dealing of an agent, the prospective agent may be under a fiduciary duty to disclose the terms of his employment as an agent. (Restatement (Second) of Agency sec. 390, comment e (1958)   .) Martin, 117 Ill.2d at 78-79, 109 Ill.Dec. 772, 510 N.E.2d 840.