Opinion ID: 2252946
Heading Depth: 1
Heading Rank: 6

Heading: Whether the Appellate Court Erred in Affirming the Trial Court

Text: Heinold also argues that the appellate court erred in holding that a fiduciary duty exists simply where the subject matter of a contract is complicated. Heinold's argument is based on its belief that the traditional criteria for the existence of a fiduciary duty were not met here and that the appellate court created a new basis on which to find a fiduciary duty. The appellate court affirmed the trial court on this point, stating: The record indicates that members of the Class were uniquely dependant upon information obtained from defendant and its soliciting brokers in order to make a profit on LCO transactions. The trading of LCO's during the relevant period was exceedingly complicated due to the mechanics of LCO's and the London exchanges, the volatility of the commodity options market, the impact of currency conversion rates and the differing terminology used among brokers offering LCO's to the public. (240 Ill.App.3d 536, 541, 181 Ill.Dec. 376, 608 N.E.2d 449.) The appellate court's opinion merely summarizes the trial court's findings that few investors, including plaintiffs, could have understood the mechanics of LCO trading or known what type of charges were proper. The appellate court's finding is not that a preagency fiduciary duty attaches when a transaction is complex, but that under these unique circumstances, where a future principal and agent are discussing compensation, and where the plaintiffs were uniquely dependant upon Heinold for information concerning the proper charges in the transaction, a duty attached. There was no error by the appellate court on this issue.