Opinion ID: 801342
Heading Depth: 4
Heading Rank: 1

Heading: Existence of Fiduciary Relationship

Text: In their complaint, the Plaintiffs-Appellants alleged that Hanafin had a fiduciary relationship with the Plaintiffs-Appellants because “[a]t all times relevant hereto Hanafin enjoyed the status of Director, fully vested shareholder, and President of ANC; that of director of Vado; and, that of an IAG partner.” Under Texas law, “[t]here are two types of fiduciary relationships—a formal fiduciary relationship that arises as a matter of law, such as principal/agent or partners, and an informal fiduciary relationship arising from a confidential relationship where one person trusts in and relies upon another, whether the relation is moral social, domestic or merely personal.” Hoggett v. Brown, 971 S.W.2d 472, 487 (Tex.App.–Houston [14 Dist.] 1997, pet. denied) (internal quotation marks and citation omitted). Vado The district court found that there was no evidence of a fiduciary relationship between Hanafin and Vado. The court first recited Vado’s assignment of its contractual rights under the contract to ANC. As previously set forth, despite that assignment, Vado had standing to bring the instant suit. The district court also relied on an email in the record from Hans Hagmann, who claimed to be the sole Vado director under Swiss law. The district court reasoned that because Vado’s claim of a fiduciary relationship is based upon Hanafin’s status as a director of Vado, and, according to Hagmann, Hanafin was not a director of Vado, Vado’s claim of a fiduciary relationship fails. The Plaintiffs-Appellants counter that Hanafin expressly assumed fiduciary duties of the Vado director when he signed the employment contract. They also point to Hanafin’s resignation as an employee and director of Vado on February 2, 13 Case: 10-20865 Document: 00511872563 Page: 14 Date Filed: 05/31/2012 No. 10-20865 2009. It is not apparent why the district court deemed the email from Hagmann dispositive of this issue. In any event, even assuming that no formal fiduciary relationship based on Hanafin’s position as a director of Vado existed, Texas law recognizes that “[e]ven apart from any written contract, a fiduciary relationship arises from an employment relationship forbidding an employee from using trade secrets or confidential or proprietary information in a manner adverse to the employer.” Mabrey v. SandStream, Inc., 124 S.W.3d 302, 316 (Tex.App.–Fort Worth 2003, no pet.). The instant employment agreement provided that any “formulae, applications or concepts created, designed or contemplated by Hanafin during the course of his employment with Vado will be the property of Vado.” Thus, the employment contract between Vado and Hanafin prohibited Hanafin from using the confidential information against Vado, which gave rise to a fiduciary relationship under Texas law. Therefore, the district court erred in finding no evidence of a fiduciary relationship between Hanafin and Vado.3 ANC In his deposition testimony, Hanafin admitted that he had been a corporate officer of ANC. The district court implicitly ruled that there was a fiduciary relationship between Hanafin and ANC, and Hanafin did not appeal this ruling.