Common law; Cal. Civ. Code § 1573; CACI Nos. 4100, 4101
Breach of fiduciary duty — and the deadline nobody agrees on
A claim in California superior courts · Last verified August 26, 2026
Most people you deal with owe you honesty. A fiduciary owes you loyalty — a duty to put your interests ahead of their own — and that difference changes what you can recover.
A fiduciary can be made to give up profits that never came out of your pocket. Disgorgement, a constructive trust, forfeiture of fees already paid. The Unfair Competition Law cannot do that; this claim can.
The hard part is at both ends. Who owes the duty is narrower than people assume. And how long you have is unsettled — the answer is three years or four depending on how the claim is characterised, and courts have not converged.
What the claim is
Someone in a position of trust and confidence toward you acted against your interests, and you were harmed.
Two duties, and they fail differently:
The duty of loyalty — no self-dealing, no undisclosed conflict, no secret profit, no competing against the person you serve. Breach here is usually deliberate.
The duty of care — act as a reasonably careful fiduciary would in the same situation. Breach here looks like negligence, and is often pleaded alongside it.
Where the right comes from
Common law. The duty arises from the relationship, not from a statute.
Civil Code § 1573 supplies a statutory neighbour: constructive fraud is a breach of duty that gains an advantage by misleading another to their prejudice, "without an actually fraudulent intent." That is important — it lets a plaintiff reach conduct that would fail a real fraud claim, because no intent to deceive need be proved.
What a plaintiff has to prove — CACI Nos. 4100 and 4101
- A fiduciary relationship existed between the plaintiff and the defendant.
- The defendant acted on the plaintiff's behalf within that relationship.
- The defendant breached the duty — by failing to act as a reasonably careful fiduciary would, or by acting disloyally.
- The plaintiff was harmed.
- The breach was a substantial factor in causing the harm.
CACI No. 4100 explains what a fiduciary duty is; CACI No. 4101 states the elements of a failure to use reasonable care. CACI No. 4106 covers breach of fiduciary duty by an attorney, which is a separate instruction because the duty and the remedies differ.
Element one is where these cases are won and lost, and it is a question of law more often than plaintiffs expect.
Who owes a fiduciary duty
Established fiduciary relationships:
- Trustee and beneficiary — the paradigm.
- Partners to one another, and joint venturers.
- Attorney and client.
- Agent and principal, including a real estate agent to their own client.
- Corporate directors and officers, to the corporation and its shareholders.
- Majority shareholders, to the minority in a close corporation.
- Executors, administrators, guardians, and conservators.
Relationships that are usually not fiduciary, however much trust was involved:
- Ordinary lender and borrower. A bank is not your fiduciary.
- Ordinary buyer and seller, and parties negotiating at arm's length.
- Franchisor and franchisee, absent something more.
- An insurer and its insured — and this one is precise. California imposes a special relationship on insurers that supports tort liability for bad faith, but it is not a fiduciary relationship. Pleading it as one invites a demurrer that succeeds.
A fiduciary duty can also arise from the facts where one party knowingly accepts the trust and confidence of another, but courts require more than a close or long-standing business relationship.
How long you have to file — and this is contested
Four years under CCP § 343, the catch-all period for an action not otherwise provided for. That is the ordinary answer where the claim rests on careless administration.
Three years under CCP § 338 where the claim is characterised as constructive fraud — a claim grounded in fraud takes the fraud period.
The two are not cleanly separated, and courts have not settled it. The prevailing approach asks what the gravamen of the claim is rather than what it is labelled: a fiduciary claim resting on concealment or misrepresentation tends to draw the three-year period, while one resting on careless administration tends to draw four. Do not assume the longer period. Plead within three and the question never arises.
A shorter period displaces both where the fiduciary is a lawyer. CCP § 340.6 governs claims against an attorney arising from the performance of professional services — one year from discovery, four years from the act — and it reaches fiduciary-duty claims as well as negligence ones where the conduct is professional.
The discovery rule applies, and it does real work here. A fiduciary's duty to disclose means the beneficiary is generally not charged with a duty to investigate their own fiduciary, so accrual is often later than it would be between strangers.
And one period can end everything. CCP § 366.2 gives one year from the date of death to bring a claim against a deceased person on a liability that survived them. It runs notwithstanding any other statute, and it is not extended by the discovery rule the way ordinary periods are. A claim against a trustee who has since died can be time-barred long before the underlying limitations period would have expired.
What has to happen before you file
Nothing, for the ordinary claim.
But where the fiduciary is a trustee or an estate representative, the forum comes first. Trust and probate disputes are heard in the probate department under the Probate Code's own procedures, and a claim against a decedent's estate generally requires a creditor's claim before suit. Filing a civil complaint where the Probate Code supplies the procedure is a recurring and expensive mistake.
Character: forum and procedure, not a bar on the right — with the sharp exception of § 366.2's one-year period, which is a substantive limit that expires.
Common defenses
No fiduciary relationship. The first and most successful defense, resolved on demurrer more often than at trial.
Consent or ratification after full disclosure. A fiduciary who discloses a conflict completely and obtains informed consent has not breached by acting on it.
The business judgment rule, for corporate directors — a presumption that a disinterested, reasonably informed decision made in good faith will not be second-guessed.
The limitations period, and the choice between three years and four is itself the fight.
Anti-SLAPP, under CCP § 425.16, where the alleged breach consists of litigation conduct or petitioning activity. An attorney sued for what they did in a lawsuit will often have a real motion, and it brings a mandatory fee award if it succeeds.
The litigation privilege, Civil Code § 47(b), on the same facts.
What the claim pays
Compensatory damages — the loss the breach caused.
Disgorgement of the fiduciary's profits, whether or not the money ever belonged to the plaintiff. This is the remedy that distinguishes the claim. A plaintiff who could recover nothing under the Unfair Competition Law, which is confined to restitution of the plaintiff's own money, can reach a disloyal fiduciary's gains here.
A constructive trust over property acquired through the breach, which converts a damages claim into a claim on a specific asset — worth far more against a defendant who may not be able to pay a judgment.
Fee forfeiture. An attorney or agent who breaches the duty of loyalty may be required to give back fees already earned, even where the client suffered no other loss.
Punitive damages under Civil Code § 3294, on clear and convincing proof of oppression, fraud, or malice — available here far more readily than on a contract theory, which is a principal reason plaintiffs plead the fiduciary claim at all.
No fee-shifting under the claim itself. The American rule applies unless a contract or another statute supplies fees.
Jury trial: it depends on the remedy. A claim for damages is legal and carries a jury right. A claim for disgorgement, a constructive trust, or an accounting is equitable and is tried to the court — and a case pleading both can end up split.
What people get wrong
"They betrayed my trust, so they're a fiduciary." Trust in the ordinary sense is not the test. The relationship has to be one the law treats as fiduciary.
"My bank owed me a fiduciary duty." Almost never. An ordinary lender-borrower relationship is arm's length.
"My insurance company is my fiduciary." No — it owes a special-relationship duty of good faith, which supports a bad faith tort. That is a different claim with different rules.
"I have four years." You may have three. The characterisation question is unresolved, and the safe course is to assume the shorter period.
"Unjust enrichment is my cause of action." It is not an independent claim in California. Plead the breach and ask for restitution or a constructive trust.
"Constructive fraud is a separate claim." It is a theory of breach that dispenses with fraudulent intent, not a freestanding tort.
"I can get the profits they made." Here, often yes — which is exactly what you cannot get under the UCL.
Where it came from
The duty comes from equity, and it long predates the California codes: a person who accepts another's trust may not use the position for personal gain. The 1872 codification of constructive fraud at Civil Code § 1573 carried that principle into statute without narrowing it.
What has changed is the boundary. Twentieth-century courts pressed to extend fiduciary duties into ordinary commercial relationships — lenders, insurers, franchisors — and California largely refused. The insurer question was resolved in a distinctive way: the duty is real and supports a tort, but it is special relationship, not fiduciary. That refusal to blur the categories is why element one still decides so many of these cases.
The remedy side has moved the other way. Disgorgement, constructive trust, and fee forfeiture have all been confirmed as available, which makes the claim disproportionately valuable relative to how narrow its threshold is.
Common questions
Who owes a fiduciary duty in California?
Trustees, partners, attorneys, agents, corporate directors and officers, executors, and guardians, among others. Ordinary lenders, arm's-length buyers and sellers, and — importantly — insurers do not, although an insurer owes a separate special-relationship duty of good faith.
How long do I have to sue for breach of fiduciary duty?
Either three or four years, and it is unsettled. A claim characterised as constructive fraud takes three years; an ordinary breach takes the four-year catch-all. Assume three. Claims against attorneys run on a different statute entirely.
Can I recover money the fiduciary made, even though it was never mine?
Yes. Disgorgement of profits and a constructive trust are both available — which is the main difference between this claim and an Unfair Competition Law claim, where nonrestitutionary disgorgement is barred.
Is my bank or my insurance company my fiduciary?
Generally not. A lender-borrower relationship is arm's length. An insurer owes a duty of good faith under a special relationship, but California does not call it fiduciary, and pleading it that way draws a demurrer.
Will I get a jury?
For a damages claim, yes. For disgorgement, an accounting, or a constructive trust, no — those are equitable and tried to the court, so a case seeking both can be split.
The fiduciary died. Does that change anything?
Substantially. A claim against a deceased person must generally be brought within one year of the death, and that period runs regardless of when you discovered the breach.