6
in other words
july3
2014
Ask a Lawyer
By Steven Leskin
Q~
What is a fiduciary?
A~
There is a lot of confusion
about what a fiduciary is and what a
fiduciary can do. To explain the term, I
want to start with a legal concept called
“agency.” Agency is a contract principal.
There are two parties to an agency
contract: the principal and the agent. An
agent acts on behalf of the principal. The
agent can only act within the scope of his
or her agency. The scope of the agency is
determined by the two parties.
For example, a real estate agent
works for either the buyer or the seller.
The agency can make and accept offers
to sell a home. The ability to make or
accept an offer is within the scope of
the agent’s authority. The agent cannot
make an offer above what he or she
is authorized to make by the seller.
The agent owes the principal a duty of
loyalty, in other words, in the real estate
setting, the agent could not work for
both the buyer and seller. Any decisions
made by the agent are made within the
scope of the agreed agency relationship.
A fiduciary is a type of
agency. Someone who has a fiduciary
responsibility can make decisions on
behalf of someone else. Unlike an
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agent, a fiduciary has to act with the best
interest of the principal and the decisions
the fiduciary makes must be objectively
reasonable and free of any personal gain.
For example, a fiduciary relationship
might exist when a child takes care of an
elderly or mentally incompetent parent.
The child could decide where the parent
lives, where and when to sell a house,
or what social services are appropriate to
the parent.
Fiduciary does not mean
financial. A fiduciary relationship might
be imposed as a matter of law, eg, a
conservator, or it might develop over the
course of a relationship. There are very
few fiduciary relationships in business.
Most business relationships are agencies
relationships.
Q~
I got a speeding ticket. I went
to court and brought with me a printout
showing that my speedometer was
incorrectly measuring my speed. It
was about ten percent to slow. When it
said I was going 55 mph, I was really
going closer to 68 mph. Why was I still
convicted of speeding if the speedometer
was wrong and I could prove that the
speedometer was malfunctioning?
A~
This a deeper issue than it
appears and gets to the heart of criminal
law.
In order to be guilty of a crime,
there must be both an intention and an
act. The best example is a pre meditated
murder. In pre meditated murder, a
person plans and kills someone. If the
killing was in a fit of rage or happened
as the result of carelessness, then there
is less intent, though there is still an
action that resulted in someone’s death.
Since the intent to kill is considered a
more heinous crime, it is punished more
severely.
When a driver does not conform
his or her driving to the motor vehicle
code, it is considered a violation of law,
not a misdemeanor or felony. A violation
of law does not require an intent. What
matters with the motor vehicle code is
that a driver observes the code, not that
he or she intends to or not. For example,
if someone runs a stop sign, it is not a
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defense to say, I intended to stop the car.
The only act that is required is the action
to stop the car in response to the stop
sign.
It is the same thing with violating
the speed limit. It does not matter how
fast you intended to drive your car, it only
matters how fast your car was going. It
is not relevant for a conviction that you
intended to observe the speed limit. The
proof that you had that the speedometer
was incorrect only confirms that your car
was traveling too fast and that you were
violating the motor vehicle code.
Q~
What’s the hardest case you ever
tried?
A~
Several years ago, an attorney
friend in Eastern Oregon called and he
asked me to take a case of his. Bill was
a down-winder. He was born blind and
suffered various cancers most of his
life. His health was never good. When
Bill asked for a favor, it was always the
better part of grace to say yes.
The case he had for me involved
an immigrant family who bought some
property in Ontario. I forget how much
they purchased, but it might have been
about a hundred acres. The family then
hired a local farmer to farm the land.
They had a common sharecropping
arrangement. The landowner paid for
the seed and chemicals, the water and the
mortgage on the land. The sharecropper
farmer supplied the labor and equipment.
If I recall correctly, the farmer received
one third of the gross receipts from the
sale of the crop.
The problem came at harvest
time when everyone was settling up.
As it happened, the sharecropper had
multiple accounts with several co-
ops. When crops came in from the
landowner, they were transported to one
of the co-ops. However, once a truck
containing the crop left the farm, there
was no proof where the crop came from.
And, once the crop was delivered to the
co-op, there was no way to prove where
the crop came from, except by what the
drivers told the co-op.
When it came time to settle up,
the landowner received a very small sum.
The farmer, who had multiple farms,
received a lot of money from various
sources. It was impossible to account
for the crops which left the landowners
property.
It turns out that the main street
in town was named after the farmer. It
turned out that the farmer’s daughter
worked in the court house. It turns out
that the farmer had dealings with most
of the members of the jury pool. (To the
courts credit, they forbid the daughter
from working on the case, and brought
in a judge from out of the county.) And,
it also turned out that the landowner had
an attorney from Portland (me).
The landowner had kept notes
on the number of trucks leaving his
property and the crops. He knew about
how much potatoes should have come
off each acre of his land. However, he
just did not have sufficient proof to
convince a jury. And, further, he was
sued by the sharecropping farmer for
lost profits when he ended the contract
before the end of the growing season.
The landowner lost because
he did not have sufficient evidence to
prove with reasonable certainty how
much money he lost- his calculations
were considered speculative. Despite
proving in court that the suit against the
landowner was based on fabricated data,
the landowner still lost. He was required
to pay the sharecropper money.
This one case has always
bothered me as a profound injustice.
The landowners were required to
declare bankruptcy. I think the courts
failed. Going to court is always a risk,
and the results are never certain. And,
some times the historical reality of what
actually happened is far different than
what results at trial.
Steven Leskin is an attorney in North
Portland. He has been in practice since
1992. You can submit a question to him
through www.ModestMeansLawOffice.
com or through the Vernonia’s Voice
website.
The Next Vernonia Area Chamber of Commerce Meeting
will be held at West Oregon Electric
652 Rose Avenue
Tuesday, July 8 at 6:30 PM
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