In most every dispute, the question of proof is often of great importance. Broadly speaking, it is the plaintiff’s burden to establish proof of some wrongdoing on the part of the defendant and then the burden shifts to the defendant to explain the action. This holds true generally for a great many cases, everything from tax law to criminal law to shareholder and partner disputes. In the latter case, one of the frequent causes of a dispute is a breach of fiduciary duty. In such a case, the point at which the burden of proof shifts is often a point of contention and, moreover, a fulcrum around which the entire case can shift.
Fiduciary duty is the responsibility to act in the interest of another person or entity–not your own interest. An administrator of an estate, for example, owes a duty to act in the best interests of the estate. An officer of a company has the duty to act in the company’s interest. When the person owing a fiduciary duty acts for personal benefit, not the company’s benefit, that duty has been breached.
The classic example of a breach of fiduciary duty among partners or shareholders is when one partner or shareholder uses company assets for personal gain, say transferring funds to himself directly or seeing company funds transferred to a company he controls.
When such a case gets to trial, the question of the burden of proof is key, more specifically the point at which the burden shifts. The question is when has the plaintiff proved the charge sufficiently that the burden then shifts to the defendant to respond? Generally courts in Illinois have held that the plaintiff must prove each specific improper transaction–each transfer of funds, each purchase, each breach of fiduciary duty–and then the burden shifts and the defendants must respond to each specific transaction and establish why it was in fact legitimate, why it did not constitute a breach.
Horowitz Law Offices represents shareholders and partners to litigate their difficult disputes. You are welcome to contact us at 312-787-5533 or email@example.com