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Keywords

lawsuitattorneyfiduciarytrustfiduciary dutybreach of fiduciary dutyconstructive trust

attorneytrialfiduciarytrustfiduciary dutybreach of fiduciary dutyappellantconstructive trust

Related Cases

City of Hastings v. Jerry Spady Pontiac-Cadillac, Inc., 212 Neb. 137, 322 N.W.2d 369

Facts

Duane Stromer served as city attorney for Hastings while also representing Jerry Spady Pontiac-Cadillac, Inc. During this time, the city was interested in acquiring property for a street extension as part of its comprehensive plan. Stromer, without the city's knowledge, negotiated to purchase the property for himself, misrepresenting the city's interest. The city only learned of his actions after he had already acquired the property, leading to the city's lawsuit to impose a constructive trust.

During 1977 and part of 1978 Duane Stromer was city attorney for the City of Hastings, and during said period was also attorney for Jerry Spady Pontiac-Cadillac, Inc. In 1976 the planning director for the City of Hastings began the development of the Hastings comprehensive plan.

Issue

Did Duane Stromer breach his fiduciary duty to the City of Hastings by negotiating the purchase of property for himself while knowing the city intended to acquire it?

Rule

An attorney must not act in a manner inconsistent with the best interests of their client and cannot purchase or negotiate for an interest in land in which their client is interested.

An attorney must not while representing a client do anything knowingly that is inconsistent with the terms of his employment or contrary to the best interests of his client.

Analysis

The court determined that Stromer had actual knowledge of the city's interest in the property and that his actions constituted a breach of fiduciary duty. The court found that the city only needed to show that the purchaser was not a bona fide purchaser for value, which was established by the evidence that Spady had knowledge of Stromer's dual representation.

The breach of fiduciary duty having been so clearly established, the City of Hastings was required to show only that Jerry Spady Pontiac-Cadillac, Inc., was not a bona fide purchaser for value. The trial court must have concluded that appellant had either actual or constructive knowledge of the City of Hastings' equitable claim to the property.

Conclusion

The court affirmed the imposition of a constructive trust on the property, concluding that Stromer's breach of fiduciary duty warranted this remedy.

The action and judgment of the trial court was correct and the judgment is affirmed.

Who won?

City of Hastings prevailed because the court found that the actions of Duane Stromer constituted a breach of fiduciary duty, justifying the imposition of a constructive trust.

The court found that the actions of Duane Stromer constituted a breach of fiduciary duty, justifying the imposition of a constructive trust.

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Related Cases

Albaugh v. The Reserve, 930 N.W.2d 676

United General Title Insurance Company v. Malone, 289 Neb. 1006, 858 N.W.2d 196

Baker v. Harrison, 180 A.D.3d 1210, 120 N.Y.S.3d 191, 2020 N.Y. Slip Op. 01233

Kuhlman v. Cargile, 200 Neb. 150, 262 N.W.2d 454

Sokoloff v. Harriman Estates Development Corp., 96 N.Y.2d 409, 754 N.E.2d 184, 729 N.Y.S.2d 425, 2001 N.Y. Slip Op. 06136