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Litigation

: Arkansas Business Litigation Blog

Emotional Distress Cannot Form the Basis of a Breach of Fiduciary Duty Claim

By H. William Allen et al.

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The Arkansas Supreme Court reversed a judgment based on emotional distress in Rees v. Smith, No. 08-293 (4/2/09).

 

Smith alleged that Rees represented her in a lawsuit, demanded sexual favors for continued representation, and that she engaged in sex with Rees based on these demands. Smith alleged this conduct was a breach of fiduciary duty, and the jury returned a verdict of $10,000 for emotional distress.

 

The supreme court reversed, holding that emotional distress cannot form the basis of a breach of fiduciary duty claim. This claim must be supported by an economic loss. The case is not over; the court also reversed the grant of summary judgment to Rees on Smith's outrage claim for the same alleged conduct.

Full post as published by Arkansas Business Litigation Blog on April 03, 2009 (boomark / email).

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