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A power of attorney is a legal instrument that individuals create and sign that gives someone else the authority to make certain decisions and act for the signer. The person who has these powers is called an "agent" or "attorney-in-fact." The signer is the "principal." The principal must have mental capacity to make the power of attorney at the time of signing. As a principal, if the principal's decisions conflict with those of the agent, the principal's decision will govern, assuming that the agent confers with the principal prior to taking an action. If an agent has acted on the principal's behalf and acted within the scope of authority granted by the power of attorney, then the principal may be obligated by the terms and conditions of his actions. The power of attorney is not a substitute for a will. Upon the principal's death, either the will or the state's law of intestacy will govern the distribution of the estate.
The person designated to be the agent assumes certain responsibilities. The agent is obligated to act in the principal's best interest. The agent must always follow the principal's directions. Agents are "fiduciaries," which means that the agent must act with the highest degree of good faith in behalf of their principals. The agent must keep his money separate from the principal's; keep detailed records concerning all transactions he engages in on the principal's behalf; not stand to profit by any transaction where the agent represents the principal's interests; and not make a gift or otherwise transfer any of the principal's money, personal property, or real estate to himself unless the power of attorney explicitly states he can do so.
Fiduciaries owe two main duties to their clients: a duty of loyalty and a duty of care. The duty of loyalty requires that fiduciaries act solely in the interest of their clients, rather than in their own interest. Thus fiduciaries must not derive any direct or indirect profit from their position, and must avoid potential conflicts of interest. The duty of care requires that fiduciaries perform their functions with a high level of competence and thoroughness, in accordance with industry standards.
Various remedies may be available if a fiduciary duty was breached. Common actions for an abuse of a power of attorney, among others, include a petition for an accounting, claim of breach of fiduciary duty, theft, conversion, or a fraud charge.
The elements of a cause of action for breach of fiduciary duty are:
(1) Plaintiff and Defendant share a relationship whereby:
(a) Plaintiff reposes trust and confidence in Defendant, and
(b) Defendant undertakes such trust and assumes a duty to advise, counsel and/or
(2) Defendant breaches its duties to Plaintiff; and
(3) Plaintiff suffers damages.
The elements of a claim for breach of fiduciary duty are not fixed as the claim may arise from virtually any case where one party accepts the trust and assumes the duty to protect a weaker party.
Affirmative defenses to a claim for breach of fiduciary duty can include, but are not limited to:
(1) The passing of the statute of limitations for filing the claim.
(2) Lack of fiduciary relationship (for example, when the parties did not enter a fiduciary relationship, but rather conducted business in an arm’s length transaction there is no duty to protect the other party or disclose facts which the other party could have discovered by its own diligence.)
(3)Lack of standing
(4) Approval (for example, if the alleged actions followed full disclosure to and the consent of the Plaintiff)
(5) Business judgment rule (ex. that the corporate fiduciary's actions were motivated by a bona fide interest in the well being of the corporation where shareholders are the ones owed the fiduciary duty)
(6) Due diligence was exercised
Limitation of actions refers to a law which sets the maximum period which one can wait before filing a lawsuit, depending on the type of case or claim. The periods vary by state and by type of claim. Federal statutes set the limitations for federal lawsuits. If the lawsuit or claim is not filed before the statutory deadline, the right to sue or make a claim is lost forever.
In some instances, a statute of limitations can be extended ("tolled") based on delay in discovery of the injury or fraud. A minor's right to bring an action for injuries due to negligence is tolled until the minor turns 18 (except for a claim against a governmental agency). Many, but not all, statutes of limitation may be subject to equitable "tolling". This "tolling" means that the clock on the limitation time period will not start to tick until the person discovers or reasonably should have discovered the fraud. Tolling (or not starting the clock) may often be appropriate where the person has continued to rely upon another for a long period after the initial harm and the defrauder continues to conceal the wrongdoing.
There also may be a series of wrongful acts which may be viewed as a unified act of continuous fraud, with the limitations time period to start at the time of the final act in the series or after the end of the transaction. The nature of the particular relationship, level of sophistication of the person harmed and extent of the reliance of the person harmed upon the other are all factors to be considered in equitable tolling of the time limitations period.
Please see the following WV statutes to determine applicability:
§ 55-2-7. Actions on bonds of personal representatives and fiduciaries.
The right of action upon the bond of an executor,
administrator, guardian, curator or committee, or of a sheriff
acting as such, shall be deemed to have first accrued as
follows: Upon a bond of a guardian or curator of a ward, from
the time of the ward's attaining the age of eighteen years, or
from the termination of the guardian's or curator's office,
whichever shall happen first; and upon the bond of any personal
representative of a decedent or committee of an insane person,
the right of action of a person obtaining execution against
such representative or committee, or to whom payment or
delivery of estate in the hands of such representative or
committee shall be ordered by a court acting upon his account,
shall be deemed to have first accrued from the return day of
such execution, or from the time of the right to require
payment or delivery upon such order, whichever shall happen
first. And as to any suit against such fiduciary himself, or
his representative, which could have been maintained if he had
given no bond, there shall be no other limitation than would
exist if the preceding section were not passed. Where
any such fiduciary, or any other fiduciary, has settled an
account under the provisions of article four,
chapter forty-four of this Code, a suit to hold such fiduciary or
his sureties liable for any balance stated in such account to be
in his hands shall be brought within ten years after the account
has been confirmed. The right to recover money paid under fraud
or mistake shall be deemed to accrue, both at law and in equity,
at the time such fraud or mistake is discovered, or by the
exercise of due diligence ought to have been discovered.
§ 55-2-12. Personal actions not otherwise provided for.
Every personal action for which no limitation is otherwise
prescribed shall be brought:
(a) Within two years next after
the right to bring the same shall have accrued, if it be for
damage to property;
(b) within two years next after the right
to bring the same shall have accrued if it be for damages for
personal injuries; and
(c) within one year next after the right
to bring the same shall have accrued if it be for any other
matter of such nature that, in case a party die, it could not
have been brought at common law by or against his personal