Madeleine Gantzer's Guide: Introduction

Yes!

Actual fraud requires that there be intent to deceive the other party. On the other hand, a cause of action for constructive fraud can exist even if there was no intention to deceive or defraud the other party. The two do share a lot of similarities, so there may be some overlap seen in this LibGuide, but this distinction of elements is important to keep in mind!

See Robson Link & Co. v. Leedy Wheeler & Co., 154 Fla. 596, 18 So. 2d 523 (1944).

Under Florida law, constructive fraud may arise in a variety of scenarios; however most jurisdictions typically require the following elements: 

(1) the existence of a fiduciary relationship;

(2) a breach of the duty arising from such relationship; and 

(3) the breach results in an improper advantage at the expense of the confiding party.

2 LN Practice Guide: FL Contract Litigation 16.15 (2020). 

To determine whether a confidential relationship exists, the court will look to the particularities of the relationship between the persons involved. The term "fiduciary or confidential relation" has been interpreted very broadly. In fact, courts have been reluctant to set forth a particular definition for constructive fraud and as a result there is no particular "threshold" to pass to satisfy the element of confidential or fiduciary relationship. Thus, whether such a relationship is present depends on each case and the particular, relevant facts. Usually, determining whether there is a fiduciary or confidential relationship is the more difficult element to satisfy because it is a rather high threshold.  

A fiduciary or confidential relationships can be either expressed or implied. For example, an express fiduciary relationships could be one that is created by contract or legal proceedings. Some express fiduciary and confidential relationships usually include: attorney-client, partnership, trustee, and principal-agent relationships. On the other hand, implied fiduciary relationships may be arise from moral, domestic, or personal relationships and thus there must be an evaluation of the particular facts and circumstances of a given case.  

 For example, it has been decided that relationships between individuals such as attorney and client, broker and client, partners, principal and agent, etc. are deemed express fiduciary or confidential relationship. In addition, a relationship may develop if there is confidence reposed in one individual and there is resulting superiority and influence on the other side.

Because not every relationship involving a high degree of trust and confidence rises to the stature of a formal fiduciary relationship, the law recognizes the existence of an informal or confidential fiduciary relationship. 

In determining whether a confidential or fiduciary relationship exists between the parties, the relevant factors have been held to include:

• The degree of kinship between the parties; the disparity in age, health, education, or business experience between the parties; and the extent to which the servient party entrusted the handling of its business to the dominant party and placed its trust and confidence in it. 
• Whether the plaintiff relied on the defendant for support, the plaintiff's advanced age and poor health, and evidence of the plaintiff's trust. 
• Whether one person has to be taken care of by others; whether one person maintains a close relationship with another; whether one person is provided transportation and has medical care provided for by another; whether one person maintains joint accounts with another; whether one is physically or mentally weak; whether one is of advanced age or poor health; and whether there exists a power of attorney between the one and another. 
• In addition to confidence of the one in the other, the existence of a certain inequality, dependence, weakness of age, of mental strength, business intelligence, knowledge of the facts involved, or other conditions giving to one advantage over the other. 
• Advanced age, youth, lack of education, ill health, and mental weakness. 

A fiduciary relationship is one founded on trust or confidence reposed by one person in the integrity and fidelity of another and which also necessarily involves an undertaking in which a duty is created in one person to act primarily for another's benefit in matters connected with such undertaking. A confidential relationship exists between two persons if one has gained the confidence of the other and purports to act or advise with the other's interest in mind. The party in whom the trust and confidence are reposed, in a confidential relationship, must act with scrupulous fairness and good faith in his or her dealings with the other and refrain from using his or her position to the other's detriment and his or her own advantage. A fiduciary or confidential relationship exists where confidence is reposed by one party and trust is accepted by the other, or where confidence has been acquired and abused, or where influence has been acquired and abused, and in which confidence has been reposed and betrayed. 

On the other hand, solely because the relationship between the parties has been lengthy and cordial does not necessarily mean a confidential relationship exists, as a basis for informal fiduciary relationship. The fact that the parties are friends or prior business associates, or have trust and confidence in each other's integrity, does not automatically establish a confidential relationship, as required for a fiduciary relationship to arise under the law; and even a longstanding relationship of friendship or cordiality is insufficient, without more, to establish an informal fiduciary relationship. The mere fact that one party subjectively trusts another party does not alone indicate that confidence is placed in another in the sense demanded by fiduciary relationships because something apart from the transaction between the parties is required. Because subjective trust is insufficient to create a fiduciary relationship, the mere fact that one party trusts another does not transform a business arrangement into a fiduciary relationship; the trust must be justifiable. 

37 Am Jur 2d Fraud and Deceit § 37