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Click here for the full text of this decision FACTS:Falcon Realty Corp. sued Guy Daniel, Guy J. Daniel Construction Co., Lesha Daniel, Ja-Le & Associates, Beverly Laine and B&L Associates for breach of fiduciary duty. At trial, Falcon’s chief financial officer testified that Falcon hired Guy to be the on-site superintendent for a construction project. Guy was responsible for hiring subcontractors and for collecting and forwarding invoices, among other duties. Toward the end of the project, Falcon found a million dollars worth’ of invoices stuffed in a drawer that had never been reported, at Falcon’s loss. After the project was over, Falcon learned that one of the subcontractors, B&L, was run by Guy’s mother-in-law, Beverly Laine, and her husband, though Guy never disclosed the fact. Falcon also learned that Guy and Lesha directly profited from the operation of B&L. Though Falcon had already paid B&L more than $373,000, it withheld the final $16,000 owed when it found out about the relationship. The CFO said that although a Falcon employee’s family member had worked for the company before, he also noted that the family member had not been compensated. Falcon called a CPA to the stand to testify as an expert witness on the financial relationship between Guy, Lesha and B&L. She estimated the profit on the project to be around $200,000. Laine testified that Guy had approached her and her husband to see if they were interested in “doing something on the side” to make some money and “save Falcon money.” She and her husband formed B&L to bid on projects, and she wired money per Guy’s instructions, to Guy’s business account, which was held in the name of Ja-Le. Guy paid the B&L employees. Laine submitted invoices to Falcon, which they paid. Falcon never complained about the quality of the work, Laine added. Lesha testified that Ja-Le was created to provide her and Guy with “additional income on side jobs.” She confirmed that approximately $277,000 in funds from B&L was transferred into the Ja-Le account and that those funds were used to pay B&L and other employees and subcontractors. Lesha said she and Guy used Ja-Le funds for personal use. Guy testified that B&L was the low bidder on the project. He made an approximately $200,000 profit off of Falcon through B&L, but he also made a loan to a colleague from the B&L funds, which he claimed should be offset against the profit amount should he be found liable. The case against Guy, the construction company, Lesha and Ja-Le went to the jury (the suit with B&L and Guy’s parents-in-law settled earlier). After a bench trial, the trial court awarded Falcon $191,000, less a settlement credit. The trial court also entered extensive findings of facts and conclusions of law. On appeal, Guy and Lesha argued that the trial court erred in finding that they breached their fiduciary duty, and in ordering a disgorgement of profits. HOLDING:Affirmed. Falcon presented evidence that Guy, who was hired to serve as a project manager and on-site superintendent for the project and who was responsible for soliciting bids, setting the scope of work for each subcontractor, reviewing the bids, letting the contracts, and overseeing people working on the project, occupied a position of peculiar confidence towards Falcon and owed Falcon a fiduciary duty. There was also evidence that Guy solicited his parents-in-law to form B&L to bid on and perform work for the project in order to “make money on the side,” that Guy and Lesha were involved in the operation of B&L, that Guy approved bids and paid invoices submitted by B&L and supervised B&L employees at the project, and that Guy never disclosed his relationship with B&L to Falcon. Falcon presented further evidence that Guy and Lesha profited by approximately $200,000 from the arrangement. This evidence establishes the existence of a fiduciary duty that was breached. The court rejects Guy’s argument that since his efforts benefited Falcon, then he cannot be said to have breached his fiduciary duty. The court reminds Guy that he never disclosed his relationship with B&L to Falcon. Furthermore, the quality of work B&L performed for Falcon is irrelevant. Regardless of whether Falcon was satisfied with B&L work, Guy was obligated to disclose his and Lesha’s relationship to the company. Similarly, Falcon’s satisfaction with B&L’s work has no bearing on whether disgorgement of profits was the proper remedy. As was stated in Kinzbach Tool Co. v. Corbett-Wallace Corp., 160 S.W.2d 509 (Tex. 1942), “A fiduciary cannot say to the one to whom he bears such relationship: You have sustained no loss by my misconduct in receiving a commission from a party opposite to you, and therefore you are without remedy.” Guy and Lesha argue that the loss of the clerk’s record unduly burdened them because they contained notes explaining the calculation of damages awarded to Falcon, which was necessary for their appeal. The court says that even assuming that the sheets contain such notes, the court would not consider them as findings of fact or conclusions of law. OPINION:Jennings, J.; Nuchia, Jennings and Higley, JJ.

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