Fraud Law Resources for Oregon and Washington
Fiduciary Duties Arise from Agreement
Washington has adopted the Restatement 2nd of Agency § 1:
(1) Agency is the fiduciary relation which results from the manifestation of consent by one person to another that the other shall act on his behalf and subject to his control, and consent by the other so to act.
(2) The one for whom action is to be taken is the principal.
(3) The one who is to act is the agent.
As the court held in Keene v. Board of Accountancy, 77 Wn. App. 849; 894 P.2d 582 (1995):
Moreover, Keene's power of attorney made him Morris's agent, and thus conferred on him the fiduciary duty of loyalty that accompanies that relationship. See Bryant v. Bryant, 125 Wash. 2d 113, 118, 882 P.2d 169 (1994); Restatement (Second) of Agency § 1(1) (1958). This duty required Keene to avoid any possible conflict of interest by acting solely in her interest. In the time-honored words of Justice Cardozo, the fiduciary relationship requires "not honesty alone, but the punctilio of an honor the most sensitive.. . ." Meinhard v. Salmon, 249 N.Y. 458, 464, 164 N.E. 545, 62 A.L.R. 1 (1928).
An agent who has dominion and control of his principal’s property is a fiduciary. The Washington Supreme Court explained this rule in Bryant v. Bryant, 125 Wash. 2d 113, 118, 882 P.2d 169 (1994);
The agent becomes a fiduciary upon acquiring dominion and control over the principal's property. Moon v. Phipps, 67 Wn.2d 948, 955, 411 P.2d 157 (1966). In handling the principal's property, the fiduciary is bound to act with the utmost good faith and loyalty.