San Antonio Express-News
October 28, 2003

Fiduciary Duty under Power of Attorney

copyright 2003, Paul Premack

You should immediately revoke the power of attorney, in writing, and should inform your daughter in writing that you terminate any further authority. An agent never holds a POA "over" the principal. Every act that the Agent undertakes must be scrupulously fair to the principal. In the recent case Vogt v. Warnock, the 8^th Court of Appeals reiterated that a "fiduciary owes her principal a high duty of good faith, fair dealing, honest performance, and strict accountability."

The way that you tell the story, it sounds as if your agent may have breached that fiduciary duty. If so, she may be liable to you. Since you say you have been sued, your attorney should be bringing your daughter in as a party to the lawsuit.

Further, she may have committed the criminal offense of misapplication of fiduciary property. If the Agent intentionally, knowingly, or recklessly misapplied your assets – that is, she used then in a way that is not beneficial to you, or in a way that breaches her fiduciary duty – the act can be investigated as a crime. Depending on the amount misappropriated, she could be charged with a misdemeanor or a felony.

Before coming to either of those conclusions, there must be proof. Your attorney will be gathering evidence in support of your position, and should obtain the original power of attorney from your daughter as evidence. Also, the written sales contract and the representations that were made to the mobile home seller are very important. If they knew she was acting as your agent and saw the power of attorney, then you probably are liable to the Seller. The Seller is also an innocent party in this transaction, and may legally rely on what the agent told him under the Durable Power of Attorney Act.

However, the wording of the power of attorney makes a big difference in that regard. You say she had power to purchase real estate, but a mobile home is not real estate... it is a manufactured home and only becomes real estate if it is permanently affixed to the ground. If she acted outside the scope of the powers you granted, she has breached her duty to you and the Seller may not be able to make you liable.

Generally, an agent should sign a document with this pattern: "John Doe by Jane Smith, Agent." It is not appropriate to just sign "John Doe" because that does not disclose the fiduciary nature of the relationship. But there is no special pattern required by law for an agent to take an action under a power of attorney, so the style of signing alone is not your best argument. Rather, it may be part of an illegal pattern of deceit and unfairness on your daughter’s part.