The appeal concerned whether an accountant providing tax planning and investment advice owed fiduciary duties to a client where the advisor fostered trust and reliance while failing to disclose a financial relationship with the developers of the recommended tax shelter investments.
The majority held that a fact-based fiduciary relationship arose because the client reasonably expected independent advice given solely in his best interests, and the undisclosed conflict breached both fiduciary and contractual duties.
The Court restored the trial judgment awarding restitutionary damages equal to the client's net losses, holding the breaching advisor bore the market risk once the client proved he would not have entered the investments but for the non-disclosure.
The dissent would have confined fiduciary duties to relationships of total dependency and would have limited contract damages because the market collapse, not the non-disclosure, caused the devaluation.
