June 27th, 2013
An attorney-in-fact owes fiduciary duties to his or her principal when acting pursuant to a power of attorney. When an attorney-in-fact acts contrary to his or her principal’s instructions, then they may end up breaching their fiduciary duties. In Georgia, the same may hold true for successor attorneys-in-fact under a power of attorney because that’s what happened to Se Ill Choi in Lee v. Choi.
John Blackwell executed a power of attorney naming his wife, Ki Tae Lee, as attorney-in-fact, and naming Choi as her successor in the event the wife was unable to serve. It was a typically broad power of attorney, providing for bank, business, real property, personal property, tax and insurance transactions, borrowing money, the commencement and prosecution of disputes, and granting access to safe deposit boxes.
The Blackwells also agreed to open a joint investment account naming Choi and Blackwell’s wife as account holders. The account was funded with $100,000, and the Blackwells agreed that Choi could keep for himself half of any earnings from investing the $100,000.
It’s the intersection of the power of attorney and the investment account that led to a breach of fiduciary duty verdict against Choi. (more…)