Expert Testimony as to Parameters of Fiduciary Obligations is Necessary

Expert Testimony as to Parameters of Fiduciary Obligations is Necessary

     In a recent decision, the Court of Appeals upheld the directed verdict granted the defendant where the plaintiff failed to submit expert testimony as to the obligations of the alleged fiduciary.  Davidson v. King, 2014 WL 1680461 (Ky. App. April 25, 2014) (Not to be Published).

     Davidson, who was experiencing financial difficulties, consulted with King who had been designated as a “Crown Financial Budget Advisor.”  He advised Davidson to do a sale-lease back of her house (most recently appraised for $121,000 and fully paid for) for $25,000 subject to a buy-back option for $26,000.  King was to be the purchaser/lessor.  The proposed deed was done.  Davidson would fall behind on her lease payments and other obligations, and King initiated eviction proceedings.  Davidson’s counter-suit made a variety of allegations against King including breach of fiduciary duty.

       At the close of Davidson’s case, the trial court granted King a directed verdict on her claim for breach of fiduciary duty.  Her claims for breach of contract and fraud, as well as King’s claim for breach of contract, would go to the jury.

     Responding to a motion for a new trial, Davidson argued the directed verdict as to breach of fiduciary duty was in error.  This assertion was rejected “because Davidson had failed to offer expert testimony on the applicable standard of care. The trial court specifically found neither exception mentioned in Jarboe v. Harting, 397 S.W.2d 775, 778 (Ky. App. 1965), applied because the duty of care owed by a budget counselor to a client is specialized and not generally known by the public.”  2014 WL 1680461, *2.

     This appeal followed.  Upholding the trial court, the Court of Appeals wrote:

We agree with the trial court’s exercise of its discretion. Green v. Owensboro Medical Health System, Inc., 231 S.W.3d 781, 783 (Ky. App. 2007) (“Whether expert testimony is required in a given case is squarely within the trial court’s discretion.”). An expert was required to explain why the relationship between Davidson and King went beyond a mere subjective trust or normal contractual business relationship.  2014 WL 1680461, *4-5.