Breach of Confidential Relationship Definition Law Meaning Defense Lawyer
What is a confidential relationship?
The legal definition of a confidential relationship is that a plaintiff’s idea may be protected on the theory of breach of a confidential relationship which requires: 1) conveyance of confidential and novel information; 2) that the offeree have knowledge that the information was being disclosed in confidence; 3) a mutual understanding between the offeror and offeree that the confidence be maintained; and 4) disclosure. Aliotti v. Dakin & Co., 831 F. 2d 898, 903 (9th Cir. 1987).
What is the meaning of fiduciary relationship?
A confidentiality relationship means that one person has confidence in and relies on another person. Examples of confidential relationships include: confidence and reliance may stem from a long-term trust, age, family relationship, marital, doctor-patient relationship, etc.
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Element 1: Confidential Relationship
What does personal and confidential mean? “A confidential relation exists between two persons when one has gained the confidence of the other and purports to act or advise with the other’s interest in mind. A confidential relation may exist although there is no fiduciary relation; it is particularly likely to exist where there is a family relationship or one of friendship or such a relation of confidence as that which arises between physician and patient or priest and penitent.” Davies v. Krasna, 14 Cal. 3d 502, 510, 121 Cal. Rptr. 705 (1975).
“An actionable breach of confidence will arise when an idea, whether or not protectable, is offered to another in confidence, and is voluntarily received by the offeree in confidence with the understanding that it is not to be disclosed to others, and is not to be used by the offeree for purposes beyond the limits of the confidence without the offeror’s permission.” Faris v. Enberg, 97 Cal. App. 3d 309, 322-323, 158 Cal. Rptr. 704, 712 (1979).
A cause of action for Breach of Confidential Relationship must be based on a contract that protects that confidence. Davies v. Krasna, 14 Cal. 3d 502, 505, 121 Cal. Rptr. 705 (1975). A claim for Breach of Confidential Relationship must fail where there is no express agreement of confidentiality, but merely an inference that confidentiality would be maintained. Aliotti v. Dakin & Co., 831 F. 2d 898, 903 (9th Cir. 1987).
There must exist evidence of the communication of the confidentiality of the submission or evidence from which a confidential relationship can be inferred. Among the factors from which such an inference can be drawn are: proof of the existence of an implied-in-fact contract; proof that the material submitted was protected by reason of sufficient novelty and elaboration; or proof of a particular relationship such as partners, joint adventurers, principal and agent or buyer and seller under certain circumstances. Faris v. Enberg, 97 Cal. App. 3d 309, 323, 158 Cal. Rptr. 704, 712-13 (1979).
Evidence of knowledge of confidence from which a confidential relationship can be implied is a minimum prerequisite to the protection of freedom in the arts. Faris v. Enberg, 97 Cal. App. 3d 309, 324-25, 158 Cal. Rptr. 704, 712-13 (1979).
Element 2: Conveyance of Confidential and Novel Information
When information is called confidential information?
An originator of an idea must prove that there was a conveyance of confidential and novel information. Aliotti v. Dakin & Co., 831 F. 2d 898, 903 (9th Cir. 1987).
Where plaintiff had already placed idea for dolls in the stream of commerce, the court held originator of idea could not have conveyed confidential information to defendant regarding the dolls. Aliotti v. Dakin & Co., 831 F. 2d 898, 903 (9th Cir. 1987).
Where plaintiff is unable to establish that it conveyed confidential and novel information to defendant, but all other elements of the cause of action are met, the claim for Breach of Confidential Relationship must fail. Entertainment Research Group v. Genesis Creative Group, 122 F. 3d 1211, 1227 (1997).
Element 3: Knowledge of Disclosure
An originator of an idea must prove the offeree had knowledge that the information was being disclosed in confidence. Aliotti v. Dakin & Co., 831 F. 2d 898, 903 (9th Cir. 1987).
Plaintiff was unable to produce testimony that Defendant knew plaintiff’s idea was disclosed in confidence. Aliotti v. Dakin & Co., 831 F. 2d 898, 903 (9th Cir. 1987).
An unsolicited submission of an idea to a potential employee or potential business partner, even if that person then passes the disclosed information to a competitor, does not present a triable issue of fact for confidentiality because no rational receiver of the communications could be bound to an understanding that a secret was being imparted. Faris v. Enberg, 97 Cal. App. 3d 309, 324-25, 158 Cal. Rptr. 704, 712-13 (1979).
Element 4: Mutual Understanding
The originator of an idea must prove that there was a mutual understanding between the offeror and offeree that the confidence be maintained. Aliotti v. Dakin & Co., 831 F. 2d 898, 903 (9th Cir. 1987).
Plaintiff unable to produce testimony of a mutual understanding that idea was being conveyed in confidence. Aliotti v. Dakin & Co., 831 F. 2d 898, 903 (9th Cir. 1987).
Where there is no direct evidence that either party believed the disclosure was being made in confidence, and there was no implied-in-fact contract and the material was not protectable, there were insufficient facts to warrant a trial. Faris v. Enberg, 97 Cal. App. 3d 309, 324-25, 158 Cal. Rptr. 704, 712-13 (1979).
Element 5: Disclosure
The originator of an idea must prove that there was disclosure. Aliotti v. Dakin & Co., 831 F. 2d 898, 903 (9th Cir. 1987).
An action for breach of confidence arises whenever an idea, offered and received in confidence, is later disclosed without permission. Davies v. Krasna, 14 Cal. 3d 502, 510, 121 Cal. Rptr. 705 (1975).
The defendant used plaintiff’s idea where the defendant had developed a film similar to a story that the plaintiff had previously submitted to the defendant’s business partner. Davies v. Krasna, 245 Cal. App. 2d 535, 54 Cal. Rptr. 37 (1966).
Plaintiff’s ideas were embodied in a written outline that defendant used to produce a movie. Faris v. Enberg, 97 Cal. App. 3d 309, 321, 158 Cal. Rptr. 704 (1979).
Remedies
Monetary Damages
(Landsberg v. Scrabble Crossword Game Players, Inc., 802 F. 2d 1193, 1199 (9th Cir. 1986) (plaintiff was entitled to defendant’s profits, not just fair value of defendant’s use of plaintiff’s idea, in action for breach of implied-in-fact contract); Mann v. Columbia Pictures, Inc., 128 Cal. App. 3d 628, 646, 180 Cal. Rptr. 522 (1982); Donahue v. Ziv Television Programs, Inc., 245 Cal. App. 2d 593, 601, 54 Cal. Rptr. 130 (1966) (plaintiff may seek recovery of reasonable value of ideas)).
Attorneys’ Fees
(Landsberg v. Scrabble Crossword Game Players, Inc., 802 F. 2d 1193, 1203 (9th Cir. 1986) (attorneys’ fees may be recoverable if party’s conduct is deemed vexatious, oppressive, or in bad faith)).
Punitive Damages May Be Available
(Landsberg v. Scrabble Crossword Game Players, Inc., 802 F. 2d 1193, 1199 (9th Cir. 1986); but see Freeman & Mills, Inc. v. Belcher Oil Co., 11 Cal. 4th 85, 44 Cal. Rptr. 2d 420 (1995); see generally §X.3:40).
Statute of Limitations
The statute of limitations for breach of confidence is two years. Cal. Civ. Proc. Code §339; see also Thompson v. California Brewing Co., 150 Cal. App. 2d 469, 472, 310 P. 2d 436 (1957).
Affirmative Defenses
Statute of Limitations (see above)