n Jet Source Charter, Inc. v. Doherty et al., the 4th Circuit Court of Appeals upheld a jury verdict finding that the aircraft dealers owed the plaintiff the duties of a fiduciary and that the aircraft dealers breached their fiduciary duty by providing the plaintiff with misleading information about the negotiated price of aircraft in six separate transactions. After a trial, the jury found the defendants liable to the plaintiff for intentional misrepresentation, negligent misrepresentation, breach of fiduciary duty, breach of contract and conversion.
Specifically, the jury believed that the defendants had acted as the plaintiff’s broker in locating aircraft for the plaintiff and then acquiring them with the plaintiff’s money. In each of the transactions, the evidence showed that the defendants mislead the plaintiff into thinking that the purchase price for the aircraft was higher than what the defendants had negotiated. The defendants then pocketed the difference between the real purchase price and the purchase price disclosed to the plaintiff.
On appeal, the defendants argued that substantial evidence did not support the verdict against them. However, the Court found that the jury had sufficient evidence to find that the defendants acted as agents of the Plaintiff, rather than “middlemen” as argued by the defendants. The Court relied heavily upon the evidence presented by the plaintiff that none of the defendants had the resources to finance the worldwide search and negotiations they conducted for the aircraft the plaintiff eventually acquired, let alone the wherewithal to purchase any of those aircraft for its own account. Rather, the plaintiff financed the activities and the purchase price of each of the aircraft and this undermined the defendants’ argument that they acted as “middlemen”.
Although the Court noted that brokers do not always owe a fiduciary duty, it held that the testimony of the defendants and plaintiff’s expert, as well as the overwhelming jury verdict, supported the conclusion that the defendants did owe the plaintiff a fiduciary duty.