Allen v. Brown Advisory, LLC, No. 21-1602 (7th Cir. 2022)
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Allen earned a Ph.D. in physics from Yale University in 1965 and embarked on a successful career in the aerospace industry. He retired in 2004 and granted a financial power of attorney to his daughter, Key, when he and his wife experienced declining health and he could no longer manage their finances. For several years Key used the power of attorney to make withdrawals from Allen’s investment accounts held by affiliated investment firms (Brown). Five years later Allen revoked the power of attorney and sued Brown, raising contract and fiduciary-duty claims under Maryland law. He alleged that Key’s withdrawals (or some of them) were not to his benefit and that the investment companies should not have honored them.
The Seventh Circuit affirmed the dismissal of the suit. The Maryland Court of Appeals has clarified that a plaintiff may plead a claim for breach of fiduciary duty even when another cause of action (like breach of contract) is available to redress the conduct. . Still, the power of attorney shields Brown from liability for breach of fiduciary duty just as it does for breach of contract. Brown had no fiduciary obligation to refuse to carry out transactions authorized by the power of attorney.
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