Utah Code 70A-3-307. Notice of breach of fiduciary duty
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(1) In this section:
Terms Used In Utah Code 70A-3-307
- Beneficiary: A person who is entitled to receive the benefits or proceeds of a will, trust, insurance policy, retirement plan, annuity, or other contract. Source: OCC
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Fiduciary: A trustee, executor, or administrator.
- Partnership: A voluntary contract between two or more persons to pool some or all of their assets into a business, with the agreement that there will be a proportional sharing of profits and losses.
- Person: means :(24)(a) an individual;(24)(b) an association;(24)(c) an institution;(24)(d) a corporation;(24)(e) a company;(24)(f) a trust;(24)(g) a limited liability company;(24)(h) a partnership;(24)(i) a political subdivision;(24)(j) a government office, department, division, bureau, or other body of government; and(24)(k) any other organization or entity. See Utah Code 68-3-12.5
- Trustee: A person or institution holding and administering property in trust.
(1)(a) “Fiduciary” means an agent, trustee, partner, corporate officer or director, or other representative owing a fiduciary duty with respect to an instrument.(1)(b) “Represented person” means the principal, beneficiary, partnership, corporation, or other person to whom the duty stated in Subsection(1)(a) is owed.
(2) If an instrument is taken from a fiduciary for payment or collection or for value, the taker has knowledge of the fiduciary status of the fiduciary, and the represented person makes a claim to the instrument or its proceeds on the basis that the transaction of the fiduciary is a breach of fiduciary duty, the following rules apply:
(2)(a) Notice of breach of fiduciary duty by the fiduciary is notice of the claim of the represented person.
(2)(b) In the case of an instrument payable to the represented person or the fiduciary as such, the taker has notice of the breach of fiduciary duty if the instrument is:
(2)(b)(i) taken in payment of or as security for a debt known by the taker to be the personal debt of the fiduciary;
(2)(b)(ii) taken in a transaction known by the taker to be for the personal benefit of the fiduciary; or
(2)(b)(iii) deposited to an account other than an account of the fiduciary, as such, or an account of the represented person.
(2)(c) If an instrument is issued by the represented person or the fiduciary as such, and made payable to the fiduciary personally, the taker does not have notice of the breach of fiduciary duty unless the taker knows of the breach of fiduciary duty.
(2)(d) If an instrument is issued by the represented person or the fiduciary as such, to the taker as payee, the taker has notice of the breach of fiduciary duty if the instrument is:
(2)(d)(i) taken in payment of or as security for a debt known by the taker to be the personal debt of the fiduciary;
(2)(d)(ii) taken in a transaction known by the taker to be for the personal benefit of the fiduciary; or
(2)(d)(iii) deposited to an account other than an account of the fiduciary, as such, or an account of the represented person.