Legal Memorandum: Escrow Holder's Breach of a Fiduciary Duty

Issue: Under Washington law, when has an escrow holder breached his or her fiduciary duty?

When reviewing an order of summary judgment the appellate court engages in the same inquiry as the trial court.  Hollis v Garwall, Inc. 137 Wn.2d 683, 690, 974 P.2d 836 (1999).  In deciding the motion all facts and reasonable inferences must be considered in the light most favorable to the nonmoving party.  Id.  A summary judgment is appropriate only when no genuine issue of material fact exists.  CR 56(c).

An escrow agent or holder becomes liable to his principals only for damages that proximately result from the breach of his principals’ instruction or from exceeding his authority as conferred by the instructions.  National Bank v. Equity Investors 81 Wn.2d 886, 910, 506 P.2d 20, 35 (1973).  Generally, whether the escrow agent has breached his duty or met his standard of care is a question of fact that cannot be resolved on summary judgment unless reasonable minds cannot differ on their interpretation of the facts.  See Bodin v. City of Stanwood, 130 Wn.2d 726, 741, 927 P.2d 240 (1996).

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