70A-3-307 - Notice of breach of fiduciary duty. - Utah Statutes

70A-3-307. Notice of breach of fiduciary duty.
(1) In this section:
(a) "Fiduciary" means an agent, trustee, partner, corporate officer or director, or otherrepresentative owing a fiduciary duty with respect to an instrument.
(b) "Represented person" means the principal, beneficiary, partnership, corporation, orother 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, thetaker has knowledge of the fiduciary status of the fiduciary, and the represented person makes aclaim to the instrument or its proceeds on the basis that the transaction of the fiduciary is abreach of fiduciary duty, the following rules apply:
(a) Notice of breach of fiduciary duty by the fiduciary is notice of the claim of therepresented person.
(b) In the case of an instrument payable to the represented person or the fiduciary assuch, the taker has notice of the breach of fiduciary duty if the instrument is:
(i) taken in payment of or as security for a debt known by the taker to be the personaldebt of the fiduciary;
(ii) taken in a transaction known by the taker to be for the personal benefit of thefiduciary; or
(iii) deposited to an account other than an account of the fiduciary, as such, or an accountof the represented person.
(c) If an instrument is issued by the represented person or the fiduciary as such, and madepayable to the fiduciary personally, the taker does not have notice of the breach of fiduciary dutyunless the taker knows of the breach of fiduciary duty.
(d) If an instrument is issued by the represented person or the fiduciary as such, to thetaker as payee, the taker has notice of the breach of fiduciary duty if the instrument is:
(i) taken in payment of or as security for a debt known by the taker to be the personaldebt of the fiduciary;
(ii) taken in a transaction known by the taker to be for the personal benefit of thefiduciary; or
(iii) deposited to an account other than an account of the fiduciary, as such, or an accountof the represented person.

Amended by Chapter 324, 2010 General Session