Use caution as the promissory note may be seen as a “trust like device”
The POMS defines trust-like devices as instruments which involve (1) a grantor (2) who transfers property (3) to a person or entity with fiduciary obligations (4) with the intention that it be held, managed, or administered by the person or entity for the benefit of the grantor or others. Id. ยงยง 1120.201 (B)(5) & (G)(1). A fiduciary relationship can arise where “one or each of the parties, in entering the transaction, expressly reposes a trust and confidence in the other or because of the circumstances of the case, the nature of their dealings, or their position towards each other, such a trust and confidence is necessarily implied.” United Jersey Bank v. Kensey, 704 A.2d 38, 44 (N.J. App. Div. 1997). In determining whether a fiduciary relationship exists, we must consider all the surrounding facts and circumstances relevant to the case. Clyde v. Hodge, 460 F.2d 532, 535 (3d Cir. 1972).
Sable v. Velez, No. 10-4647 (3rd Cir. Jul 12, 2011)
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