(Adds Breakingviews link, law professor comment and background)

By Tom Hals

Nov 30 (Reuters) - The Delaware Supreme Court on Monday upheld a $76 million damage award against RBC Capital Markets for its role in the 2011 sale of ambulance company Rural/Metro but described its closely watched decision as a narrow one.

The opinion's language should temper fears on Wall Street that affirming a 2014 ruling by the Court of Chancery could expose financial advisers on merger deals to potential liability if a board mishandled the sale of a company.

The lower court found RBC was liable for convincing the board of Scottsdale, Arizona-based Rural/Metro to rush into a $438 million buyout led by private equity firm Warburg Pincus.

RBC, a unit of Royal Bank of Canada, was found by the lower court to have concealed that it was also trying to win the more lucrative role of providing financing to Warburg.

"We are disappointed with the court's determination but respect its decision," said RBC in a statement.

One law professor said while the Delaware Supreme Court upheld one of the largest judgments of its kind against a financial adviser, it also made clear Rural/Metro was an exceptional case.

The ruling "sends a powerful message to disloyal investment banks, but also provides investment banks with great comfort provided they act transparently," said Andrew Tuch of the Washington University School of Law in St. Louis.

The opinion warned against reading the ruling broadly.

"Our holding is a narrow one that should not be read expansively to suggest that any failure on the part of a financial adviser to prevent directors from breaching their duty of care gives rise to a claim for aiding and abetting a breach of the duty of care," said the 105-page opinion. The opinion was written by Justice Karen Valihura.

The opinion also said shareholders must prove a financial adviser acted with intent, which the court said makes the claim "among the most difficult to prove."

In the wake of Laster's Rural/Metro opinion, numerous class actions have been filed by shareholders against Wall Street banks for the advice they gave to boards during mergers. Most of the cases are in the early stages.

During oral arguments, the Delaware Supreme Court was told that the Rural/Metro case has already shaped the behavior of investment bankers by encouraging them to be more transparent about potential conflicts.

It joins other rulings in recent years that have had an impact on investment bankers.

In a shareholder class action over the sale of Del Monte, Laster found in 2011 that Barclays Capital had a conflict of interest by advising Del Monte while also providing financing for the buyers.

Del Monte and Barclays later paid $89.4 million to settle that case, and many bankers have stopped the practice of working with potential buyers when they are also advising a publicly listed company that is being sold.

Investment bankers may be reassured that the Delaware Supreme Court rejected Laster's characterization of financial advisers as "gatekeepers" to the board who would be best motivated if they were exposed to lawsuits by shareholders.

"Adhering to the trial court's amorphous 'gatekeeper' language would inappropriately expand our narrow holding here by suggesting that any failure by a financial adviser to prevent directors from breaching their duty of care gives rise to an aiding and abetting claim against the adviser."

(Reporting by Tom Hals in Wilmington, Del.; additional reporting by Greg Roumeliotis in New York; Editing by Matthew Lewis and Cynthia Osterman)