United States Court of Appeals

FOR THE EIGHTH CIRCUIT

___________

No. 08-2210

___________

Lafarge North America, Inc., formerly *

known as Lafarge Corporation, *

*

Plaintiff-Appellant, *

* Appeal from the United States

v. * District Court for the Western 

* District of Missouri. 

Discovery Group L.L.C.; Explorer *

Investments 1 L.L.C.; Steven J. Tharpe; *

Douglas E. Pope, * 

*

Defendants-Appellees. *

___________

Submitted: January 16, 2009

Filed: July 27, 2009

___________

Before BYE, COLLOTON, and GRUENDER, Circuit Judges.

___________

BYE, Circuit Judge.

Lafarge North America, Inc. (“Lafarge”) appeals from the district court’s order

granting summary judgment in favor of Discovery Group L.L.C. (“Discovery

Group”), Explorer Investments 1 L.L.C. (“Explorer”), Steven Tharpe, and Douglas

Pope (collectively, the “Defendants”) on its claims for breach of contract, negligent

and fraudulent misrepresentation, breach of fiduciary duty, negligence, and rescission.

We reverse.
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I

This case arises from a transaction in which Lafarge hired the Defendants to

assist with the relocation of its Missouri Division Headquarters, which prior to March

2001 had been located in Kansas City, Missouri. Lafarge found it necessary to

relocate because the headquarters was situated on a very active floodplain. In July

1999, Robert Diakiw, then Vice President and General Manager of Lafarge’s Missouri

operation, began discussions with Discovery Group concerning its ability to assist

Lafarge with the relocation.

In July 1999, Discovery Group submitted a Real Estate Services Proposal (the

“Proposal”) to Lafarge, which stated Discovery Group would “provide an initial

profile of the project objectives.” The Proposal included wording as to Discovery

Group having already begun “to identify the key players in terms of Owners, Brokers,

Government authorities and general resources to assist with the site/building selection

phase of our work.” The Proposal further stated it would be Discovery Group’s “goal

to essentially serve as an extension of the Lafarge real estate department function,”

and Discovery Group would serve as “[a] single source for all Kansas City relocation

activities,” offer “[a] strategic approach to the relocation process,” and integrate “the

research, capital, economic, planning, design, construction, transaction and consulting

functions.”

Thereafter, Discovery Group and Lafarge entered into an Exclusive

Representation Agreement (“ERA”) effective as of August 1, 1999. Discovery Group

agreed to assist Lafarge with site selection for the relocation of its headquarters. They

also agreed upon selection of a site, it was Lafarge’s intentions to have an entity

related to Discovery Group, i.e., Explorer, purchase the selected property and enter

into a triple net operating lease with Lafarge. Relevant to this appeal, the ERA

provided:
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Discovery will undertake it best efforts to represent [Lafarge] in

prospecting for and identifying prospective real estate sites . . . .

Discovery will search for sites and/or buildings and review each

prospective real estate location with regard to its ability to achieve the

objectives of [Lafarge] with respect to the Representation Agreement.

The ERA also stated that Lafarge “confirms its review and acknowledgment of the

Attached Exhibit ‘A’ Agency Disclosure and Representation Provisions required by

the Missouri Real Estate Commission.” Exhibit A was Missouri Revised Statute

§ 339.730, which sets forth various disclosures and responsibilities of a real estate

agent; it includes, among other things, a requirement for the agent to exercise

reasonable care and skill and to disclose to the client all adverse material facts known

by the agent.

As Discovery Group began prospecting for and analyzing various potential sites

for Lafarge’s Missouri headquarters, it periodically sent Lafarge updates on its

progress. On September 16, 1999, Discovery Group sent its first progress report to

Lafarge, which listed one of the priority objectives of Phase One as “Understand

Local Government Policies.” The report stated Discovery Group was “In Process”

with respect to this objective, noting it has “met with officials in Blue Spring and

Independence to discuss economic and site concerns.” On October 1, 1999, Discovery

Group sent Lafarge another progress report indicating it was “In Process” with respect

to the objective of “[f]urther understand[ing] land values and government incentives

at each of the locations.” On October 15, 1999, a third progress report once again

affirmed that Discovery Group was “In Process” with respect to “understand[ing] land

values and government incentives at each of the locations.”

Consistent with the ERA, Discovery Group presented Lafarge with fifteen

possible site locations. Based on Discovery Group’s advice, Lafarge selected a parcel

referred to as the “Chapel Ridge” site located in Lee’s Summit, Missouri. Lafarge

received no economic incentives for relocating to the Chapel Ridge site other than
1

The Defendants filed a third-party claim for breach of contract and

indemnification against Chapel Development, Atcheson, and Haas. The district

court’s resolution of the third-party claims is the subject of a separate appeal.

-4-

standard state tax credits. Discovery Group next contacted Chapel Development

L.L.C. (“Chapel Development”) about having an entity related to Discovery Group

(Explorer) purchase the property. Involved in the transaction were two representatives

of Chapel Development, Michael Atcheson and Larry Haas.1

 Chapel Development

eventually agreed to acquire the Chapel Ridge property and sell it to Explorer.

Around this same time, Chapel Development and other entities owned by or

associated with Atcheson and Haas brought a petition in the Circuit Court of Jackson

County, Missouri, for the formation of the Strother Transportation Development

District (the “Strother District”). The Strother District sought to impose an additional

1/2 percent sales tax on all transactions occurring within the district, the proceeds of

which would fund a proposed interchange and other infrastructure improvements. The

Chapel Ridge site is located within the Strother District. Shortly before closing on the

property, Discovery Group learned of the proposed Strother District. Despite

knowledge of the proposed Strother District – and its tax consequences for those

located therein – Discovery Group/Explorer completed the purchase of the Chapel

Ridge property on December 3, 1999, without informing Lafarge of the Strother

District.

The Strother District was formed on January 21, 2000. On March 30, 2000,

Lafarge and Explorer executed a lease of the Chapel Ridge property. The Strother

District was approved on April 25, 2000.

Throughout this process, Lafarge did not, consistent with its past practice,

intend to collect sales tax from its Missouri headquarters regardless of its location.

Lafarge believed that, because the vast majority of its sales were made by mobile sales

associates, its responsibility was to collect sales tax applicable to the plant from which
-5-

the material being sold originated. Lafarge first learned of the Strother District in

March 2001 when representatives contacted Lafarge regarding collection of the 1/2

percent sales tax. Lafarge claimed it did not owe sales tax to the Strother District

because it did not conduct any sales from its headquarters in Chapel Ridge. Lafarge

then sent a letter to the Missouri Department of Revenue seeking clarification. The

Department of Revenue disagreed with Lafarge and concluded it must collect sales tax

at its headquarters in Chapel Ridge, which in turn made Lafarge liable for the sales tax

imposed by the Strother District. Shortly thereafter, Lafarge once again relocated its

headquarters, choosing a location outside of the Strother District and for which it

received governmental incentives based on sales tax revenue.

Lafarge brought this diversity action against the Defendants in the Western

District of Missouri for (1) breach of the ERA, (2) fraudulent misrepresentation, (3)

negligent misrepresentation, (4) breach of fiduciary duty, (5) negligence, and (6)

rescission of the lease agreement. Lafarge contended the Defendants had an

obligation, both in contract and tort, to disclose the existence of the Strother District.

Defendants moved for summary judgment, which the district court granted. The court

concluded Lafarge’s breach of contract claim failed because the ERA did not impose

an obligation on Discovery Group to investigate or disclose economic incentives and

tax obligations. It likewise granted summary judgment on Lafarge’s fraudulent

misrepresentation, negligent misrepresentation, and breach of fiduciary duty claims

because it determined the existence of the Strother District was not a material fact, and

the court further concluded the negligence claim failed because Defendants did not

owe a duty to disclose the Strother District. Finally, the court granted judgment on

Lafarge’s rescission claim because it determined the lease was not based on any

fraudulent misrepresentation, misapprehension, or mistake. Lafarge appeals each of

the district court’s conclusions.
2

Lafarge’s breach of contract claim is asserted solely against Discovery Group

because it is the only Defendant that is a party to the ERA. 

-6-

II

We review the district court’s grant of summary judgment de novo. Urban

Hotel Dev. Co., Inc. v. President Dev. Group, L.C., 535 F.3d 874, 877 (8th Cir. 2008).

“Summary judgment is appropriate if the evidence, viewed most favorably to the nonmoving party, establishes that no genuine issue of material fact exists and the moving

party is entitled to judgment as a matter of law.” Id. In a diversity action such as this,

we are required to apply Missouri law. See id.

Breach of Contract

 In Missouri, a party seeking to establish a breach of contract claim must prove:

“(1) the existence of a valid contract; (2) the rights and obligations of each party; (3)

breach; and (4) damages.” Evans v. Wele, 31 S.W.3d 489, 493 (Mo. Ct. App. 2000).

Though the parties agree the ERA is a valid contract, they dispute the rights and

obligations of each party under the contract.2

 Specifically, Lafarge asserts the ERA

obligated Discovery Group to investigate economic incentives and disclose important

tax information, i.e., the Strother District. Although the contract nowhere discusses

economic incentives or prevailing tax rates, Lafarge relies on the ERA’s language

which states, “Discovery will search for sites and/or buildings and review each

prospective real estate location with regard to its ability to achieve the objectives of

[Lafarge] with respect to the Representation Agreement.” Lafarge argues its

“objectives” as intended by the contract include available economic incentives and tax

rates; thus, it argues Discovery Group was obligated under the terms of the contract

to investigate economic incentives and disclose prevailing tax rates. To support its

interpretation of the ERA, Lafarge relies on Discovery Group’s Services Proposal –

in which it states Discovery Group would provide a profile of project objectives and

had begun to identify key players in terms of government authorities – and its status

updates – in which Discovery Group identified understanding government policies
-7-

and incentives at each location as “objectives.” In response, Discovery Group argues

the contract is unambiguous and contains no reference to economic incentives or tax

rates, and, as such, the parole evidence rule bars Lafarge’s attempts to create an

ambiguity through extrinsic evidence.

“The cardinal rule in the interpretation of a contract is to ascertain the intention

of the parties and give effect to that intention.” J.E. Hathman v. Sigma Alpha Epsilon

Club, 491 S.W.2d 261, 264 (Mo. 1973). If the contract is unambiguous, then the

intent of the parties is to be gathered from the contract alone, and “any extrinsic or

parole evidence as to the intent and meaning of the contract must be excluded from

the court’s review.” Vidacak v. Okla. Farmers Union Mut. Ins. Co., 274 S.W.3d 487,

490 (Mo. Ct. App. 2008). Where a contract is ambiguous and unclear, however, “a

court may resort to extrinsic evidence to resolve an ambiguity.” Burrus v. HBE Corp.,

211 S.W.3d 613, 616 (Mo. Ct. App. 2006). “A contract is ambiguous when it is

reasonably susceptible to different constructions.” Id. (internal quotation marks

omitted). Whether a contract is ambiguous is a question of law. Edgewater Health

Care, Inc. v. Health Sys. Mgmt., Inc., 752 S.W.2d 860, 865 (Mo. Ct. App. 1988). If

a contract is ambiguous, “then a question of fact arises as to the intent of the parties,

and thus it is error to grant summary judgment.” Essex Dev., Inc. v. Cotton Custom

Homes, L.L.C., 195 S.W.3d 532, 535 (Mo. Ct. App. 2006).

Viewing the ERA in its entirety, we conclude it is ambiguous whether

Discovery Group was obligated to investigate economic incentives and disclose

prevailing tax rates. Discovery Group contracted to search for sites and review each

prospective location with regard to its ability to achieve Lafarge’s “objectives,” which

is an undefined term in the ERA. See Burrus, 211 S.W.3d at 618 n.4 (noting that

while a contract term is not automatically rendered ambiguous simply because it is

undefined, it is relevant to the court’s analysis when the term is capable of more than

one reasonable construction). It seems axiomatic that part of Lafarge’s objectives in

selecting prospective sites included economic considerations, such as a location’s cost,
-8-

appraised value, potential for appreciation, etc. As such, it is reasonable to conclude

one of those economic considerations relevant to Lafarge’s search was the economic

incentives and tax rates existing at particular locations. Therefore, it is reasonable to

construe the term “objectives” in the ERA to include the economic benefits and

drawbacks to Lafarge of selecting a particular site, which in turn imposes an

obligation to investigate and disclose to Lafarge existing economic incentives and tax

rates.

Discovery Group argues the only “objectives” contemplated by the agreement

were Lafarge’s goals in having an entity related to Discovery Group purchase a site,

build or renovate a building as necessary, and thereafter enter into a triple net

operating lease with Lafarge. Thus, according to Discovery Group, its only obligation

under the contract was to review sites in accordance with their ability to meet those

goals without regard to any other factors – economic or otherwise – impacting the site.

While this may be a reasonable interpretation of the contract, it is also reasonable to

construe the term “objectives” as encompassing more considerations than those

advanced by Discovery Group. Under Discovery Group’s interpretation of the word

“objectives,” Lafarge apparently would not be concerned with several major details

impacting the attractiveness of particular sites, such as a location’s cost, whether it

was overpriced, its potential for appreciation, taxation rates, etc. This would mean

Discovery Group’s sole obligation was to identify sites that could be purchased and

leased to Lafarge, without having to disclose any beneficial or negative facts relevant

to that site. For example, under Discovery Group’s interpretation of the contract,

Lafarge did not even have the objective of ensuring that its new location was not in

a floodplain, even though that was the very reason Lafarge was relocating in the first

place.

As such, it is reasonable to conclude that the term “objectives” in the contract

encompasses more than Discovery Group selecting a site which could be purchased

by Explorer, renovated to suit Lafarge’s needs, and then leased to Lafarge. Given the
3

The district court concluded even if the contract was ambiguous, Lafarge’s

extrinsic evidence was “minimal.” As previously noted, however, once a contract is

deemed ambiguous, a question of fact arises and the issue is reserved for the jury.

Essex, 195 S.W.3d at 535. 

-9-

obvious economic considerations involved, as well as the contract’s failure to define

the relevant terms, it is reasonable to interpret Discovery Group’s obligation to

“search for sites” and “review each prospective location” in accordance with Lafarge’s

“objectives” as requiring Discovery Group to investigate and disclose the economic

considerations impacting a particular site, which necessarily encompasses taxation

rates. In the end, however, we do not decide which interpretation is more reasonable,

but only that both interpretations are reasonable. Because the ERA is reasonably

susceptible to multiple constructions – one of which imposes a requirement on

Discovery Group to review and disclose existing economic incentives and prevailing

tax rates and one of which does not – the contract is ambiguous about whether the

parties intended Discovery Group to undertake such an obligation.

Because the contract is ambiguous, a question of fact arises as to the parties’

intent, and extrinsic evidence may be introduced as proof of the parties’ intent. See

Burrus, 211 S.W.3d at 616. Both parties have extrinsic evidence favorable to their

interpretation of the contract and the meaning of the term “objectives.” Discovery

Group can introduce evidence that Lafarge did not care about prevailing tax rates

because it did not believe them relevant, never discussed economic incentives, and

could have easily included this obligation in the contract if such was its desire. In

contrast, Lafarge can introduce evidence that Discovery Group represented prior to

the contract they would meet with government authorities, and it identified

“Understand Local Government Policies” as an “objective” in its status reports. It is

for a jury, not this court, to weigh the evidence, along with the terms of the contract,

and make a factual determination of the parties’ intent concerning Discovery Group’s

obligation to investigate and disclose economic incentives and tax rates.3

 Thus, we
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reverse the district court’s grant of summary judgment in favor of Discovery Group

on Lafarge’s breach of contract claim.

Fraudulent and Negligent Misrepresentation

The elements of a fraudulent representation claim in Missouri are: “(1) a false,

material representation; (2) the speaker’s knowledge of its falsity or his ignorance of

its truth; (3) the speaker’s intent that it should be acted upon by the hearer in the

manner reasonably contemplated; (4) the hearer’s reasonable reliance on its truth; and

(5) the hearer’s consequent and proximately caused injury.” Kesselring v. St. Louis

Group, Inc., 74 S.W.3d 809, 813 (Mo. Ct. App. 2003). To state a claim for negligent

misrepresentation, a plaintiff must prove:

(1) the speaker supplied information in the course of his business; (2)

because of a failure by the speaker to exercise reasonable care, the

information was false; (3) the information was intentionally provided by

the speaker for the guidance of a limited group of persons in a particular

business transaction; (4) the listener justifiably relied on the information;

and (5) due to the listener’s reliance on the information, the listener

suffered a pecuniary loss.

Id. While similar, there are two differences between a fraudulent misrepresentation

claim and a negligent misrepresentation claim. First, “fraudulent misrepresentation

requires that the person knowingly or recklessly supplied false information, whereas

negligent misrepresentation requires no such knowledge or recklessness.” Id.

Second, “negligent misrepresentation requires that the information be supplied in the

course of the defendant’s business.” Id.

The district court granted summary judgment on Lafarge’s misrepresentation

claims because it concluded the existence of the Strother District, of which the failure

to disclose made certain prior representations false, was not material to Lafarge. The

court relied on the undisputed fact that Lafarge had not in the past reported sales tax

from the location of its headquarters and did not intend to report sales tax from its new
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location. Furthermore, the court relied on testimony by David Addison, Lafarge’s

controller of its North America Division, explicitly stating the existence of the

Strother District would not have been of consequence to him. For the following

reasons, we disagree with the district court’s materiality analysis.

Materiality is a question of fact for the jury, “but when the misrepresentation

is of such a nature that all minds would agree it is or is not material the question is

appropriate for summary judgment.” Continental Cas. Co. v. Maxwell, 799 S.W.2d

882, 889 (Mo. Ct. App. 1990). A “representation is material if a reasonable person

would attach importance to it in determining his choice of action in the transaction in

question.” St. Louis Air Cargo Serv., Inc. v. City of St. Louis, 929 S.W.2d 821, 826

(Mo. Ct. App. 1996); Brown v. Bennett, 136 S.W.3d 552, 556 (Mo. Ct. App. 2004)

(“Facts to which a reasonable person might be expected to attach importance in

making one’s choice of action are material.”). Because it focuses on a reasonable

person, the “test of materiality . . . is an objective one, to be evaluated by the facts and

circumstances of the transaction in question.” DeLong v. Hilltop Lincoln-Mercury,

Inc., 812 S.W.2d 834, 840 (Mo. Ct. App. 1991). Thus, the participants’ subjective

beliefs concerning the importance of the misrepresentation at issue are immaterial to

our analysis.

We conclude a genuine issue of fact exists whether disclosure of the Strother

District was material. A factfinder could conclude that a reasonable business engaged

in selling construction materials would attach importance to a special sales tax when

choosing the location of its new headquarters. Lafarge is a business which conducts

sales from its headquarters and is obligated to pay sales tax according to the rate of

taxation in the jurisdiction of its headquarters. It seems simple enough to say that a

business conducting sales from its headquarters would attach importance to a special

sales tax when choosing where to relocate it headquarters.
4

Although the parties argued the element of causation below, the district court

did not discuss causation, and the Defendants do not argue a lack of causation on

appeal. Thus, we leave this issue for the district court to resolve. See Schweiss v.

Chrysler Motors Corp., 922 F.2d 473, 476 (8th Cir. 1990) (explaining that we may

decline to address an issue not reached by the district court “where there are factual

questions still to be resolved or where we would benefit from having the District

Court decide the issue in the first instance”). Furthermore, we make no ruling with

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Although the above point is easily made, the confusion lies in the fact that while

Lafarge is required to pay sales tax at its headquarters, it did not – at the time –

understand its obligation. As such, Lafarge had not reported sales tax from its

headquarters and did not intend to report sales tax from its headquarters in its new

location. By considering such facts, however, the district court (and Defendants)

mistakenly take subjective considerations into account while applying an objective

standard. A reasonable business conducting sales from its headquarters would have

placed importance on the Strother District in selecting a site for its headquarters. The

fact that Lafarge, based on an incorrect interpretation of Missouri law, mistakenly

believed it did not conduct sales from its headquarters is a subjective factor irrelevant

under an objective analysis. A reasonable company in Lafarge’s position with a

correct understanding of the law would have attached importance to the Strother

District. That Lafarge was mistaken in its understanding of the law goes to the

subjective importance it would have placed on the Strother District, not the

importance a reasonable company would have placed on the same information. See

Osterberger v. Hites Constr. Co., 599 S.W.2d 221, 228 (Mo. Ct. App. 1980) (“The test

of materiality . . . is not, subjectively, whether the fact concealed would have affected

the conduct of the particular buyer concerned but, rather, whether, objectively, the fact

concealed would have affected the conduct of a reasonably prudent buyer.”).

While the importance Lafarge would have placed on the Strother District

because of its beliefs concerning its tax obligations is relevant for purposes of

causation – i.e, whether Lafarge in fact would have proceeded differently had it

known of the Strother District – it is irrelevant with respect to materiality.4

 Because
respect to the other elements of Lafarge’s misrepresentation claims.

5

We affirm the district court with respect to certain specific representations

made in a brochure produced by Discovery Group. The brochure was not created until

April 2000 (after Lafarge contracted with Discovery Group, selected the Chapel Ridge

site, and entered into a lease with Explorer), and there is no evidence how Lafarge

could have relied on representations contained therein. However, it is important to

note that Lafarge’s misrepresentation claims do not necessarily rely on affirmative

misrepresentations. “Concealment of a fact which one has a duty to disclose properly

serves as a substitute element for a false and fraudulent misrepresentation.”

Osterberger, 599 S.W.2d at 227. Because Defendants, as real estate brokers, had a

duty to disclose all adverse material facts, Missouri Revised Statute § 339.730(1),

their failure to disclose the Strother District, if found to be material, constitutes its

own misrepresentation without reliance on any other representation or statement. 

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a reasonable company in Lafarge’s position would have attached importance to the

Strother District, the failure to disclose its existence was material. Therefore, we

reverse the district court’s grant of summary judgment in favor of Defendants on

Lafarge’s claims of fraudulent and negligent misrepresentation.5

Breach of Fiduciary Duty

In Missouri, a claim for breach of fiduciary duty has four elements: (1) the

existence of a fiduciary relationship between the parties; (2) a breach of that fiduciary

duty; (3) causation; and (4) harm. Koger v. Hartford Life Ins. Co., 28 S.W.3d 405,

411 (Mo. Ct. App. 2000). Under Missouri common law, a real estate broker and client

have a fiduciary relationship. Am. Mortgage Inv. Co. v. Hardin-Stockton Corp., 671

S.W.2d 283, 290 (Mo. Ct. App. 1984). As such, a broker, among other things, is

“obligated . . . to make a complete and full disclosure of all material facts concerning

the transaction.” Id. In 1997, Missouri enacted Missouri Revised Statute § 339.730,

“which is intended to take the typical real estate agency relationship out of the realm

of common law agency.” Lowdermilk v. Vescovo Bldg. & Realty Co., Inc., 91

S.W.3d 617, 629 (Mo. Ct. App. 2002) (internal quotation marks and citation omitted).

The statute imposes upon a broker an obligation to disclose “all material adverse facts
6

Again, we do not address causation or any other element of Lafarge’s breach

of fiduciary duty claim not addressed by the district court. See Schweiss, 922 F.2d at

476.

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actually known or that should have been known” by the broker. Mo. Rev. Stat. §

339.730(1)(3)(c). An adverse material fact is defined as “a fact related to the property

not reasonably ascertainable or known to a party which negatively affect the value of

the property.” Mo. Rev. Stat. § 339.710(1).

As with its other claims, Lafarge alleges Defendants breached their fiduciary

duty by failing to disclose the existence of the Strother District. The district court

granted summary judgment on Lafarge’s breach of fiduciary duty claim, once again

concluding the Strother District was not an adverse material fact. For many of the

same reasons as before, we conclude there is a factual dispute whether the Strother

District was a material fact. A reasonable person could conclude that an objective

business would have found the Strother District important in making its decision, and

it is safe to say the Strother District more than likely negatively affected the value of

the property. Again, the fact that Lafarge may have mistakenly believed the Strother

District to be unimportant goes to causation, not materiality.6

 For this reason, we

reverse the district court’s grant of summary judgment in favor of Defendants on

Lafarge’s breach of fiduciary duty claim.

Negligence

To prevail on a negligence claim in Missouri, the plaintiff must prove: “1) the

existence of a duty on the part of the defendant to protect the plaintiff from injury; 2)

the defendant’s failure to perform that duty; and 3) the plaintiff’s injury was

proximately caused by that failure.” Smith v. Dewitt & Assoc., Inc., 279 S.W.3d 220,

224 (Mo. Ct. App. 2009). A duty arises when “there is a foreseeable likelihood that

particular acts or omissions will cause harm or injury,” and the scope of that duty “is

measured by whether a reasonably prudent person would have anticipated danger and

provided against it.” Id. (internal quotation marks and citation omitted).
7

Although Defendants are correct in pointing out Lafarge represented that its

headquarters would be used for office space and research, this does not necessarily

preclude the possibility that sales taxation rates would be applicable. It is possible,

as this case demonstrates, that work undertaken in an office could incur sales tax. In

fact, when Lafarge sent Defendants a spreadsheet of the individuals who would be

working in the new headquarters, it identified fifteen people under the category “RM

Sales.”

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The district court granted summary judgment in favor of Defendants because

it concluded Defendants did not breach any duty owed to Lafarge. We disagree.

First, Missouri courts have long recognized a real estate broker owes a duty of care

towards his clients, which requires him “to exercise reasonable skill, diligence, and

care in the handling of business given over or entrusted to the broker.” Am. Mortgage

Inv. Co., 671 S.W.2d at 293. Courts also recognize such a standard is “dependent

upon the nature and extent of the job undertaken by the broker.” Id. Whether that

duty is breached in a particular case is a question of fact for the jury to decide. Pyle

v. Layton, 189 S.W.3d 679, 685 (Mo. Ct. App. 2006). Therefore, “[s]ummary

judgment is frequently inappropriate in a negligence case particularly where the issue

is whether there are facts upon which the trier of fact could find a breach of an

admitted or otherwise established duty.” Lumbermans Mut. Cas. Co. v. Thornton, 92

S.W.3d 259, 263 (Mo. Ct. App. 2002).

In light of the evidence, there is an issue of fact whether Defendants exercised

reasonable care in handling Lafarge’s business. In light of Defendants agreeing to

handle all of Lafarge’s business with respect to the relocation of its headquarters, a

factfinder could conclude a reasonably prudent person would have disclosed the

existence of the Strother District to Lafarge. First, Discovery Group had little reason

to believe the Strother District would have been of no consequence to Lafarge.

Lafarge never told Defendants that it did not intend to pay sales tax at its new

location.7

 More importantly, even if Defendants had reason to believe the Strother

District may be inconsequential to Lafarge, they have yet to provide a persuasive

justification for not disclosing the information. Informing Lafarge of the Strother
-16-

District would have been very easy, and would not have imposed upon the Defendants

any additional burdens or costs. If Defendants truly believed the Strother District was

immaterial to Lafarge, they could have easily disclosed its existence and then

proceeded to closing with Lafarge’s blessing. Thus, a factfinder could conclude a

reasonable person/company in Defendants’ position would have disclosed the Strother

District to Lafarge. The district court erred in finding as a matter of law that

Defendants did not breach their duty.

The district court also erred in holding that, even if Defendants did breach their

duty, such breach was not the proximate cause of Lafarge’s injuries. According to the

district court, the cause of Lafarge’s damage was the letter by the Missouri

Department of Revenue concluding Lafarge conducted sales at its headquarters. The

district court erred, however, because the test “of proximate cause is whether the

negligence is an efficient cause which sets in motion the chain of circumstances

leading to the plaintiff’s injuries or damages.” English v. Empire Dist. Elec. Co., Inc.,

220 S.W.3d 849, 856 (Mo. Ct. App. 2007). Thus, a “defendant’s negligence does not

need to be the sole cause of the injury, but rather need only be one of the efficient

causes thereof without which the injury would not have occurred.” Id. Proximate

causation is satisfied when “the purported intervening cause occurs in combination or

concurrent with earlier negligence, or where the intervening act itself constitutes an

act . . . which is a foreseeable consequence of the original act of negligence.” Id.

“The test is not whether a reasonably prudent person would have foreseen the

particular injury, but whether, after the occurrences, the injury appears to be the

reasonable and probable cause of the act or omission of the defendant.” Simonian v.

Gevers Heating & Air Conditioning, Inc., 957 S.W.2d 452, 475 (Mo. Ct. App. 1997).

We conclude that if Defendants are found to be negligent in failing to disclose

the Strother District, such negligence was the proximate cause of Lafarge’s injuries.

See Payne v. City of St. Joseph, 135 S.W.3d 444, 451 (Mo. Ct. App. 2004) (noting
8

This presupposes that Defendant’s negligence is found to be the cause in fact,

or “but for” cause, of Lafarge’s injuries, i.e., Lafarge would have chosen a different

site for its headquarters had Defendants acted in a reasonably prudent manner. See

Simonian, 957 S.W.2d at 474-75 (explaining the differences between “but for”

causation and proximate causation; a plaintiff in a negligence action must demonstrate

both). The district court did not address causation in fact, and the parties do not argue

causation in fact on appeal. Therefore, we decline to address this element of Lafarge’s

negligence claim. See Scweiss, 922 F.2d 476.

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that proximate causation is generally a question of law).8

 Because Lafarge was

required to pay the special tax imposed by the Strother District it was also a

reasonable and probable consequence of the Defendants’ failure to inform Lafarge of

the Strother District. Although Lafarge had not in the past paid sales tax from the

jurisdiction of its headquarters, its failure to do so was based on an incorrect

interpretation of the law. It is foreseeable that Lafarge would eventually have its

understanding of the law corrected and thus begin paying the special sales tax imposed

by the Strother District. See Jones v. Tritter, 938 S.W.2d 165, 168 (Mo. Ct. App.

1998) (“It is only necessary that the party charged knew or should have known there

was an appreciable chance some injury would result.”). Notably, the letter from the

Department of Revenue did not constitute a change in the law – which would allow

Defendants to argue that such a change was not foreseeable – but simply an

application of existing law to the circumstances of this case. Therefore, Lafarge

paying the special sales tax imposed by the Strother District was a reasonable,

probable, and foreseeable consequence of Defendants not disclosing the Strother

District to Lafarge.

Rescission

In its final claim, Lafarge seeks to rescind the lease it entered into with

Explorer. Lafarge alleges that because the lease was induced through the fraudulent

representations and omissions of the various Defendants, it is entitled to rescission.

Missouri courts have held that “rescission may be based upon actual fraud, i.e., a false

representation of a material fact, made with the knowledge of its falsity and with the
9

Defendants also argue that Explorer, the lessor, cannot be held liable for the

misdeeds of other parties (i.e., Discovery Group, Tharpe, and Pope), and that Lafarge

failed to seek rescission in a timely manner. The district court did not address these

arguments. Because we believe it would be beneficial for the district court to address

these issues in the first instance, we decline to affirm on these alternative theories.

Schweiss, 922 F.2d at 476.

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intent to deceive.” Osterberger, 599 S.W.2d at 227. In addition, “a party to a contract

can rescind if the contract was induced by an innocent misrepresentation.” Groothand

v. Schlueter, 949 S.W.2d 923, 927 (Mo. Ct. App. 1997). Thus, “[t]here is no

requirement that the party prove the speaker’s knowledge of the falsity or intent to

cheat or defraud.” Id.

The district court granted summary judgment against Lafarge on this claim,

concluding, based on its other rulings, Lafarge could not demonstrate the lease was

based on a misrepresentation of a material fact. For the reasons previously explained,

this ruling was incorrect; there is a genuine issue of fact whether the Strother District

was a material fact. Therefore, we reverse the district court’s ruling with respect to

Lafarge’s rescission claim.9

III

For the aforementioned reasons, we reverse the district court’s order with

respect to Lafarge’s claims against Defendants and remand for further proceedings.

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