Opinion ID: 1630945
Heading Depth: 2
Heading Rank: 1

Heading: Whether the Circuit Court of the First Judicial District of Hinds County, Mississippi, erred in granting Cleve B. Brock summary judgment.

Text: ¶ 15. The homeowners assert that the circuit court erred in granting Brock's summary judgment in accordance with Rule 56(c) of the Mississippi Rules of Civil Procedure. However, Rule 56(c) of the Mississippi Rules of Civil Procedure allows summary judgment where there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. ¶ 16. In its final judgment granting Brock summary judgment, the court determined the homeowners presented no genuine issue of material fact. Therefore, the trial court concluded that Brock was entitled to a summary judgment as a matter of law. The trial court's decision was based on the following facts taken from the record: (a) land records evidencing that the corporation acted in a corporate capacity; (b) minutes memorializing annual meetings of the corporation's organization; (c) share certificates evidencing Brock and Buchanan's stock ownership as shareholders in the corporation; (d) the corporation's certificate of incorporation issued by the Mississippi Secretary of State; (e) evidence illustrating when the corporation purchased the subdivision from Robert M. Buchanan, Jr.; and (f) evidence illustrating that the corporation acted as the owner and developer of the subdivision after its purchase. These facts constituted such probative evidence as to validate the circuit court's final judgment to grant Brock summary judgment. ¶ 17. These facts supply sufficient evidence for affirming Brock's summary judgment as a matter of law. In accordance with Rule 56(c) of the Mississippi Rules of Civil Procedure, if no genuine issue of material fact exists, and the moving party is entitled to judgment as a matter of law, then summary judgment should be granted to the moving party. Based on the evidence the record before the trial court, Brock acted corporately as opposed to individually in the development of the subdivision. ¶ 18. [I]ndividual liability of corporate officers or directors may not be predicated merely on their connection to the corporation but must have as their foundation individual wrongdoing. Turner v. Wilson, 620 So.2d 545, 548 (Miss. 1993). When a corporate officer directly participates in or authorizes the commission of a tort, even on behalf of the corporation, he may be held personally liable. Id. ¶ 19. The homeowners presented no proof evidencing Brock directly participated in the alleged misfeasance in the development. ¶ 20. To disregard the corporate entity in determining whether Brock should be held potentially liable for the corporation's possible negligence, the appellate court would have to consider a three-prong test to justify placing shareholder liability on the Brock T.C.L., Inc. v. Lacoste, 431 So.2d 918, 922 (Miss.1983), overruled on other grounds, C & C Trucking Co. v. Smith, 612 So.2d 1092, 1105 (Miss.1992); Thames & Co. v. Eicher, 373 So.2d 1033, 1035 (Miss.1979). In order to pierce this corporate shield, the homeowners must prove the following: (i) some frustration of contractual expectations regarding the party to whom he looked for performance; (ii) the flagrant disregard of corporate formalities by the defendant corporation and its principals; (iii) a demonstration of fraud or other equivalent misfeasance on the part of the corporate shareholder. Gray v. Edgewater Landing, Inc., 541 So.2d 1044, 1047 (Miss.1989). ¶ 21. The homeowners failed to argue this corporate shield should be pierced if this Court does find that Brock was acting in his corporate capacity. ¶ 22. The homeowners bear the burden of proof and have not put forth any proof in the record evidencing Brock used the corporation's status as a corporate entity to perpetrate a fraud on them, nor any frustration of contractual expectations, or a disregard of corporate formalities. Thus, the homeowners have not proven the elements necessary to pierce the corporate shield. Brock did assist in the everyday sales and business operations of the corporation. However, this general assumption of sales duties and business operation duties for the corporation cannot be held a basis of liability for one agent or shareholder. Id. at 1047. ¶ 23. Additionally, in accordance with the corporate shield and alter ego liability, in order for there to be alter ego liability placed on one shareholder of a corporation, there must be a claim in existence against the corporation. 1 William Meade Fletcher, Fletchers Cyclopedia of the Law of Private Corporations § 41.28, at 608 (1999). A claim against the corporation is a prerequisite for alter ego liability being placed on one shareholder. Id. ¶ 24. The homeowners never pursued a claim against the corporation separately from their claim against Brock. Therefore, they have failed to satisfy the prerequisite needed to place liability on one shareholder of the corporation.