Court Opinion

ID: 9516900
Source: CourtListenerOpinion
Date Created: 2023-08-06 23:55:30.212743+00
Date Added: 2024-06-11T09:39:55.500755
License: Public Domain

DUANE BENTON, Judge,
dissenting.
I dissent. This case exemplifies the general rule:
Merely holding a corporate office will not subject one to personal liability for the misdeeds of the corporation.
Boyd v. Wimes, 664 S.W.2d 596, 598 (Mo.App.1984). This is common sense because corporations must act through individuals, who are not personally liable for doing their jobs. Someone must hire and fire employees, without incurring personal liability. Lynch v. Blanke Baer & Bowey Krimko, Inc., 901 S.W.2d 147, 154 (Mo.App.1995). Someone must carry out contracts, without incurring personal liability. Zipper v. Health Midwest, 978 S.W.2d 398, 414 (Mo.App.1998).
There is an exception:
[N]othing short of active participancy in a positively wrongful act intendedly and directly operating injuriously to the prejudice of the party complaining will give origin to individual liability.
*507Fusz v. Spaunhorst, 67 Mo. 256, 264 (1878); Wolfersberger v. Miller, 327 Mo. 1150, 39 S.W.2d 758, 764 (1931). A corporate president that defrauds or steals is personally liable, although acting in the corporation’s name. See Boyd, 664 S.W.2d at 598; Grothe v. Helterbrand, 946 S.W.2d 301, 304 (Mo.App.1997); Rauch v. Brunswig, 155 Mo.App. 367, 137 S.W. 67, 67-68 (1911); Osterberger v. Hites Constr. Co., 599 S.W.2d 221, 229 (Mo.App.1980); Constance v. B.B.C. Dev’t Co., 25 S.W.3d 571, 589-90 (Mo.App.2000). A manager who controls the operations of the corporation, and directs the wrong, is individually ha-ble. Robinson v. Moark-Nemo Consol. Mining Co., 178 Mo.App. 531, 163 S.W. 885, 887-88 (1914); Curlee v. Donaldson, 233 S.W.2d 746, 754 (Mo.App.1950). Usually, an officer held personally hable is an owner of the corporation. See, e.g., Grothe, 946 S.W.2d at 304; Constance, 25 S.W.3d at 589; Curlee, 233 S.W.2d at 754.
In this case, the officer is not the president, not a manager of operations, and not an owner. He is a staff officer, the chief financial officer. Before a corporate staff officer may be sued individually, active participaney requires more than the performance of normal job duties. Suit should not be allowed for “rubber stamp” financial approval or authorization. To constitute active participaney, a chief financial officer must have the freedom to disburse funds in a discretionary manner, and actively do so with the intent to accomplish a positively wrongful act.
Plaintiffs do not allege that Marvin K Kaiser, the chief financial officer, had any discretion over environmental funding. The petition does not state a cause of action against Kaiser. See State ex rel. Malone v. Mummert, 889 S.W.2d 822, 825 (Mo. banc 1994). Most allegations against him repeatedly re-state the precise words of the exception. “Mere conclusions of the pleader not supported by factual allegations are disregarded in determining whether a petition states a claim on which relief can be granted.” Commercial Bank of St. Louis County v. James, 658 S.W.2d 17, 22 (Mo. banc 1983). The more specific allegations in the petition reference Kaiser’s “involvement” in budgeting, such as helping to set budgets, approving expenditures, and signing financial assurances to the State of Missouri. See Section ⅛⅛⅛..368 RSMo 2000. Plaintiffs never allege that he had any discretionary authority, the minimum for active participation.
More importantly, joinder is pretensive if there is in fact no cause of action against the joined defendant, even if the petition on its face states a cause of action. See Mummert, 889 S.W.2d at 825. Here, join-der is pretensive because Kaiser did not actively participate in making environmental decisions. Kaiser never refused to authorize a funding request. He supplied one of six required signatures for financial disbursements, in order to ensure that spending was properly authorized, funded, and accounted for. He never had authority over any environmental employees or programs. He did not propose or reject specific environmental expenditures.
Venue is not proper in the Circuit Court for the City of St. Louis. Fortunately, the General Assembly can correct the state of the law. Venue is determined solely by statute. State ex rel. BJC Health System v. Neill, 121 S.W.3d 528, 529 (Mo. banc 2003). The legislature can prescribe that, when the corporation is also a defendant, venue is not determined by the personal residence of a corporate officer who does not intend to actively participate in a positively wrongful act.