For a case of fraud based on suppression of a fact, a plaintiff must establish that the defendant had a duty to disclose a material fact. Smith v. General Motors Corp., 979 S.W.2d 127, 129 (Ky. Ct. App. 1998); Osterberger v. Hites Construction Co., 599 S.W.2d 221, 227 (Mo. App. 1980). "It is, of course, well established that mere silence is not fraudulent absent a duty to disclose."
"To hold an officer of a corporation liable, he must be shown to have had actual or constructive knowledge of the actionable wrong and participated therein." Osterberger v. Hites Const. Co., 599 S.W.2d 221, 229 (Mo.Ct.App. 1980). See also Constance v. B.B.C. Development Co., 25 S.W.3d 571 (Mo.Ct.App. 2000).
A contract involving fraud in the inducement affords the victimized party a choice of remedies: to rescind the contract or to enforce it and sue independently for the damages resulting from the fraud. Cabinet Distributors, Inc. v. Redmond, 965 S.W.2d 309, 314 (Mo.App. 1998); Groothand v. Schlueter, 949 S.W.2d 923, 927 (Mo.App. 1997); Osterberger v. Hites Construction Company, 599 S.W.2d 221, 227 (Mo.App. 1980). The Mackley court acknowledged Metropolitan Paving but endeavored to distinguish it on the ground that it had concerned a contract dealing with the sale of bonds.
In its final point plaintiff argues that the trial court erred in dismissing Count III, its alternate claim for rescission of the lease. A party who is fraudulently induced to enter a contract may affirm the contract and sue for damages or disaffirm the contract and sue in equity for rescission. Cottonhill Inv. Co. v. Boatman's Nat'l. Bank of Cape Girardeau, 887 S.W.2d 742, 744 (Mo. App. 1994); Osterberger v. Hites Constr. Co., 599 S.W.2d 221, 227 (Mo. App. 1980). Rescission may be based on actual fraud or an innocently made misrepresentation. Osterberger, 599 S.W.2d at 227.
We note that appellants in the instant case characterize their misrepresentation claim as being one for fraudulent inducement to enter a contract, and that Missouri clearly recognizes such a cause of action. See, e.g., Timmons v. Bender, 601 S.W.2d 688 (Mo.App. 1980); Osterberger v.Hites Construction Co., 599 S.W.2d 221 (Mo.App. 1980). Generally, claims based on misrepresentation or fraud are distinct from and contain different elements than claims grounded on breach of warranty or contract.
But β[t]o hold an officer of a corporation liable, he must be shown to have had actual or constructive knowledge of the actionable wrong and participated therein.β Protus, 2009 WL 775582, at *2 (quotation marks omitted) (quoting Osterberger v. Hites Constr. Co., 599 S.W.2d 221, 229 (Mo. App. 1980)). Top Gun has failed to allege facts or provide evidence showing that any specific Individual Defendant had actual or constructive knowledge of and participated in tortious conduct.
The Complaint alleges that Kohlberg is an officer of Kane and serves as its President and CEO. (Complaint, ΒΆΒΆ3, 43). Kohlberg can be liable if he had actual or constructive knowledge of the tortious corporate conduct and participated in the wrong. See Grothe v. Helterbrand, 946 S.W.2d 301, 304 (Mo. Ct. App. 1997) (citing Lynch v. Blanke Baer & Bowey Krimko, Inc., 901 S.W.2d 147, 153[15] (Mo.App.1995); Boyd, 664 S.W.2d at 598[1]; Osterberger v. Hites Constr. Co., 599 S.W.2d 221, 229[20] (Mo.App.1980) ("corporate officers may be held individually liable for tortious corporate conduct if they have actual or constructive knowledge of, and participated in, an actionable wrong."). The Complaint alleges, "[a]s Kane's President, Kohlberg is and has been ultimately responsible for all aspects of Kane's business. Kohlberg was also the mastermind behind the Kane Conspiracy."
An individual is not protected from liability simply because the acts constituting the tort were done in the scope and course, and pertained to, the duties of his [or her] employment [and] a corporate officer may be held individually liable for tortious corporate conduct if he or she had actual or constructive knowledge of, and participated in, an actionable wrong.State ex rel. Doe Run Res. Corp. v. Neill, 128 S.W.3d 502, 505 (Mo.banc 2004) (citations and internal quotation marks omitted); see also Constance v. B.B.C. Dev. Co., 25 S.W.3d 571, 590 (Mo.Ct.App.2000); Grothe v. Helterbrand, 946 S.W.2d 301, 304 (Mo.Ct.App.1997); Osterberger v. Hites Constr. Co., 599 S.W.2d 221, 229 (Mo.Ct.App.1980). Here, Brightergy alleges that Canady actually knew about and participated in the tortious conduct alleged by Brightergy. Def.'s Answer and Countercl. at 10, ΒΆ 7 (Doc. 5).
For an officer of a corporation to be individually liable for the misdeeds of a corporation, "he must be shown to have had actual or constructive knowledge of the actionable wrong and participated therein." Osterberger v. Hites Const. Co., 599 S.W.2d 221, 229 (Mo.App. 1980). The mere fact that a corporation is subject to local jurisdiction does not necessarily mean its nonresident officers, directors, agents, and employees are suable locally as well.
This is true even when the officers are acting in their corporate capacity. Id. See also Osterberger v. Hites Constr. Co., 599 S.W.2d 221, 229 (Mo.App. 1980). In an action for inducing a breach of contract, a corporate officer is protected from individual liability, "provided no improper means are used, the defendant acts in good faith to protect the corporation[,] and does not act for his own benefit."