319 So.3d 1174
Miss. Ct. App.2021Background
- Jan Macko formed Magnolia Properties and Remodel LLC; Macko was manager/member and Andrea Miller was a member. The LLC purchased and ostensibly renovated a Hattiesburg house in 2016.
- Renovations were partial: some roof, plumbing, and electrical work were performed, but prior owner and contractors testified additional/complete repairs were needed.
- Miller advertised the house on her personal Facebook as a "totally renovated" home with "all new wiring, roof, etc." The purchase contract and property-disclosure were signed by Miller and Macko (listed as sellers), but title was held by Magnolia LLC.
- After closing, buyers Jonathan Lancaster and Cassie Bickham discovered major defects and no transferable warranties; they sued Magnolia LLC, ICOM LLC, and Miller and Macko individually for fraud, misrepresentation, breach of contract, and related claims.
- The circuit court granted summary judgment for Miller and Macko based on LLC protection and lack of evidence to pierce the veil; on appeal plaintiffs withdrew veil-piercing claims and the sole issue became whether Miller and Macko were personally liable for misrepresentation.
- The Court of Appeals reversed and remanded, holding genuine issues of material fact existed about Miller’s and Macko’s individual misrepresentations and intent, so summary judgment was improper.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Miller and Macko are individually liable for misrepresentation/fraud | Miller and Macko made specific, false representations (Facebook, disclosure, contract) and plaintiffs relied, causing damages | Any statements were made on behalf of Magnolia LLC; no individual tortious conduct; LLC shields members | Reversed: genuine factual disputes exist as to individual misrepresentation; summary judgment improper |
| Whether fraud/misrepresentation was pleaded with sufficient specificity (M.R.C.P. 9) | Complaint alleges specific misrepresentations (renovations, warranties, roof warranty) and intent | Allegations are vague and not pled with required particularity | Held pleadings met Rule 9’s specificity requirements |
| Whether there is evidence of intent to defraud (required for fraud; clear and convincing burden at trial) | Circumstantial evidence (Facebook post, prior owner/contractor testimony, disclosure statements, lack of warranties) supports an inference of intent | No direct evidence of intent; record shows partial repairs and partial transferable warranty; evidence is conjectural | Held: circumstantial evidence creates triable issues of fact on intent; intent may be inferred; summary judgment denied |
| Whether LLC statutory shield bars individual liability absent veil piercing | Defendants relied on Miss. Code Ann. § 79-29-311 to bar individual liability | Plaintiffs do not seek veil piercing now but assert individuals committed torts personally | Held: LLC shield does not protect individuals from their own tortious acts; individual liability may attach for personally committed torts |
Key Cases Cited
- Mississippi Printing Co. v. Maris, West & Baker Inc., 492 So. 2d 977 (Miss. 1986) (corporate officer who directly participates in a tort may be personally liable)
- Gray v. Edgewater Landing Inc., 541 So. 2d 1044 (Miss. 1989) (three-part test to pierce corporate veil)
- Whitaker v. Limeco Corp., 32 So. 3d 429 (Miss. 2010) (reiterating individual liability for officers who participate in torts)
- Gulf Coast Hospice LLC v. LHC Grp. Inc., 273 So. 3d 721 (Miss. 2019) (elements and standard for negligent misrepresentation)
- Aldridge v. Aldridge, 168 So. 3d 1127 (Miss. Ct. App. 2014) (individual wrongdoing required for personal liability beyond corporate connection)