IN THE SUPREME COURT OF MISSISSIPPI
NO. 2009-CA-00351-SCT
R. W. WHITAKER AND MONTY FLETCHER
v.
LIMECO CORPORATION AND WILLIAM KIDD
DATE OF JUDGMENT: 01/30/2009
TRIAL JUDGE: HON. JAMES LAMAR ROBERTS, JR.
COURT FROM WHICH APPEALED: LEE COUNTY CIRCUIT COURT
ATTORNEYS FOR APPELLANTS: MICHAEL N. WATTS
R. BRADLEY BEST
ATTORNEYS FOR APPELLEES: MARGARET SAMS GRATZ
L. F. SAMS, JR.
NATURE OF THE CASE: CIVIL - CONTRACT
DISPOSITION: AFFIRMED IN PART; REVERSED IN
PART, AND REMANDED - 04/08/2010
MOTION FOR REHEARING FILED:
MANDATE ISSUED:
BEFORE CARLSON, P.J., LAMAR AND CHANDLER, JJ.
CARLSON, PRESIDING JUSTICE, FOR THE COURT:
¶1. Failing in their efforts to collect more than $850,000 purportedly owed to them as a
result of the trial court’s dismissal of their claims against Limeco Corporation and William
Kidd, R. W. Whitaker and Monty Fletcher appeal to us for relief. Although we find that the
trial court correctly dismissed some of the claims asserted by Whitaker and Fletcher, we
likewise find error on the part of the trial court in dismissing in their entirety all claims
asserted by Whitaker and Fletcher against Limeco and Kidd. Thus, the Lee County Circuit
Court’s judgment of dismissal is affirmed in part, reversed in part, and remanded for further
proceedings consistent with this opinion.
FACTS AND PROCEEDINGS IN THE TRIAL COURT
¶2. Some of the facts in today’s case are gleaned from our opinion in a related case,
Fletcher v. Limeco Corporation, 996 So. 2d 773 (Miss. 2008). William Kidd served as
managing director of Limeco Corporation. Beginning in 2001, negotiations began between
Kidd/Limeco, the Defendants/Appellees,1 and R. W. Whitaker and Monty Fletcher,2 the
Plaintiffs/Appellants, in connection with what later became a failed effort to purchase a
hockey team in Tupelo. The Plaintiffs maintain that in the course of these 2001 negotiations,
Kidd misrepresented to them that Limeco was a corporation with substantial assets. The
Plaintiffs further allege that, as a result of Kidd’s misrepresentations, they were fraudulently
induced by Kidd to lend Limeco $750,000. According to the Plaintiffs, these loans were
made based on Kidd’s misrepresentations to the Plaintiffs that, to the extent Kidd could not
pay back the loans, Limeco had sufficient assets to repay the loans in full. The Plaintiffs
claim Kidd concealed the fact that Limeco had no assets, and in doing so, shared with the
Plaintiffs certain financial records and books which showed the corporation to be a solvent
corporation possessing sufficient assets to repay the loans. See Fletcher, 996 So. 2d at 774.
1
Except when necessary to refer to William Kidd or Limeco Corporation,
individually, they will be referred to collectively as the Defendants.
2
Except when necessary to refer to R. W. Whitaker or Monty Fletcher, individually,
they will be referred to collectively as the Plaintiffs.
2
¶3. The Plaintiffs further allege that, on or about February 19, 2002, Kidd induced
Whitaker to take out an additional $100,000 loan from Peoples Bank & Trust Company in
Tupelo, and, in turn, to lend Kidd the full amount of this loan, which came due on April 19,
2002. This loan was extended by Whitaker in the form of a continuing guaranty with the
understanding that the Defendants would be responsible to the bank for any and all
indebtedness of Whitaker to the bank for an amount up to $100,000.
¶4. On July 1, 2002, the parties entered into what they referred to as promissory notes
(referred to as the “Fletcher note” and the “Whitaker note”) to memorialize the terms of the
loan agreements they had made in early 2002. Both Fletcher and Whitaker, in an effort to
secure what they thought were promissory notes, were granted a continuing lien on Limeco’s
monies, securities, and/or other property for the entire amount of the promissory notes (each
in the amount of $375,000).
¶5. On December 11, 2003, Whitaker and Fletcher filed separate complaints against
Limeco and Kidd.3 The Plaintiffs alleged that they had lent Kidd more than $850,000 that
had never been repaid. Both complaints alleged claims of breach of promissory notes.
Whitaker also alleged that he had been induced to lend Kidd an additional $100,000 and had
allowed Kidd to enter into a continuing guaranty when the loan came due; thus, Whitaker’s
3
Actually, the first complaint filed was that of T-REX 2000, Inc., against Brett Kidd
and Jamie Kidd for alleged breach of a stock-purchase agreement. This suit was the
byproduct of 2001 contract negotiations for the purchase of a hockey team in Tupelo, the T-
Rex 2000 team. It later was consolidated with subsequent causes of action. Fletcher, 996 So.
2d at 774-75. T-REX 2000, Inc., Brett Kidd, and Jamie Kidd are not parties before this Court
in the current appeal.
3
complaint included both a breach-of-promissory-note claim and breach-of-continuing-
guaranty claim. The Lee County Circuit Court dismissed both complaints due to defective
service. The cases were consolidated, and the dismissal for lack of proper service was
affirmed by this Court on appeal. Fletcher, 996 So. 2d at 781.
¶6. However, on September 18, 2007, during the early stages of the Fletcher appeal,4 the
Plaintiffs filed a complaint against Kidd and Limeco in the Lee County Chancery Court,
alleging breach of promissory notes, breach of continuing guaranty, fraud, and fraudulent
transfer of assets.5 Due to the alleged fraud, the Plaintiffs sought to pierce the corporate veil
in order to include as defendants not only Limeco, but William Kidd, individually. The trial
court ultimately found the suit to be time-barred. The breach-of-promissory-note claims were
dismissed due to the trial court’s determination that the notes did not meet the statutory
requirements to be considered instruments of negotiability; thus, according to the trial court,
the claims were subject to a three-year breach-of-contract statute of limitations, as opposed
to the six-year statute of limitations for a breach-of-promissory-note cause of action. The
fraud claims were found to be time-barred because, according to the trial court, the Plaintiffs
first had knowledge of the fraud in 2003 when they filed the original suit. As a result,
4
The Supreme Court Clerk’s docket in the Fletcher appeal reveals, inter alia, that a
notice of appeal was filed on July 20, 2007, and that on September 27, 2007, the trial court
record was filed and a briefing schedule notice was issued.
5
In addition to fraud in the inducement of the loan agreements, the Plaintiffs also
alleged that Kidd caused Limeco’s assets to be fraudulently transferred to his own personal
entities and entities owned by Kidd’s family members.
4
according to the trial court, the three-year statute of limitations for fraud would have run in
2006. The trial court rejected the Plaintiffs’ argument that the factual basis for their fraud
claims had been fraudulently concealed from them by Kidd until March 2007. The trial court
found that, because the Plaintiffs had failed to establish a basis for a claim of fraud, there
was no justification for piercing the corporate veil and holding Kidd responsible for
Limeco’s failure to repay the $850,000.
¶7. The Defendants, Limeco and Kidd, filed separate answers and defenses to the
complaint. Subsequently, the Defendants filed a motion to dismiss and a motion to stay
discovery, to which the Plaintiffs responded. Finally, by mutual agreement, the parties
agreed to transfer this case to the Circuit Court of Lee County on February 4, 2008.
¶8. Following an August 12, 2008, hearing on the Defendants’ motion to dismiss, Judge
James L. Roberts, Jr., presiding, the trial court entered an order on January 30, 2009,
dismissing the complaint on the grounds that the statute of limitations had expired for the
breach-of-promissory-note claim, the breach-of-continuing-guaranty claim, and the fraud
claim. The trial court rejected the argument made by the Plaintiffs that Kidd fraudulently had
concealed the facts supporting their fraud claim. The trial court found the statute of
limitations for fraud began running on December 11, 2003, when the Plaintiffs had filed their
original claim; thus, according to the trial court, all claims were time-barred as of December
2006. The trial court concluded that, because their fraud claims were time-barred, the
Plaintiffs were precluded from bringing a cause of action against Kidd in an individual
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capacity because, in order to pierce the corporate veil, the Plaintiffs were required to have
a viable fraud claim. From the trial court’s judgment of dismissal, the Plaintiffs timely
appealed to this Court.
DISCUSSION
¶9. The Plaintiffs raise the following issues in today’s appeal: (1) whether the trial court
erred in dismissing the breach-of-promissory-notes claims based on a finding that the
promissory notes were not negotiable instruments under Mississippi Code Section 75-3-104
(Rev. 2002), and thus not subject to the six-year statute of limitations; (2) whether the trial
court erred in dismissing the fraud and breach-of-continuing-guaranty claims based on its
finding that the Plaintiffs did not allege any facts that would toll the three-year statute of
limitations; and (3) whether the trial court erred in ruling that Limeco had no corporate
liability, and as a result, ruling that the Plaintiffs could not pierce Limeco’s corporate veil.
¶10. When considering issues of law, such as statutes of limitations, this Court employs
a de novo review. Andrus v. Ellis, 887 So. 2d 175, 179 (Miss. 2004). When reviewing a
trial court's grant or denial of a motion to dismiss or a motion for summary judgment, this
Court likewise applies a de novo standard of review. Burleson v. Lathem. 968 So. 2d 930,
932 (Miss. 2007) (citing Scaggs v. GPCH-GP, Inc., 931 So. 2d 1274, 1275 (Miss. 2006);
Park on Lakeland Drive, Inc. v. Spence, 941 So. 2d 203, 206 (Miss. 2006); McLendon v.
State, 945 So. 2d 372, 382 (Miss. 2006); Monsanto Co. v. Hall, 912 So. 2d 134, 136 (Miss.
2005)). “‘When considering a motion to dismiss, the allegations in the complaint must be
6
taken as true and the motion should not be granted unless it appears beyond doubt that the
plaintiff will be unable to prove any set of facts in support of his claim.’” Id. (quoting
Scaggs, 931 So. 2d at 1275).
I. WHETHER THE TRIAL COURT ERRED IN HOLDING THAT
THE PROMISSORY NOTES WERE NOT NEGOTIABLE
INSTRUMENTS AND THUS NOT SUBJECT TO THE SIX-
YEAR STATUTE OF LIMITATIONS.
¶11. The Plaintiffs argue that the notes entered into by Kidd, each in the amount of
$375,000, met all of the statutory requirements for negotiable instruments pursuant to
Mississippi Code Section 75-3-104 (Rev. 2002); thus, the complaint was timely filed within
the six-year statute of limitations pursuant to Section 75-3-118(b).
¶12. The trial court dismissed the Plaintiffs’ complaint on the basis that neither of the
promissory notes, each in the amount of $375,000, was a negotiable instrument under
Section 75-3-104 because neither of the notes contained the required “words of
negotiability.” As a result, the trial court found that the notes were not subject to the six-year
statute of limitations applicable to negotiable instruments under Section 75-3-118(b).
Instead, according to the trial court, the notes were subject to the three-year statute of
limitations for breach-of-contract claims. Conversely, Kidd argues that the trial court
correctly interpreted the provisions of Section 75-3-104.
¶13. Section 75-3-104(a) defines a negotiable instrument as follows:
Except as provided in subsections (c) and (d), “negotiable instrument” means
an unconditional promise or order to pay a fixed amount of money, with or
without interest or other charges described in the promise or order, if it:
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(1) Is payable to bearer or to order at the time it is issued or first comes into
possession of a holder;
(2) Is payable on demand or at a definite time; and
(3) Does not state any other undertaking or instruction by the person
promising or ordering payment to do any act in addition to the payment of
money, but the promise or order may contain (i) an undertaking or power to
give, maintain, or protect collateral to secure payment, (ii) an authorization or
power to the holder to confess judgment or realize on or dispose of collateral,
or (iii) a waiver of the benefit of any law intended for the advantage or
protection of an obligor.
Miss. Code Ann. § 75-3-104(a) (Rev. 2002).
¶14. The statutory definition of “payable to order” is found in Section 75-3-109(b), which
states:
A promise or order that is not payable to bearer is payable to order if it is
payable (i) to the order of an identified person or (ii) to an identified person
or order. A promise or order that is payable to order is payable to the identified
person.
Miss. Code Ann. § 75-3-109(b) (Rev. 2002).
¶15. What the Plaintiffs identify as the “Whitaker note” reads as follows: “On demand, for
value received, I promise to pay to R.W. Whitaker . . . the sum of Three Hundred, Seventy-
five Thousand Dollars ($375,000).” The written agreement identified as the “Fletcher note”
contains identical language. The Plaintiffs argue that this meets the statutory definition of
“payable to order” and urge this Court to interpret Section 75-3-109(b) as defining “payable
to order” as follows: payable “to the order of an identified payee,” payable to an identified
payee, or payable “to order.” In support of their argument, the Plaintiffs cite the canon of
8
statutory construction that statutes written in the disjunctive set forth separate and distinct
alternatives. See In re Branan, 419 So. 2d 145, 146 (Miss. 1982) (“The use of the
disjunctive ‘or’ denotes a choice between alternatives.”).
¶16. However, interpreting Section 75-3-109(b)(ii) as defining “payable to order” as
payable to an identified payee or payable to order is contrary to how the majority of
jurisdictions interpret the Uniform Commercial Code’s statutory requirements for negotiable
instruments. In order to meet the requirements of a negotiable instrument:
[A] paper or instrument generally must be payable to order or to bearer at the
time it is issued or comes into the possession of a holder. This means that
notes payable simply to a specific payee, and not to the order of the payee or
to the payee or order, are not negotiable.
11 Am. Jur. 2d Bills and Notes § 37 (2009) (footnotes omitted). Thus, the words “payable
to the order of” or payable “to [identified payee] or order” must appear within the instrument
in order to qualify it as a negotiable instrument, and since the promissory notes in today’s
case do not contain this language, they cannot be deemed to be negotiable instruments.
¶17. Arguing that the agreements met the statutory definition of negotiable instruments,
the Plaintiffs contend that the six-year statute of limitations for negotiable instruments under
Section 75-3-118 applies in this case and that the statute of limitations would not have
expired until July 1, 2008, six years after the Whitaker and Fletcher notes were signed.
However, having already found no error on the part of the trial court in declining to find that
either of the notes met the statutory requirements for negotiable instruments, we find no error
on the part of the trial court in applying the three-year statute of limitations pursuant to
9
Section 15-1-49. See Miss. Code Ann. § 15-1-49 (Rev. 2003). Accordingly, there was no
error on the part of the trial court in dismissing the breach-of-promissory-notes claim as
time-barred.
II. WHETHER THE TRIAL COURT ERRED IN DISMISSING THE
FRAUD AND BREACH-OF-CONTINUING-GUARANTY
CLAIMS.
¶18. Negotiations between these parties began in 2001. The Plaintiffs’ complaint states that
in early 2002, based on the fraudulent inducement by Kidd, they each lent Kidd/Limeco
$375,000. On or about February 19, 2002, Kidd allegedly induced Whitaker to borrow from
The Peoples Bank & Trust Company in Tupelo $100,000 for the benefit of Kidd, who in turn
misrepresented to the Plaintiffs that, to the extent he could not personally repay the loans,
Limeco had sufficient assets to satisfy the loan agreements. According to the Plaintiffs, Kidd
concealed the fact that Limeco did not have sufficient assets to repay the loans by showing
them false documentation in the form of financial books depicting Limeco as a corporation
with substantial assets. On April 19, 2002, the bank loan came due and was extended with
the understanding that Kidd would execute a continuing guaranty in which Kidd guaranteed
that any and all indebtedness of Whitaker to the Bank would be paid by Kidd/Limeco for an
amount up to $100,000 – a continuing guaranty which both Kidd and Limeco subsequently
failed to honor. On July 1, 2002, Kidd entered into a promissory note with both Plaintiffs,
with each note memorializing the agreement between Kidd and the Plaintiffs to repay each
of them $375,000 with an interest rate of seven percent per year.
10
¶19. The trial court found that “the Plaintiffs have failed to allege any affirmative acts on
the part of the Defendants designed to conceal the Plaintiffs’ causes of action. The facts
alleged relate only to the original act of fraud by the Defendants.” As to when the three-year
statute of limitations commenced running for the fraud claim, the trial court opined:
[T]he Plaintiffs’ complaint fails to state precisely when Kidd and Limeco
Corporation committed these acts. However, it is certain that the Plaintiffs had
knowledge of their claim for fraud at the very latest on December 11, 2003,
when they filed their original complaint. As the present suit was filed in
September, 2007, the Plaintiffs’ causes of action for fraud are clearly barred
by the three-year statute of limitations.
Accordingly, the trial court granted Kidd’s Motion to Dismiss based upon the Plaintiffs’
failure to state a claim upon which relief could be granted pursuant to Mississippi Rule of
Civil Procedure 12(b)(6).
¶20. “[F]raudulent concealment of a cause of action tolls its statute of limitations.”
Channel v. Loyacono, 954 So. 2d 415, 423 (Miss. 2007) (quoting Robinson v. Cobb, 763
So. 2d 883, 887 (Miss. 2000); Myers v. Guardian Life Ins. Co. of America, Inc., 5 F. Supp.
2d 423, 431 (N.D. Miss. 1998)). The fraudulent concealment doctrine “applies to any cause
of action.” Robinson, 763 So. 2d at 887 (quoting Myers, 5 F. Supp. 2d at 431).
¶21. Mississippi Code Section 15-1-67 governs the tolling of statutes of limitations due
to fraudulent concealment:
If a person liable to any personal action shall fraudulently conceal the cause
of action from the knowledge of the person entitled thereto, the cause of action
shall be deemed to have first accrued at, and not before, the time at which such
fraud shall be, or with reasonable diligence might have been, first known or
discovered.
11
Miss. Code Ann. § 15-1-67 (Rev. 2003). The proper test is “whether a reasonable person
similarly situated would have discovered potential claims.”Andrus, 887 So. 2d at 180 (citing
Am. Bankers’ Ins. Co. of Fla. v. Wells, 819 So. 2d 1196, 1201 (Miss. 2001)).
¶22. In alleging fraudulent concealment of a claim, a plaintiff must show: “(1) some
affirmative act or conduct was done and prevented discovery of a claim, and (2) due
diligence was performed on their part to discover it.” Channel, 954 So. 2d at 423 (quoting
Stephens v. Equitable Life Assurance Soc. of U.S., 850 So. 2d 78, 84 (Miss. 2003)). The
affirmative act must be designed to prevent discovery of the claim. Id. (citing Robinson v.
Cobb, 763 So. 2d 883, 887 (Miss. 2000). Both are questions of fact, not law, and should be
left to a jury for determination. Robinson, 763 So. 2d at 888-89.
¶23. The Defendants argue that the trial court was correct in its ruling inasmuch as the
Plaintiffs assert the same facts to support both the fraud claim and the fraudulent-
concealment claim, namely that Kidd produced false books showing Limeco to be solvent.
According to the Defendants, the Plaintiffs failed to assert any subsequent affirmative act of
concealment. The Defendants cite Andrus v. Ellis, 887 So. 2d 175, 181 (Miss. 2004), for
the premise that a plaintiff must prove “some subsequent affirmative act by the defendant
which was designed to prevent and which did prevent discovery of the claim.” Id. (citing
Stephens, 850 So. 2d at 83-84).
¶24. The facts at hand, however, are easily distinguished from those found in Andrus,
which involved various plaintiffs who entered into loan agreements with Commercial Credit
12
Corporation. Andrus, 887 So. 2d at 176-78. The plaintiffs in Andrus filed suit against eight
individual defendants, all employees of Commercial Credit, claiming that the defendants
fraudulently induced them to purchase credit-insurance policies in connection with their
loans. Id. at 176. The plaintiffs claimed that they either were not aware that they had
purchased credit insurance, or they were aware, but thought the insurance was required in
order to take out the loan. Id. This Court rejected the plaintiffs’ fraudulent-representation
argument on the basis that the testimony reflected a general misunderstanding of the terms
of their loans, not specific, affirmative acts of concealment. Id. at 181. Moreover, all
plaintiffs were put on notice of the terms of the loans when they received copies of the loan
documents. Id.
¶25. As to the first prong of fraudulent concealment, an affirmative act to prevent
discovery of a claim, see Channel, 954 So. 2d at 423, we find that the Plaintiffs have made
a sufficient showing of affirmative acts by Kidd to conceal the Plaintiffs’ fraud claim to
warrant a jury determination. Kidd made fraudulent misrepresentations regarding Limeco’s
assets in the course of negotiations between the parties as early as 2001. These negotiations
culminated in three separate loan agreements, wherein the Defendants received more than
$850,000. Kidd presented the Plaintiffs with financial records depicting Limeco as a solvent
corporation. According to the Plaintiffs, in February 2002, Kidd induced Whitaker to take
out a loan in the amount of $100,000, again with the understanding that Kidd and Limeco
had sufficient assets to repay this loan. In April 2002, Kidd executed a continuing guaranty
13
with the understanding that Kidd would be responsible for any and all indebtedness to the
Bank up to $100,000. In July 2002, Kidd memorialized the two $375,000 loans with two
written contracts (called “promissory notes” by the Plaintiffs), drafted and executed with the
understanding that Kidd and Limeco had substantial assets to repay the loans.
¶26. Moreover, as to whether there were subsequent acts of concealment, the facts in this
case are distinguishable from the case relied on by the trial court, Dunn v. Dent, 169 Miss.
574, 153 So. 798 (1934). Dunn involved a claim for alleged false representations made in
a warranty deed as to the amount of land conveyed to the appellant. Dunn, 153 So. at 798.
The suit was time-barred because it was not filed within the requisite six-year statute of
limitations. Id. at 799. This Court rejected the appellant’s fraudulent-concealment claim
based on the fact that, once the real estate transaction was complete and the six-year statute
of limitations period began running, the parties had no subsequent communication or
dealings. The Court stated, “[A]fter the delivery of the deed, the appellant had no
communication with the appellees, and it fails to show that they did anything that could be
construed as a concealment of the falsity of the representation as to the amount of land
conveyed, or a concealment of the cause of action.” Id. Unlike Dunn, the Plaintiffs’
complaint in today’s case alleged subsequent dealings and communication between the
parties, such that a jury determination as to whether the Plaintiffs used due diligence in
discovering their fraud claim is necessary.
14
¶27. The trial court aptly stated the law that an act cannot be both an act of fraud in the
inducement and an act of fraudulent concealment. Thus, showing false financial records
could not serve to have both fraudulently induced the Plaintiffs and fraudulently concealed
from the Plaintiffs the underlying fraud claim. Regardless of whether the Plaintiffs were
fraudulently induced to lend the money by the false financial records, the parties had
subsequent dealings after the early 2002 fraudulent inducement, namely, inducing Whitaker
to lend Kidd an additional $100,000 and to enter into the continuing guaranty, and then
entering into the written agreements (referred to by the Plaintiffs as promissory notes) in July
2002. These subsequent agreements and dealings were predicated on the fact that Kidd
continued to incur debt with the understanding that, to the extent he could not repay the
loans, Limeco would repay the debts that he incurred on Limeco’s behalf.
¶28. As to the second prong, due diligence, the Plaintiffs deposed Kidd in March 2007, as
part of the discovery in the original complaint for the breach-of-promissory-notes and
breach-of-continuing-guaranty claims. During his deposition, Kidd admitted to fraudulently
misrepresenting Limeco’s assets. The Plaintiffs argue that the trial court erred in finding that
the statute of limitations on the fraud claim began running in December 2003, when they
filed their original complaint, because they did not learn of the fraud until March 2007,
during the course of Kidd’s deposition testimony. We find this argument compelling in that
as of December 2003, the Plaintiffs had knowledge of the breach – the fact that Limeco had
failed to repay the loans and had failed to honor the continuing guaranty. However, what
15
the Plaintiffs did not know until March 2007 was that Limeco had never possessed the assets
to repay the debt incurred by Kidd, nor did Kidd have any intention to repay the loans. Thus,
we remand for a jury determination as to whether the Plaintiffs used reasonable diligence.
¶29. Because we are considering the propriety of a trial judge’s grant of a motion to
dismiss, the allegations in the Plaintiffs’ complaint must be viewed as true, and
Kidd/Limeco’s motion to dismiss should not have been granted by the trial court unless it
appeared beyond doubt that the Plaintiffs would be unable to prove any set of facts that
supported their claim. See Burleson, 968 So. 2d at 932. Based on our discussion of this
issue thus far, we find the trial court erred in dismissing the fraud claim on the basis that the
Plaintiffs did not state a claim upon which relief could be granted under Mississippi Rule of
Civil Procedure 12(b)(6). In other words, from the record before us, we are not prepared to
state that it appears beyond doubt that the Plaintiffs are unable to prove any set of facts in
support of their claim that Kidd committed subsequent, affirmative acts to prevent the
Plaintiffs from discovering they were fraudulently induced to enter into the loan agreements.
Accordingly, we reverse and remand this issue to the trial court for proceedings consistent
with this opinion.
¶30. The Plaintiffs also raise as part of this issue whether the trial court erred in dismissing
the breach-of-continuing-guaranty claim. Because the Plaintiffs were aware of the breach
of the continuing guaranty as early as 2002 and at the latest in December 2003, when they
originally filed suit, the trial court did not commit error in dismissing this claim as being
16
time-barred by the three-year limitations period provided in Mississippi Code Section 15-1-
49 (Rev. 2002).
III WHETHER THE TRIAL COURT ERRED IN RULING THAT
LIMECO HAD NO CORPORATE LIABILITY.
¶31. The Plaintiffs argue that Kidd’s fraudulent misrepresentations while acting as
managing director of Limeco give them leeway to pierce the corporate veil and hold Kidd
liable for the torts he committed when acting as managing director of Limeco. To this end,
the Plaintiffs cite Turner v. Wilson, 620 So. 2d 545 (Miss. 1993), for the general premise
that “ 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. at 548. Piercing the
corporate veil is predicated on a showing of fraud. Id. at 548-49.
¶32. The trial court found that there were no viable claims against Limeco due to the
statute of limitations having run as to all claims, including the fraud claim. As a result,
because Limeco could not be held liable, there was no basis for piercing the corporate veil
to hold Kidd personally liable.
¶33. Because this issue is conditioned upon a showing by the Plaintiffs that their fraud
claim was fraudulently concealed from them until 2007, we decline to address this issue and
remand this issue to the trial court for further proceedings in accordance with this opinion.
CONCLUSION
¶34. In sum, the Plaintiffs’ first assignment of error is without merit inasmuch as the trial
court correctly interpreted the statutory requirements for negotiable instruments pursuant to
17
Mississippi Code Section 75-3-104 (Rev. 2002). As to the issue of whether the breach-of-
continuing-guaranty claim was improperly dismissed, we find that it was properly dismissed
as time-barred. As to the issue of whether the fraud claim was improperly dismissed, we
reverse and remand this issue to the trial court, for the reasons stated, for the jury to consider
whether the claim was fraudulently concealed from the Plaintiffs until discovered in March
2007. Also, the final issue must be remanded to the trial court, since piercing the corporate
veil to hold Kidd personally liable would be contingent on the Plaintiffs proving their fraud
claim. Therefore, the final judgment of dismissal entered against R. W. Whitaker and Monty
Fletcher and in favor of Limeco Corporation and William Kidd is affirmed in part, reversed
in part, and remanded for further proceedings consistent with this opinion.
¶35. AFFIRMED IN PART; REVERSED IN PART, AND REMANDED.
WALLER C.J., GRAVES, P.J., DICKINSON, RANDOLPH, LAMAR,
KITCHENS, CHANDLER AND PIERCE, JJ., CONCUR.
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