K.C. Roofing Ctr. v. On Top Roofing, Inc.

Missouri Court of Appeals · 1991 · Corporations

807 S.W.2d 545 (Mo. Ct. App. 1991)

Updated August 22, 2026

CorporationsPiercing the corporate veilShareholder liabilitycorporate veilalter egocomplete dominationinjusticeinequitable conduct

Facts

Russell and Carol Nugent were the sole shareholders, officers, and directors of On Top Roofing, Inc., and Russell exercised total control over its business activities. In 1987, while On Top could not pay its trade debts as they accrued and while Nugent had decided to pay only secured creditors, On Top bought substantial unsecured supplies from plaintiffs even though it already owed roughly $75,000 to $100,000 to prior suppliers it could not pay. Nugent repeatedly shut down one roofing corporation and formed another for a "fresh start," all operating from the same address and phone number, and after On Top supposedly ceased business he continued using the On Top name, trucks, forms, sign, and advertising. Plaintiffs could not collect On Top's debts and sought to hold Russell Nugent personally liable.

Issue

Whether the trial court properly pierced On Top Roofing, Inc.'s corporate veil to hold Russell Nugent personally liable for the corporation's debts to plaintiffs. Also, whether the trial court properly admitted evidence concerning Nugent's involvement with his other corporate entities.

Rule

Under Missouri law, a court may pierce the corporate veil when the plaintiff shows: (1) complete domination of the corporation's finances, policy, and business practice with respect to the challenged transaction so that the corporation had no separate mind, will, or existence of its own; (2) that this control was used to commit fraud or wrong, violate a legal duty, or commit a dishonest and unjust act in contravention of the plaintiff's legal rights; and (3) that the control and breach of duty proximately caused the plaintiff's injury or unjust loss. Actual fraud is not necessary; the veil may also be pierced to prevent injustice or inequitable consequences.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

In St. Louis, Mason Kerr owns 100% of Archway Siding, Inc. He personally approves every purchase, decides which creditors will be paid, and instructs employees to continue ordering materials from a supplier after he has decided the company will stop paying unsecured trade debt. The supplier sues Mason personally after the corporation defaults.

Under the governing veil-piercing test, which fact most strongly satisfies the first element?

Explanation. The first element requires more than stock ownership; it requires complete domination of finances, policy, and business practice in respect to the challenged transaction, so the corporation had no separate mind or will of its own. Mere majority ownership, later dissolution, or absence of a guaranty does not by itself establish that degree of domination.