## Facts

- Brian Wandersee owned and led Advanced Cleaning Technologies, Inc. (ACT), an exclusive distributor for a manufacturer of touch-free car wash systems.
- BP Products North America, Inc. (BP) ordered and paid for three car wash systems, including one intended for a BP location in O’Fallon, Missouri.
- Because BP’s locations were under construction, BP requested delayed delivery; ACT stored the systems in its warehouse.
- Two systems were delivered and installed; the O’Fallon system remained in ACT’s possession after a BP manager stated the project was not in her budget.
- An ACT employee contacted BP’s security advisor and alleged Wandersee and another ACT employee were attempting to sell the O’Fallon system without BP’s knowledge.
- BP’s security advisor reported a suspected theft to law enforcement; police obtained a warrant, searched ACT’s premises, seized the system, and arrested Wandersee and the other employee.
- Prosecutors filed felony stealing charges, but the case was later abandoned and charges were dropped after further investigation.
- Wandersee and ACT sued BP for injurious falsehood, alleging the report was false and caused pecuniary losses, including loss of customers, credit restrictions, added collateral demands, and professional fees.
- A jury found BP liable and awarded approximately $605,350; the trial court denied BP’s motions for judgment as a matter of law, new trial, and remittitur.

## Issues

1. Whether the evidence was sufficient to submit “knowledge or reckless disregard” (malice) to the jury, including whether corporate scienter could be based on the combined knowledge of BP’s agents.
2. Whether BP’s report to law enforcement could be found a substantial factor in causing plaintiffs’ pecuniary losses despite police and prosecutorial actions.
3. Whether plaintiffs’ burden-of-proof instruction for injurious falsehood misstated the law and required a new trial.
4. Whether BP was entitled to a jury instruction on qualified privilege for good-faith reports to law enforcement.
5. Whether the categories and time scope of damages submitted to the jury (lost profits, foregone wages, professional fees, and post-2000 losses) were improper or unsupported.
6. Whether the verdict was excessive requiring remittitur.

## Decision

- The Missouri Supreme Court affirmed the judgment for Wandersee and ACT.
- The court held the evidence permitted a finding that BP acted knowingly or recklessly, and corporate scienter could be established through imputation of multiple agents’ knowledge.
- The court held the false report could be found a substantial factor in causing plaintiffs’ losses; subsequent police and prosecutorial decisions did not necessarily break causation.
- The court found no prejudicial instructional error on the injurious falsehood burden of proof.
- The court held BP was not entitled to a new trial based on the absence of a qualified-privilege instruction, particularly because any privilege is defeated by malice and the jury found malice.
- The court upheld the damages categories and temporal scope as supported by the evidence and denied remittitur.

## Legal Principles

- Injurious falsehood requires proof of (1) falsity, (2) publication, (3) malice (knowledge of falsity or reckless disregard), and (4) special damages (pecuniary loss caused by the falsehood).
- A corporation’s knowledge or recklessness may be established through imputation and aggregation of information held by its agents acting within the scope of employment; the communicating agent need not personally possess all relevant facts.
- Causation may be shown if the defendant’s publication is a substantial factor in producing the pecuniary loss; intervening actions by police or prosecutors do not automatically sever causation.
- Communications to law enforcement may be subject to a qualified privilege, but the privilege is lost if the defendant acts with knowledge of falsity or reckless disregard.
- In injurious falsehood, recoverable special damages may include lost profits, lost compensation, and consequential professional fees when proved with reasonable certainty and tied to the false publication; continuing damages may be recoverable if supported by evidence.
- Remittitur is warranted only when an award is so excessive that it indicates bias, passion, prejudice, or shocks the conscience.

## Conclusion

The court upheld liability and damages for injurious falsehood based on a false theft report to law enforcement, holding that corporate malice may be inferred from imputed collective knowledge, the report could be a substantial factor in resulting business losses despite later governmental actions, and the jury’s damages award was supported and not excessive.


Wandersee v. BP Prods. N. Am., Inc., 263 S.W.3d 623 (Mo. 2008) (en banc)