Ferguson Trenching sued Advanced Excavation's president Kiehne after Advanced failed to pay for trenching work on a construction project. Advanced had received funds from the main contractor but used them for other projects and operating expenses instead of paying subcontractors like Ferguson. Maryland's Court of Appeals ruled that a corporate officer can be held personally liable for misusing trust funds only if they acted with intent to defraud—simply diverting funds is strong evidence of fraud but not automatic proof.
If a contractor diverts your payment to other projects or operating expenses, you have grounds to pursue the corporate officer personally, not just the company