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State v. Christy Pontiac-GMC, Inc

    Brief Fact Summary. In a bench trial, the Defendant Christy Pontiac-GMC, Inc. (Defendant) was found guilty of two counts of theft by swindle and two counts of aggravated forgery and was sentenced to a $1,000 fine on each of the two forgery convictions. The Defendant argues that, as a corporation, it cannot be prosecuted for theft or forgery and that the evidence failed to establish that the acts complained of were the acts of the Defendant.

    Synopsis of Rule of Law. A corporation may be guilty of a specific intent crime. Further, a corporation may be found guilty of a specific intent crime committed by its agent if: (1) the agent was acting within the course and scope of his employment, having the authority to act for the corporation with respect to the particular corporate business which was conducted criminally; (2) the agent was acting, at least in part, in furtherance of the corporation’s business interests and (3) the criminal acts were authorized, tolerated or ratified by corporate management.

    Facts. The Defendant is a Minnesota corporation, doing business as a car dealership, and owned by a sole shareholder, James Christy (Christy). In the spring of 1981, General Motors offered a rebate program. When both James Linden (Linden) and Ronald Gores (Gores) purchased new GM vehicles, they were told that the rebate program had recently ended. However, Phil Hesli (Hesli), a Christy Pontiac salesman and fleet manager, subsequently forged the names of both Linden and Gores and backdated the rebate applications in order to receive the rebate to the Defendant and not the buyers.

    Issue. Can the Defendant be held criminally liable for a specific intent crime committed by one of its agents?

    Held. The evidence presented was sufficient to sustain the four convictions against the Defendant, even though the agent, Hesli, was acquitted on three of the four charges.

    Discussion. Each of the elements of corporate vicarious liability were met in this case, including:
    Hesli, the forger, had authority and responsibility to handle new car sales and to process and sign cash rebate applications.

    The Defendant received the rebate, so Hesli was acting in furtherance of the corporation’s business interests.

    There was sufficient evidence of management’s authorization, tolerance, and ratification. Hesli himself, though not an officer, had middle management responsibilities for cash rebate applications. Next, when Gores asked about the discontinued rebate, he was referred by a salesman named Benedict to Hesli. Further, Gary Swandy (Swandy), a corporate officer, signed the backdated retail buyer’s order form for the Linden sale. Finally, Christy attempted to negotiate a settlement with Gores after Gores complained. All of these facts lead to the conclusion that management authorized, tolerated and ratified the rebate transactions


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