Court Opinion

ID: 9572401
Source: CourtListenerOpinion
Date Created: 2023-08-21 20:41:27.178183+00
Date Added: 2024-06-11T12:32:52.654272
License: Public Domain

EASLEY, Justice, dissenting. The law regarding the liability of a corporation for punitive damages for the acts of one of its employees has been subject to considerable controversy and change in recent years. There are at least three well-established views on the subject. The New Mexico cases and the majority of the Court in this case espouse the more conservative of the three legal principles. Insofar as the principles apply to the specific facts at issue in this case, they are, in simplified form, as follows: 1. The New Mexico rule holds that it must be shown that there was participation, authorization or ratification of the agent’s tortious conduct by the principal. Couillard v. Bank of New Mexico, 89 N.M. 179, 548 P.2d 459 (Ct.App.1976); Stewart v. Potter, 44 N.M. 460, 104 P.2d 736 (1940). 2. A substantial number of jurisdictions follow the view adopted by the Restatement (Second) of Agency § 217(C) (1958) which holds the principal liable for the tortious act of an agent who is employed in a managerial capacity and acting in the scope of his employment. Stroud v. Denny’s Restaurant, Inc., 271 Or. 430, 532 P.2d 790 (1975). See generally Hodel, The Doctrine of Exemplary Damages in Oregon, 44 Ore. L.Rev. 175 particularly at 233-39 (1965). 3. It is said that a majority of the jurisdictions have adopted the rule that, if an agent has committed a tort within the scope of his employment so as to render the corporation liable for compensatory damages, and if the agent’s act is such as to render him liable for punitive damages, then the corporation is likewise liable for punitive damages. Stroud v. Denny’s Restaurant, Inc., supra; see generally W. Prosser, Torts § 2 at 12 (4th ed. 1971). It is my view that the law on this issue is ripe for a change in New Mexico. The more liberal third alternative, supra, is not persuasive. However, this Court should adopt the second alternative and its philosophical concept that a corporation, which can act only through agents, should be subject to punishment for torts committed by its managerial agents. The rationale is that penalties may be inflicted if corporate officials fail to exercise close control of their managerial personnel. W. Prosser, supra ; C. McCormick, Damages § 80 at 284-85 (1935). I respectfully dissent. SOSA, concurs in the dissent.