During the next few years, the business did well and Helmut was supervising a staff of 10 persons. Homer and Marge keep meticulous records of receipts and payments, but did not document certain corporate transactions, such as salaries and shareholder meetings. In one year the corporation paid six of Marge's monthly home mortgage payments because she was having severe financial problems. Also during this period, Vircon borrowed $150,000 from Nice Bank to be used as working capital.

One day Helmut, an employee of Vircon, driving negligently, severely injured Thelma and her prize poodle Fifi in a car accident while he was on his way back to work after visiting a new client located about 5 miles from the office.Thelma and Fifi live in Arizona and were only in Los Angeles, where the accident occurred, to get Fifi groomed by her favorite stylist for her next show. Needless to say, Thelma is furious and plans to sue Vircon and Helmut for at least $300,000. Vircon does not have any appropriate insurance coverage for this accident.

(A)On what legal basis can Thelma sue Vircon for the injuries she sustained in the car accident with Helmut?

(B)DISREGARD THIS QUESTION, WE WILL DISCUSS IN CLASS. On what legal theory can Thelma sue Homer and Marge, individually, as shareholders of Vircon (assume they are the only shareholders of Vircon)?

(C) Assume that instead of getting into an accident with Thelma, Helmut drives approximately 30 miles in a different direction from the office to visit a friend at a restaurant on his way back to work. As he was leaving, he negligently hit Pete's car and injured Peter. Is Vircon liable to Pete for the damages caused by Helmut?

(D)Would your answer to (A) above be different if Helmut was an independent contractor?