Trantina

I. FACTS AND PROCEDURAL HISTORY

Charles E. Trantina served as an insurance agent for State Farm Insurance Companies (“State Farm”) in the Phoenix area from 1958 until his retirement in 1996. He operated his insurance agency as a sole proprietorship until 1978. In 1978, he incorporated the agency as Trantina Insurance Agency, Inc. (“the Corporation”), an Arizona corporation of which he was the sole shareholder. Upon incorporation in 1978, State Farm and the Corporation executed a Corporation Agent Agreement (“Corporate Agreement”), which lies at the center of the current dispute. TRANTINA v. UNITED STATES 293 The Corporate Agreement governed all aspects of the Cor- poration’s relationship with State Farm. The Corporate Agree- ment imposed on the Corporation, among other duties, the obligation to solicit insurance applications, collect premiums and other charges, service insurance policies, help with insur- ance claim processing, and deposit monies collected on behalf of State Farm into a trust account. The Corporate Agreement required that the Corporation’s principal business be the ful- fillment of the agreement and that the Corporation and its sales…