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Willamette's Liability: A Case Against Adopting the Dual Persona Doctrine

   

Added on  2019-09-20

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105 Wash.2d 217Supreme Court of Washington,En Banc.Christopher John CORR, Appellant,v.WILLAMETTE INDUSTRIES, INC.; Western Kraft Corporation;Western Kraft Company; Western Kraft Paper Corporation; and JohnDoes 1 through 10, Respondents.No. 50978–6.Jan. 30, 1986.Employee injured while cleaning bulk bin compressor unit brought products liability action againstparent corporation of corporate employer, and also alleged that parent corporation negligently failed to provide safe and helpful working environment. The Superior Court, King County, James D. McCutcheon, J., granted summary judgment in favor of parent corporation, and employee appealed. The Supreme Court, Pearson, J., held that: (1) dual capacity doctrine was not available as exception to rule that Workers' Compensation Act provides exclusive remedy in action against employer for personal injuries; (2) merger with corporation that manufactured unit did not give parent corporation dual persona, such that action could be maintained against it; and(3) parent corporation did not waive protection of Workers' Compensation Act.Affirmed.Dore, J., filed dissenting opinion.West Headnotes (6)Collapse West HeadnotesChange View1Workers' CompensationExclusiveness of Remedies Afforded by ActsWorkers' CompensationRight of Action of Employee or Representative GenerallyWorkers' Compensation Act provides exclusive remedy of employee against employer for personal injuries suffered in workplace; however, if third person not in same employ as injured employee causes injury, injured worker may seek damages from third person without jeopardizing right to receive benefits under Workers' Compensation Act.West's RCWA 51.04.010,51.24.030,51.24.040.3Cases that cite this headnote2Workers' CompensationEmployer as Third PersonEmployee could not maintain products liability action against employer for injuries sustained while cleaning bulk bin compressor unit based on employer's dual capacity as employer with obligation to provide safe working environment and manufacturer of product used in workplace, in addition to workers' compensation claim.West's RCWA 51.04.010.2Cases that cite this headnote3Workers' CompensationEmployer as Third PersonInjured employee could not maintain products liability action against employer based on doctrine of dual persona for injuries sustained in cleaning bulk bin compressor unit obtained in merger with manufacturer of unit, where unit was not manufactured for resale or entry into stream of commerce, and manufacturer could not, as result, have been subject to third person liability.West's RCWA 51.04.010,51.24.030.
Willamette's Liability: A Case Against Adopting the Dual Persona Doctrine_1

4Cases that cite this headnote4Workers' CompensationWhat Persons Liable as Third PersonsThird person liability under dual persona doctrine, enabling employee to bring action against employer's second persona, should arise in merger context, if at all, only when corporate manufacturer sells defective equipment to successor corporation prior to merger or otherwise places defective product somewhere other than in its own workplace, such as in stream of commerce.West's RCWA 51.04.010,51.24.030.17Cases that cite this headnote5Workers' CompensationWhat Persons Liable as Third PersonsWorkers' Compensation Act provides exclusive remedy for employee injured by defective equipment designed and built by employer's corporate predecessor, unless employer expressly waives Act's protection, absent dual persona doctrine.West's RCWA 51.04.010.10Cases that cite this headnote6Workers' CompensationEmployer as Third PersonExclusive remedy for employee injured while cleaning bulk bin compressor unit against corporateemployer that merged with manufacturer of unit was provided by Workers' Compensation Act, in that no express contractual waiver on part of corporation existed and no waiver would be implied from statutory formalities of corporate merger, once dual persona doctrine was determined to be inapplicable.West's RCWA 51.04.010.7Cases that cite this headnoteAttorneys and Law Firms**93*217Bogle & Gates, Kelly P. Corr, Seattle, for appellant.James J. Stanton, Gary W. House, Seattle, for respondents.OpinionPEARSON, Justice.This case raises the issue of whether the workers' compensation act,RCW 51.04.010et seq.,provides the exclusive remedy for an employee injured by defective*218equipment designed and built by his employer's corporate predecessor. Under the facts of this case, we hold that the workers' compensation act is the exclusive remedy available to appellant.Corco, Inc. was an Ohio corporation engaged in the manufacture and sale of corrugated paper packaging and plastic packaging products. In 1977 Willamette Industries, Inc. absorbed Corco in a corporate merger. Willamette acquired Corco's accounts receivable, accounts payable, physical plant, inventory, work in progress, finished goods, patents, trade name, customer lists, and goodwill.Willamette also acquired substantially all of Corco's plant equipment, including two bulk bin compressor units.Corco employees had designed and built only two such units, both of which Corco had used in the manufacture of large cardboard boxes known as bulk bins. The two bulk bin compressor units never were sold or otherwise placed in the stream of commerce except as incident to the merger of Corco and Willamette.Pursuant to the terms of the merger agreement, and by virtue of statute, Willamette succeeded toall Corco's liabilities and obligations,RCW 23A.20.060(5), and continued the same line of business. Willamette used the two bulk bin compressor units without modification. Willamette never sold either of these units.In April 1980, Western Kraft Paper Group, a wholly-owned subsidiary of Willamette, employed Christopher Corr as a general laborer at its plant in Bellevue, Washington. On July 1, 1980, Corr suffered serious injuries while cleaning one of the bulk bin compressor units. Corr subsequently filed for, and received, workers' compensation benefits.
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In October 1981, Corr initiated this products liability action against Willamette, the parent corporation of Western Kraft Paper Group. Corr also alleged that Willamette negligently failed to provide “a safe and helpful working environment”. Willamette later moved for summary judgment on the ground that the workers' compensation act*219provides the exclusive remedy available to an injured employee. The trial court granted summary judgment in favor of Willamette and dismissed the action with prejudice. Corr appealed directly to this court.I1The Legislature has abolished common law actions between employee and employer**94for personal injuries suffered by the employee in the workplace.RCW 51.04.010. The workers' compensation act provides the exclusive remedy in such cases.Spencer v. Seattle,104 Wash.2d 30, 700 P.2d 742 (1985);Provost v. Puget Sound Power & Light Co.,103 Wash.2d 750, 696 P.2d 1238 (1985). However, if a third person not in the same employ as the injured employee causes the injury, the injured worker may seek damages from the third person.RCW 51.24.030. An election to proceed against a third person does not jeopardize the injured worker'sright to receive benefits under the workers' compensation act.RCW 51.24.040.Corr argues that Willamette is such a third person, subject to liability in that capacity for the injuries suffered by Corr. Two doctrines potentially support Corr's characterization of Willamette as a third person: (1) dual capacity, and (2) dual persona. As discussed below, this court has rejected the former and finds that the latter does not apply given the facts of this case.II2The dual capacity doctrine has been defined asthat theory under which an employer who normally enjoys immunity from common-law and statutory liability under the exclusive remedy provision of workers' compensation law may become liable to an employee when acting in a capacity outside the employer-employee relationship, which capacity may impose obligations apart from those imposed as an employer.Annot.,*220Workmen's Compensation Act as Furnishing Exclusive Remedy for Employee Injured by Product Manufactured, Sold, or Distributed by Employer,9 A.L.R.4th 873, 875 n. 2 (1981). Corr argues that Willamette acted in a dual capacity as: (1) an employer with an obligation to provide a safe working environment; and (2) a manufacturer of a product used in theworkplace, which subjects Willamette to products liability claims. If the doctrine of dual capacity were the law of this state, Corr arguably would have a cause of action against Willamette in its second capacity as a product manufacturer.This court, however, recently rejected the dual capacity doctrine inSpencer v. Seattle, supra.InSpencer,this court held that the workers' compensation act barred suit against a city byan employee of its park department for injuries allegedly caused by the negligence of the road department. In rejecting the dual capacity doctrine, this court recognized that “[t]he ‘dual capacity’doctrine has been subject to much criticism. Even Arthur Larson, who is given much credit for thedoctrine's evolution, believes it should be jettisoned because of misapplication and abuse.” (Citations omitted.)Spencer,at 32–33, 700 P.2d 742.Many other jurisdictions have refused to apply the dual capacity doctrine to an employer also acting in the capacity of manufacturer.See2A A. Larson,Workmen's Compensation§ 72.83 (1983). Courts have rejected the dual capacity doctrine in the employer/manufacturer relationshipbecause an employer's obligation to provide a safe workplace cannot be separated from the dutyowed by an employer to his employees by reason of his manufacture of equipment with which employees must work.See9 A.L.R.4th 873 (1981). We believe this rationale is sound and reiterate our rejection of the dual capacity doctrine.III3The “dual capacity” doctrine, however, must be distinguished from the doctrine of “dual persona”. A. Larson, at § 72.81. Professor Larson explains the “dual persona” doctrine thusly:An employer may become a third person, vulnerable to tort suit by an employee, if—and only if—he possesses a*221second persona so completely independent from and unrelated to his statusas employer that by established standards the law recognizes it as a separate legal person.**95A. Larson, at § 72.81. The focus is not upon the degree of distinction between the second function and the first, but whether the second function generates obligations distinct from those related to the employment activity.
Willamette's Liability: A Case Against Adopting the Dual Persona Doctrine_3

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