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

The dual persona doctrine allows for an employee to sue their employer in a third-party capacity when the employer has assumed obligations of the third party tortfeasor through a merger or acquisition. This doctrine is supported by the principles that the surviving corporation succeeds to the liabilities of the constituent corporations and that workers' compensation laws permit recovery against third persons. The courts have established this doctrine, as seen in cases such as Billy v. Consolidated Mach. Tool Corp., Kimzey v. Interpace Corp., Inc., and Schweiner v. Hartford Accident & Indem. Co.

105 Wash.2d 217
Supreme Court of Washington,
En Banc.
Christopher John CORR, Appellant,
v.
WILLAMETTE INDUSTRIES, INC.; Western Kraft Corporation;
Western Kraft Company; Western Kraft Paper Corporation; and John
Does 1 through 10, Respondents.
No. 50978–6.
Jan. 30, 1986.
Employee injured while cleaning bulk bin compressor unit brought products liability action against
parent 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 Headnotes
Change View
1Workers' Compensation
Exclusiveness of Remedies Afforded by Acts
Workers' Compensation
Right of Action of Employee or Representative Generally
Workers' 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.
3 Cases that cite this headnote
2Workers' Compensation
Employer as Third Person
Employee 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.
2 Cases that cite this headnote
3Workers' Compensation
Employer as Third Person
Injured 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.

4 Cases that cite this headnote
4Workers' Compensation
What Persons Liable as Third Persons
Third 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.
17 Cases that cite this headnote
5Workers' Compensation
What Persons Liable as Third Persons
Workers' 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.
10 Cases that cite this headnote
6Workers' Compensation
Employer as Third Person
Exclusive remedy for employee injured while cleaning bulk bin compressor unit against corporate
employer 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.
7 Cases that cite this headnote
Attorneys and Law Firms
**93 *217 Bogle & Gates, Kelly P. Corr, Seattle, for appellant.
James J. Stanton, Gary W. House, Seattle, for respondents.
Opinion
PEARSON, Justice.
This case raises the issue of whether the workers' compensation act, RCW 51.04.010 et
seq., provides the exclusive remedy for an employee injured by defective *218 equipment
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 to
all 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.

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 *219 provides 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.
I
1The Legislature has abolished common law actions between employee and employer **94 for
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's
right 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.
II
2The dual capacity doctrine has been defined as
that 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., *220 Workmen'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 the
workplace, 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 in Spencer v. Seattle,
supra. In Spencer, this court held that the workers' compensation act barred suit against a city by
an 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 the
doctrine'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 relationship
because an employer's obligation to provide a safe workplace cannot be separated from the duty
owed by an employer to his employees by reason of his manufacture of equipment with which
employees must work. See 9 A.L.R.4th 873 (1981). We believe this rationale is sound and
reiterate our rejection of the dual capacity doctrine.
III
3The “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 status
as employer that by established standards the law recognizes it as a separate legal person.
**95 A. 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.

A leading example of dual persona is the case of Billy v. Consolidated Mach. Tool Corp., 51
N.Y.2d 152, 412 N.E.2d 934, 432 N.Y.S.2d 879 (1980). In Billy the court held that where, by
corporate merger, the employer succeeds to the liabilities of the manufacturer of the equipment,
the employer cannot avoid those liabilities merely because the workers' compensation law
covered the decedent. Billy, at 162, 412 N.E.2d 934, 432 N.Y.S.2d 879. The court
in Billy reasoned that the decedent's representative was not suing the decedent's former
employer, but rather was suing the successor to the liabilities of the alleged tortfeasor. The court
concluded that the employer-employee relationship did not control because the obligation arose
out of an independent business transaction between corporations, not out of the employment
relationship. The court distinguished Billy from cases applying the “dual capacity” doctrine
because in Billy third parties with no employment relationship with the decedent committed the
tort, and not the decedent's employer or any of its agents.1Accordingly, the court ruled that the
lower court erred in dismissing the cause of action merely because the defendant had been the
decedent's employer.
Two additional jurisdictions also have adopted the dual persona doctrine in the context of
corporate mergers. See Kimzey v. Interpace Corp., 10 Kan.App.2d 165, 694 P.2d 907
(1985); Schweiner v. Hartford Accident & Indem. Co., 120 Wis.2d 344, 354 N.W.2d 767
(Ct.App.1984). The circumstances which supported imposition of dual persona *222 liability
in Billy, Kimzey and Schweiner are indistinguishable from those present in this case. The
predecessor corporation, Corco, manufactured the plant equipment which exposed Corr to the
risk of injury. As manufacturer, Corco might have had potential liability for injuries caused by the
plant equipment. When Willamette and Corco merged, Willamette succeeded to the liabilities and
obligations of Corco. Accordingly, under Billy, Kimzey and Schweiner, Corr arguably should be
entitled to recover under the doctrine of dual persona.
These three decisions, however, fail to carry through the analysis of the dual persona doctrine to
its reasonable conclusion. The doctrine rests on the premise that if the merging corporations had
not merged, the injured claimant could have sued the manufacturing corporation as a third
person tortfeasor. Billy, 51 N.Y.2d at 161–62, 412 N.E.2d 934, 432 N.Y.S.2d 879; Kimzey, 10
Kan.App.2d at 169–70, 694 P.2d 907; Schweiner, 120 Wis.2d at 352–53, 354 N.W.2d 767; see
also RCW 51.24.030. Under the facts of this case, however, an injured claimant never could
have sued Corco as a third person because Corco had no liabilities or obligations flowing to
Willamette's employees. The two bulk bin compressor units were not manufactured for resale or
entry into the stream of commerce. From the time of installation until merger, both units remained
in Corco's workplace.
Only by virtue of the merger did the defective plant equipment transfer from Corco to Willamette.
Thus, absent the merger, Corr could have been injured by this machinery only if he had been an
employee of Corco. As an employee of Corco, however, Corr would be limited to the exclusive
remedies of the workers' compensation act. Corco never owed obligations or had liabilities to
persons other than its own employees relative to these compressor units. Accordingly, Corco
never could be subject to third person liability. Because Corco could not be subject to third
person liability, such liability cannot be imposed **96 upon Willamette simply *223 because the
two corporations merged.
4Although we need not decide this issue, third person liability under the dual persona doctrine
arguably should arise in the merger context only when the corporate manufacturer sells the
defective equipment to the successor corporation prior to merger or otherwise places the
defective product somewhere other than in its own workplace, i.e. in the stream of commerce.
Under these circumstances, the corporate manufacturer would have existed as a third person
subject to liability prior to the merger. Because an individual could have been injured by the
defective machinery outside the manufacturer's workplace, an injured employee of the
manufacturer's corporate successor arguably should be permitted to maintain a cause of action
against his employer for resulting injuries.
Put simply, the formalities of a corporate merger should not extinguish the liability of the
manufacturer whose assets and obligations have been transferred to another corporate entity. In
this case, however, the injured claimant has not been precluded from bringing suit against the
manufacturer of the product due to merger. No obligation or liability would have existed prior to
the merger, and none should be created by the merger that could not have existed

independently. Thus, although the court might apply the dual persona doctrine in the proper
case, this is not such a case.
IV
56Absent the dual persona doctrine, the dispositive principle in this case is that the workers'
compensation act provides the exclusive remedy for an employee injured by defective equipment
designed and built by his employer's corporate predecessor, unless the employer expressly
waives the act's protection. See Brown v. Prime Constr. Co., 102 Wash.2d 235, 684 P.2d 73
(1984); Seattle-First Nat'l Bank v. Shoreline Concrete Co., 91 Wash.2d 230, 588 P.2d 1308
(1978). No express contractual waiver exists in this case, and we refuse to imply such a waiver
from the statutory *224 formalities of a corporate merger. Accordingly, we affirm the trial court.
DOLLIVER, C.J., and UTTER, BRACHTENBACH, ANDERSEN, CALLOW, GOODLOE and
DURHAM, JJ., concur.
DORE, Justice, (dissenting).
The majority concedes that this action is indistinguishable from the circumstances supporting
imposition of dual persona liability in the only three decisions which have addressed this precise
issue. See Billy v. Consolidated Mach. Tool Corp., 51 N.Y.2d 152, 412 N.E.2d 934, 432 N.Y.S.2d
879 (1980); Schweiner v. Hartford Accident & Indem. Co., 120 Wis.2d 344, 354 N.W.2d 767
(Ct.App.1984); Kimzey v. Interpace Corp., Inc., 10 Kan.App.2d 165, 694 P.2d 907 (1985). The
majority nonetheless holds that this is not the proper case for adoption of the dual persona
doctrine and decides the case contrary to the rationale of the controlling case law. I dissent.
THE DUAL PERSONA DOCTRINE
The dual persona doctrine is premised on two principles. First, the surviving corporation of a
merger succeeds to the liabilities of the constituent corporations and second, the workers'
compensation act permits recovery against third persons. In conjunction, these two principles
merge into the dual persona doctrine, acknowledging responsibilities of the merger
survivor separate from those of corporate employer.
Both of these principles are present in the instant action and, thus, warrant adoption of the dual
persona doctrine. First, pursuant to the terms of the merger agreement and by virtue of statute,
Willamette succeeded to all the liabilities and obligations of Corco. The merger agreement
specifically provided that Willamette “shall be liable for all the obligations of [Corco] ...” See
also RCW 23A.20.060(5). In the ordinary course of events Willamette would be answerable to
Corr for Corco's tortious conduct. See Billy v. Consolidated Mach. Tool Corp., 51 N.Y.2d 152,
161, 412 N.E.2d 934, 432 N.Y.S.2d 879 (1980); *225 Schweiner v. **97 Hartford Accident &
Indem. Co., 120 Wis.2d 344, 348–51, 354 N.W.2d 767 (Ct.App.1984); Kimzey v. Interpace Corp.,
Inc., 10 Kan.App.2d 165, 694 P.2d 907, 912 (1985).
Second, it is a well established rule that if an employee recovers benefits under the workers'
compensation act, he cannot maintain a common law tort action against his employer for
damages. 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). If, however, the worker's injuries for
which compensation is payable were caused by the negligence of a third person not in the same
employ as the injured worker, the worker is not precluded from accepting the compensation and
also pursuing a cause of action against the third person. RCW 51.24.030; Spencer, 104 Wash.2d
at 32, 700 P.2d 742; see also Kimzey, 694 P.2d at 910. It is undisputed that Corco designed and
built the bulk bin compressor unit and that Corr was not in the employment of Corco. Thus Corco
is within the third person liability exception to exclusivity of workers' compensation.
These two principles in combination form the basis of dual persona liability. The Billy court set
forth the conceptual basis for the doctrine as follows:
Conceptually, the deceased employee's executrix is suing not the decedent's former employer,
but rather the successor to the liabilities of the two alleged tort-feasors. That USM also happens
to have been the injured party's employer is not of controlling significance, since the obligation
upon which it is being sued arose not out of the employment relation, but rather out of an
independent business transaction between USM and Farrel. What distinguishes this case from
the “dual-capacity” cases discussed above is that here the tort in question was not committed by
the employer or any of its agents; instead, the tort, if any, was committed by third parties, which,
as it appears on the present record, never had an employer-employee relationship with the
injured party. Since these third parties would have had no basis for invoking section 11 of the

Workers' Compensation Law as a defense in a common-law action brought against them by the
employee or his dependents, USM, which stands in their shoes with respect to the question of
liability, should *226 similarly not be permitted to do so.
Through its merger with Consolidated and Farrel, USM voluntarily assumed any obligations that
those corporations may have had to individuals who might suffer injury as a result of a defect in
their product. It would be grossly inequitable to permit USM to avoid its assumed obligations
solely because the injured party was coincidentally an employee and the injuries in question
arose in the course of his employment. As we have already seen, the policies underlying the
Workers' Compensation Law do not extend so far as to preclude actions by an injured worker
against a third-party manufacturer whose defective product has caused the injury. Inasmuch as
plaintiff's action represents essentially an attempt to recover from third-party manufacturers
through a suit against their corporate successor, plaintiff should be permitted to maintain the
action, notwithstanding that the successor corporation is also an employer which would
otherwise be immune from suit under section 11. Accordingly, we hold that it was error for the
courts below to dismiss plaintiff's causes of action against USM on the basis of its status as
employer.
(Footnote omitted.) Billy, 51 N.Y.2d at 161–62, 412 N.E.2d 934, 432 N.Y.S.2d 879.
Professor Larson cites Billy as a leading example of dual persona. He 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 second persona so completely independent from and unrelated to his status as
employer that by established standards the **98law recognizes it as a separate legal person.
2A A. Larson, Workmen's Compensation § 72.81 (1984). As previously indicated the second
persona of Willamette is that of a successor corporation which generates assumed obligations of
the defunct corporation, Corco.
The merger agreement in Kimzey, like the agreement in the Willamette/Corco merger, provided
that the successor corporation assumed “ ‘all debts, liabilities, restrictions, duties and obligations'
” of the third party manufacturer corporation. Kimzey, 694 P.2d at 909. The court held that the
exclusivity provisions of the workers' compensation act did not bar an action against the
successor corporation which had*227 by reason of the merger agreement assumed the liabilities
of the third party tortfeasor.
The majority's addition of a “stream of commerce” element to the doctrine is unfounded. Majority
opinion, at 8. This element is not addressed in any of the three opinions adopting the dual
persona doctrine, nor is it an element of the cause of action as defined by Professor Larson. The
majority premises the addition of the “stream of commerce” requirement on the basis that Corco
could never have been subject to third party liability absent the merger. It is not placing the plant
equipment in the stream of commerce which creates the possibility of third party liability,
however, but the contractual and statutory liabilities assumed by a successor corporation which
imposes third party liability. In essence, dual persona liability arises in this circumstance solely by
reason of the employer's independent assumption, by contract and statute, of the obligations of
the third party tortfeasor. Willamette's liability arises out of an independent business transaction
unrelated to “stream of commerce” transactions. We are not concerned with whether Corr could
have come in contact with the plant equipment absent the merger. He in fact did come into
contact with the bulk bin compressor and his employer, Willamette, had assumed the
manufacturer's obligations for injuries caused by its equipment.
Having demonstrated all the essential elements of dual persona liability, Corr should be entitled
to maintain his action against Willamette as successor to the third party tortfeasor. I therefore
dissent.
All Citations
105 Wash.2d 217, 713 P.2d 92
Footnotes
1

The court in Billy v. Consolidated Mach. Tool Corp., 51 N.Y.2d 152, 412 N.E.2d 934, 432
N.Y.S.2d 879 (1980) specifically rejected application of the traditional dual capacity doctrine to an
employer acting in the capacity of the manufacturer. Billy,at 160, 412 N.E.2d 934, 432 N.Y.S.2d
879.