Case Title: Stayton v. Clariant Corporation,et al.

Citation: 

Docket Number: 231, 2010

State: delaware

Court: Delaware Supreme Court

Date: 2010-12-13T00:00:00Z

Document:
THE SUPREME COURT OF THE STATE OF DELAWARE 
 
ROCKY STAYTON, 
 
 
§ 
 
 
 
 
 
 
§  No. 231, 2010 
 
Plaintiff Below, 
 
 
§ 
 
Appellant,  
 
 
§  Court Below – Superior Court 
 
 
 
 
 
 
§  of the State of Delaware 
 
v. 
 
 
 
 
§  in and for Kent County 
 
 
 
 
 
 
§  C.A. No. 05C-05-042 
CLARIANT CORPORATION, a 
§ 
foreign corporation, and  
 
§ 
POLYMER COLOR NORTH  
§ 
AMERICA, INC., a former 
 
§ 
Delaware Corporation, 
 
 
§ 
 
 
 
 
 
 
§ 
 
Defendants Below, 
 
 
§ 
 
Appellees.  
 
 
§ 
 
 
 
 
 
 
    Submitted:  November 10, 2010 
 
 
 
                 Decided:  December 13, 2010 
 
Before HOLLAND, JACOBS and RIDGELY, Justices. 
 
 
Upon appeal from the Superior Court.  REVERSED and 
REMANDED. 
 
 
 
William D. Fletcher, Jr., Esquire (argued) and B. Brian Brittingham, 
Esquire, Schmittinger & Rodriguez, P.A., Dover, Delaware, for appellant. 
 
 
Kevin J. Connors, Esquire, Marshall, Dennehey, Warner, Coleman & 
Goggin, Wilmington, Delaware, for appellee. 
 
 
 
 
HOLLAND, Justice: 
 
 
2
 
This is an appeal by the plaintiff-appellant, Rocky Stayton 
(“Stayton”), from a final judgment entered by the Superior Court in favor of 
the defendants-appellees, Clariant Corporation (“Clariant”) and Polymer 
Color North America, Inc. (“Polymer Color”).  The Superior Court granted 
the defendant’s motion to dismiss Stayton’s Amended Complaint on the 
basis that it was barred by the Delaware Workers’ Compensation Act. 
 
Stayton contends that, pursuant to the dual persona doctrine, his 
complaint should not have been dismissed.  Stayton submits that the 
Workers’ Compensation Act only bars an action against his employer, 
Clariant, in its capacity as his employer.  Stayton argues that his action 
against Clariant is as the successor in interest by merger to the alleged third-
party tortfeasor, Polymer Color.   
 
We have concluded that the Superior Court erred as a matter of law in 
dismissing Stayton’s Amended Complaint.  Therefore, the judgment of the 
Superior Court must be reversed.  This matter is remanded for further 
proceedings in accordance with this opinion.   
Facts 
On May 20, 2003, Stayton was injured while he was an employee of 
Clariant.  Stayton was manually moving a four-wheeled pelletizer machine, 
weighing nearly 1700 pounds, when it toppled over on him.  The accident 
 
 
3
was allegedly due to defects in the floor and the top-heavy nature of the 
machine.  Stayton suffered injuries to his left leg and hand and underwent 
numerous surgeries as a result of the accident.   
The original owner of the machine was Plastic Materials Co., Inc. 
(“Plastic Materials”), which used the machine in the same manufacturing 
facilities where Stayton was injured.  In May 1996, PMC purchased the 
business assets of Plastic Materials.  On December 20, 1996, PMC merged 
with Polymer Color.  Pursuant to the merger agreement, Polymer Color was 
the surviving corporation.  On December 31, 1997, Polymer Color, a 
Delaware corporation, merged with Clariant, a New York corporation 
unrelated to Plastic Materials, PMC, and Polymer Color.  Clariant was the 
surviving corporation.  In 1999, Stayton began his employment with 
Clariant. 
In the Amended Complaint, Stayton alleges that Plastic Materials, 
PMC, and Polymer Color all “maintained, altered, and/or modified” the 
pellitizer in a negligent manner that rendered the machine unreasonably 
susceptible to tip-overs.  Stayton does not claim that Clariant acted 
negligently in any way.  Instead, Stayton argues that Clariant is statutorily 
 
 
4
liable for the negligent acts of its predecessors pursuant to the New York 
merger statute.1 
Clariant filed a motion to dismiss pursuant to Superior Court Rule 
12(b)(6).  The Superior Court concluded that the actions against both 
Clariant and Polymer Color were barred by the exclusivity provision of the 
Workers’ Compensation Act and granted the motion to dismiss. 
Workers’ Compensation Act 
The purpose of Delaware’s Workers’ Compensation Act is to 
“eliminate questions of negligence and fault in industrial accidents, and to 
substitute a reasonable scale of compensation for the common-law remedies, 
which experience had shown to be, generally speaking, inadequate to protect 
the interest of those who had become casualties of industry.”2  Delaware’s 
Workers’ Compensation Act provides that the exclusive remedy for personal 
injuries sustained during the course of employment is worker compensation 
payments.  Section 2304 states: 
Every employer and employee, adult and minor, except as 
expressly excluded in this chapter, shall be bound by this 
chapter respectively to pay and accept compensation for 
                                          
 
 
1 Stayton erroneously asserted that Clariant, a New York Corporation, was liable under 
the Delaware merger statute.  We note that, pursuant to the dual persona doctrine that we 
adopt in this case, the result would be the same under Delaware law.  Del. Code Ann. tit. 
8, § 259(a). 
2 Hill v. Moskin Stores, Inc., 165 A.2d 447, 451 (Del. 1960). 
 
 
5
personal injury or death by accident arising out of and in the 
course of employment, regardless of the question of negligence 
and to the exclusion of all other rights and remedies.3 
 
This exclusivity provision “precludes a suit for negligence under the 
common law, even if the injury was caused by the gross, wanton, wil[l]ful, 
deliberate, reckless, culpable or malicious negligence, or other misconduct 
of the employer.”4 
 
Delaware’s exclusivity provision does not, however, prevent an 
injured worker from bringing suit against a third-party tortfeasor.  A basic 
principle of workers’ compensation law is that if “a stranger’s negligence 
was the cause of injury to claimant in the course of employment, the stranger 
should not be in any degree absolved of his or her normal obligation to pay 
damages.”5  Although the exclusivity provision prevents an injured 
employee from suing the employer for the employer’s negligence, it does 
nothing to alter the injured party’s right to bring a negligence action against 
a third-party tortfeasor. 
New York Merger Statute 
 
Mergers between corporations in New York are governed by section 
906 of its corporation statute, which provides in relevant part, as follows: 
                                          
 
 
3 Del. Code. Ann. tit. 19, §2304. 
4 Rafferty v. Hartman Walsh Painting Co., 760 A.2d 157, 159 (Del. 2000). 
5 Arthur Larson, Larson’s Workers’ Compensation Law, 6 §110.01, pg. 110.3 (ed. 2000). 
 
 
6
(b) 
When such merger or consolidation has been effected: 
 
(1) 
Such surviving or consolidated corporation shall 
thereafter, 
consistently 
with 
its 
certificate 
of 
incorporation as altered or established by the merger or 
consolidation, 
possess 
all 
the 
rights, 
privileges, 
immunities, powers and purposes of each of the 
constituent corporations. 
 
(2) 
All the property, real and personal, including 
subscriptions to shares, causes of action and every other 
asset of each of the constituent entities, shall vest in such 
surviving or consolidated corporation without further act 
or deed. 
 
(3) 
The surviving or consolidated corporation shall 
assume and be liable for all the liabilities, obligations 
and penalties of each of the constituent entities.  No 
liability or obligation due or to become due, claim or 
demand for any cause existing against any such 
constituent entity, or any shareholder, member, officer or 
director thereof, shall be released or impaired by such 
merger or consolidation.  No action or proceeding, 
whether civil or criminal, then pending by or against any 
such constituent entity, or any shareholder, member, 
officer or director thereof, shall abate or be discontinued 
by such merger or consolidation, but may be enforced, 
prosecuted, settled or compromised as if such merger or 
consolidation had not occurred, or such surviving or 
consolidated corporation may be substituted in such 
action or special proceeding in place of any constituent 
entity.6   
 
Clariant is the surviving corporation of the merger between itself and 
Polymer Color.  Under New York law, Clariant has succeeded to not only 
                                          
 
 
6 N.Y. Business Corporation Law §906 (McKinney 2010) (emphasis added).  
 
 
7
the rights, privileges and immunities that Polymer Color possessed, but also 
to Polymer Color’s liabilities and obligations. 
Standard of Review 
 
This Court reviews a motion to dismiss de novo7 and examines 
whether the trial judge erred as a matter of law in formulating or applying 
legal principles.8  In ruling upon a motion to dismiss a complaint for failure 
to state a claim, pursuant to Superior Court Civil Rule 12(b)(6), all well-
pleaded allegations must be accepted as true.9  The legal issue to be decided 
is, whether a plaintiff may recover under any reasonably conceivable set of 
circumstances susceptible of proof under the complaint.10   
Dual Persona Doctrine 
 
The dual persona doctrine, as used in workers’ compensation 
jurisprudence, provides that “an employer may become a third person, 
vulnerable to tort suit by an employee, if—and only if—it possesses a 
second persona so completely independent from and unrelated to its status as 
an employer that by established standards the law recognizes that persona as 
                                          
 
 
7 Precision Air, Inc. v. Standard Chlorine of Delaware, Inc., 654 A.2d 403, 406 (Del. 
1995); Malpiede v. Townson, 780 A.2d 1075, 1082 (Del. 2001). 
8 Gadow v. Parker, 865 A.2d 515, 518 (Del. 2005). 
9 Spence v. Funk, 396 A.2d 967, 968 (Del. 1978). 
10 Id. 
 
 
8
a separate legal person.”11  This Court has never addressed the applicability 
of the dual persona doctrine to the factual circumstances presented here.  An 
authoritative treatise on workers’ compensation law, Larson’s Workers’ 
Compensation Law,12 cites Billy v. Consolidated Machine Tool Corp.13 as 
the leading case that has addressed the dual persona doctrine in a similar 
context.   
In Billy, the New York Court of Appeals held that a claimant could 
sue the employer in tort, as a corporate successor by merger, since it had 
assumed all of the obligations and liabilities of the alleged third-party 
tortfeasor.14  In Billy, the employee was injured by a machine that had been 
manufactured by a corporation that was not the employee’s employer.  
Before the employee’s injury, the manufacturer and the employee’s 
employer merged.  The New York Court of Appeals held that when the 
employer’s liability, if any, is alleged to have arisen solely from its 
independent assumption, by contract or operation of law, of the obligations 
and liabilities of a third-party tortfeasor, the exclusivity provision of New 
York Workers’ Compensation Statute did not bar a common-law action 
                                          
 
 
11 Larson, §113.01[1], pg. 113-2. 
12 Arthur Larson, Larson’s Workers’ Compensation Law, 6 §113.01[3], pg. 113-5 (ed. 
2000). 
13 Billy v. Consolidated Machine Tool Corp., 412 N.E.2d 934 (N.Y. 1980). 
14 Id. at 940; see also Larson, §113.01[3], pg. 113-5. 
 
 
9
against the employer for injuries sustained by an employee in the course of 
his employment.15   
As the New York Court of Appeals in Billy noted, it is well settled 
that the policies underlying workers’ compensation statutes do not preclude 
the maintenance of a common-law suit against third-parties who may be 
responsible for the employee’s injuries.16  The court further recognized that 
had the merger between the employee’s employer and the manufacturer not 
occurred, the employee could have brought an action against the 
manufacturer.17  The fact that the successor corporation also happened to be 
the injured party’s employer, the court stated, was not of controlling 
significance, “since the obligation upon which it is being sued arose not out 
of the employment relationship, but rather out of an independent business 
transaction” between the employer and the manufacturer.18  According to 
Larson, “[t]he [New York] [C]ourt of [A]ppeals ha[d] thus performed a 
signal service in disavowing the distorted dual capacity doctrine while, at the 
                                          
 
 
15 Billy v. Consolidated Machine Tool Corp., 412 N.E.2d at 936. 
16 Id. at. 939. 
17 Id. at 939-940. 
18 Id. at 940. 
 
 
10
same time, demonstrating that a genuine case of separate legal personality 
can be satisfactorily dealt with under the dual persona doctrine.”19 
 
After Billy, several other jurisdictions have followed its reasoning, 
including Wisconsin,20 Massachusetts,21 Illinois,22 and Kansas.23  Clariant, 
however, points to other jurisdictions that have declined to apply Billy in 
similar circumstances.  In particular, Clariant relies on Braga v. Genlyte 
Group,24 in which the First Circuit held that an employer cannot be held 
liable on the basis of a predecessor’s mere ownership of defective equipment 
when it merged with the employer.25  In support of that holding, the court 
cited decisions from Michigan, New Jersey, Maine, and Washington.   Those 
cases all discussed the Billy decision and noted that the reasoning in Billy 
was persuasive.  Nevertheless, the courts in those cases proceeded to 
examine the merits of whether the predecessor corporation would be liable 
                                          
 
 
19 Larson, §113.01[3], pg. 113-6. 
20 Schweiner v. Hartford Accident & Indemnity Co., 354 N.W.2d 767 (Wis. Ct. App. 
1984).  
21 Gurry v. Cumberland Farms, 550 N.E.2d 127 (Mass. 1990).   
22 Robinson v. KFC National Management Co., 525 N.E.2d 1028 (Ill. App. Ct. 1988).  
23 Kimzey v. Interpace Corp. Inc., 694 P.2d 907 (Kan. Ct. App. 1985).  
24 Braga v. Genlyte Group, Inc., 420 F.3d 35 (1st Cir. 2005). 
25 Id. at 43. 
 
 
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as a third-party tortfeasor in determining whether the dual persona doctrine 
applied to the facts at issue. 26 
Clariant’s Dual Persona 
 
We find that the ratio decidendi of the Billy decision is persuasive.  
The dual persona doctrine prevents an employer from avoiding the third-
party obligations it assumed through a corporate merger by asserting the 
immunity, as the employer of the injured employee, conferred by the 
Delaware Workers’ Compensation Act.27  The dual persona doctrine gives 
effect to the legislative purposes of both the Workers’ Compensation Act 
and the merger provisions of most state corporation statutes.  Under New 
York law, Clariant, as the surviving corporation, voluntarily assumed the 
liabilities and obligations of Polymer Color when the two corporations 
merged.28   
Stayton contends that Clariant’s liability arises from its voluntary 
assumption by merger of Polymer Color’s liabilities and obligations, a third-
party role that is unrelated to Clariant’s role as Stayton’s employer.29  
                                          
 
 
26 Herbolsheimer v. SMS Holding Co., Inc., 608 N.W.2d 487 (Mich. Ct. App. 2000); 
Vega v. Standard Machinery Co. of Auburn, Rhode Island, 675 A.2d 1194 (N.J. Super. 
Ct. App. Div. 1996); Hatch v. Lido Company of New England, 609 A.2d 1155 (Me. 
1992); Corr v. Willamette Industries, Inc., 713 P.2d 92 (Wash. 1986). 
27 Gurry v. Cumberland Farms, Inc., 550 N.E.2d at 131. 
28 Billy v. Consolidated Machine Tool Corp., 412 N.E.2d at 940. 
29 Schweiner v. Hartford Accident & Indemnity Co., 354 N.W.2d at 770. 
 
 
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Delaware’s Workers’ Compensation Act has never precluded an injured 
employee from suing third-party tortfeasors simply because the injury 
occurred in the workplace.  Allowing an employer to assert immunity under 
the exclusivity provision of section 2304 of the Worker’s Compensation Act 
would “cloak the employer with absolute immunity from liability under any 
theory to an injured employee who is eligible for or has received workers’ 
compensation even though the liability asserted arises outside the 
employment relationship.”30     
 
Given our ruling, it is unnecessary for this Court to consider the 
merits of other issues raised, such as whether Polymer Color owed any duty 
to Stayton31 or whether Stayton’s claim is barred by the statute of 
limitations.  Those matters will be decided in the proceedings upon remand.  
The issue before this Court is whether, as a matter of law, Stayton’s action 
against Clariant, for the alleged third-party negligence of Polymer Color, is 
precluded by the Delaware Workers’ Compensation Act.  We hold, pursuant 
to the dual persona doctrine, that the Delaware Workers’ Compensation 
Act’s exclusivity provision does not bar Stayton’s claim against Clariant as 
                                          
 
 
30 Kimzey v. Interpace Corp. Inc., 694 P.2d at 912. 
31 Cf. Braga v. Genlyte Group, Inc., 420 F.3d 35 (1st Cir. 2005). 
 
 
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the surviving corporation in its merger with Polymer Color, the alleged 
thirty-party tortfeasor.  
Conclusion 
 
The judgment of the Superior Court is reversed.  This matter is 
remanded for further proceedings in accordance with this opinion.