Opinion ID: 2423941
Heading Depth: 1
Heading Rank: 5

Heading: Dual Persona Doctrine

Text: 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 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 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 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 as a third-party tortfeasor in determining whether the dual persona doctrine applied to the facts at issue. [26]