Opinion ID: 2521086
Heading Depth: 1
Heading Rank: 2

Heading: Interstate's Liability

Text: The Act provides the exclusive remedy against an employer for an employee who is injured in the workplace. RCW 51.04.010, 51.32.010. Employers who are self-insured under the Act also obtain the same immunity. RCW 51.32.010; Manor v. Nestle Food Co., 131 Wash.2d 439, 444, 932 P.2d 628 (1997). In addition, a parent company and its subsidiaries will be treated as one entity for the purposes of immunity under the Act. Id. at 456, 932 P.2d 628 (upholding former WAC 296-15-023 (1993), repealed by St. Reg. XX-XX-XXX (Nov. 17, 1999)). [2] The Act was enacted to guarantee certain relief for employees injured within the scope of their employment. RCW 51.04.010. The insurance is based upon a compromise between employees and employers, ensuring the worker receives speedy relief, while granting employers immunity from common law responsibility. Meyer v. Burger King Corp., 144 Wash.2d 160, 164, 26 P.3d 925 (2001); Favor v. Dep't of Labor & Indus., 53 Wash.2d 698, 703, 336 P.2d 382 (1959). In exchange for such relief, the employee forfeits certain rights to pursue alternative tort or other remedies. West v. Zeibell, 87 Wash.2d 198, 201, 550 P.2d 522 (1976). The Act clearly states this intent: The state of Washington, therefore, exercising herein its police and sovereign power, declares that all phases of the premises are withdrawn from private controversy, and sure and certain relief for workers, injured in their work, and their families and dependents is hereby provided regardless of questions of fault and to the exclusion of every other remedy, proceeding or compensation, except as otherwise provided in this title; and to that end all civil actions and civil causes of action for such personal injuries and all jurisdictions of the courts of the state over such causes are hereby abolished, except as in this title provided. RCW 51.04.010. As a result, employees may receive less than full tort damages in exchange for the expense and uncertainty of litigation. See generally McIndoe v. Dep't of Labor & Indus. 144 Wash.2d 252, 26 P.3d 903 (2001); Frost v. Dep't of Labor & Indus., 90 Wash.App. 627, 631, 954 P.2d 1340 (1998). In this case, Interstate qualified as a self-insurer in accordance with the provisions of the Act. Ch. 51.14 RCW. As a self-insurer, Interstate was obligated to pay Minton workers' compensation for the injuries he suffered incident to his employment, and Interstate has been paying these benefits since the day the accident occurred. RCW 51.04.010. For the policy reasons previously cited in favor of promulgating the Act and because Minton's accident was not an intentional tort, nor does it fall under another exception, Minton has lost the right to pursue alternative tort remedies. See RCW 51.24.020, .040,.060(1)(c), .070, 51.12.100(4). The Legislature's stated compromise in granting Minton workers' compensation supports the determination that he relinquishes alternative tort remedies against Interstate. Although there is no direct cause of action against Interstate in light of the compromise presented by the Act, Minton argues that Interstate still owes him additional compensation because it has assumed Continental's liabilities. This court addressed questions similar to those presented here in Corr v. Willamette Industries, Inc., 105 Wash.2d 217, 713 P.2d 92 (1986), and DuVon. We find Corr factually analogous and controlling. In Corr, Willamette Industries, Inc. (Willamette) merged with Corco, Inc. in 1977. Incidental to the merger, Willamette acquired two bulk bin compressors designed and manufactured by Corco. Corco had never sold or otherwise put the compressors into the stream of commerce. The plaintiff, Corr, was employed at Western Kraft Paper Group, a wholly owned subsidiary of Willamette. In 1980, Corr was injured while cleaning one of the compressors. He filed for and received workers' compensation benefits. Corr subsequently filed a products liability action against Willamette claiming that it should be subject to liability under the dual persona doctrine. The dual persona doctrine provides that an employer may be subject to a tort suit by an employee if, and only if, the employer `possesses a second 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.' [3] Id. at 220-21, 713 P.2d 92 (quoting 2A ARTHUR LARSON, WORKMEN'S COMPENSATION § 72.81 (1983)). This court rejected Corr's claim. We held that neither the dual capacity nor the dual persona doctrine would overcome the exclusive remedy under the Act in the factual scenario presented. In holding that the Act provided the exclusive remedy, we reasoned that Corco could not have been liable as a third party prior to the merger because it had not placed the compressors into the stream of commerce and Corr had not been a Corco employee. Therefore, we concluded, Willamette should not be liable solely because of the merger. In DuVon, meanwhile, the defendant, Rockwell International (Rockwell), was the general contractor at Hanford Nuclear Reservation (Hanford). During its contract, Rockwell designed and constructed equipment for the operation including portable exhausters. The plaintiff was an employee while Rockwell held the contract. In 1987, Westinghouse Hanford Company (Westinghouse) replaced Rockwell as the prime contractor and took possession of all the equipment used by Rockwell at Hanford. The plaintiff then became an employee of Westinghouse. Five days after the plaintiff became an employee of Westinghouse, he was injured in an accident involving one of the portable exhausters. He pursued an industrial insurance claim against Westinghouse and brought a separate action against Rockwell as a third party pursuant to RCW 51.24.030(1). [4] Rockwell argued that under Corr, it should not be liable for DuVon's injuries because as DuVon's employer, it could not have been liable prior to Westinghouse's assumption of the contract. We rejected Rockwell's argument, holding that Rockwell was a third party for purposes of RCW 51.24.030(1) and that Rockwell owed a duty to the plaintiff. In so holding, we limited Corr to situations involving mergers and held that it did not apply to situations involving transfers or sales of property. The finding of no duty in Corr was therefore largely based on the fact that the transferor, Corco, and transferee, Willamette, became one and the same as of the moment of transfer. DuVon, 116 Wash.2d at 759-60, 807 P.2d 876. This distinction between Corr and DuVon is significant. While the factual scenarios appear similar in both cases, the key separating factor arises from the fact that in Corr the company that merged would assume the liabilities of the nonsurviving company, hence carrying forth and fulfilling the purposes and obligations of the Act. In DuVon, by contrast, the two companies did not merge and the subsequent contractor would not assume the same liabilities as its contractual predecessor. Thus, the predecessor now assumes new liabilities as it has been relieved of its previous obligations. In Corr, however, the liabilities have become one and the same. The petitioners argue that because Continental, as Minton's employer, could not have been liable for Minton's injuries before the merger, under Corr, the surviving corporation should similarly not be liable. Minton responds that Interstate is subject to liability in its capacity as the successor to Continental's liabilities. Resp't Answer to Pet. for Review at 6 (citing RCW 23B.11.100(3), which provides that when a merger occurs, [t]he surviving corporation has all the liabilities of each corporation ... to the merger). Minton attempts to distinguish this case from Corr by arguing that the merger with Continental occurred after Interstate's purchase of Continental. However, Interstate, as the parent corporation, would be immune from suit by a Continental employee. See Manor, 131 Wash.2d at 455-56, 932 P.2d 628 (stating when self-insurer is purchased by another firm, parent agrees to stand in shoes of subsidiary corporation for subsidiary's industrial insurance obligations). Furthermore, the two-day lag between sale and merger is irrelevant because Continental and Interstate did merge in fact, and the latter assumed the liabilities of the former. Therefore, similar to the factual pattern in Corr, but not DuVon, Interstate and Continental's liabilities are now synonymous. Continental's liabilities prior to the merger would have been limited to workers' compensation benefits under the Act. Similarly, Interstate's liabilities are limited to the exclusive remedy provided under the Act, namely workers' compensation benefits. As Continental merged into Interstate, Interstate assumed the burden of Continental's liabilities, which would include compensation for a work-related accident in accordance with the Act. Interstate has fulfilled this obligation. Accordingly, we hold that there are no genuine issues of material fact regarding Interstate's liability, and summary judgment in its favor is appropriate.