Court Opinion

ID: 9562836
Source: CourtListenerOpinion
Date Created: 2023-08-21 18:34:10.7979+00
Date Added: 2024-06-11T09:17:32.976367
License: Public Domain

Dore, J.
(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., 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 Coreo. The merger agreement specifically provided that Willamette "shall be liable for all the obligations of [Coreo] ..." 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); Schweiner v. Hartford Accident & Indem. Co., 120 Wis. 2d 344, 348-51, *225354 N.W.2d 767 (Ct. App. 1984); Kimzey v. Interpace Corp., 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 Wn.2d 30, 700 P.2d 742 (1985); Provost v. Puget Sound Power & Light Co., 103 Wn.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, at 32; see also Kimzey, 694 P.2d at 910. It is undisputed that Coreo designed and built the bulk bin compressor unit and that Corr was not in the employment of Coreo. Thus Coreo 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 *226similarly 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, at 161-62.
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 law 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, Coreo.
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, at 165. The court held that the exclusivity provisions of the workers' compensation act did not bar an action against the successor corporation which had *227by 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 223. 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 Coreo 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.