Court Opinion

ID: 9676776
Source: CourtListenerOpinion
Date Created: 2023-08-24 05:32:45.092301+00
Date Added: 2024-06-11T18:16:51.140640
License: Public Domain

Hoekstra, J.,
(dissenting). The majority recognizes that our Supreme Court adopted the dual-persona doctrine in Howard v White, 447 Mich 395; 523 NW2d 220 (1994), but it declines to apply the doctrine in this case. The majority does not argue that the facts of this case are somehow incompatible with the dual-persona doctrine. Rather, the majority holds that it can freely pick and choose case by case which dual personas are covered by the doctrine and which are not. By using this analysis, and adding to it a problematic “stream of commerce element,” the majority concludes that policy precludes us from applying the dual-persona doctrine in this case. Although I find the majority’s policy considerations to be compelling, I would argue that stare decisis does not permit this intermediate appellate court to unilaterally curtail a doctrine that our Supreme Court has unequivocally adopted. Rather, we should apply the doctrine as it is customarily and uniformly understood, because our Supreme Court has not indicated that we are free to deviate from it. A uniform and customary application, when done here, mandates that we allow plaintiff to *258pursue this cause of action. Accordingly, I respectfully dissent.
In this case, we are asked to decide whether an employee can sue his employer, as a successor in liability, in a third-party lawsuit under Michigan’s Worker’s Disability Compensation Act (wdca). Ordinarily, the wdca provides the exclusive remedy for an employee who is injured on the job. However, where a third party’s negligence has., caused the injury, an employee can collect workers’ compensation benefits and sue the third party for damages. MCL 418.827; MSA 17.237(827). This case, however, addresses a hybrid recovery situation where the employer also stands in the shoes of the third-party tortfeasor. In Howard, supra, our Supreme Court defined an exception to the wdca’s exclusive remedy provision, the “dual-persona doctrine,” that allows an injured employee to recover both worker’s compensation benefits and traditional tort remedies in this type of situation.
However, despite our Supreme Court’s unequivocal adoption of the dual-persona doctrine, the majority refuses to apply it here.1 The majority reaches this conclusion despite the fact that it agrees that, in *259cases like this one, the dual-persona doctrine is generally thought to apply. Indeed, the majority notes that the facts in Billy v Consolidated Machine Tool Corp, 51 NY2d 152; 432 NYS2d 152; 412 NE2d 934 (1980), are very similar to the facts here. Not only did the Billy court find that the doctrine applied, but the leading treatise in this area cites the decision as a prime example of the doctrine’s proper application. See 6 Larson, Workers’ Compensation Law, § 113.01[3], pp 113-5 to 113-6. I find it noteworthy that our Supreme Court relied on this treatise in Howard, supra, when it adopted the dual-persona doctrine. On the basis of that fact, I must conclude that our Supreme Court joined the treatise author’s endorsement of Billy as a prime example of the doctrine’s proper application. Given that the facts in Billy are similar to those here, I must find that the doctrine applies and that plaintiff should be permitted to pursue her claim. 2 Indeed, I do not see how it could be otherwise.
*260Initially, the majority cites policy concerns as a basis for rejecting the doctrine in this particular case. I share some of the majority’s concerns, especially regarding how this judicially created exception might limit the legislative intent behind the wdca. I am convinced, however, that my policy concerns should not subvert my duty to apply well-settled Supreme Court precedent.31 simply do not accept the majority’s argument that applying the dual-persona doctrine here requires that we extend the doctrine’s scope. As I noted above, the facts here are very similar to those in Billy, supra, and that case is generally understood to be a leading example of how courts should apply the dual-persona doctrine.
Further, I find the majority’s reliance on Howard's cautionary language regarding “looseness” and “over-extension” to be inapplicable here. The cautionary language, originally found in Larson’s treatise, was *261cited by the Howard Court as a basis for rejecting the dual-capacity doctrine, which is a much broader exception to the wdca’s exclusivity provision than the dual-persona doctrine. This language does not support the majority’s narrow inteipretation of the dual-persona doctrine, nor was it intended to bar the doctrine’s application in cases like this one.
The majority relies, in part, on the reasoning expressed in Corr v Willamette Industries, Inc, 105 Wash 2d 217; 713 P2d 92 (1986). Essentially, the Corr court argues that goods cannot be the source of third-party liability unless the predecessor corporation manufactured them for resale. Although the “stream of commerce” argument has a certain intuitive appeal, it has been employed in other contexts without success. See 6 Larson, § 113.01[4], pp 113-6ff. For example, suppose a corporation’s employees use a product that the corporation also sells, and the corporation merges with a successor corporation. The product then injures someone hired after the merger. The question necessarily becomes whether this fact pattern meets the Washington court’s stream of commerce test. Unfortunately, ambiguity plagues the stream of commerce concept, and it eventually forces courts to draw meaningless distinctions.4 Id.
*262In addition to the troubling ambiguities inherent in its stream of commerce doctrine, the Washington court reached its conclusions in a very different legal context. As the dissent in Corr points out, Washington has not adopted the dual-persona doctrine. Corr, supra at 224 (Dore, J., dissenting). That fact alone distinguishes the case from this one. Because our Supreme Court has explicitly adopted the doctrine and because we are an intermediate appellate court, we are bound to apply it.5
In addition to the inevitable practical problems encountered in adding the stream of commerce element to the dual-persona doctrine, I find that such rationalizations also undermine the majority’s argument that the policy underlying the wdca should trump a judicially created doctrine. The majority attempts to distinguish (1) a case where the defective goods are sold, or inserted into the “stream of commerce,” by one company to another before the two companies merge from (2) a case where the plaintiff’s employer acquired the defective goods through a merger. The majority would allow the plaintiff injured by the defective goods to bring his suit under the for*263mer situation, but not the latter. The majority argues that the policy underlying the wdca, that worker’s compensation is the sole remedy against an employer, should prevent the plaintiff from bringing a third-party suit against his employer in the second situation. However, the policy is still confounded by the first situation, because a plaintiff-employee is permitted to bring a third-party suit against his employer. The majority has failed to demonstrate a meaningful distinction between buying a defective product on the market and buying it as part of a merger. In both situations, the party responsible for the defect cedes liability to the employer, and in both situations the employee pursues a third-party liability suit against his employer. I see no meaningful difference between the two types of successor liability.6
If the dual-persona doctrine is to apply in any case, it applies here. The predecessor corporation was an entity so separate from defendant’s employer that the law recognizes it as a separate person. We are not free to draw the troubled distinctions relied on by the Washington court, and I can find no case rejecting the view expressed by both the treatise and the Billy court in a state where the dual-persona doctrine has been adopted. Therefore, I would find that plaintiff can bring her case against defendant SMS Holding *264Company, Inc., as the successor in interest to the corporation that allegedly modified the turning machine.

 I note that SMS Holding Company, Inc., has stipulated that it is the successor in interest to the corporation that allegedly modified the machine in question. In their “supplement brief in support of motion for summary disposition,” defendants wrote:
The plaintiffs allege liability based on the modification of a machine purchased by Saginaw Machine and Tool Company Division of Wickes Corporation on July 15, 1980. . . . Saginaw Machine and Tool Company Division of Wickes Corporation no longer exists and plaintiff must therefore pursue this matter against a corporation, now in existence, that would have successor liability. In this particular case Saginaw Machine Systems, Inc., now SMS Holding Company is clearly the corporation which purchased the assets of *259Saginaw Machine and Tool Company a Division of Wickes Corporation including the machine and the facilities at issue.
The law is clear that successor liability attaches where the buying corporation is a mere continuation of the selling corporation. In this particular case with [sic] SMS Holding Company not only purchased the equipment and facilities from the Wickes Corporation in November of 1993, but continued to operate the facilities in its same capacity. The SMS Holding Company must clearly be found to be the successor corporation.

 Several other jurisdictions also have followed the Billy court. See, for example, Robinson v KFC Natl Management Co, 171 Ill App 3d 867; 121 Ill Dec 721; 525 NE2d 1028 (1988) (“We conclude that the exclusive remedy provision of the Workers’ Compensation Act . . . does not bar an employee who has accepted workers’ compensation benefits from maintaining a tort action against his employer, when the manufacturing corporation, by whom he was never employed, has merged with the employer corporation prior to the time of the employee’s injuries.”); Kimzey v Interpace Corp, Inc, 10 Kan App 2d 165; 694 P2d 907 (1985) (the plaintiff *260could sue the employer despite the exclusivity provision of the Workers’ Compensation Act because his employer was acting as a second persona unrelated to its status as the plaintiffs employer when it assumed the liabilities, through merger, of the corporation that manufactured the defective equipment); Gurry v Cumberland Farms, Inc, 406 Mass 615; 550 NE2d 127 (1990) (corporation that was successor to both manufacturers of product that allegedly caused worker’s death and to worker’s employer could not for its own convenience disregard its predecessor corporations’ separate identities and pierce the corporate veil so as to take advantage of exclusive remedy provision of worker’s compensation law in wrongful death action brought against corporation arising from death of worker allegedly caused by product manufactured by predecessor); and Schweiner v Hartford Accident & Indemnity Co, 120 Wis 2d 344; 354 NW2d 767 (1984) (under the dual-persona doctrine, the defendant’s status as a successor in liability was a sufficiently separate persona to allow the plaintiff to bring a third-party action).

 I note that our Supreme Court decided Howard peremptorily. I think that this case presents an excellent opportunity for our Supreme Court to give plenary consideration to this jurisprudentially significant area of the law and to weigh and resolve the policy concerns expressed by the majority.

 For example, how much of a product must a company insert into the stream of commerce before it will be held liable? Is the sale of one of a given product sufficient? If so, is there a meaningful distinction to be made between the sale of that item during a merger and its sale sometime before the merger? If one item is not sufficient, then how much should be required? Is there a meaningful difference between a company that uses fifty percent of its product in-house and sells the remaining fifty percent, and one that uses ninety percent of its product in-house and sells ten percent? These questions demonstrate the intractable difficulties of the stream of commerce argument.

 The majority claims that the fact that the Corr court rejected the dual-persona doctrine is inapposite. I disagree. Given the procedural posture of this case, the distinction is critical. The Washington court, when faced with this issue, was writing on a blank slate. Absent any precedence to the contrary, it could adopt whatever permutation on the dual-persona doctrine it desired. Here, however, as acknowledged by the majority opinion, our Supreme Court has explicitly adopted Larson’s version of the dual-persona doctrine. Larson cites Billy as the quintessential application of the doctrine. The majority cites Larson several times as standing for the proposition that the doctrine should be applied only in extraordinary cases. Conspicuously absent from the majority’s opinion, however, is any reference to Larson’s endorsement of the Billy court’s reasoning. I maintain that, until the Supreme Court says otherwise, we are a dual-persona state, and that fact requires us to allow plaintiff to bring her suit.

 The majority also argues that only an employee would be in a position to be injured by the equipment, but this argument also fails. First, one can easily imagine any number of circumstances whereby a nonemployee might be injured by the machine. Consider the liability of SMS, Inc., for the defective window if the flying metal had hit a visitor to its factory. Second, if SMS, Inc., had sold the machine to another company, and the accident occurred at the machine’s new location, SMS, Inc., as the successor in liability, would be liable for the defective modification. In short, I see no merit in the argument that only an employee could be injured by the machine.