Lead Opinion
Opinion
Appellant William Bell was employed by respondent Industrial Vangas, Inc. (Vangas), as a route salesman. He was severely injured in a fire which occurred when he delivered a flammable gas to the premises of a customer—Long Chemical, Inc.
Bell brought suit, charging Vangas and Long Chemical, Inc., and others as joint tortfeasors with strict “manufacturer’s” liability as that term has been defined in California products liability law. (See Greenman v. Yuba Power Products, Inc. (1963)
Bell’s pleading, when construed with the liberality required in motions brought under Code of Civil Procedure section 437c, alleges a cause of action against both Yangas and Long Chemical on the basis of their being “manufacturers” of a defective product. Factual issues bristle in the pleading papers before the trial court.
I
The finding of a triable issue of fact, however, does not ipso facto require reversal, for Yangas has a second, a legal, arrow in its quiver to support the trial court’s grant of summary judgment. Yangas reasons: Bell was Yangas’ employee, injured while engaged in his employer’s work; he has already received a workers’ compensation award and therefore is precluded from suing his employer for tort damages as a matter of law; workers’ compensation is the “exclusive remedy”; “Pandora’s box” will be opened, argues the employer, if Bell is permitted to
To support its underlying thesis, Yangas points to judicial declarations to this effect: “‘In the most explicit terms, [Labor Code] section 3600 declares the exclusive character of the employer’s workmen’s compensation liability in lieu of any other liability to any person. Sections 3600 and 3601 form a complementary, unmistakable declaration of legislative policy ... ,’”
II
The 37-year history of California legal precedents—buttressed by an analysis of the Workers’ Compensation Act (Act) and its constitutional foundations and underlying public policy considerations—contradicts the employer’s overbroad statement of the scope of the “exclusive remedy” doctrine.
This court, as well as appellate courts of this state, has authored many opinions recognizing employees’ rights to recover damages from the employer for injuries sustained in a jobsite setting in addition to those allowed by workers’ compensation law. These decisions have not ignored the “plain unambiguous” language of sections 3600 and 3601. Rather, the courts have followed the lead of the California Legislature when, in 1937, it codified earlier statutory provisions in Labor Code
In 1944, this court in Baugh v. Rogers,
What has come to be known as the “dual capacity” doctrine
Since Duprey, California courts have applied the dual capacity concept in a variety of factual situations. The dual capacity doctrine has been recognized and applied where the employer in one capacity—proprietor of a dairy produce business—supplied defective products from a separate legal entity of which the employer was also a general partner. (Dorado v. Knudsen Corp. (1980)
And in Shook v. Jacuzzi (1976)
In face of a claim of exclusivity of remedy under Labor Code section 3601, this court in Unruh v. Truck Insurance Exchange (1972)
This court most recently in referring to the Unruh holding said: “By analogy to Duprey, it was determined that the insurer in Unruh was ‘invested with a dual personality’ so that while it was performing its proper role within the compensation system it stood in the position of plaintiff’s employer and was immune from suit, but when it stepped outside that role by committing an intentional tort, it ‘became a person other than the employer’ like the doctor in the Duprey case, and subject to liability at law.... Unruh involved the liability of the insurer as the alter ego of the employer . . . . ” (Johns-Manville Products Corp. v. Superior Court (1980)
Closest in point of factual application are the recent California appellate court cases in which the dual capacity doctrine has been applied to a defendant who occupied the dual positions of employer and manufac
Most recently, this court (D’Angona v. County of Los Angeles (1980)
“Larson declares that the decisive test of dual capacity is whether the nonemployer aspect of the employer’s activity generates a different set of obligations by the employer toward the employee.” This court then held: “In treating plaintiffs disease the county owed her a duty separate and distinct from its duty as her employer, and this was the duty to provide medical care free of negligence—the same duty that it owes to any member of the public who becomes a patient at its hospital.” {Id., at p. 669.) These principles parallel and support Bell’s precise legal and factual claim here.
III
An analytic examination of the “exclusivity” language of the Labor Code sections and their constitutional foundation lends support to the 37 years of judicial interpretation which approve and apply the dual capacity doctrine. Workers’ compensation laws in the United States and California had their genesis in the inability of the 19th century common law remedies to cope with modern industrialism and its inherent unfairness to injured workers. Implicit therefrom is the concept that workers’ compensation statutes relate generally to the legal status or relationship between employer and employee. Perhaps best expressing the view that workers’ compensation was one essentially of status is the comment of
The essentiality of the “status” requirement is connoted in Labor Code sections 3600 and 3601 by the usage of the very terms “employer” and “employee.” Moreover, the importance of the existence of this status for the applicability of California workers’ compensation is readily discernible from the multiplicity of cases addressing the issues of whether one was an “employee” or whether the injury was one “received ... in the course of or arising out of,” the injured employee’s employment.
The purpose of the Act was to compensate for losses resulting from the risks to which the fact of employment in the industry exposes the employee. Liability under the Act is based, not upon any act or omission of the employer, but upon the existence of the relationship which the employee bears to the employment and because the injury arose out of and in the course of the employment. If the duty flows solely from the employment relationship and the injury “arises out of” and “during the course of” that employment, then the recited policy considerations behind the exclusive remedy in workers’ compensation mandating that the employer be immune from tort liability have viability. If, however, an additional concurrent duty flows from an “extra” employer status or a relationship that is distinct from that of employer-employee and invokes a different set of obligations, then a second capacity arises and the employer status is coincidental. The employer should then be treated as any third party tortfeasor, not immune from a common law tort action. (D’Angona v. County of Los Angeles (1980)
Workers’ compensation laws were adopted long before a manufacturer’s strict liability in tort—the Greenman v. Yuba Power Products, Inc., supra,
Former article XX, section 21 of the California Constitution
To accept Yangas’ construction and application of these statutes would require this court to hold that employees are not entitled to maintain a products liability action against a manufacturer in circumstances where all other users of defective products could maintain such an action. By interpreting the workers’ compensation law in harmony with product liability doctrine, a manufacturer will not escape liability to its employees for defective products where there would be liability to any other injured person. (Dept. of Corrections v. Workers' Comp. Appeals Bd. (1979) 23 Cal.3d 197, 207 [
IV
The trial court refused Bell the protection granted to every other user of manufactured products. Such result runs counter to the long term trend of California tort law and disrupts accepted loss distribution
The imperative of public safety, the deterrence of manufacture of shoddy products, was a powerful force motivating the establishment of product liability law. The manufacturer is held strictly liable because it “is in a peculiarly strategic position to promote the safety of [its] products .... [T]he pressure of strict liability could scarcely be exerted at a better point if accident prevention is to be furthered by tort law.” (James, General Products—Should Manufacturers Be Liable Without Negligence? (1957) 24 Tenn.L.Rev. 923.)
Yangas, as a “manufacturer” who sells its products to the public, continues to be strictly liable to nonemployee consumers; there is naught to commend a rule of the law which would encourage manufacturers to do less in the area of product safety if by chance the product is to be used by their own employees. The inherent deterrent aspect of a manufacturer’s strict liability law is thwarted if the manufacturer has no responsibility to its employees (or the third party joint tortfeasors) beyond a workers’ compensation award.
The obligations Yangas owed as a manufacturer-designer-seller of equipment to all users was entirely independent of those obligations imposed upon it as an employer. (Cf. 2A Larson, Workmen’s Compensation Law, § 72.80.) “Manufacturer” Yangas owed a duty to all foreseeable users of its product not to introduce a defective product into the stream of commerce. (Rest.2d Torts, § 402A.) Neither law nor right reason excludes employees of a manufacturer from this broad rule.
The public policy goals underlying product liability doctrine should not be subverted by the mere fortuitous circumstance that the injured individual was an employee of the manufacturer whose product caused the injury. If the injured individual had not been an employee, he would have had a cause of action against the defendant. To deny Bell such a
One final thought germane to societal concerns with the rule selected: A most perceptive scholar has criticized those decisions refusing to apply the dual capacity rule, saying: “[This view] considers the dual capacity doctrine to be antagonistic to the perpetuation of the workmen’s compensation scheme. This conclusion may not necessarily be warranted because, under both workmen’s compensation or a consumer rights theory, the ultimate goal is to reduce the burden of recovery faced by the employee or consumer, and to shift any loss onto the industry that created the initial risk of injury. By rejecting the dual capacity doctrine, the employer is permitted to escape full liability for the defective manufacture of goods simply by using those goods in his own plant. . .. The employee, an intended and foreseeable user, must, therefore, bear the full loss under the consumer loss-disbursement mechanism, while a non-employee party can force that loss onto the manufacturer. Thus, a smaller loss will usually be shifted onto the industry through the worker loss-disbursement mechanism of workman’s compensation than that which would be shifted if the consumer loss-disbursement mechanism were to be invoked.” (Note, Dual Capacity Doctrine: Third-Party Liability of Employer-Manufacturer in Products Liability Litigation (1979) supra, 12 Ind.L.Rev. 553, 580.)
V
California’s historic and current preeminence in applying the dual capacity doctrine must be contrasted with prevailing—weight of authority—views found in sister states. Without doubt, if Bell’s case is to be decided by an arithmetic head count of jurisdictions that have considered the issue, the prevailing weight of authority would hold workers’ compensation to be the exclusive remedy. (See Douglas v. E. & J. Gallo Winery, supra,
Perhaps the clearest, most authoritative (outside California) exposition of the dual capacity concept is to be found in the United States Supreme Court decision of Reed v. The Yaka [1963] (
In so finding, the Supreme Court commented, at page 415 [10 L.Ed.2d at pages 452-453]: “[0\nly blind adherence to the superficial meaning of a statute could prompt us to ignore the fact that Pan-Atlantic was not only an employer of longshoremen but was also a bareboat charterer and operator of a ship and, as such, was charged with the traditional, absolute, and nondelegable obligation of seaworthiness which it should not be permitted to avoid .... We think it
In sum, Bell’s complaint discloses injuries arising from two concurrent causes: the employment relation (for which Yangas is liable under workers’ compensation law) coinciding with a defective product (for which Yangas is here sought to be held liable as the manufacturer).
The principle enunciated and approved by this court from Duprey, supra,
A refusal to apply the “dual capacity” principles where facts fulfilling these conditions are posited by the complaint would constitute a specie of legal wrong in the form of an unjustified abandonment of long established, well reasoned precedent. Such refusal would as well inflict “a harsh and incongruous result” in the form of an inadequate recovery for injuries received. (See Edmonds v. Compagnie Generate Transatl., su
Little more than one year ago this unanimous court most succinctly summarized the applicable and controlling law: “[I]f any injury arises from a relationship which is distinct from that of employer and employee and invokes a different set of obligations than the employer’s duties to its employee, there is no justification for shielding the employer from liability at common law.” (D’Angona v. County of Los Angeles, supra,
Judgment reversed.
Bird, C. J., Tobriner, J., Newman, J., and Wiener, J.,
Notes
Assigned by the Chairperson of the Judicial Council.
Vangas argues that even assuming workers’ compensation is not the exclusive remedy, Bell has failed to state a cause of action in strict products liability because Yangas is not in the business of manufacturing or marketing any of the allegedly defective products. While an uncontradicted declaration submitted in support of Yangas’ motion adequately refutes any suggestion that Yangas was in the business of manufacturing or marketing the delivery truck driven by Bell, the complaint also refers to numerous other allegedly defective products which proximately caused Bell’s injuries. While the declaration asserts such products were not manufactured by Yangas, it does not similarly deny any involvement in marketing or distribution which may be sufficient to give rise to strict liability for a defective product. (See, e.g., Price v. Shell Oil Co. (1970)
Labor Code section 3600, excluding certain exceptions not relevant herein, provides: “Liability for the compensation provided by this division, in lieu of any other liability whatsoever to any person ... shall, without regard to negligence, exist against an employer for any injury sustained by his employees arising out of and in the course of the employment ... in those cases where the following conditions of compensation concur:
it
“(b) Where, at the time of injury, the employee is performing service growing out of and incidental to his employment and is acting within the course of his employment.
“(c) Where the injury is proximately caused by the employment, either with or without negligence." (Italics added.)
And Labor Code section 3601, insofar as relevant here, provides: “(a) Where the conditions of compensation exist, the right to recover such compensation, pursuant to the provisions of this division is ... the exclusive remedy for injury or death of an employee against the employer or against any other employee of the employer acting within the scope of his employment____”
The employees’ right to sue “some other person than the employer” for damages for a jobsite injury was first granted by statute in 1917. (Stats. 1917, ch. 586, § 26, p. 854.) This right was subject inter alia to such provisos as notification of the employer, permissive joinder by the employer and where joinder did occur “damages shall be so apportioned that the claim of the employer shall take precedence over that of the injured employee and if the damages shall not be sufficient or shall only be sufficient to reimburse the employer ... such damages shall be assessed in his [the employer’s] favor.”
This concept assumes a logical, rational and legally self-evident premise. An individual can act in two or more different, distinct capacities, either simultaneously or sequentially, giving rise in law to separate and distinct sets of obligations. There is no fictional character, no need to create any “Doppelganger” to support the rule as long applied in California; only a recognition of a simple fact—one person can have separate and distinct legal personalities.
Professor Larson, the foremost scholarly proponent of the dual capacity concept, characterizes Duprey as “one of [the] most interesting applications” of the dual capacity doctrine, but feels this court “ran the doctrine into the ground in Unruh [Unruh v. Truck Insurance Exchange, supra, 1 Cal.3d 616].” (2A Larson, Workmen’s Compensation Law (1976) § 72.80, p. 14-118.)
As amended in 1918. Section 21 of article XX was repealed in 1976 and its provisions were reenacted as section 4 of article XIV.
Complete and scholarly expositions of the theoretical and societal justifications of this doctrine are found in Comment, Workmen’s Compensation and Employer Suability: The Dual Capacity Doctrine (1974) 5 St. Mary’s L.J. 818; Note, Dual Capacity Doctrine: Third-Party Liability of Employer-Manufacturer in Products Liability Litigation (1979) 12 Ind.L.Rev. 553; Note, The Third Party’s Right to Contribution From an Employer Covered by Workmen’s Compensation (1980) 56 N.D.L.Rev. 373; and Comment, Manufacturer’s Liability as a Dual Capacity of an Employer (1979) 12 Akron L.Rev. 747.
Of greater significance than a counting of judicial noses is the trend of recent decisions from courts in jurisdictions with socio-economic-labor-demographic-historical characteristics more closely akin to California which have adopted the dual capacity
The Reed v. The Yaka rule has been followed by later United States Supreme Court and appellate court decisions (see Jackson v. Lykes Steamship Co. (1967)
Assigned by the Chairperson of the Judicial Council.
Dissenting Opinion
I respectfully dissent. The majority holds, contrary to both the great weight of authority and the express language of controlling California statutes, that an employer is liable in tort to any employee injured in the course of his employment as a result of defective products or equipment manufactured by the employer. In my view, the workers’ compensation laws afford the sole and exclusive remedy to the employee against his employer in such a situation.
Employer Yangas’ contention that employee Bell’s workers’ compensation remedy is exclusive is statutorily founded. The Legislature has been very clear. Labor Code section 3600 provides: “Liability for the compensation provided by this division, [is] in lieu of any other liability whatsoever to any person (Italics added.) If this statutory expression is not sufficiently specific, the following section, 3601, subdivision (a), recites that “ Where the conditions of compensation exist, the right to recover such compensation, pursuant to the provisions of this division is, ... the exclusive remedy for injury or death of an employee against the employer ....” (Italics added.)
The majority opinion suggests that the employment relationship in this case was “‘only a matter of circumstance.’” (Ante, p. 278.) With due respect, this suggestion of a lack of causal relationship between Bell’s injury and his employment is, frankly, absurd. As the majority
Bell never has contended that his injury was nonindustrial. Rather, having previously recovered full workers’ compensation, he sought an additional remedy based on the theory that because Yangas was acting in a “dual capacity” as both manufacturer and employer, a strict liability tort recovery is also available to him. The majority permits it. I would not.
The so-called “dual capacity” doctrine originated in Duprey v. Shane (1952)
Most employers, however, assume additional roles or responsibilities which create particularized duties of care toward the public generally, whether as landowners, retailers, manufacturers, designers or sellers. To hold that an employee may sue in tort whenever an employer breaches such general duties owed to the public at large would, in my view, significantly affect the operation of the workers’ compensation system and substantially alter the carefully constructed and fundamental balance between the rights and interests of employees and employers which is the cornerstone of workers’ compensation laws. To preserve that balance, the dual capacity doctrine should be limited to those situations in which “the nonemployer aspect of the employer’s activity generates a different set of obligations by the employer toward the employee.” (D’Angona, supra,
A substantial majority of cases which have considered the issue, including those of our California appellate courts, fully agrees with the foregoing analysis. Thus, in Shook v. Jacuzzi (1976)
Similarly, in Williams v. State Compensation Ins. Fund (1975)
The holdings in Shook and Williams are mirrored in many like decisions in our sister states. (See Atchison v. Archer-Daniels-Midland Co. (La.App. 1978)
The majority relies, however, upon Douglas v. E. & J. Gallo Winery (1977)
Those commentators most frequently recognized in the field have rejected the majority’s reasoning. Thus, Professor Larson, a respected authority in the workers’ compensation area, is highly critical of both Douglas and Mercer, characterizing them as “unsound applications of the dual-capacity concept. They overlook the simple fact that the use of the product was a routine and integral part of the employment. Dual capacity requires a distinct separate legal persona, not just a separate theory of liability of the same legal person.” (2A Larson, supra (1981 supp.) p„ 193, italics added.) In the ease before us, use of the product in question was a “routine and integral part of’ Bell’s employment.
I am convinced that the majority’s adoption of the Douglas rule will drive a substantial wedge into the exclusivity principle which has characterized the workers’ compensation laws from their very inception. If an employer is to be held civilly liable to injured workers in the employer’s capacity as a “manufacturer,” what compelling reason can exist for denying similar liability for injuries attributable to the employer’s other relationships including his status as “landowner,” “motor vehicle operator,” or “cafeteria proprietor”? Yet employers in our “pluralistic society” frequently assume multiple roles in the course of their ordinary business pursuits. For over 60 years, however, so long as the injury oc
The majority opinion, in extended fashion, emphasizes the social policies favoring adequate recovery by injured employees such as Bell. There is no reason to believe that the Legislature is insensitive to these policies. Yet, the majority wholly fails to explain how we properly may ignore the plain, specific, unambiguous language appearing in both sections 3600 and 3601, statutorily mandating the exclusive remedy rule. It is not our function to tinker with these laws for the purpose of “improving” them. Moreover, if policy considerations were relevant here, surely the exclusivity rule is founded upon a sound policy of “reciprocal concessions,” a policy which has been recognized historically as underlying the entire workers’ compensation scheme. Unlike the ordinary consumer or user of manufactured goods, the employee-user under the workers’ compensation laws is given an assured protection from impairment of earning capacity, and payment of medical expenses, without regard to any principles of comparative fault (see Daly v. General Motors Corp. (1978)
Thus, in consideration for such concessions, employer misconduct much more egregious than that alleged here remains compensable only through a workers’ compensation remedy. (See, e.g., Wright v. FMC Corp. (1978) 81 Cal.App.3d 777, 779 [
There can be no question but that this delicate balance, carefully conceived and preserved for many years by the Legislature, is signifi
I would affirm the judgment.
Mosk, J., concurred.
Respondent’s petition for a rehearing was denied December 30, 1981. Kaus, J., did not participate therein. Richardson, J., was of the opinion that the petition should be granted.