Bell v. Industrial Vangas, Inc.

• Decision Date: 30 November 1981
• Citation: 179 Cal.Rptr. 30,30 Cal.3d 268
• Court: California Supreme Court
• Parties: , 637 P.2d 266 William BELL, et al., Cross-Complainants and Appellants, v. INDUSTRIAL VANGAS, INC., Cross-Defendant and Respondent. L.A. 31362.

Page 30

179 Cal.Rptr. 30

30 Cal.3d 268, 637 P.2d 266

William BELL, et al., Cross-Complainants and Appellants, v. INDUSTRIAL VANGAS, INC., Cross-Defendant and Respondent.

L.A. 31362.

Supreme Court of California, In Bank.

Nov. 30, 1981.

Rehearing Denied Dec. 30, 1981.

Myron S. Lapidus, Angelo J. Manente, Cadoo, Tretheway, McGinn & Morgan and Bernard S. Shoeps, Marina Del Rey, for cross-complainants and appellants.

Leonard Sacks, Northridge, Harvey R. Levine, San Diego, Edward I. Pollock, Los Angeles, Robert E. Cartwright, San Diego, William M. Shernoff, Stephen I. Zetterberg, Claremont, Arne Werchick, San Francisco, Ian Herzog, Los Angeles, Glen T. Bashore, North Fork, and Victoria J. De Goff, Berkeley, as amici curiae on behalf of cross-complainants and appellants.

Vletas & Greer, Barry E. Shanley and Gus Vletas, Los Angeles, for cross-defendant and respondent.

Maier & Rogers and John L. Maier, Los Angeles, as amici curiae on behalf of cross-defendant and respondent.

STANIFORTH, Justice. ^**

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., 59 Cal.2d 57, 63, 27 Cal.Rptr. 697, 377 P.2d 897; Vandermark v. Ford Motor Co., 61 Cal.2d 256, 262, 37 Cal.Rptr. 896, 391 P.2d 168; Price v. Shell Oil Co., 2 Cal.3d 245, 251-254, 85 Cal.Rptr. 178, 466 P.2d 722; Douglas v. E. & J. Gallo Winery, 69 Cal.App.3d 103, 107, 137 Cal.Rptr. 797; Prosser, Law of Torts (4th ed.) pp. 663-665.) He alleged they "were engaged in the business of designing, manufacturing, purchasing, producing, constructing, assembling, processing, preparing, testing, inspecting, maintaining, repairing, installing, endorsing, selling, leasing, bailing, licensing the use of, and otherwise marketing" defective products that proximately caused his injuries. The trial court finding no triable issue of fact, granted Vangas' motion for summary judgment on the ground Bell's exclusive remedy against Vangas, his employer, was workers' compensation. Bell appeals.

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 Vangas 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. ¹

I

The finding of a triable issue of fact, however, does not ipso facto require reversal, for Vangas has a second, a legal, arrow in its quiver to support the trial court's grant of summary judgment. Vangas reasons: Bell was Vangas' 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 sue; there is a recognized statutory "tradeoff" embodied in the workers' compensation scheme and to whittle away at one side of that equation is to upset a delicately struck balance.

To support its underlying thesis, Vangas 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 ...." ² (Dixon v. Ford Motor Co., 53 Cal.App.3d 499, 503, 125 Cal.Rptr. 872, quoting Pacific Gas and Elec. Co. v. Morse, 6 Cal.App.3d 707, 713-714, 86 Cal.Rptr. 7.)

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 sections 3852 through 3860, inclusive, and gave unqualified ³ authority to the employee to sue for damages against "any person other than the employer" responsible to some degree for a worker's jobsite injury. (See County of San Diego v. Sanfax Corp., 19 Cal.3d 862, 873, 140 Cal.Rptr. 638, 568 P.2d 363.)

In 1944, this court in Baugh v. Rogers, 24 Cal.2d 200, 213, 214, 148 P.2d 633, held an employer's (driver-lessee of an auto) negligence was to be imputed to the third party lessor in a suit by an employee injured in the scope of employment. The negligent employer-driver's liability for workers' compensation did not bar recovery from the third party by the injured employee. This court reasoned:

"(T)he Labor Code does not purport to alter the correlative rights and liabilities of persons who do not occupy the reciprocal statuses of employer and employee. Our workmen's compensation laws were not designed to relieve one other than the employer from any liability imposed by statute or by common law. 'The claim of an employee for compensation does not affect his claim or right of action for all damages proximately resulting from such injury or death against any person other than the employer.' (Lab.Code, § 3852; ....) The employee's right to recover against a third person is not affected by the fact that the 'person other than the employer' is not a stranger but has entered into a consensual legal relationship with the employer. (Citations.)" (Id., at p. 214, 148 P.2d 633; italics added.)

The dissenters in Baugh express the same fears and articulate reasons similar to the dissent here.

What has come to be known as the "dual capacity" doctrine ⁴ was first recognized and applied in the landmark case of Duprey v. Shane, 39 Cal.2d 781, 249 P.2d 8, where Duprey, a nurse, sustained an industrial injury while employed by Shane, a chiropractor. Although he carried workers' compensation insurance, Shane and another chiropractor employed by him undertook personally to treat Duprey for the injury and, as it was found, did so negligently. This court upheld a recovery in an action for malpractice, reasoning that in treating Duprey Shane was acting as an attending doctor rather than as an employer and that " 'the employer-doctor is a "person other than the employer" within the meaning of section 3852 of the Labor Code ....' " (Id., at p. 793, 249 P.2d 8.) This court reasoned:

"It is true that the law is opposed to the creation of a dual personality, where to do so is unrealistic and purely legalistic. But where, as here, it is perfectly apparent that the person involved-Dr. Shane-bore towards his employee two relationships-that of employer and that of a doctor-there should be no hesitancy in recognizing this fact as a fact. Such a conclusion, in this case, is in precise accord with the facts and is realistic and not legalistic." (Ibid.)

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., 103 Cal.App.3d 605, 612, 163 Cal.Rptr. 477.)

And in Shook v. Jacuzzi, 59 Cal.App.3d 978, 981-982, 129 Cal.Rptr. 496, the court recognized the dual capacity doctrine and its application to an employer guilty of faulty design or manufacture, etc. of equipment which caused the employee injuries but held the principle nonapplicable, stating:

"We note, also, that products liability rules do not apply in the circumstances here shown. International created the machine exclusively for its own use in its own plant and premises. It did not sell the machine or in any way place it in the stream of commerce. Rather, it was but an occasional or casual manufacturer, and thus not subject to strict liability (see Rest.2d Torts, § 402-A, com. f; 4 Witkin, Summary of Cal. Law, pp. 3126-3127). Its design and construction of this machine was but auxiliary to its principal manufacturing operation. As such, it does not subject International to products liability to its employees ...." (Id., at p. 981, 129 Cal.Rptr. 496.)

In Williams v. State Compensation Ins. Fund, 50 Cal.App.3d 116, 120, 123 Cal.Rptr. 812, the court in confronting a similar pleading posture, stated:

"Plaintiffs argue that in designing and manufacturing the spraying machine, Wallace Brothers assumed a dual role as employer and manufacturer, incurring common law liability in the latter capacity. At this point plaintiffs rely on Duprey v. Shane, 39 Cal.2d 781 (249 P.2d 8) ...." (Id., at p. 121, 123 Cal.Rptr. 812.)

but held the demurrer properly sustained, explaining:

"Here there is no allegation that Wallace Brothers manufactured spraying machines as a business enterprise separate from that employing plaintiff Williams. Rather, the complaint shows that the firm created the machine for use by its own employees in its own production or service operations. Many entrepreneurs build and supply appliances and equipment exclusively for use in their own plants or premises. That sort of activity is integral...