Bonus-Built, Inc. v. United Grocers, Ltd.

Citation136 Cal.App.3d 429,186 Cal.Rptr. 357
Decision Date23 September 1982
Docket NumberBONUS-BIL,INC
CourtCalifornia Court of Appeals
Parties, Cross-Complainant and Appellant, v. UNITED GROCERS, LTD., Cross-Defendant and Respondent. Civ. 49985.

Michael P. Bradley, John H. Feeney, Hunkeler, Murphy & Pearson, San Francisco, for cross-complainant and appellant.

Robert G. Heywood, Hanna, Brophy, MacLean, McAleer & Jensen, Oakland, for cross-defendant and respondent.

BANCROFT, Associate Justice. *

Bonus-Bilt, Inc. appeals from a summary judgment in favor of respondent United Grocers, Ltd. (United Grocers). In the underlying action, plaintiff Murphy (Murphy), an employee of United Grocers brought suit for damages arising from injuries he sustained when a loaded cart fell upon him from the tailgate apparatus of a truck being unloaded at United Grocers' premises. Murphy's suit alleged defendants-appellants Bonus-Bilt (Bonus-Bilt) and Villata Truck Equipment Co., the distributor of the truck tailgate, were liable under product liability, implied liability and negligence theories.

United Grocers intervened in Murphy's action to recover worker's compensation benefits it paid. Bonus-Bilt cross-complained and specifically sought indemnity against United Grocers alleging that United Grocers had participated in the design and manufacture of the subject frozen food cart for the purpose of putting said carts into the stream of commerce.

United Grocers' demurrer to Bonus-Bilt's first amended cross-complaint on the basis of its claimed immunity as an employer under the Labor Code was overruled and United Grocers filed its answer.

After certain discovery was completed, United Grocers moved for summary judgment. The respective contentions of the parties, supported by deposition testimony on behalf of United Grocers and the statement of the president of Bonus-Bilt presented the question whether there was a triable issue of fact as to the theory of Bonus-Bilt's cross-complaint that United Grocers was not only Murphy's employer but also, by virtue of the dual capacity doctrine, a participant in the manufacturing process which placed the carts in the stream of commerce. We believe there is no such triable issue of fact. Accordingly we affirm the grant of summary judgment in favor of United Grocers.

I

United Grocers contended essentially that it was not involved in the manufacturing process, that to the extent it participated in the design of the carts it was not so involved for the purpose of placing the carts into the stream of commerce and that it did not place the carts in the stream of commerce. We are thus called upon to evaluate the documentary presentations the respective parties made before the trial judge in the light of the applicable law.

II

Employers are immune from liability for civil damages to employees injured on the job through application of Labor Code sections 3600 and 3601. These sections provide that an employer's workers' compensation liability for industrial accidents is "in lieu of any other liability whatsoever to any person" (Lab.Code, § 3600), 1 and is "the exclusive remedy for injury or death of an employee against the employer." (Lab.Code, § 3601.) 2

Our courts have allowed this "exclusivity of remedy" immunity to be breached where the employer occupies a "dual capacity" with respect to its employees. (See generally 65 Cal.Jur.3d § 25; Witkin, Summary of California Law (8th Ed. 1982 Supp.) § 50A.) Bonus-Bilt's cross-complaint in the instant case alleges that United Grocers occupied such a dual capacity with reference to its injured employee herein. The immunity of Labor Code sections 3600 and 3601 extends to cross-complainants for indemnity by virtue of Labor Code section 3864. 3

III

The seminal California dual capacity doctrine case is Duprey v. Shane (1952) 39 Cal.2d 781, 249 P.2d 8, in which our high court held, in an exception to the exclusive remedy rule, that a doctor could be sued for malpractice where he negligently treated his own employee who suffered an industrial injury for which she received workers' compensation benefits. The court found that Duprey's employer, a doctor, was "a person other than the employer" within the meaning of section 3852 of the Labor Code 4 and therefore amenable to his employee's tort cause of action. In 1972, the Supreme Court decided the case of Unruh v. Truck Insurance Exchange (1972) 7 Cal.3d 616, 102 Cal.Rptr. 815, 498 P.2d 1063 and allowed an action by the injured employee against the employer's insurance carrier for its deceitful conduct in handling the investigation of the employee's compensation claim.

Whether on the theory of malpractice, as in Duprey v. Shane, supra, 39 Cal.2d 781, 249 P.2d 8, of intentional misconduct as in Unruh v. Truck Insurance Exchange, supra, 7 Cal.3d 616, 102 Cal.Rptr. 815, 498 P.2d 1063, or on the theory of strict product liability, the employers' traditional "exclusivity of remedy" immunity has not been allowed to serve as a shield against liability in appropriate cases. (Cf. Douglas v. E & J Gallo Winery (1977) 69 Cal.App.3d 103, 137 Cal.Rptr. 797; Shook v. Jacuzzi (1976) 59 Cal.App.3d 978, 129 Cal.Rptr. 496.)

In Shook v. Jacuzzi, supra, 59 Cal.App.3d 978, 129 Cal.Rptr. 496, employees of a designer and manufacturer of a machine used in connection with automobile injuries failed in their direct suit against their employer for injuries allegedly arising from defects in the machine when the appellate court found that the employer neither sold the machine nor placed it in the stream of commerce.

However, in Douglas v. E & J Gallo Winery, supra, 69 Cal.App.3d 103, 137 Cal.Rptr. 797, a direct suit by an employee was permitted on the theory that the employer occupied a dual capacity in that the article allegedly responsible for the injury was manufactured for sale to the general public and was intended to be placed in the stream of commerce.

The Douglas court said: "We limit the holding of this case to a defendant who engages in manufacturing for sale to the general public. A single or occasional disconnected act does not constitute engaging in such manufacturing. The defendant who designs or manufactures a product for his own use and subsequently does sell an extra one of the products to his neighbor or to a similar business is not thereby subjected to manufacturers' liability when his own employee is injured in using the retained product. On the other hand, manufacturers' liability clearly arises where plaintiff employee is injured in using a product designed and manufactured by his employer primarily for sale to the general public and only incidentally used in the defendant's other activities. In between these extremes, the matter must be resolved on the facts of the particular case. The proper standard for determining whether a defendant is engaged in manufacturing so as to make applicable the manufacturers' liability imposed hereunder is the exercise of judgment on a case by case basis to decide if the manufacturing by the particular defendant is such as to justify the conclusion that it is part and parcel of an activity which occupies the effort, attention and time of the defendant for the purpose of possible profit on a continuing basis." (Douglas v. E & J Gallo Winery, supra, 69 Cal.App.3d 103, 113, 137 Cal.Rptr. 797, emphasis added; see Moreno v. Leslie's Pool Mart (1980) 110 Cal.App.3d 179, 167 Cal.Rptr. 747.)

In November 1981, our Supreme Court reversed the trial court's granting of a summary judgment motion in a dual capacity case involving a route salesman allegedly injured by a fire at the premises of a customer arising from his employer's manufacture of flammable gas. (Bell v. Industrial Vangas, Inc. (1981) 30 Cal.3d 268, 179 Cal.Rptr. 30, 637 P.2d 266.)

In a comprehensive opinion, assigned Justice Staniforth traced the history of the dual capacity versus the exclusivity doctrines and, in reliance upon D'Angona v. County of Los Angeles (1980) 27 Cal.3d 661, 166 Cal.Rptr. 177, 613 P.2d 238, stated: "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." (Bell v. Industrial Vangas, Inc., supra, 30 Cal.3d 268, 277, 179 Cal.Rptr. 30, 637 P.2d 266, emphasis added.)

The D'Angona case, upon which Justice Staniforth relied in the Bell case, involved a physical therapist employed by a county hospital who received a workers' compensation award for a compensable disease arising out of and in the course of her hospital employment. She sued the county hospital and the doctors who treated her there for alleged negligent treatment aggravating her occupational disease condition.

In reversing the judgment of dismissal, our high court, in an opinion written by Justice Mosk, stated: "Underlying Duprey is the rationale that if 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...

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