Douglas v. E. & J. Gallo Winery

• Citation: 137 Cal.Rptr. 797,69 Cal.App.3d 103
• Court: California Court of Appeals
• Decision Date: 18 April 1977
• Parties: James Edward DOUGLAS, Plaintiff and Appellant, v. E. & J. GALLO WINERY, Defendant and Respondent. Thomas P. MITCHELL, Plaintiff and Appellant, v. E. & J. GALLO WINERY, Defendant and Appellant. Civ. 2804.

Page 797

137 Cal.Rptr. 797

69 Cal.App.3d 103

James Edward DOUGLAS, Plaintiff and Appellant, v. E. & J. GALLO WINERY, Defendant and Respondent.

Thomas P. MITCHELL, Plaintiff and Appellant, v. E. & J. GALLO WINERY, Defendant and Appellant.

Civ. 2804.

Court of Appeal, Fifth District, California.

April 18, 1977.

Lowell T. Carruth, James P. Wagoner, McCormick, Barstow, Sheppard, Coyle & Wayte, Fresno, for plaintiffs and appellants

Murray M. Aron, Parichan, Renberg & Crossman, Fresno, for defendant and respondent.

OPINION

HOPPER, Associate Justice.

The main issue presented in this appeal is the liability (other than under Workers' Compensation) of an employer to his employee for injuries incurred in the course of employment in the use of a product which is also manufactured and sold to the public by the employer.

Appellants, employees of respondent, filed separate identical complaints against E. Gallo, J. Gallo, J. P. Jones and Does I through L for personal injuries suffered when the scaffolding on which they were working collapsed. Respondent was subsequently served as Doe XXI. ¹ Each complaint (insofar as respondent was involved) alleged several causes of action based on:

1. Negligent manufacture, sale, etc., of the elevator scaffold device.

2. Failure to provide safe place to work (admitted by appellants as being barred by the Workers' Compensation remedy and therefore not discussed herein).

3. Breach of warranty in the manufacture, sale, etc., of the cables and socket of the scaffold.

4. Products liability based on defective manufacture, sale, etc., of the scaffold and its parts.

Respondent demurred to the complaints. The court sustained the demurrer without leave to amend on the grounds that the sole remedy was under the Workers' Compensation provisions of the Labor Code and that the superior court lacked jurisdiction under Labor Code section 3601. ²

For the purposes of this opinion, the term 'manufacture' includes manufacturer, seller, distributor or any other person who may be subject to products liability.

We hold that a plaintiff may state a cause of action (or causes of action) based on manufacturer's liability even though the defendant is also the plaintiff's employer and the alleged injuries take place in the course of employment, provided that the product involved is manufactured by the employer for sale To the public rather than being manufactured for the sole use of the employer.

The basis for our holding is the dual capacity doctrine established in Duprey v. Shane (1952) 39 Cal.2d 781, 249 P.2d 8. See also, Unruh v. Truck Insurance Exchange (1972) 7 Cal.3d 616, 102 Cal.Rptr. 815, 498 P.2d 1063 and Hoffman v. Rogers (1972) 22 Cal.App.3d 655, 99 Cal.Rptr. 455.

As stated by Larson, Law of Workmen's Compensation (1976), Vol. 2a, § 72.80, at page 14--112:

'Under this doctrine, an employer normally shielded from tort liability by the exclusive remedy principle may become liable in tort to his own employee if he occupies, in addition to his capacity as employer, a second capacity that confers on him obligations independent of those imposed on him as employer.'

Hannah, California Law of Employee Injuries and Workmen's Compensation, Vol. 2, after discussing Duprey, states in section 22.03 at pages 22--25 and 22--36:

'Subsequent attempts to transform an employer or insurance carrier into a third person have met with no success, the courts being unwilling by legalistic machinations to make unwarranted inroads into the proper jurisdiction of the appeals board.' (See Deauville v. Hall (1961) 188 Cal.App.2d 535, 10 Cal.Rptr. 511; Noe v. Travellers Insurance Company (1959) 172 Cal.App.2d 731, 342 P.2d 976; Hazelwerdt v. Industrial Indemnity Exchange (1958) 157 Cal.App.2d 759, 321 P.2d 831; cf., Park v. Union Mfg. Co. (Harris) (1941) 45 Cal.App.2d 401, 114 P.2d 373.)

Those cases are distinguishable from the instant case. Park was decided long before Duprey. Furthermore, in Park, a partnership case, the employer did not in fact assume a different role. The other cases cited by Hannah merely hold that under the particular facts dual capacity was improper. These cases do not stand for the proposition that dual capacity is itself an 'unwarranted inroad'. In fact, Duprey itself, 39 Cal.2d at page 793, 249 P.2d 8 cautioned against legal machinations. In Noe, 172 Cal.App.2d at 736, 342 P.2d at 979, the court in distinguishing its facts from Duprey states:

'Shane does not transform the employer Into the doctor to fashion a new personality by some Svengali projection; it merely recognizes that the doctor who did treat the employee happened also to be her employer. In brief, Shane Was a doctor, and a living 'third party' physician who affirmatively and medically treated the employee and did so negligently; . . .'

In Deauville, the employer was not acting in another capacity when the existing industrial injury was aggravated by the employer's first-aid man. Nor was the insurance carrier in Hazalwerdt. Thus, unlike the contention here, in none of those cases was the employer acting in a separate capacity and relationship to the employee. The employer was simply acting as an employer and not performing extra-employer activities. ³

The Supreme Court certainly considered Duprey and the dual capacity doctrine still viable in Unruh v. Truck Insurance Exchange, supra, 7 Cal.3d 616, 102 Cal.Rptr. 815, 498 P.2d 1063.

Two recent cases in the appellate courts are also distinguishable here. In Shook v. Jacuzzi (1976) 59 Cal.App.3d 978, 129 Cal.Rptr. 496, the defective machine was designed Solely for the use of the employer in its own manufacturing process and was not sold to the public as is shown by the affidavits for summary judgment. In Williams v. State Compensation Insurance Fund (1975) 50 Cal.App.3d 116, 123 Cal.Rptr. 812, there was no allegation that the employer was in the business of manufacturing the injury-causing instrumentalities for sale to the public.

Mere separateness in the divisions or the departments is insufficient to establish dual capacity. As Larson, The Law of Workmen's Compensation, Vol. 2a, § 72.80 at page 14--117 stated:

'The decisive dual-capacity test is not concerned with how separate or different the second function of the employer is from the first, but with whether the second function generates obligations unrelated to those flowing from the first, that of employer.'

This explains (as well as the fact that they antedate Duprey) such cases as Walker v. City and County of San Francisco (1950) 97 Cal.App.2d 901, 219 P.2d 487 (separate departments of the same local government). ⁴

Cases in other jurisdictions are in conflict. ⁵ Characterizing a defendant as an 'employer' and therefore automatically cloaked with immunity from common law suit is a simplification that tends to cloud proper analysis. The focus should be on the defendant's responsibility for his own acts or omissions where a different duty to take care or make sure that care is taken arises than that imposed on an employer.

Our society is pluralistic. The same person (real or artificial) from time to time obviously adopts many Roles in relationship with others. Our law is replete with these many different roles.

An employer Qua employer enjoys the cloak of immunity waved by the Workers' Compensation Law. But when an employer engages in the dual capacity of manufacturer of a product for sale to the public, the employer assumes all of the duties and liabilities of such manufacturer. In electing to manufacture elevator scaffolding for the public rather than obtaining it from a third party manufacturing firm, the defendant should be held to the standard of care of manufacturers generally.

This is not a legalistic machination; nor is it 'conjuring a non-employer doppelganger' ⁶ out of the manufacturer's activity. There is nothing ghostly or fictional about two capacities. The dual capacity concept is within the highest tradition of analytical jurisprudence. Dual capacity recognizes the long accepted doctrine that every person is a bundle of rights, no rights, liabilities and immunities. ⁷ Which combination of jural opposites or jural correlatives apply is dependent in the specific role assumed at the particular Time involved. ⁸ While it may be that a defendant cannot Simultaneously be two distinct entities, a defendant can act in two distinct capacities Sequentially.

Allowing the conduct of a manufacturer to deprive an employee of the full protection of the law which obligates a manufacturer to provide safe products is really not an incident of the intended employment. When an employee is hired, he assumes all of the hazards and risks of employment which naturally flow from that employment. He does not as employee give up his rights as a user against a manufacturer. The Workers' Compensation Law preserves the right of an employee to sue third parties. As pointed out by Kelly, Workmen's Compensation and Employer Sueability: The Dual Capacity Doctrine, (1974) 5 St. Mary's Law Journal, 818, 832:

'A third-party action should be no less viable because the duty owned by the tortfeasor springs from an extra-relational capacity of the employer rather than arising from another third party. All the reasons supporting the justness of recovering from third parties generally can be assembled to support dual-capacity liability. The employee, in accepting employment, can be presumed to have accepted all the conditions of his employment obvious to him and to have implicitly or explicitly agreed to the workmen's compensation compromise. But he cannot be presumed to have waived his right to bring common law actions against negligent third parties who coincidentally share the role of employer.'

If the employee uses his own personally purchased tools in his employment, he does not give up his right to sue in manufacturer liability cases simply because the manufacturer was also at a different time his employer. It would be grossly...