Minton v. Ralston Purina Co.

• Decision Date: 06 June 2002
• Docket Number: No. 71115-1.,71115-1.
• Citation: 146 Wash.2d 385,47 P.3d 556
• Court: Washington Supreme Court
• Parties: George A. MINTON, Respondent, v. RALSTON PURINA COMPANY, a corporation; Interstate Brands as successor to Continental Baking Company; and Continental Baking, Petitioners.

47 P.3d 556

146 Wash.2d 385

George A. MINTON, Respondent, v. RALSTON PURINA COMPANY, a corporation; Interstate Brands as successor to Continental Baking Company; and Continental Baking, Petitioners.

No. 71115-1.

Supreme Court of Washington, En Banc.

Argued March 19, 2002.

Decided June 6, 2002.

James King, Christopher Kerley, Spokane, for Petitioners.

Eugene Schuster, David Williams, Richland, for Respondent.

BRIDGE, J.

George Minton suffered severe head and bodily injuries when a condensate collector exploded at the bakery where he worked. Minton sued his current employer Interstate Brands (Interstate), Continental Baking Company (Continental), the company that installed the equipment that allegedly injured him and later merged with Interstate, and the parent corporation Ralston Purina Company (Ralston) for tort damages. We are asked to determine whether Continental and Interstate are immune from suit, pursuant to the Industrial Insurance Act (Act) Title 51 RCW, or otherwise, by an employee who suffers injuries in the workplace. We are also asked to determine whether Ralston is subject to liability under the RESTATEMENT (SECOND) OF TORTS § 388 (1965) and DuVon v. Rockwell International, 116 Wash.2d 749, 807 P.2d 876 (1991), even though a parent company generally will not be held liable for the torts of its wholly owned subsidiaries absent evidence that would justify piercing the corporate veil. We hold that workers' compensation benefits provide the sole remedy for the employee, consistent with the Act; that DuVon is factually distinguishable from the case presented; and that the evidence does not justify piercing the corporate veil. Accordingly, we reverse the trial court's denial of the defendants' motions for summary judgment.

I

Minton was injured in 1998 when a condensation tank exploded at his workplace, Interstate's Spokane bakery facility. The allegedly defective equipment was installed in 1985 when the bakery was owned and operated by Continental. At the time the equipment was installed, Continental was a wholly owned subsidiary corporation of Ralston. Interstate purchased Continental from Ralston on July 22, 1995. On July 24, 1995, Interstate merged Continental into itself with Interstate surviving as the sole corporate entity. Interstate, as Minton's employer and as a self-insurer under the Act, has paid Minton workers' compensation benefits since October 18, 1998, the day of the accident.

Minton brought an action against Interstate, Continental and Ralston seeking recovery for his injuries. The defendants moved for summary judgment asserting that Interstate and Continental were immune from liability under the provisions of the Act, RCW 51.32.010 and RCW 51.04.010, and that Ralston, as a parent corporation, was not liable to Minton for the torts of its wholly owned subsidiary. The superior court denied the defendants' motions and its subsequent motion for reconsideration, but granted the defendants' request that the orders be certified pursuant to RAP 2.3(b).¹ Interstate, Continental and Ralston then sought discretionary review by this court.

The defendants (petitioners herein) argue that the superior court erred in denying their motions for summary judgment because Minton's claims against Interstate and Continental are barred by the Act and that Ralston cannot be liable for the torts of its wholly owned subsidiary. Minton responds that Interstate is subject to liability in its capacity as the successor to Continental's and Ralston's liabilities. It further argues that Continental and Ralston are liable as sellers of inherently dangerous products pursuant to the RESTATEMENT (SECOND) OF TORTS, supra, and DuVon.

This court reviews the denial of a summary judgment motion de novo, interpreting all facts in the light most favorable to the nonmoving party. Marquis v. City of Spokane, 130 Wash.2d 97, 104-05, 922 P.2d 43 (1996). Summary judgment is appropriate when there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. Id. Having reviewed the relevant facts and in light of the issues presented, we determine that there are no genuine issues of material fact and summary judgment as to each petitioner is appropriate in this case.

II Interstate's Liability

The Act provides the exclusive remedy against an employer for an employee who is injured in the workplace. RCW 51.04.010, 51.32.010. Employers who are self-insured under the Act also obtain the same immunity. RCW 51.32.010; Manor v. Nestle Food Co., 131 Wash.2d 439, 444, 932 P.2d 628 (1997). In addition, a parent company and its subsidiaries will be treated as one entity for the purposes of immunity under the Act. Id. at 456, 932 P.2d 628 (upholding former WAC 296-15-023 (1993), repealed by St. Reg. XX-XX-XXX (Nov. 17, 1999)).²

The Act was enacted to guarantee certain relief for employees injured within the scope of their employment. RCW 51.04.010. The insurance is based upon a compromise between employees and employers, ensuring the worker receives speedy relief, while granting employers immunity from common law responsibility. Meyer v. Burger King Corp., 144 Wash.2d 160, 164, 26 P.3d 925 (2001); Favor v. Dep't of Labor & Indus., 53 Wash.2d 698, 703, 336 P.2d 382 (1959). In exchange for such relief, the employee forfeits certain rights to pursue alternative tort or other remedies. West v. Zeibell, 87 Wash.2d 198, 201, 550 P.2d 522 (1976). The Act clearly states this intent:

The state of Washington, therefore, exercising herein its police and sovereign power, declares that all phases of the premises are withdrawn from private controversy, and sure and certain relief for workers, injured in their work, and their families and dependents is hereby provided regardless of questions of fault and to the exclusion of every other remedy, proceeding or compensation, except as otherwise provided in this title; and to that end all civil actions and civil causes of action for such personal injuries and all jurisdictions of the courts of the state over such causes are hereby abolished, except as in this title provided.

RCW 51.04.010. As a result, employees may receive less than full tort damages in exchange for the expense and uncertainty of litigation. See generally McIndoe v. Dep't of Labor & Indus. 144 Wash.2d 252, 26 P.3d 903 (2001)

; Frost v. Dep't of Labor & Indus., 90 Wash.App. 627, 631, 954 P.2d 1340 (1998).

In this case, Interstate qualified as a self-insurer in accordance with the provisions of the Act. Ch. 51.14 RCW. As a self-insurer, Interstate was obligated to pay Minton workers' compensation for the injuries he suffered incident to his employment, and Interstate has been paying these benefits since the day the accident occurred. RCW 51.04.010. For the policy reasons previously cited in favor of promulgating the Act and because Minton's accident was not an intentional tort, nor does it fall under another exception, Minton has lost the right to pursue alternative tort remedies. See RCW 51.24.020, .040,.060(1)(c), .070, 51.12.100(4). The Legislature's stated compromise in granting Minton workers' compensation supports the determination that he relinquishes alternative tort remedies against Interstate.

Although there is no "direct" cause of action against Interstate in light of the compromise presented by the Act, Minton argues that Interstate still owes him additional compensation because it has assumed Continental's liabilities. This court addressed questions similar to those presented here in Corr v. Willamette Industries, Inc., 105 Wash.2d 217, 713 P.2d 92 (1986), and DuVon. We find Corr factually analogous and controlling.

In Corr, Willamette Industries, Inc. (Willamette) merged with Corco, Inc. in 1977. Incidental to the merger, Willamette acquired two bulk bin compressors designed and manufactured by Corco. Corco had never sold or otherwise put the compressors into the stream of commerce. The plaintiff, Corr, was employed at Western Kraft Paper Group, a wholly owned subsidiary of Willamette. In 1980, Corr was injured while cleaning one of the compressors. He filed for and received workers' compensation benefits. Corr subsequently filed a products liability action against Willamette claiming that it should be subject to liability under the dual persona doctrine. The dual persona doctrine provides that an employer may be subject to a tort suit by an employee if, and only if, the employer "`possesses a second persona so completely independent from and unrelated to his status as employer that by established standards the law recognizes it as a separate legal person.'"³ Id. at 220-21, 713 P.2d 92 (quoting 2A ARTHUR LARSON, WORKMEN'S COMPENSATION § 72.81 (1983)).

This court rejected Corr's claim. We held that neither the dual capacity nor the dual persona doctrine would overcome the exclusive remedy under the Act in the factual scenario presented. In holding that the Act provided the exclusive remedy, we reasoned that Corco could not have been liable as a third party prior to the merger because it had not placed the compressors into the stream of commerce and Corr had not been a Corco employee. Therefore, we concluded, Willamette should not be liable solely because of the merger.

In DuVon, meanwhile, the defendant, Rockwell International (Rockwell), was the general contractor at Hanford Nuclear Reservation (Hanford). During its contract, Rockwell designed and constructed equipment for the operation including portable exhausters. The plaintiff was an employee while Rockwell held the contract. In 1987, Westinghouse Hanford Company (Westinghouse) replaced Rockwell as the prime contractor and took possession of all the equipment used by Rockwell at Hanford. The plaintiff then became an employee of Westinghouse. Five days after the plaintiff became an employee of Westinghouse, he was injured in an accident involving one of the portable exhausters. He pursued an industrial insurance...