South Carolina: Supreme Court Adopts Larson’s “Dual Persona” Doctrine

Answering a question certified to it by the U.S. District Court for the District of South Carolina, the Supreme Court of South Carolina, in Mendenall v. Anderson Hardwood Floors, Inc., 2013 S.C. LEXIS 27219 (Feb. 13, 2013), recently held that the state recognizes the “dual persona” doctrine,“ as that doctrine is described in Larson’s Workers’ Compensation Law, § 113.01 (”Larson”). While the court adopted the dual persona rule, it specifically indicated that it was not deciding whether the dual persona doctrine was applicable to the underlying case; that determination was for the U.S. District Court.  

In 2003, Corporation A (“Corp A”), the owner and operator of a wood product manufacturing plant, designed and constructed a cement vat at its operations. The vat’s purpose was to soak hardwood logs in a highly heated solution prior to milling. Thereafter there was a series of mergers, with Corporation B (“Corp B”) becoming the surviving entity. Corp B assumed all liabilities of Corp A in the process. In 2008, after the conclusion of the merger activity, Mendenall was hired to work at the plant by Corp B. Four months later, Mendenall fell into the cement vat, suffered severe burns over 90 percent of his body. The burns eventually resulted in his death. He received workers’ compensation benefits for the injuries and death.

Mendenall’s estate (“the Estate”) then filed a wrongful death action against Corp A, Corp B, and other parties The matter was removed to federal court and Corp B sought to dismiss the action on the grounds that it was barred by the exclusive remedy provisions of the South Carolina Workers’ Compensation Act. The Estate opposed dismissal, arguing that Mendenhall had never been employed by Corp A, the entity that had negligently designed and constructed the vat, and that Corp B’s liability did not arise from the employment relationship, but rather arose independently under the “dual persona” doctrine.

The Supreme Court, quoting Larson, indicated that under dual persona doctrine, “[a]n employer may become a third person, vulnerable to tort suit by an employee, if–and only if–it possesses a second persona so completely independent from and unrelated to its status as employer that by established standards the law recognizes that persona as a separate legal person.” Observing that in Johnson v. Rental Uniform Serv. of Greenville, 316 S.C. 70, 70, 447 S.E.2d 184, 185 (1994), the court had earlier considered rejected the “dual capacity” doctrine (discussed in Larson, § 113.01[4]), the high court indicated that it accepted the dual persona doctrine as an exception to the Act’s exclusivity provision.

The court added that the dual persona doctrine was a narrow exception, that if the plaintiffs could not have sued the predecessor (Corp A) in tort if the merger had not occurred, they could not sue the successor (Corp B) in tort. Whether the doctrine applies, indicated the court, depends upon whether the duty claimed to have been breached is distinct from those duties owed by virtue of the employer’s persona as such.