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412 N.E.2d 934 51 N.Y.2d 152, 412 N.E.2d 934, 432 N.Y.S.2d 879 (Cite as: 51 N.Y.2d 152, 412 N.E.2d 934, 432 N.Y.S.2d 879)

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Meyer, J., dissented and filed opinion in which Jasen, J., concurred. Court of Appeals of New York. Mildred A. BILLY, as Executrix of Joseph M. Billy, Jr., Deceased, Appellant, v. CONSOLIDATED MACHINE TOOL CORPORATION et al., Respondents. Oct. 21, 1980. Action was instituted against corporate employer, its parent and subsidiaries for fatal injuries sustained by plaintiff's decedent in course of employment. The Supreme Court, Special Term, Monroe County, Robert J. McDowell, J., granted defendants' motion for summary judgment and dismissed complaint, and plaintiff appealed. The Supreme Court, Appellate Division, 419 N.Y.S.2d 29, 71 A.D.2d 796, affirmed, and plaintiff appealed by permission. The Court of Appeals, Gabrielli, J., held that: (1) exclusivity provisions of Workers' Compensation Law do not bar a common-law action against an employer for injuries sustained by an employee in course of his employment where employer's liability is alleged to have arisen solely from its independent assumption, by contract or operation of law, of obligations and liabilities of a third-party tort-feasor; and (2) plaintiff could maintain a common-law action against corporate defendant which acquired, through mergers prior to fatal injuries to plaintiff's decedent in course of employment, companies responsible for design and manufacture of equipment which allegedly caused injuries, but plaintiff could not, despite exclusivity provisions of Workers' Compensation Law, invoke dual capacity doctrine and maintain a commonlaw action against corporate defendant in its capacity as a participant in manufacture and design of equipment which was involved in accident or in its capacity as owner of premises on which accident occurred. Modified and affirmed. West Headnotes [1] Workers' Compensation 413 2162

413 Workers' Compensation 413XX Effect of Act on Other Statutory or Common-Law Rights of Action and Defenses 413XX(C) Action Against Third Persons in General for Employee's Injury or Death 413XX(C)1 Right of Action of Employee or Representative Generally 413k2160 What Persons Liable as Third Persons 413k2162 k. Employer as third person. Most Cited Cases Exclusivity provisions of Workers' Compensation Law do not bar a common-law action against an employer for injuries sustained by an employee in course of his employment where employer's liability is alleged to have arisen solely from its independent assumption, by contract or operation of law, of obligations and liabilities of a third-party tort-feasor. Workers' Compensation Law 11. [2] Workers' Compensation 413 2162

413 Workers' Compensation 413XX Effect of Act on Other Statutory or Common-Law Rights of Action and Defenses 413XX(C) Action Against Third Persons in General for Employee's Injury or Death 413XX(C)1 Right of Action of Employee or Representative Generally 413k2160 What Persons Liable as Third Persons 413k2162 k. Employer as third person. Most Cited Cases The dual capacity doctrine, as it has been applied to permit common-law suits against employers in their capacities as property owners or manufacturers of plant equipment, is fundamentally unsound

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412 N.E.2d 934 51 N.Y.2d 152, 412 N.E.2d 934, 432 N.Y.S.2d 879 (Cite as: 51 N.Y.2d 152, 412 N.E.2d 934, 432 N.Y.S.2d 879)

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as circumventing the exclusivity provisions of the Workers' Compensation Law. Workers' Compensation Law 11. [3] Workers' Compensation 413 2162

with his employees as to all matters arising from and connected with their employment and may not be treated as a dual legal personality. [5] Labor and Employment 231H 2832

413 Workers' Compensation 413XX Effect of Act on Other Statutory or Common-Law Rights of Action and Defenses 413XX(C) Action Against Third Persons in General for Employee's Injury or Death 413XX(C)1 Right of Action of Employee or Representative Generally 413k2160 What Persons Liable as Third Persons 413k2162 k. Employer as third person. Most Cited Cases Plaintiff could maintain a common-law action against corporate defendant which acquired, through mergers prior to fatal injuries to plaintiff's decedent in course of employment, companies responsible for design and manufacture of equipment which allegedly caused injuries, but plaintiff could not, despite exclusivity provisions of Workers' Compensation Law, invoke dual capacity doctrine and maintain a common-law action against corporate defendant in its capacity as a participant in manufacture and design of equipment which was involved in accident or in its capacity as owner of premises on which accident occurred. Workers' Compensation Law 11. [4] Workers' Compensation 413 2162

231H Labor and Employment 231HXVII Employer's Liability to Employees 231HXVII(B) Working Conditions and Methods of Performing Work 231Hk2832 k. Nature and scope of duty owed by employer. Most Cited Cases (Formerly 148Ak30 Employers' Liability) Employers are expected to provide their employees with a safe workplace that is reasonably free from hazards. [6] Labor and Employment 231H 2832

231H Labor and Employment 231HXVII Employer's Liability to Employees 231HXVII(B) Working Conditions and Methods of Performing Work 231Hk2832 k. Nature and scope of duty owed by employer. Most Cited Cases (Formerly 148Ak30 Employers' Liability) Labor and Employment 231H 2842

413 Workers' Compensation 413XX Effect of Act on Other Statutory or Common-Law Rights of Action and Defenses 413XX(C) Action Against Third Persons in General for Employee's Injury or Death 413XX(C)1 Right of Action of Employee or Representative Generally 413k2160 What Persons Liable as Third Persons 413k2162 k. Employer as third person. Most Cited Cases An employer remains an employer in his relations

231H Labor and Employment 231HXVII Employer's Liability to Employees 231HXVII(B) Working Conditions and Methods of Performing Work 231Hk2841 Kind of Equipment 231Hk2842 k. In general. Most Cited Cases (Formerly 148Ak30 Employers' Liability) Obligation of an employer to provide a safe workplace simply cannot be separated in a logical and orderly fashion from duties owed by employer to his employees by reason of his ownership of premises or his manufacture of equipment with which employees must work. [7] Workers' Compensation 413 413 Workers' Compensation 2158

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412 N.E.2d 934 51 N.Y.2d 152, 412 N.E.2d 934, 432 N.Y.S.2d 879 (Cite as: 51 N.Y.2d 152, 412 N.E.2d 934, 432 N.Y.S.2d 879)

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413XX Effect of Act on Other Statutory or Common-Law Rights of Action and Defenses 413XX(C) Action Against Third Persons in General for Employee's Injury or Death 413XX(C)1 Right of Action of Employee or Representative Generally 413k2158 k. In general. Most Cited Cases Policies underlying Workers' Compensation Law do not preclude maintenance of a common-law action against third-party tort-feasors who may be responsible, in whole or in part, for an employee's injuries. Workers' Compensation Law 11. [8] Workers' Compensation 413 2162

413k2162 k. Employer as third person. Most Cited Cases Where tort, if any, was committed by third parties which never had an employer-employee relationship with injured party, and third parties had no basis for invoking exclusivity provisions of Workers' Compensation Law as a defense in a commonlaw action brought against them by employee or his dependents, employer, which by way of merger stood in shoes of both third parties with respect to question of liability, was similarly precluded from invoking that defense. Workers' Compensation Law 11. [10] Workers' Compensation 413 2162

413 Workers' Compensation 413XX Effect of Act on Other Statutory or Common-Law Rights of Action and Defenses 413XX(C) Action Against Third Persons in General for Employee's Injury or Death 413XX(C)1 Right of Action of Employee or Representative Generally 413k2160 What Persons Liable as Third Persons 413k2162 k. Employer as third person. Most Cited Cases Obligations which employer inherited through corporate merger with designer and manufacturer of machine which subsequently injured employee could not be avoided simply because of fortuity that injured party was an employee covered by provisions of Workers' Compensation Law. Workers' Compensation Law 11. [9] Workers' Compensation 413 2162

413 Workers' Compensation 413XX Effect of Act on Other Statutory or Common-Law Rights of Action and Defenses 413XX(C) Action Against Third Persons in General for Employee's Injury or Death 413XX(C)1 Right of Action of Employee or Representative Generally 413k2160 What Persons Liable as Third Persons

413 Workers' Compensation 413XX Effect of Act on Other Statutory or Common-Law Rights of Action and Defenses 413XX(C) Action Against Third Persons in General for Employee's Injury or Death 413XX(C)1 Right of Action of Employee or Representative Generally 413k2160 What Persons Liable as Third Persons 413k2162 k. Employer as third person. Most Cited Cases Inasmuch as action for fatal injuries to plaintiff's decedent during course of employment represented essentially an attempt to recover from third-party manufacturers of defective machine through a suit against employer as their corporate successor, plaintiff could properly maintain action notwithstanding that employer would otherwise have been immune from suit by virtue of exclusivity provision of Workers' Compensation Law. Workers' Compensation Law 11. [11] Corporations 101 1.3

101 Corporations 101I Incorporation and Organization 101k1.3 k. Distinct entity in general, corporation as. Most Cited Cases Corporations 101 215

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412 N.E.2d 934 51 N.Y.2d 152, 412 N.E.2d 934, 432 N.Y.S.2d 879 (Cite as: 51 N.Y.2d 152, 412 N.E.2d 934, 432 N.Y.S.2d 879)

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101 Corporations 101IX Members and Stockholders 101IX(D) Liability for Corporate Debts and Acts 101k215 k. Nature and grounds in general. Most Cited Cases The law generally treats corporations as having an existence separate and distinct from that of their shareholders and, consequently, will not impose liability upon shareholders for acts of corporation. [12] Corporations 101 1.4(2)

101 Corporations 101IX Members and Stockholders 101IX(D) Liability for Corporate Debts and Acts 101k215 k. Nature and grounds in general. Most Cited Cases Fact that employer of plaintiff's fatally injured decedent was a wholly-owned subsidiary was insufficient in itself to support imposition of liability upon parent corporation for acts of subsidiary. [15] Corporations 101 215

101 Corporations 101I Incorporation and Organization 101k1.4 Disregarding Corporate Entity 101k1.4(2) k. Justice and equity. Most Cited Cases Corporations 101 1.4(3)

101 Corporations 101I Incorporation and Organization 101k1.4 Disregarding Corporate Entity 101k1.4(3) k. Fraud or illegal acts. Most Cited Cases Courts will disregard separate legal personality of a corporation and assign liability to its owners where necessary to prevent fraud or to achieve equity. [13] Corporations 101 215

101 Corporations 101IX Members and Stockholders 101IX(D) Liability for Corporate Debts and Acts 101k215 k. Nature and grounds in general. Most Cited Cases Parent corporation could not be held liable for fatal injuries sustained by employee of its wholly-owned subsidiary during course of employment where evidence showed that employer acquired through mergers prior to accident companies responsible for design and manufacture of equipment which allegedly caused decedent's injuries, but did not show that parent disregarded separate identity of subsidiary. [16] Judgment 228 181(5.1)

101 Corporations 101IX Members and Stockholders 101IX(D) Liability for Corporate Debts and Acts 101k215 k. Nature and grounds in general. Most Cited Cases A liability can never be predicated solely on fact of a parent corporation's ownership of a controlling interest in shares of its subsidiary and, at the very least, there must be direct intervention by the parent in the management of the subsidiary to such an extent that the subsidiary's paraphernalia of incorporation, directors and officers are completely ignored. [14] Corporations 101 215

228 Judgment 228V On Motion or Summary Proceeding 228k181 Grounds for Summary Judgment 228k181(5) Matters Affecting Right to Judgment 228k181(5.1) k. In general. Most Cited Cases (Formerly 228k181(5)) Pretrial Procedure 307A 714

307A Pretrial Procedure 307AIV Continuance 307Ak714 k. Grounds for continuance in general. Most Cited Cases

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412 N.E.2d 934 51 N.Y.2d 152, 412 N.E.2d 934, 432 N.Y.S.2d 879 (Cite as: 51 N.Y.2d 152, 412 N.E.2d 934, 432 N.Y.S.2d 879)

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A court may deny a summary judgment or grant a continuance pending discovery as long as facts essential to justify opposition to motion are shown to exist. CPLR 3212(f). [17] Corporations 101 215

*156 OPINION OF THE COURT GABRIELLI, Judge. [1] As a general rule, when an employee is injured in the course of his employment, his sole remedy against his employer lies in his entitlement to a recovery under the Workers' Compensation Law (Workers' **937 Compensation Law, s 11). In our previous decisions, we have adhered strictly to this basic rule and have declined to recognize exceptions, even when the liability is purportedly premised upon conduct of the employer acting in a capacity other than that of employer (e. g., Williams v. Hartshorn, 296 N.Y. 49, 69 N.E.2d 557; Winter v. Doelger Brewing Co., 175 App.Div. 796, 162 N.Y.S. 469, affd. without opn. 226 N.Y. 581). We have not previously been called upon to consider, however, a situation in which the employer's liability, if any, is alleged to have arisen solely from its independent assumption, by contract or operation of law, of the obligations and liabilities of a third-party tort-feasor. Having examined all of the relevant precedent as well as the firmly rooted policies underlying the Workers' Compensation Law, we conclude that, in such situations, the exclusivity provisions of that statute do not bar a common-law action against the employer for injuries sustained by an employee in the course of his employment. Plaintiff's decedent, an employee of defendant USM Corporation, was killed when a 4,600-pound ram from a vertical boring mill broke loose and struck him. There was no doubt that the October 21, 1976 accident occurred in the course of the decedent's employment within the meaning of section 10 of the Workers' Compensation Law. Although the decedent's widow applied for and received workers' compensation benefits, she subsequently commenced a common-law tort action against USM Corporation***882 seeking recompense for the decedent's personal injuries and wrongful death. Also named as party defendants were Emhart Corporation, the parent of USM, and Consolidated Machine Tool Corporation, Farrel-Birmingham Company

101 Corporations 101IX Members and Stockholders 101IX(D) Liability for Corporate Debts and Acts 101k215 k. Nature and grounds in general. Most Cited Cases Sole remedy for any injuries resulting from tortious conduct of companies which have been completely absorbed by an employer lies in an action against that corporate entity. [18] Corporations 101 590(4)

101 Corporations 101XIV Consolidation 101k590 Liabilities for Debts and Acts of Original Corporations 101k590(4) k. Liability for torts. Most Cited Cases Companies which were allegedly responsible for design and manufacture of equipment which allegedly caused fatal injuries to plaintiff's decedent in course of employment could not be held liable as defendants in actions where companies had been acquired, through mergers prior to accident, by corporate employer, also named as a defendant, and had long ceased to exist at time action was commenced. *154 ***881 **936 Robert J. Michael and Jay M. Friedman, Rochester, for appellant. *155 Thomas C. Burke, New York City, for respondents. Robert Abrams, Atty. Gen. (Stanley Fishman and Shirley Adelson Siegel, Asst. Attys. Gen., of counsel), in his statutory capacity under section 71 of the Executive Law.

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412 N.E.2d 934 51 N.Y.2d 152, 412 N.E.2d 934, 432 N.Y.S.2d 879 (Cite as: 51 N.Y.2d 152, 412 N.E.2d 934, 432 N.Y.S.2d 879)

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and Farrel Corporation, all of which had *157 been absorbed by USM through corporate mergers prior to the accident. In her complaint, plaintiff alleged that the accident had been caused by certain defects in the manufacture and design of the vertical boring mill and in the two moving parts that had been directly involved in the accident, a metal lifting bar and a 4,600-pound ram. After preliminary discovery had taken place, each of the five corporate defendants moved for summary judgment. USM Corporation, the decedent's employer, based its summary judgment motion primarily upon section 11 of the Workers' Compensation Law. That section provides that the employer's obligation to furnish workers' compensation benefits is exclusive and in place of any other liability whatsoever to employees or their dependents for injuries sustained in the course of employment. Both Special Term and the Appellate Division, 71 A.D.2d 796, 419 N.Y.S.2d 29, concluded that section 11 constituted an absolute bar to the assertion of any common-law claim that plaintiff might have against USM Corporation, regardless of the theory of liability advanced. Accordingly, the causes of action asserted against USM were dismissed. We granted plaintiff's motion for leave to appeal on November 20, 1979 ( 48 N.Y.2d 608, 424 N.Y.S.2d 1025, 399 N.E.2d 1205). Because we find the principle of exclusivity embodied in section 11 to be inapplicable to the unique set of facts presented in this case, we now reverse this aspect of the lower courts' rulings and hold that the causes of action asserted against USM should be reinstated. It is undisputed that the vertical boring mill which allegedly caused decedent's injuries was designed several decades ago and manufactured during the early 1950's by Consolidated Machine Tool Corporation and Farrel-Birmingham Company. It was also established through discovery that Consolidated Machine Tool Corporation had played a significant role in the design of the 4,600-pound ram that eventually broke loose from the machine and killed

the decedent. Farrel-Birmingham Company was apparently responsible for the 1955 installation of the vertical boring mill in the plant now operated by USM. Through a series of consolidations and mergers that took place during the 1950's and 1960's, Consolidated Machine Tool Corporation and FarrelBirmingham Company were ultimately absorbed into USM Corporation.**938 In 1954, FarrelBirmingham, which had acquired a controlling interest in Consolidatedthree *159 years earlier, dissolved that corporation and, concededly, assumed its assets and liabilities. In 1963, the name of the resulting corporate entity was changed from FarrelBirmingham Company to Farrel Corporation. Farrel Corporation was finally merged into USM Corporation, the decedent's employer, in 1968, eight years before the accident in question occurred. It is not seriously disputed that this merger resulted in the assumption by USM, a New Jersey corporation, of the liabilities and obligations of Farrel, a Connecticut corporation, including those liabilities that Farrel had inherited from Consolidated (see Conn.Gen.Stats.Ann. s 33-371, subd. (d); N.J. Stats.Ann., s 14A:10-7, subd. (3); see, also, Business Corporation Law, s 906, subd. (b), par. (3)). At the outset, we note our rejection of plaintiff's contention that, notwithstanding section 11 of the Workers' Compensation Law, she is entitled to maintain a common-law action against USM either in its capacity as a participant in the manufacture and design of the metal lifting bar which was involved in the accident or in its capacity as the owner of the premises on which the accident occurred. The theory advanced by plaintiff, commonly known as the dual capacity doctrine, has been described by one noted commentator as follows: (A)n employer***883 normally shielded from tort liability by the exclusive remedy principle (embodied in section 11 of the Workers' Compensation Law) may become liable in tort to his own employee if he occupies, in addition to his capacity as an employer, a second capacity that confers on him obligations in-

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412 N.E.2d 934 51 N.Y.2d 152, 412 N.E.2d 934, 432 N.Y.S.2d 879 (Cite as: 51 N.Y.2d 152, 412 N.E.2d 934, 432 N.Y.S.2d 879)

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dependent of those imposed on him as employer (2A Larson, Workmen's Compensation Law, s 72.80, at p. 14-112; see e. g., Reed v. The Yaka, 373 U.S. 410, 83 S.Ct. 1349, 10 L.Ed.2d 448; Duprey v. Shane, 39 Cal.2d 781, 249 P.2d 8; Smith v. Metropolitan Sanitary Dist., 77 Ill.2d 313, 33 Ill.Dec. 135, 396 N.E.2d 524; see, generally, Kelly, Workmen's Compensation and Employer Suability: The Dual-Capacity Doctrine, 5 St. Mary's L.J. 818). The doctrine is most frequently invoked when, as here, an employee or his dependents are seeking to hold the employer liable at common law as the owner of the property upon which a job-related injury has occurred (2A Larson, Workmen's Compensation Law, at p. 14-113). Although several jurisdictions have permitted maintenance of a common-law action under this theory (e. g., State ex rel. Auchter Co. v. Luckie, 145 So.2d 239 (Fla.App.); Marcus v. Green, 13 Ill.App.3d 699, 300 N.E.2d 512; Duplechin v. Pittsburgh Plate Glass Co., 265 So.2d 787 (La.App.); but see McCarty v. City of Marshall, 51 Ill.App.3d 842, 9 Ill.Dec. 541, 366 N.E.2d 1052), we have squarely rejected its use in our State ( Williams v. Hartshorn, 296 N.Y. 49, 69 N.E.2d 557, supra; Winter v. Doelger Brewing Co., 175 App.Div. 796, 162 N.Y.S. 469, affd. without opn. 226 N.Y. 581, supra ; see Minsky v. Baitelman, 281 App.Div. 910, 120 N.Y.S.2d 86; see, also, Murray v. City of New York, 43 N.Y.2d 400, 401 N.Y.S.2d 773, 372 N.E.2d 560; cf. Volk v. City of New York, 284 N.Y. 279, 30 N.E.2d 596), as have several other jurisdictions ( Kottis v. United States Steel Corp., 543 F.2d 22 (7th Cir.); Vaughn v. Jernigan, 144 Ga.App. 745, 242 S.E.2d 482; Jansen v. Harmon, 164 N.W.2d 323 (Iowa); Frith v. Harrah South Shore Corp., 92 Nev. 447, 552 P.2d 337; Billings v. Dugger, 50 Tenn.App. 403, 362 S.W.2d 49). In a similar vein, there has been a spate of cases in recent years in which employees have attempted to avoid the effects of the exclusivity rule by suing their employers in their capacities as manufacturers or designers of hazardous equipment causing injury on the job. While some courts have recognized and adopted this approach ( Douglas v. E. & J. Gallo Winery, 69 Cal.App.3d 103, 137

Cal.Rptr. 797; Mercer v. Uniroyal, Inc., 49 Ohio App.2d 279, 361 N.E.2d 492), most have specifically refused to do so ( Mapson v. Montgomery White Trucks, 357 So.2d 971 (Ala.); Profilet v. Falconite, 56 Ill.App.3d 168, 14 Ill.Dec. 16, 371 N.E.2d 1069; Winkler v. Hyster Co., 54 Ill.App.3d 282, 12 Ill.Dec. 109, 369 N.E.2d 606; Needham v. Fred's Frozen Foods, 359 N.E.2d 544 (Ind.App.); **939Atchison v. Archer-Daniels-Midland Co., 360 So.2d 599 (La.App.); Schlenk v. Aerial Contractors, 268 N.W.2d 466 (N.D.); Kottis v. United States Steel Corp., 543 F.2d 22, supra). [2] Having examined all of the pertinent precedent, we conclude that the dual capacity doctrine as it has been applied to permit common-law suits against employers in their capacities as property owners or manufacturers of plant equipment is fundamentally unsound. The Workers' Compensation Law was designed to spread the risk of industrial accidents through the vehicle of insurance coverage and, more specifically, to provide a swift and sure source of benefits to the injured employee or to the dependents of (a) deceased employee ( O'Rourke v. Long, 41 N.Y.2d 219, 222, 391 N.Y.S.2d 553, 359 N.E.2d 1347), without regard to fault in most instances. In exchange for the security of knowing that fixed benefits will be paid without the need to resort to expensive and sometimes risky litigation, however, the employee has been asked to pay a price in the form of the loss of his common-law right to sue his employer in tort and perhaps to enjoy a more substantial recovery through a jury award. The legislative implementation of this trade-off is embodied in ***884section 11 of the Workers' Compensation Law, which precludes suits against the employer and limits the *160 employees to the recompense afforded under the statute when he is injured in the course of his employment. [3][4][5][6] We cannot sanction the circumvention of this clear legislative plan by approving a theory which would permit the employer to be sued in his capacity as property owner or manufacturer of equipment used on the job site. As we have previ-

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412 N.E.2d 934 51 N.Y.2d 152, 412 N.E.2d 934, 432 N.Y.S.2d 879 (Cite as: 51 N.Y.2d 152, 412 N.E.2d 934, 432 N.Y.S.2d 879)

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ously observed, an employer remains an employer in his relations with his employees as to all matters arising from and connected with their employment. He may not be treated as a dual legal personality, a sort of Dr. Jekyl and Mr. Hyde ( Williams v. Hartshorn, 296 N.Y. 49, 50-51, 69 N.E.2d 557, supra, quoting Winter v. Doelger Brewing Co., 95 Misc. 150, 153, 159 N.Y.S. 113). Employers are expected to provide their employees with a safe workplace that is reasonably free of hazards. This obligation to provide a safe workplace simply cannot be separated in a logical and orderly fashion from the duties owed by the employer to his employees by reason of his ownership of the premises or his manufacture of the equipment with which the employees must work. Indeed, these duties are merely subcategories within the complex of obligations that arise in connection with the employment relation. We would be seriously undermining the salutary social purposes underlying the existing workers' compensation scheme if we were to permit common-law recovery outside of that scheme on the basis of such illusory distinctions. This we decline to do. [7] Plaintiff's claim against USM as the successor to the liabilities of Consolidated Machine Tool Corporation and Farrel-Birmingham Company, however, stands on a somewhat different footing. It is well settled that the policies underlying the Workers' Compensation Law do not preclude the maintenance of a common-law action against thirdparty tort-feasors who may be responsible, in whole or in part, for an employee's injuries. (I)n compensation law, social policy has dispensed with fault concepts to the extent necessary to ensure an automatic recovery by the injured workman; but the disregard of fault goes no further than to accomplish that object, and, with payment of the workman assured, the quest of the law for the actual wrongdoer may proceed in the usual way (2A Larson, Workmen's Compensation Law, s 71.10, at p. 14-2). In the present case, had the corporate identities of Consolidated Machine Tool Corporation and Farrel-Birmingham Company been preserved,

plaintiff would have had a right to maintain an action against those corporations on the theory that they *161 exposed her deceased husband to the risk of injury by designing and manufacturing a defective vertical boring mill and ram. It is only because these corporations were consolidated and then merged with USM Corporation that plaintiff is now without the means to hold them directly accountable as third-party tort-feasors. **940 [8] As previously noted, USM has not seriously disputed that it had succeeded to the liabilities and obligations of Consolidated and FarrelBirmingham as a result of the 1968 merger (see Business Corporation Law, s 906, subd. (b), par. (3)). In effect, USM stands in the shoes of these two defunct corporations and, in the ordinary course of events, would be fully answerable to plaintiff for their tortious conduct. Under the circumstances of this case, we cannot accept USM's contention that the obligations it inherited through corporate merger may be avoided simply because of the fortuity that the injured party was an employee covered by the provisions of the Workers' Compensation Law. In short, we conclude that the exclusivity rule of section 11 is not available as a defense to a common-law tort action under these facts. [9] Conceptually, the deceased employee's executrix is suing not the decedent's former employer, but rather the successor to the liabilities of the two alleged tort-feasors. That USM also happens to have been the injured party's employer is not of controlling***885 significance, since the obligation upon which it is being sued arose not out of the employment relation, but rather out of an independent business transaction between USM and Farrel. What distinguishes this case from the dual-capacity cases discussed above is that here the tort in question was not committed by the employer or any of its agents; instead, the tort, if any, was committed by third parties, which, as it appears on the present record, never had an employer-employee relationship with the injured party. Since

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412 N.E.2d 934 51 N.Y.2d 152, 412 N.E.2d 934, 432 N.Y.S.2d 879 (Cite as: 51 N.Y.2d 152, 412 N.E.2d 934, 432 N.Y.S.2d 879)

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these third parties would have had no basis for invoking section 11 of the Workers' Compensation Law as a defense in a common-law action brought against them by the employee or his dependents, USM, which stands in their shoes with respect to the question of liability, should similarly not be permitted to do so.[FN*] FN* There is no record evidence that the decedent was ever employed by the predecessor corporations, Farrel-Birmingham and Consolidated. Moreover, inasmuch as Farrel was not the surviving corporation (Business Corporation Law, s 901, subd. (b), par. (4)), decedent's subsequent employment by USM cannot be attributed to Farrel. It is therefore unnecessary for us to consider or, indeed, to speculate whether USM Corporation would have inherited the immunity from suit which these corporations would have enjoyed had decedent been in their employ at some time prior to the merger (see Business Corporation Law, s 906, subd. (b), par. (1)). The dissenter's reasoning to the contrary is unavailing. Inasmuch as Farrel never employed decedent Billy and, therefore, never invested in workers' compensation insurance to cover injuries decedent might sustain during the course of his employment, it cannot be said, logically or legally, that section 11 of the Workers' Compensation Law would have afforded Farrel any immunity from a lawsuit instituted on behalf of Billy; it follows that since Farrel possessed no immunity from such a suit there was no immunity for USM to inherit in consequence of its ultimate merger with Farrel. [10] *162 Through its merger with Consolidated and Farrel, USM voluntarily assumed any obligations that those corporations may have had to individuals who might suffer injury as a result of a defect in their product. It would be grossly inequit-

able to permit USM to avoid its assumed obligations solely because the injured party was coincidentally an employee and the injuries in question arose in the course of his employment. As we have already seen, the policies underlying the Workers' Compensation Law do not extend so far as to preclude actions by an injured worker against a thirdparty manufacturer whose defective product has caused the injury. Inasmuch as plaintiff's action represents essentially an attempt to recover from third-party manufacturers through a suit against their corporate successor, plaintiff should be permitted to maintain the action, notwithstanding that the successor corporation is also an employer which would otherwise be immune from suit under section 11. Accordingly, we hold that it was error for the courts below to dismiss plaintiff's causes of action against USM on the basis of its status as employer. We note that plaintiff had also named Emhart Corporation, USM's parent, as a party defendant in the action. It was plaintiff's position that Emhart should be **941 answerable for the obligations of USM because its involvement in its subsidiary's management was so extensive as to render the subsidiary a mere alter ego of the parent (see, generally, Berkey v. Third Ave. Ry. Co., 244 N.Y. 84, 155 N.E. 58; Lowendahl v. Baltimore & Ohio R. R. Co., 247 App.Div. 144, 287 N.Y.S. 62, affd. 272 N.Y. 360, 6 N.E.2d 56). Upon Emhart's motion for summary judgment, the courts below dismissed the complaint against that corporation, but only because they had concluded that USM, upon which Emhart's alleged liability was based, could not itself be held liable to plaintiff. Inasmuch as we have reached a contrary conclusion as to USM's potential liability, we must now consider whether, assuming USM *163 to be liable, there are sufficient facts on the record to permit plaintiff to continue the action against Emhart. [11][12][13] As a general rule, the law treats corporations as having an existence separate***886 and distinct from that of their shareholders and consequently, will not impose liability upon shareholders for the acts of the corporation ( Port Chester

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412 N.E.2d 934 51 N.Y.2d 152, 412 N.E.2d 934, 432 N.Y.S.2d 879 (Cite as: 51 N.Y.2d 152, 412 N.E.2d 934, 432 N.Y.S.2d 879)

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Elec. Constr. Corp. v. Atlas, 40 N.Y.2d 652, 656, 389 N.Y.S.2d 327, 357 N.E.2d 983). Indeed, the avoidance of personal liability for obligations incurred by a business enterprise is one of the fundamental purposes of doing business in the corporate form (see Rapid Tr. Subway Constr. Co. v. City of New York, 259 N.Y. 472, 487-488, 182 N.E. 145). It is true that, on occasion, the courts will disregard the separate legal personality of the corporation and assign liability to its owners where necessary to prevent fraud or to achieve equity ( International Aircraft Trading Co. v. Manufacturers Trust Co., 297 N.Y. 285, 292, 79 N.E.2d 249). But, such liability can never be predicated solely upon the fact of a parent corporation's ownership of a controlling interest in the shares of its subsidiary. At the very least, there must be direct intervention by the parent in the management of the subsidiary to such an extent that the subsidiary's paraphernalia of incorporation, directors and officers are completely ignored ( Lowendahl v. Baltimore & Ohio R. R. Co., 247 App.Div. 144, 155, 287 N.Y.S. 62, affd. 272 N.Y. 360, 6 N.E.2d 56, supra). [14][15] Here, there has been no showing whatsoever that Emhart disregarded the separate identity of USM and involved itself directly in the affairs of that corporation. In response to Emhart's moving papers, which assert that Emhart is merely a holding company with no employees involved in the management of USM, plaintiff has stated only that her claim against Emhart is based on the fact that the defendant USM Corporation is (a) whollyowned subsidiary (of Emhart). Of course, this fact alone would not be sufficient to support the imposition of liability upon Emhart for the acts of its subsidiary. [16] Nevertheless, plaintiff argues that a grant of summary judgment in favor of Emhart would be premature because it is still unclear whether there is the necessary control exerted by the parent corporation to make it liable for the acts of its subsidiary. Plaintiff further contends that additional discovery is essential in this connection. While it is

true that CPLR 3212 (subd. (f)) authorizes the court to deny summary judgment or grant a continuance pending discovery when facts essential to justify opposition (to the motion) may exist *164 but cannot be stated, we cannot conclude that such action would be warranted here, since plaintiff has given no indication as to what essential facts she believes exist that would justify a denial of Emhart's motion to dismiss her complaint. Consequently, Emhart is entitled to summary judgment on its motion. [17][18] Finally, we hold that the dismissal of the complaint as it pertained to defendants Consolidated Machine Tool Corporation, Farrel-Birmingham Company and Farrel Corporation was entirely proper. Those corporations had long since ceased to exist at the time the instant action was commenced, and there is no indication that there remain any assets or insurance coverage which would provide a source of recovery. Inasmuch as these corporations have been completely absorbed by USM, plaintiff's **942 sole remedy for any injuries resulting from their tortious conduct lies in an action against that corporate entity. Accordingly, the order of the Appellate Division should be modified, with costs to plaintiff against USM Corporation, by reinstating plaintiff's causes of action against USM Corporation in accordance with the opinion herein and, as so modified, affirmed, with costs to the remaining defendants against plaintiff. MEYER, Judge (dissenting). I would affirm. I agree that the dual capacity doctrine is inapplicable, though on different grounds than the majority, but I disagree with their conclusion that the Business Corporation Law, when all its pertinent provisions are considered, authorizes the action. ***887 As the majority notes, the dual capacity doctrine holds a manufacturer-employer liable at common law for injury to an employee which results from a defect in the product. The theory under-

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412 N.E.2d 934 51 N.Y.2d 152, 412 N.E.2d 934, 432 N.Y.S.2d 879 (Cite as: 51 N.Y.2d 152, 412 N.E.2d 934, 432 N.Y.S.2d 879)

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lying liability is that the duty of the manufacturer to make a product free of defect is unrelated to the employment relationship by reason of which the employer's compensation liability and resultant immunity from tort liability comes into being. But even under the most liberal application of that doctrine a manufacturer-employer is held protected by compensation immunity when the product was manufactured solely for his own use and not for distribution to the general public (see Douglas v. E. & J. Gallo Winery, 69 Cal.App.3d 103, 137 Cal.Rptr. 797; Mercer v. Uniroyal, Inc., 49 Ohio App.2d 279, 361 N.E.2d 492). Here Farrel-Birmingham (Farrel) acquired Consolidated *165 in 1951 and Consolidated was formally dissolved on December 31, 1954. The record indicates that Consolidated designed the vertical boring mill, that it was manufactured by Consolidated and Farrel during the latter part of 1954 and part of 1955 and installed in the Farrel plant in August, 1955. Since no cause of action for the claimed design defect could exist before completion of installation ( Sears, Roebuck & Co. v. Enco Assoc., 43 N.Y.2d 389, 401 N.Y.S.2d 717, 372 N.E.2d 555; Sosnow v. Paul, 36 N.Y.2d 780, 369 N.Y.S.2d 693, 330 N.E.2d 643), Consolidated, which had been dissolved before that time, had no liability as an entity separate from Farrel. Moreover, since Farrel caused the mill to be installed for use in its own plant, the dual capacity doctrine would not apply to it, to impose common-law liability to an employee, in any event. My disagreement with the majority is that it has applied only a part of the provisions of the Business Corporation Law. Relying on the provision in section 906 (subd. (b), par. (3)) of that law, which makes the surviving corporation liable for all the liabilities, obligations and penalties of each of the constituent corporations, it ignores paragraph (1) of subdivision (b) of the same section which endows the surviving corporation with all the rights, privileges, immunities, powers and purposes of each of the constituent corporations.

Accepting for purposes of argument that the dual capacity doctrine will not be applied in New York, [FN*] we then have a situation in which Farrel, USM's predecessor corporation, incurred an inchoate liability at the time the defectively designed boring mill was installed in its plant, to anyone injured by the defect other than an employee, as to whom the compensation law immunized it from common-law liability. Since both immunities and liabilities of the predecessor corporation, Farrel, are available to or imposed upon the survivor or consolidated corporation, USM, it necessarily follows that the latter corporation is immune from liability if the person injured by the defect **943 when the previously inchoate liability becomes choate is one of USM's employees. The reason, quite simply, is that the predecessor corporation would have been immune had there been no merger or consolidation and *166 section 906 explicitly says that merger or consolidation does not affect immunity. That there might have been liability had the injury occurred before merger or consolidation is immaterial, for the coalescence of defect and injury which makes liability choate is accompanied by employment of the injured person, which under the Business Corporation Law immunizes the surviving corporation from tort liability. The facts that Billy was never employed by Farrel and that Farrel is not the surviving ***888 corporation are immaterial for USM as the surviving corporation was entitled as to its employees to the immunity to which Farrel, one of the constituent corporations, would have been entitled had there been no merger. FN* Since the majority posits liability under section 906 of the Business Corporation Law, there is no occasion to discuss the merits of the dual capacity doctrine and developments subsequent to Williams v. Hartshorn, 296 N.Y. 49, 69 N.E.2d 557, not briefed by the parties or discussed by the majority, such as our decision in Dole v. Dow Chem. Co., 30 N.Y.2d 143, 331 N.Y.S.2d 382, 282 N.E.2d 288, which materially affected the employer's workers'

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412 N.E.2d 934 51 N.Y.2d 152, 412 N.E.2d 934, 432 N.Y.S.2d 879 (Cite as: 51 N.Y.2d 152, 412 N.E.2d 934, 432 N.Y.S.2d 879)

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compensation protection, the predicate for Hartshorn's conclusion. The majority's argument that Farrel would be subject to suit by Mr. Billy's survivors had it not merged with USM and that USM, therefore, should not escape liability through the fortuity of its merger with USM is inconsistent not only with the Business Corporation Law but with the facts and with decisional law. Had Billy been injured while working for Farrel, Farrel would have been immunized by section 11 of the compensation law and USM as the successor to Farrel would have been immune to suit by Billy because Farrel was. There could be liability on USM's part for an injury to Billy only if Farrel sold the mill to USM and did not merge with it. There was, however, no sale, and there was, indeed, a merger. All that has occurred is that USM acquired the corporations that built the allegedly defective mill and used it in their work. The mill has never been removed from the employment operation and neither corporation ever surrendered the immunity from suit which was conferred upon it by reason of compliance with the Workers' Compensation Law. When USM acquired Farrel, it acquired as well the immunity of which Farrel was possessed, an immunity USM would not have acquired if it had merely purchased the mill from Farrel. That immunity protected Farrel from liability resulting from defective design for injury to an employee in the course of his employment by equipment manufactured by Farrel for its own use. Both the immunity and the liability remained inchoate until the occurrence of an injury brought both into play. If the person injured was a nonemployee of USM, USM would be liable for the design defect because Farrel would have been and USM was the successor corporation. If the injured person was an employee of USM, USM would be immune from liability because Farrel was and USM was the successor *167 corporation. It is immaterial that Billy never worked for Farrel (cf. majority opn., footnote, p. 161, p. 885 of 432 N.Y.S.2d, p. 940 of 412 N.E.2d).

USM was immune from liability to Billy as its employee not because Billy was a Farrel employee but because Farrel was immune from liability to an employee and USM inherited that immunity. This is made clear by McElwain v. Primavera, 180 App.Div. 288, 289, 167 N.Y.S. 815 which teaches that the effect of section 906 is that nothing is lost by a merger; that the company formed by the merger stands in the place of those merged, and any right which belonged to them can be asserted by it. Nor are the assets of a merged corporation to be considered as having been transferred to the surviving corporation. As is illustrated by Torrey Delivery v. Chautauqua Truck Sales & Serv., 47 A.D.2d 279, 366 N.Y.S.2d 506, there is a substantial difference between a transfer of stock and a transfer of property. In that case plaintiff tenant had been granted a right of first refusal by its corporate landlord. On the death of the landlord's sole stockholder, his stock was acquired by another corporation. Claiming that the stock sale violated its right of first refusal, the tenant sued to enforce it. The Appellate Division held that there had been no change of ownership of the landlord-corporation's property, that the corporate merger cannot be viewed as divesting or separating control of the subject**944 property from the corporate entity ( 47 A.D.2d, at p. 283, 366 N.Y.S.2d 506). Similarly, USM, Billy's employer, stands in the place of Farrel and benefits from the compensation law's grant of immunity. The fallacy of the majority's reasoning becomes apparent if we consider the consequences. Assume that a person works for a company which has manufactured its own equipment, that the corporation is acquired by another corporation and that the employee remains in his job. Under the majority's reasoning, although the former employer***889 had protection against suit, the Workers' Compensation Law does not protect the acquiring corporation against suit if an injury to the employee is caused by any of the acquired equipment built by its predecessor. To make common-law liability of an employer otherwise entitled to section 11 im-

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412 N.E.2d 934 51 N.Y.2d 152, 412 N.E.2d 934, 432 N.Y.S.2d 879 (Cite as: 51 N.Y.2d 152, 412 N.E.2d 934, 432 N.Y.S.2d 879)

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munity turn on whether the injury causing equipment was built by it or its predecessor is unrealistic. An acquiring corporation should not be required to take inventory of the equipment acquired through merger and obtain general liability insurance on so much of it as was manufactured by the acquired corporation, and nothing in either section 906 of the Business Corporation Law or *168section 11 of the Workers' Compensation Law suggests that the Legislature so intended. The majority's conclusion is, in my view, theoretically deficient and impractical. Since the courts below properly granted summary judgment to defendant, the order of the Appellate Division should be affirmed. COOKE, C. J., and JONES, WACHTLER and FUCHSBERG, JJ., concur with GABRIELLI, J. MEYER, J., dissents and votes to affirm in a separate opinion in which JASEN, J., concurs. Order modified, with costs to plaintiff against defendant USM Corporation, in accordance with the opinion herein and, as so modified, affirmed, with costs to the remaining defendants against plaintiff. N.Y., 1980. Billy v. Consolidated Mach. Tool Corp. 51 N.Y.2d 152, 412 N.E.2d 934, 432 N.Y.S.2d 879 END OF DOCUMENT

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