NO. 88-87
IN THE SIJPREME COURT OF THE STATF OF MONTANA
1989
NANCY PAPP, Individually and as
Personal Representative of the Estate
of ALEX PAPP,
Plaintiff and Appell-ant,
ROCKY MOUNTAIN OIL AND MINERALS, INC.;
PETRO-LEWIS CORP. , and PETRO-LEWIS FlJNDS ,
INC., and PARTNERSHIP PROPERTIES CO.;
BUCKEYE ENERGY CORP., and RALCROTJ OIL
COMPANY,
Defendants and Respondents.
APPEAL FROM: District Court of the Thirteenth Judicial District,
In and for the County of Yellowstone,
The Honorable G. Todd Raugh, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
TJgrin, Alexander, Zadick & Slovak; John D. Alexander and
Neil E. Ugrin argued, Great Falls, Montana
For Respondent:
Moses Law Firm; Charles F. Moses, Billings, Montana
Dorsey and Whitney; James L. Jones argued for Rocky
Mountain Oil, Billings, Montana
:$TcNamer and Thompson, Mark S. Werner argued for Petro-
Ln
.--i
Lewis, Billings, Montana
1 1
7 - 1
>keefer, Roybal, Hanson, Stacey & Jarussi; Neil S.
,
i ~:'jKeefer araued for Buckeye & Ralcron, Billings, Montana
Submitted: January 121 1989
Decided: March 2, 1989
Mr. Chief Justice J. A. Turnage delivered the Opini-on of the
Court.
This is an appeal from an order of the Thirteenth
Judicial District, Yellowstone County, granting summarv
judgment to respondents, Rocky Mountain Oil, Petro-Lewis
Corporation, and Buckeye Energy Corporation. Appellant,
Nancy Papp, brought suit in strict liability in tort and
negligence for the wrongful death of her husband. Alex Papp
died of lethal inhalation of hydrogen sulphide (H2S) gas
while working for Balcron Oil Company. Appellant claims the
facility in which Papp was working and its components were
defective and unreasonably dangerous. The court aranted
summary judgment in favor of defendants. We affirm.
The issues here are:
(1) Whether the District Court properly found that
respondents were entitled to summarv judgment as a matter OF
law on the grounds that the claim for strict liability does
not fulfill the requirements of Restatement (Second) of
Torts, section 402A.
(2) Whether the negligence issue must be dismissed on
the qrounds that the builders of the separator facility are
too remote.
(3) Whether Buckeye Energy Corporation and Balcron Oil
are joint venturers in the State B lease, thus immunizinc!
Buckeye from appellant's negligence claim.
FACTS
In 1951, the State of Montana, State Board of Land
Commissioners, entered into an oil and gas lease agreement
with Phillips Petroleum Company and Ada Oil Company for
property located southwest of Conrad, Montana. Known as the
"State R " lease, it was assigned to Rocky Mountain Oil and
Minerals, Tnc. (Rocky Mountain) in Auuust 1971. On September
1, 1978, Rocky Mountain sold its interest to the Petro-Lewis
Corporation, Petro-Lewis Funds, Inc., and Partnership Proper-
ties Co. (Petro-Lewis), reserving a 50 percent interest in
the leasehold estate. On October 4, 1981, Petro-Lewis sold
bv way of assignment, bill of sale, and conveyance, oil and
gas leases in Pondera County, including the State B lease, to
Buckeye Energy Corp. (Buckeye), who, in the same meeting,
sold two-thirds interest in its Pondera Countv oil and qas
leases to Balcron Oil Co. (Ralcron).
In 1979, Alex Papp was hired by Ralcron as an oil and
gas pumper and worked for Balcron from 1979 until the date of
his death, June 6, 1985. He spent up to 90 percent of his
time in the gas fields and 10 percent working in the o i l
fields. On the State R lease southwest of Conrad was an oil
"treater" or "separator" facility. The facility's purpose
was to separate water and qas from the crude oil being pumped
out of the ground. There are two tanks in the separator
facility, the water knock-out tank and the gun barrel tank.
An incoming flow line enters the facility from an underground
pipe depositing oil into the knock-out tank. The tank sepa-
rates salt water from the oil and allows hydrogen sulphide
gas (HZS) to separate from the crude oil and vent into the
atmosphere. Once the initial impurities are separated and
siphoned out, the oil is transqerred to the gun barrel tank
where it is heated to remove any remaining impurities. The
treated oil is then put into storage.
Prior to the State R lease acquisition by Rocky Moun-
tain, the treater facility had become worn from use. After
the acquisition by Rocky Mountain, Rocky Mountain dismantled
and rebuilt the facility and its components, completely
enclosing it.
After Ralcron took over the lease in 1985, it began
replaci-ng the flow pipes entering the facility . Ralcron
replaced PVC pipe, which was unflexible and brittle, with a
more flexible poly pipe. Alex Papp and Larry Rannelr were
assigned to complete an auxiliary flow line in the facility.
On June 6, 1985, shortly after lunch, Papp and Ranney went to
finish the flow line. Later that afternoon, Jerry Griggs,
another employee of Balcron, went to the facility and found
both men overcome by H 2S inhalation.
Hydrogen sulphide is a deadly gas, exposure to which
can quickly cause death. The building which houses the
separator facility had at the time of Papp's death only one
door for ingress and egress and no ventilation. There were
no signs warning against the H 2 S gas. Both decedents were
aware of the presence of H2S gas in the oil and at least some
of its dangers. However, employees o f Balcron were given no
formal- training concerning the dangers of H 2 S gas.
When Griggs arrived at the treater facility, Papp was
found sitting against the east wall with his feet under the
steel flow line. Larry Ranney was found twelve feet from
Alex Papp against the inside west wall, with a wrench in his
hand. Griggs realized that there was the presence of H2S gas
in the air. Despite the presence of the gas, he went inside
and pulled Alex Papp out. Another employee arrived and
pulled out Larry Ranney.
Oil was steadily flowing out of the pipes into the
facility and both Papp and Ranney were covered with dirt and
oil which had apparently sprayed from a cracked PVC pipe.
After the deaths, employees of Balcron were given
formal H 2S training. Furthermore, changes in the treater
facility were made. These included constructing an addition-
al entrance for cross-ventilation, erecting warning signs of
H 2S gas, and finishing the replacement of the PVC pipe.
The Occupational Safety and Health Administration
(OSHA) issued to Ralcron Oil citations for ~riolationsof the
Occupational Safety and Health Act. Specifically, Balcron
was cited for inadequate warning of H2S gas and for not
providing respirators for the employees.
Decedent's wife, Nancy Papp, received workers' compen-
sation benefits from the death of her husband, paid out by
Balcron Oil. She later filed a complaint on behalf of her-
self and on behalf of the estate of Alex Papp, against Rocky
Mountain, Petro-Lewis, Buckeye, and Balcron, alleging strict
liability, negligence, and negligent failure to warn on the
basis that the separator facility and its components were
defective and unreasonably dangerous. After the defendant^
answered the complaint, plaintiff took the depositions of
three of Papp's fellow employees and filed sets of interroq-
atories. In February, March, and April, 1987, defendants
filed motions for summary judgment. Plaintiff thereafter
moved to compel discovery, and filed briefs in opposition to
the motions for summary judgment. On December 10, 1987, the
District Court granted the motion for summary judgment on the
grounds that no dispute as to material facts existed and that
the defendants were entitled to summary judgment as a matter
of law.
DISCUSSION
The first issue is whether the District Court properly
granted summary judgment on the grounds that appellant fail-ed
to show that the treater facility was within the Restatement
(Second) of Torts, S 402A definition of "product."
"PRODUCT" DEFINITION
The standard of review for granting or denying a motion
for summary judgment is the same as that used by the trial
court--that is, the moving party is entitled to judqment at
law i.f there I s no genuine issue of material. fact and the
moving party is entitled to judgment as a matter of law.
Rule 56 (c), M.R.Civ.P. ; Frigon v. Morrison-~aierle, Inc.
(Mont. 1988), 760 P.2d 57, 45 St.Rep. 1344; Sevalstad v.
Glaus (Mont. 1988), 737 P.2d 1147, 44 St. Rep 930; Kronen 77.
Richter (1984), 211 Mont. 288, 683 P.2d 1315; Reagan v. Union
Oil Company of California (1984), 208 Mont. 1, 675 P.2d 953.
Appellant alleges that there are material facts in
dispute--namely, whether the design and manufacture of the
facility and its component parts were defective or whether it.
was negligent use or misuse of the equipment by Papp himself
which caused his death. The reason for the death, according
to appellant, was that the treater facility was defective and
unreasonably dangerous. The facility lacked ventilation,
there was insufficient ingress and egress, and there were no
signs warning of the dangers of H2S. Moreover, Papp had
received no formal training regarding the dangers of the gas.
To prove that the respondents are liable under strict
liability, appellant must demonstrate that the treater facil-
ity was a "product" within the $ 402A definition, that this
$
product was built and maintained by the respondents, and that
the product was in a defective condition unreasonably danger-
ous. If the appellant is unable to show that the separator
facility was a product, then S 402A is inapplicable to this
case, and the summary judgment order will be affirmed.
Respondents allege that the appellant has not met the re-
quirements of the 5 402A strict liability claim. To find
strict liability of the seller of the facility, the facility
and its component parts must be a "product" for S 402A
purposes.
Restatement (Second) of Torts, 5 402A states in perti-
nent part:
(1) One who sells any product in a
de fect . j ~7e condition unreasonably
dangerous to the user or consumer or to
his property is subject to liability for
physical harm thereby caused to the
ultimate user or consumer, or to his
property, if (a) the seller is engaged
in the business of selling such a prod-
uct ...
From the time that the second Restatement was published in
1965, courts have struggled to find an all-inclusive defini-
tion for the term "product." The Restatement writers them-
selves began the list in the official comments following
S 402A. The list included the sale of food for human con-
sumption, or other products for intimate bodily use. The
authors of the Restatement also embraced any product which
reached the consumer or ultimate user in substantially the
same condition in which it was intended, such as an automo-
bile, an airplane, a grinding wheel, a water heater, a gas
stove, a power tool, a riveting machine, a chair, or an
insecticide. It also included any product which harmed the
consumer's chattels or land.
Since 1965, the list has expanded tremendously and
courts have adopted policy reasons for defining a product,
rejecting a strict dictionary definition of the word "prod-
uct. " The social policy justifications for determining
whether a "product" is found have been discussed by this
Court in Brandenburger v. Toyota Motor Sales, U.S.A., Inc.
(1973), 162 Mont. 506, 514-515, 513 P.2d 268, 273. The
policy considerations applicable to the case at har include:
(3) It is in the public interest to
discourage the marketing of defective
products ;
(4) It is in the public interest to
place responsibility for injury upon the
manufacturer who was responsible for its
reaching the market;
(5) That this responsibility should also
he placed upon the retailer and whole-
saler of the defective product in order
that they may act as the conduit through
which liability may flow to reach the
manufacturer, where ultimate responsi-
bility lies;
(7) That the consumer does not have the
ability to investigate for himself the
soundness of the product;
(8) That this consumer's vigilance has
been lulled by advertising, marketing
devices and trademarks.
See also: Lecherga, Inc. v. Montgomery (Ariz.App. 1970), 467
P.2d 256; Nalbandian v. Byron Jackson Pumps, Inc. (19651, 97
Ariz. 280, 399 P.2d 681; Greenman v. Yuba Power Products,
Inc. (1962), 27 Cal.Rptr. 697, 377 P.2d 897; Escola v. Coca
Cola Bottling Co. of Fresno (1944), 24 Cal.2d 453, 150 ~ . 2 d
436; "Products Liability Symposium: What is or is not a
Product within the Meaning of Section 402A," 57 Marq. L. Rev.
623 (1974).
Therefore, courts analyzing a cause of injurv to see i f
the injury-causing thing is a "product" within the confines
of a strict liability definition for S 402A purposes, t.est
the injury-causing thing against these preceding policy
justifications. If it passes muster, it is then deemed to be
a product.
In applying the policy justifications, most courts have
refused to adopt the contention that a building is a "prod-
uct." In Lowrie v . City of Evanston (Il1.App. 1977), 365
N.E.2d 923, decedent died from a fall in a parking garage.
The Tll.inois AppeLI-ate Court held that neither the parking
ramp nor the parking space was a "product" within the product
liability definition. In Trent v. Brasch Manufacturing Co.,
Inc. (I11.App. 1 Dist. 1985), 477 N.E.2d 1312, the plaintiff
was injured while "checking a thermostat" of the heating,
ventilation, and air-conditioning system (HVAC) in a build-
ing. Defendants claimed that the HVAC was a component and
indivisible part of the building. The court disagreed,
reasoning that the HVAC was attached to real estate. The
court applied the social policy considerations, ultimately
sending the issue back to the trial court. See also:
Imrnergluck v. Ridgeview House, Inc. (I11.App. 1977) , 368
N.E.2d 803 (in wrhich a sheltered-care facility was held not
to be a product); and Heller v. Cadral Corp. (Ll1.App. 19801,
406 N.E.2d 88.
Other jurisdi.ctions have also held that huildinqs are
outside the scope of the "product" definition area. In
Messier v. Association of Apartment Owners (Hawaii App.
1987), 735 P.2d 939, plaintiff was injured during a storm br
l
an allegedly defective metal panel which dislodged from the
roof of his condominium. The Hawaii court held that the
condominium was not a product.
The Washington Appellate Court in Charlton v. Day
Island Marina, Inc. (Wash.App. 1987), 732 P.2d 1008, held
that a boathouse builder was not liable for the deaths of
plaintiffs' decedents who died from carbon monoxide poisonins
after being overcome by exhaust fumes caused by the boat's
running engine within the boathouse. The plaintiffs claimed
that there was inadequate ventilation in the boathouse. The
court found that the plaintiffs failed to show that the
boathouse was a product given its similarities with other
buildings.
For more cases which regard buildings to be outside the
purview of "products" for strict liability in tort, see:
McClanahan v. America Gilsonite Co. (D.C. Colo. 1980), 494
F.Supp. 1334; and K-Mart Corp. v. Midcon Realty Group of
Connecticut, Ltd. (D.C. Conn. 1980), 489 F.Supp. 813.
A case which is nearly identical in terms of facts to
the case at bar is Cox v. Shaffer (Pa.Super. 1973), 302 A.2d
457. In - the decedent died by asphyxiation while working
Cox,
in a silo. The Pennsylvania court held that a silo con-
structed in place on an employer's land is not a product.
Some states have alternatively held that a building is
a product within the scope of strict liability in tort, but
o l 7 under limited circumstances.
n: In 1965, the New Jersev
Supreme Court was the first court to extend strict liability
to home development in Schipper v. Levitt & Sons, Inc. (N.J.
1965), 207 A.2d 314. In Schipper, a child of plaintiffs was
scalded by hot tap water and plaintiffs sued the
builder-vendor for failure to install a mixing valve to
reduce the water temperature after the water left the heating
boiler. In holding the builder-vendor strict1.y liable, the
court stated:
When a vendee buys a development house
from an advertised model, as in a Levitt
or in a comparable project, he clearly
relies on the skill of the developer and
on its implied representations that the
house will be erected in reasonably
workmanlike manner and will be reason-
ably fit for habitation. He has no
architect or other professional adviser
of his own, he has no real competency to
inspect on his own, his actual examina-
tion is, in the nature of things, large-
ly superficial . . .
Schipper, 207 A.2d at 325. The court continued, saying that
if injuries are the result of defective const.ructi.on, the
builder should hear the cost.
In 1969, California followed New Jersey in adopting
strict liability for mass production and sale of tract homes
in Kreigler v. Eichler Homes, Inc. (1969), 269 Cal.App.2d
224, 74 Cal.Rptr. 749. Defendant had constructed over 4000
homes in which steel tube radient systems had been installed
in the concrete floor. Kreigler was injured when the floor
collapsed from corrosion of the steel tubing. The California
court, in holding defendant strictly liable, analogized
mass-production of homes and mass-production of cars, stating
that the buyer is not in a position to protect himself and
that the policy reasons for "product" status were the same.
In Kanecko v. Hilo Coast Processing (Hawaii 19821, 654
P.2d 343, the Hawaii Supreme Court also held in favor of
strict liability in cases of construction of prefabricated
buildings. See also: Lantis v. Artec Industries, Inc. (7th
Cir. 1981), 648 F.2d 1118.
An alternative view in a few states is that the home
itself is not a "product1' but that the component parts or
additions to the building are "products" within the § 403A
definition. In Philadelphia National Bank v. Dow Chemical
Co. (E.D.Pa. 1985), 605 F.Supp 60, one of Dow's products,
Sarahond, was a chemical in the mortar used in erecting
plaintiff's bank building. The Sarabond corroded metals
embedded in the mortar and brick panels of the building,
causing structural damage. Defendants alleged that the
mortar had become incorporated in the structure and indivisi-
ble from the building. The court rejected this argument
holding that the Sarabond was a product and not part of the
real property or a fixture thereto. In S.L Rowland Construc-
tion Co. v. St. Paul Fire and Marine Ins. Co. (Wash. 19671,
434 P.2d 725, the court held that in cases where an insurance
policv limited liability in case of fire, the house itself
was not a product, but the component parts therein were
products.
Another dimension of "product1'definition was added by
the Nevada Supreme Court in Elley v. Stephens (Nev. 1 9 8 8 1 ,
760 P.2d 768. There, the Supreme Court of Nevada held:
. . . even if we assumed, arguendo, that
a prefab house is a product subject to
the law of strict products liability, a
strict liability theory is not applica-
ble to an occasional seller of a prod-
uct, who does not, in the regular course
of his business, sell such a product.
[Emphasis added. 1
Elley, 760 P.2d at 771.
The foregoing discussion sets out the development of
case law considering buildings in terms of "product" defini-
tion. In summary, a "product" is defined by policy consider-
ations. Where a building is the alleged product, most.
jurisdictions do not subject defendants to strict liability7
scrutiny unless the homes are prefabricated and mass-produced
and the defendants are in the business of constructing or
selling these types of homes, thus eliminating the unique
status of most buildings.
PRODUCT LIABLLITY IN MONTANA
Strict liability is not new to Montana. Section 402A
was first adopted in Brandenburger, in which we discussed the
policy reasons for applying strict liability in tort. There
are two decisions in Montana which are pertinent here. The
first is Thompson v. Nebraska Mobile Home Corp. (1982), 198
Mont. 461, 647 P.2d 334; the second, McJunkin v. Kaufman
(Mont. 1987) 748 P.2d 910, 44 St.Rep. 2111. In Thompson, the
plaintiff complained of defects in her 1972 Magnolia Futurama
Mobile Home, including loose shingles on the roof and poor
seals in the corners of the home. We held that strict
liabilty was expanded to those instances where there is
damage onlv to the defective product. Personal injury is not
required.
In McJunkin, a K & B Mobile Home had numerous alleged
defects shortly after the home was purchased. It was held
that the plaintiff failed to show that the product was defec-
tive. We also held that the phrase "defective conditior.
unreasonably dangerous" in S 4 0 2 A is an indivisible require-
ment to he proved by the plaintiff. Defendants contender?
that the plaintiffs were required to prove that the mobile
home was both in a defective condition - unreasonably
and
dangerous.
Montana, however, has not addressed the initial ques-
tion of whether the injury-causing thing is a product. We
did not consider whether the mobile homes were "products" in
Thompson or McJunkin, although, in the case of prefabricated
homes and mobile homes which are mass-produced and sold in
the stream of commerce, they may qualify as "products."
We hold that the summary judgment decision that the
treater facility was not a "product" by the District Court
must he upheld because:
(1) The respondents were not in the husiness of selling
separator facilities as required hv the Restatement;
(2)The alleged product did not reach the stream of
commerce nor was the decedent a consumer as defj-ned by the
policy considerations in Brandenburger; and
(3) The treater facility, a building, is not a product.
Section 4 0 2 A refers specifically to "one who sells a
product in a defective condition," where the seller is en-
gaged in the business of selling the product. The respon-
dents here are not sellers of treater facilities. They engage
in the business of extracting oil and gas for refinement.
They are, therefore, not sellers within the 5 402A
definition. This provision was incorporated in our statutes
in 1987. See 5 27-1-719, MCA.
In testing the alleged cause of death for "product"
status, it is necessary to test the alleged product aqainst
the list of policy considerations. According to the policy
consj-derations in Brandenburger, whether the product is in
the stream of commerce is relevant. See also: Immergluck v.
Ridgeview House, Inc. (111.App. 1977), 368 N.E.2d 803; Roddie
v. Litton Unit Handling Systems (111.App. 1 Dist. 19831, 4 5 5
N.E.2d 142; Moorman Manufacturing Co. v. National Tank Co.
(I1l.App. 1980), 414 N.E.2d 1302, rev'd in part, aff'd in
part (1982), 435 N.E.2d 443. This is apparent in three
specific policy considerations, i .e., the public interest in
discouraqFng the marketing of defective products, the limita-
tions and solicitations of the manufacturers to the purchaser
of the product, and the ability of the consumer to inspect
the product.
The separator facility did not enter the stream cf
commerce. It was part of the property passed from one lessee
to another. The facility was not a product which was in the
stream of commerce. Because Papp was not a "consumer," usin?
the treater facility after it had reached the stream of
commerce, there was no issue of disparity in bargaining power
or a manufacturer's use of persuasive advertising or market-
ing devices to cause the consumer to buy the product. More-
over, no issue has arisen as to whether the decedent was able
to inspect the facility. The treater facility is not a
product under the widely used policy considerations.
A "product" is narrowly defined in the area of build-
ings, and the treater facility and the building which houses
it do not fit within the definition prescribed by the Re-
statement. Leadinq cases have held that a building is not a
"product,' A n l e s s the buj.1 dins is mass-produced or
prefabricated. The separator facility is not mass-produced
but is unique in nature. Considering that the structure
which houses the separator facility is a building, the facil-
ity is not a "product" within a strict liability definition.
Other jurisdictions have held that components within a
building are "products." However, even though the cracked P T
TC
pipe is a component and is known to be brittle and of poorer
quality than the poly pipe, it is not that component alone
which caused the death here. The H2S gas leaking from the
pipe was deadly because it was not allowed to evaporate into
the atmosphere, but was confined within the housing struc-
ture. The building and its component parts are indivisible in
this case. We hold that the building is not a "product"
within the definition of § 402A of the Restatement.
NEGLIGENCE
The second issue is whether the claim of negligence
must be dismissed on the ground that the builders of the
separator facility cannot be liable for negligence once they
have sold the facility and released all control of it.
Appellant alleges that the respondents were negligent
in their construction of the building and in their failure to
warn decedent. Each of the defendants--Rocky Mountain,
Petro-Lewis, Buckeye, and Balcron--denied liability, declar-
ing instead that the decedent was negligent in misusing the
components of the facilitv, specifically, putting too much
strain on the PVC pipe while replacing it, causing the crack.
Also, once the pipe had cracked, the decedents took improper
steps in preventing the H2S gas from filling the facility and
did not use caution to save themselves. Rocky Mountain and
Petro-Lewis also blamed subsequent lessees for not properly
inspectinq and preventing any hazards.
Restatement (Second) of Torts, S S 352 and 353, propose
that liability of builders is terminated once they have
relinquished ownership and control of the property. The
California Supreme Court has addressed the issue of a former
owner's liability in a negligence claim. In Isaacs v. Hunt-
ington Memorial Hospital (1985), 38 Cal.3d 112, 134, 695 P.2d
653, 664, the court stated that:
[a] defendant cannot he held liable for
the defective or dangerous condition of
property which it did not own, possess,
or control. Where the absence of owner-
ship, possession, or control has been
unequivocably established, summary
judgment is proper.
Furthermore, in Preston v. Goldman (1986), 42 Cal.3d 108, 720
P.2d 476, in a case where a previous owner was sued for
injuries to a child who fell in a pond built by the former
owner, the court held that a former owner is not subject to
liability for injuries sustained on the property long after
he had relinquished ownership and control.
We apply the same reasoning here and hold that Rocky
Mountain and Petro-Lewis are not liable to the appellant for
decedent's death. They do not own, nor are they in posses-
sion of, the treater facility. Even as builders, the respon-
dents should not be held responsible for reasons similar to
the accepted "work rule doctrine." Once the builders fin-
ished the work on the facility and relinquished control of it
to the subsequent owners, the subsequent owners accepted the
property as finished. Therefore, the builders of the facili-
ty are not liable. Harrington v. LaBelle's of Colorado, Inc.
(1988), 765 P.2d 732, 45 St.Rep. 2176.
JOINT VENTURE
The third issue is whether Buckeye is immune from
negligence liability as a joint venturer with Balcron Oil.
Appellant was awarded workers' compensation benefits
from Balcron. Pursuant to $ 39-71-411, MCA (1985), if a
claimant is awarded workers' compensation benefits, workers'
compensation is the exclusive remedy, and employers are
immune from further liability. If Buckeye and Balcron are
joint venturers, Buckeye is an employer and is immune from
negligence liability. Appellant claims that there is no
joint venture and Buckeye is a separate owner and liable to
appellant.
Buckeve and Balcron must meet the four elements of a
joint venture, to qualify as joint venturers. They are as
follows: 1) an express or implied agreement or contract
creating the joint venture; 2) a common purpose among the
parties; 3) community of interest; and 4) an equal right of
control of the venture. Bender v. Bender (1965), 144 Mont.
470, 480, 397 P.2d 957, 962.
On October 26, 1984, Petro-Lewis sold its interest to
Buckeye who sold two-thirds of its interest to Balcron Oil on
the same day. The parties arranged an agreement which de-
clared that Buckeye held a one-third investment interest and
Balcron held a two-thirds operations interest. Information
income tax returns are filed as a joint venture and their
respective income taxes are calculated thereon. Buckeye
reimbursed Balcron for one-third of the wages and workers'
compensation insurance premiums.
We hold that the four elements have been met here.
From the agreement between the parties, it can be discerned
that they have entered into an agreement which created a
joint venture. Co-ownership is not sufficient by itself to
establish a joint venture, however. Sunbird Aviation, Inc.
v. Anderson (1982), 200 Mont. 438, 651 P.2d 622. The two
companies have a common purpose, that being the financing and
operation of oil fields. The operation of the State R lease
also shows the community of interest between Buckeye and
Balcron.
Appellant contends that the fourth element has not been
met because Buckeye's two-thirds interest is not an equal
share and they are not actively involved in the business
affairs of the alleged venture. However, we have established
that the parties can choose to delegate management duties to
one venturer and still establish equal right of control.
Murphy v. Redland, (1978), 178 Mont. 296, 583 P.2d 1049.
Buckeye has sufficiently established that a joint venture is
present.
Therefore, as a joint venturer with Balcron, Buckeye is
an employer of the employees working in the State B lease oil
and gas fields and is immune from negligence liability pursu-
ant to S 39-71-411, MCA.
CONCLUSION
The District Court found that because the S 402A re-
quirements were not met and there were no material facts at
issue, summary judgment would be granted in favor of respon-
dents. We affirm the summary judgment decision. The treater
facility is not a "product" and, therefore, strict liability
is not applicable as a matter of law. Fl~rthermore, Rocky
Mountain and Petro-Lewis were not negligent at the time of
decedent's death, and Buckeye, as an employer, is immune from
negligence claims.
The appellant has failed to show that the treater
facility was a product and concomitantly has failed to show
any genuine issue of material fact. If the movant has met
the initial burden of showing no genuine issue of material
fact, "it then shifts to the non-moving party to demonstra.te
a genuine issue of material fact. " Gamble Robinson Co. v.
Carousel Properties (1984), 212 Mont. 305, 312, 688 P.2d 283,
287; Frigon v. Morrison-Maierle, Inc. (Mont. 1988), 760 P.2d
57, 45 St.Rep. 1344. Appellant has failed to show a genuine
issue of material fact regarding respondents Petro-Lewis and
Rocky Mountain.
Moreover, appellant has failed to show any genuine
issue of material fact that any of the respondents are liable
in negligence. The District Court was correct in ordering
summary judgment.
Afftrmed.
Chief Justice
We concur:
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