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 PetroLn 

.--i Lewis, Billings, Montana 

>keefer, Roybal, Hanson, Stacey & Jarussi; Neil S. 7-1 11 

,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 Properties 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 oil 

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 separates 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 Mountain, 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 S inhalation. 2 

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 S gas. Both decedents were 2 

aware of the presence of H2S gas in the oil and at least some 

of its dangers. However, employees of Balcron were given no 

formal- training concerning the dangers of H S gas. 2 

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 S training. Furthermore, changes in the treater 2 

facility were made. These included constructing an additional entrance for cross-ventilation, erecting warning signs of 

H S gas, and finishing the replacement of the PVC pipe. 2 

The Occupational Safety and Health Administration 

(OSHA) issued to Ralcron Oil citations for ~riolations of 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' compensation benefits from the death of her husband, paid out by 

Balcron Oil. She later filed a complaint on behalf of herself 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 interroqatories. 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 Is 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 facility 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 dangerous. 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 requirements 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 pertinent part: 

(1) One who sells any product in a 

de f ec t.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 product . . . 

From the time that the second Restatement was published in 

1965, courts have struggled to find an all-inclusive definition for the term "product." The Restatement writers themselves began the list in the official comments following 

S 402A. The list included the sale of food for human consumption, 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 automobile, 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 "product. " 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 wholesaler of the defective product in order 

that they may act as the conduit through 

which liability may flow to reach the 

manufacturer, where ultimate responsibility 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 ~.2d 

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 if 

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 "product." 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 building. 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 blr 

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 - Cox, the decedent died by asphyxiation while working 

in a silo. The Pennsylvania court held that a silo constructed 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 

onl:7 under limited circumstances. 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 reasonably 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 examination is, in the nature of things, largely 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 indivisible 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 Construction 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. 19881, 

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 applicable to an occasional seller of a product, 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" definition. In summary, a "product" is defined by policy considerations. 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 defective. We also held that the phrase "defective conditior. 

unreasonably dangerous" in S 402A is an indivisible requirement 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 - and unreasonably 

dangerous. 

Montana, however, has not addressed the initial question 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 402A refers specifically to "one who sells a 

product in a defective condition," where the seller is engaged in the business of selling the product. The respondents 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, 455 

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 limitations 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 marketing devices to cause the consumer to buy the product. Moreover, 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 buildings, and the treater facility and the building which houses 

it do not fit within the definition prescribed by the Restatement. Leadinq cases have held that a building is not a 

"product, 'Anless the buj.1 dins i s 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 facility 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 PTTC 

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 structure. 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, declaring 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, SS 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. Huntington 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 ownership, 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 possession of, the treater facility. Even as builders, the respondents should not be held responsible for reasons similar to 

the accepted "work rule doctrine." Once the builders finished 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 facility 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 declared 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 pursuant to S 39-71-411, MCA. 

CONCLUSION 

The District Court found that because the S 402A requirements were not met and there were no material facts at 

issue, summary judgment would be granted in favor of respondents. 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. 

We concur: 

Chief Justice 

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