The opinion of the court was delivered by: John E. Miller, District Judge.
On September 10, 1952, the plaintiff, Bonner Huffstettler,
filed his complaint against the defendant, Lion Oil Company,
hereinafter often referred to as Lion, in the Circuit Court of
Ashley County, Arkansas, in which he alleged:
Plaintiff is a resident of Ashley County, Arkansas.
Defendant is a Delaware corporation doing business in Ashley
County, Arkansas, and maintains its principal office in El
On February 6, 1952, Lion was the owner of a "petroleum bulk
plant" at Hamburg, Arkansas, consisting of warehouses, office,
equipment, etc.; that Lion owned all property and stock
located in and upon the premises, except the equipment used by
M.F. Taylor, its distributor, in delivering Lion products to
its customers; that Lion furnished this bulk plant, and
operating facilities located thereon, to M.F. Taylor in
furtherance of its effort in marketing its products.
Plaintiff was employed by M.F. Taylor and his duties
consisted of, among other things, delivering Lion products to
consumers and retailers; that about one o'clock p.m. on
February 6, 1952, in performance of his duties as a tank truck
driver and salesman of Lion products, plaintiff was informed
by Mr. Frank Woods, who was at the time employed by M.F.
Taylor, and who was known to the plaintiff as the bulk plant
manager, that Mrs. Joe Kustren (Kusturin) was without
gasoline, and Woods instructed plaintiff to make the delivery;
that plaintiff obtained the keys from the wareroom in order to
unlock the lower valve of the gasgline storage tank, which was
located directly in front of the door to the office of the
bulk plant; that approximately four feet above the lower valve
was a lever valve which was used to regulate the flow of
gasoline from the storage tank into the delivery truck, and
that this valve was usually and customarily operated while
standing on the truck, from which place the flow of the
gasoline into the truck could be regulated.
The lower valve was a screw-type valve, and as plaintiff
opened the valve, gasoline gushed out of and from the loading
pipe arm and the pipe sleeve which was situated over the arm,
falling upon him and upon the platform on which he stood. That
plaintiff began to close the lower valve at which time he
heard an unusual sound, resembling a strong wind. That the
sound came from behind him, and within an instant he was
enveloped in flame.
Plaintiff received severe and permanent injuries as a result
of the explosion.
The defendant was guilty of negligence which was the
proximate cause of the accident. That defendant's negligence
"a. The failure of the defendant, Lion Oil Company to
provide and furnish the plaintiff, Bonner Huffstettler, with
a safe place to work.
"b. The failure of the defendant, Lion Oil Company to
exercise ordinary care in permitting and placing an open-face
heater within 12 feet of the loading pipe.
"c. The failure of the defendant, Lion Oil Company to
recognize the danger to which persons were exposed as a result
of an open flame, when they had, or should have had, superior
knowledge as to the peculiar combustible qualities of their
"d. The failure of the defendant, Lion Oil Company, to use
ordinary care in requiring the servants of M.F. Taylor to load
gasoline near an open and unguarded flame.
"e. The failure of the defendant, Lion Oil Company, to
properly warn the employees of M.F. Taylor as to the danger
existing at their petroleum bulk plant at Hamburg, Arkansas.
"f. The failure of the defendant, Lion Oil Company to
properly construct its buildings and equipment in a fashion
sufficient to protect the employees of M.F. Taylor."
Plaintiff was not guilty of any contributory negligence.
Plaintiff prayed judgment for $143,000, costs, and all
On September 23, 1952, the case was removed to the United
States District Court for the Western District of Arkansas, El
Dorado Division, on the grounds of diversity of citizenship of
the parties and the amount involved.
Thereafter, the defendant on November 15, 1952, filed its
motion for summary judgment in which it alleged:
That plaintiff was an employee of M.F. Taylor who was a
distributor of defendant's products and in charge and control
of defendant's bulk plant at Hamburg, Arkansas.
That at the time of the accident, it was and had been for
many years prior thereto the defendant's custom and practice
to enter into written contracts with gasoline service station
operators; that such contracts were designated as "Dealer
Sales Agreements" and "Equipment Rental Agreements."
That all sales made by M.F. Taylor to such dealers were made
in the name and on behalf of the defendant and all products so
sold were owned solely by the defendant.
That by virtue of the various contracts, the defendant Lion
was a "contractor", M.F. Taylor was a subcontractor, and
plaintiff was a statutory employee of the defendant under the
provisions of Section 6 of the Workmen's Compensation Law of
the State of Arkansas, Ark.Stats. § 81-1306.
That plaintiff at the time of the accident was engaged in
the performance of his duties as an employee of M.F. Taylor in
carrying out the performance of an obligation of the defendant
arising under the provisions of one of the Dealer Sales
Agreements; that M.F. Taylor had failed to afford coverage for
his employees under the provisions of the Workmen's
Compensation Law and that the defendant had failed to require
M.F. Taylor to carry such coverage; that at the time of the
accident and at all times since defendant has been qualified
in its own name and behalf as a self-insurer under the
Workmen's Compensation Law of Arkansas.
That the right of plaintiff is limited solely and
exclusively to the rights afforded him by the provisions of
the Workmen's Compensation Law of Arkansas and that this Court
has no jurisdiction of this suit.
Defendant attached to the motion as Exhibit A a copy of the
Distributor's contract in force, at the time of the accident,
between M.F. Taylor and the defendant. Defendant also attached
as exhibits B and C copies of a "Dealer Sales Agreement" and
an "Equipment Rental Agreement" entered into between the
defendant and W.C. Breazeal, one of the retail dealers, and
stated that the provisions of these contracts were identical
with similar contracts entered into by the defendant with
other retail dealers, and reflected the methods and procedures
universally followed in the transactions between defendant and
service station operators.
In support of the motion the defendant also attached the
affidavits of C.E. Bethel, the defendant's Assistant Manager
of Station Sales; M.F. Taylor, the defendant's Distributor at
Hamburg, Arkansas; and Dave Peel, Chairman of the Workmen's
Compensation Commission of the State of Arkansas.
On December 24, 1952, plaintiff filed his response to the
motion for summary judgment in which he stated that "there is
a genuine issue of fact to be presented to the court on the
question pertaining to the relationship of the parties.
Plaintiff further states that the motion filed herein by the
defendant company is premature inasmuch as, at this stage of
the proceedings, the genuine and material factual issues
necessary to determine the relationship of the parties cannot
be adequately presented to the court upon pleadings
accompanied by affidavits."
Upon the issues raised by the defendant's motion and the
plaintiff's response thereto, the parties filed briefs in
support of their respective contentions and, at the request of
the court, oral argument was heard on January 15, 1953. During
the course of the oral argument, counsel for both parties
agreed that there was no genuine issue of fact raised by the
motion, its exhibits and the affidavits attached thereto, and
that the relationship between defendant and M.F. Taylor, and
the relationship between defendant and the various service
station operators was correctly set forth in the exhibits and
affidavits then on file, but the Judge suggested to counsel
that, since the plaintiff in his response had alleged that
there was a factual question as to the relationship of the
parties and the complaint alleged that the gasoline was being
loaded into the tank truck for delivery to Mrs. Joe Kusturin
(erroneously spelled as Kustren in the complaint), he desired
specific proof as to the relationship between Lion and Mrs.
Kusturin. Thereupon, the attorney for Lion asked permission to
furnish a copy of the contract under which Mrs. Kusturin was
operating the filling station and supplemental affidavit or
affidavits, which permission was granted. In accordance with
the suggestion by the court, counsel for Lion furnished a
photostatic copy of the contract entered into between Lion Oil
Refining Company and Mr. Joe Kusturin, the now deceased
husband of Mrs. Joe Kusturin, and a supplemental affidavit of
M.F. Taylor disclosing that said contract was entered into on
May 31, 1939, and that, until his death in 1945, Mr. Kusturin
operated his service station under the provisions of the
contract, and that Mrs. Kusturin, as his surviving widow, and
the Lion Oil Company, defendant, as the successor to Lion ...