Mustang Fuel Corp. v. Youngstown Sheet & Tube Co., 76-1462

CourtUnited States Courts of Appeals. United States Court of Appeals (10th Circuit)
Citation561 F.2d 202
Docket NumberNo. 76-1462,76-1462
PartiesMUSTANG FUEL CORPORATION, a corporation, Appellant, v. YOUNGSTOWN SHEET AND TUBE COMPANY, an Ohio Corporation, Appellee.
Decision Date28 September 1977

Edwin D. Abel of Lampkin, Wolfe, Burger, Abel, McCaffrey & Norman, Oklahoma City, Okl., for appellant.

Gary W. Gardenhire, Oklahoma City, Okl. (Calvin W. Hendrickson, Oklahoma City, Okl., on the brief), Pierce, Couch, Hendrickson & Short, Oklahoma City, Okl., of counsel, for appellee.

Before SETH, BARRETT and DOYLE, Circuit Judges.

BARRETT, Circuit Judge.

This is the third appeal by the same appellant, Mustang Fuel Corporation (Mustang), from the grant of a Summary Judgment on behalf of appellee, Youngstown Sheet and Tube Company (Youngstown). Jurisdiction vests by reason of diversity.

The facts giving rise to the controversy involved here have been fully developed in Mustang Fuel Corporation v. Youngstown Sheet & Tube Company, 516 F.2d 33 (10th Cir. 1975). Briefly, Youngstown manufactured and delivered 37 miles of metal pipe in compliance with the API specifications contained in its contract with Mustang, the purchaser. Mustang laid the pipe to transport natural gas to its customers. Some three years after the pipe was laid, an explosion occurred at Okarche, Oklahoma, resulting in the death of Mrs. Ervin W. Lemke and serious injuries to members of her family. Mustang, while denying liability, settled with the Lemkes in amount of $680,000.00 and it thereafter filed suit seeking recovery from Youngstown on two grounds: first, on the basis of indemnity and, second, for the economic loss incurred in replacing that which Mustang contends to have been defective pipe sold and supplied to it by Youngstown.

Upon the first appeal, this court set aside a summary judgment granted to Youngstown against Mustang (denying Mustang any recovery) for failure of the trial court to follow the mandates of rule 56(c), Fed.Rules Civ.Proc., 28 U.S.C.A., relative to hearing and notice requirements. Mustang Fuel Corporation v. Youngstown Sheet & Tube Company, 480 F.2d 607 (10th Cir. 1973).

Upon the second appeal, this court again set aside a summary judgment granted to Youngstown against Mustang (denying Mustang any recovery) and remanded for further proceedings to determine the applicability of the doctrine of strict liability in tort announced by the Oklahoma Supreme Court in the case of Kirkland v. General Motors Corporation, 521 P.2d 1353 (Okl.1974), which decision was handed down some three months after the trial court granted the second summary judgment. We there specifically rejected Mustang's claim for recovery against Youngstown and in doing so affirmed the trial court insofar as Mustang's basis for recovery was on its contractual claim of breach of implied warranty of fitness of the pipe for its particular use. We rejected the breach of implied warranty claim, holding that Youngstown had complied with its express contract with Mustang in that it manufactured the pipe pursuant to American Petroleum Institute (API) standards and specifications. Mustang Fuel Corporation v. Youngstown Sheet & Tube Company, 516 F.2d 33 (10th Cir. 1975). However, as previously noted, we did set the summary judgment aside and remanded for further proceedings in light of the Kirkland, supra, decision.

The trial court, in the case at bar, again granted summary judgment to Youngstown, based upon a review of the entire record, our opinion reported in 516 F.2d 33, supra, and memorandum briefs of the parties. The Order recites that the court ". . . finds that there is no evidence tending to establish any genuine issue of liability of the defendant, . . . (Youngstown) . . . under the theory of Manufacturers' Products Liability as adopted by the Supreme Court of Oklahoma in its decision, Kirkland v. General Motors Corporation, supra, and that, accordingly, pursuant to the mandate of the United States Court of Appeals for the Tenth Circuit, the Summary Judgment heretofore granted the defendant is reinstated by the Court, Judgment is granted to the defendant under the doctrine of Manufacturers' Products Liability, and Judgment is hereby entered dismissing this action." (R., Vol. I, p. 138.)

A Motion for New Trial was filed by Mustang and overruled. Thereafter, the trial court entered a detailed Memorandum Opinion and Order denying the Motion for New Trial for these reasons: (1) Mustang failed in its burden of proving an unreasonable danger, (2) Mustang voluntarily assumed the risk of a known defect, and (3) an act of Mustang caused the injury complained of.

The sole issue on appeal is whether, as Mustang contends, there is a genuine issue as to any material facts from which reasonable men could find Youngstown liable to Mustang on the basis of the theory of "Manufacturers' Products Liability."

We undertake this review, guided by the rule that a motion for summary judgment should be granted only when the moving party has established the absence of any genuine issue as to a material fact. Dzentis v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 494 F.2d 168 (10th Cir. 1974); James v. Atchison, Topeka & Santa Fe Railway Co., 464 F.2d 173 (10th Cir. 1972).

We recognize that great deference is to be accorded the views of a resident federal district judge relative to the interpretation and application of the law of his state in the absence of controlling precedents opined by the highest court of that state. In Re Cox, 543 F.2d 1277 (10th Cir. 1976); Matthews v. IMC Mint Corporation, 542 F.2d 544 (10th Cir. 1976). Where, as here, the state's highest court has opined, the question is then one of law. Our review is then governed by the "clearly erroneous" rule. Reversal is required only if the appellate court's review results in a firm conviction that a mistake has been committed. Fed.Rules Civ.Proc., rule 52, 28 U.S.C.A.; Zenith Radio Corp. v. Hazeltine Research, Inc., 395 U.S. 100, 89 S.Ct. 1562, 23 L.Ed.2d 129 (1969); United States v. United States Gypsum Co., 333 U.S. 364, 68 S.Ct. 525, 92 L.Ed. 746 (1948); Muller v. United States Steel Corporation, 509 F.2d 923 (10th Cir. 1975), cert. denied, 423 U.S. 825, 96 S.Ct. 39, 46 L.Ed.2d 41 (1975).

I.

At the threshold, we observe that the trial court's memorandum opinion recites that this court's 1975 opinion held that Youngstown complied with its contract with Mustang in that it manufactured the pipe to API standards and specifications. Accordingly, the trial court ruled that the proffered depositional testimony of one Dr. Robert Hockman, a metallurgical expert, relative to tests and examinations which he conducted on fractured sections of the pipe, in the nature of "microprobe analysis" which led him to conclude that the pipe was defective when delivered by Youngstown notwithstanding its compliance with the API specifications, was not admissible. The trial court erred in so ruling.

In our 1975 opinion (516 F.2d 33) we upheld the trial court's ruling rejecting the offer of Dr. Hockman's expert testimony because the suit was on the contract and ". . . there being no cogent evidence that API specifications were not met, summary judgment was properly granted against Mustang's theory of breach of express warranty urged upon the Court." 516 F.2d, at 38. We anchored our holding supporting the denial of Dr. Hockman's expert testimony to the proposition that his testimony did not go to any issues raised in the contract proper which would aid Mustang's claim of breach of express warranty. Dr. Hockman's testimony, we noted, involved the results of tests he conducted on sections of the fractured pipe which ". . . were not included in the tests required by the API in determining whether or not the pipe conformed to API standards." 516 F.2d at 38. When this court upheld the trial court's rejection of the proffer of Dr. Hockman's expert testimony aforesaid, we did not indicate, directly or by implication, that his expert testimony was to be rejected upon remand and rehearing insofar as it may be relevant and material in the determination of Youngstown's liability to Mustang under the doctrine of strict liability in tort or, as the Oklahoma Supreme Court referred to it in Kirkland v. General Motors Corporation, supra, "Manufacturers' Products Liability."

The trial court, in the instant proceeding, held that Dr. Hockman's expert testimony relative to defects in the pipe when delivered, in the nature of a concentration of sulphur in the heat-affected zone and an incomplete seam closure, did not present a triable issue of fact, predicated, as we view it, on the following "findings" contained in the court's memorandum opinion: (a) Dr. Hockman agreed that the API specifications did not call for the "microprobe analysis" test which he conducted, (b) Dr. Hockman's testimony established as undisputed fact...

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