Vol 81 No 31 (Nov 20) - Oklahoma Bar Association

Transcription

Volume 81 u No. 31 u November 20, 2010
2650
The Oklahoma Bar Journal
Vol. 81 — No. 31 — 11/20/2010
OFFICERS & BOARD OF GOVERNORS
Allen M. Smallwood, President, Tulsa
Deborah Reheard, President-Elect, Eufaula
Mack K. Martin, Vice President, Oklahoma City
Jon K. Parsley, Immediate Past President, Guymon
Jack L. Brown, Tulsa
Martha Rupp Carter, Tulsa
Charles W. Chesnut, Miami
Glenn A. Devoll, Enid
Steven Dobbs, Oklahoma City
W. Mark Hixson, Yukon
Jerry L. McCombs, Idabel
Lou Ann Moudy, Henryetta
David A. Poarch, Norman
Ryland L. Rivas, Chickasha
Susan S. Shields, Oklahoma City
James T. Stuart, Shawnee
Molly Aspan, Tulsa, Chairperson,
OBA/Young Lawyers Division
BAR Center Staff
John Morris Williams, Executive Director;
Gina L. Hendryx, General Counsel;
Donita Bourns Douglas, Director of Educational
Programs; Carol A. Manning, Director of
Communications; Craig D. Combs, Director of
Administration; Travis Pickens, Ethics Counsel;
Jim Calloway, Director of Management Assistance
Program; Beverly Petry Lewis, Administrator
MCLE Commission; Jane McConnell, Coordinator
Law-related Education; John Burchell, Information
Services Manager; Loraine Dillinder Farabow,
Debbie Maddox, Ted Rossier, Assistant General
Counsels; Katherine Ogden, Staff Attorney,
Tommy Butler, Sharon Orth, Dorothy Walos
and Krystal Willis, Investigators
Manni Arzola, Debbie Brink, Melissa Brown,
Stephanie Burke, Brenda Card, Morgan Estes,
Johnny Marie Floyd, Matt Gayle, Susan Hall,
Brandon Haynie, Suzi Hendrix, Misty Hill,
Debra Jenkins, Amy Kelly, Jeff Kelton,
Durrel Lattimore, Debora Lowry,
Heidi McComb, Renee Montgomery,
Wanda Reece-Murray, Tracy Sanders,
Mark Schneidewent, Robbin Watson,
Laura Willis & Roberta Yarbrough
EDITORIAL BOARD
Editor in Chief, John Morris Williams, News &
Layout Editor, Carol A. Manning, Editor, Melissa
DeLacerda, Stillwater, Associate Editors: P. Scott
Buhlinger, Bartlesville; Dietmar K. Caudle,
Lawton; Sandee Coogan, Norman; Emily Duensing, Tulsa; Thomas E. Kennedy, Enid; Pandee
Ramirez, Okmulgee; James T. Stuart, Shawnee;
Leslie D. Taylor, Oklahoma City; January
Windrix, Poteau
events Calendar
NOVEMBER 2010
25 – 26 OBA Closed – Thanksgiving Day Observed
30
OBA Uniform Laws Committee Meeting; 3:30 p.m.; Oklahoma
Bar Center, Oklahoma City and OSU Tulsa; Contact: Fred Miller
(405) 325-4699
DECEMBER 2010
2
OBA Law-related Education Committee Meeting; 4 p.m.;
Oklahoma Bar Center, Oklahoma City and Tulsa County Bar Center, Tulsa;
Contact: Jack G. Clark (405) 232-4271
7
OBA Appellate Practice Section Meeting; 2:30 p.m.; Oklahoma Bar
Center, Oklahoma City and Tulsa County Bar Center, Tulsa; Contact:
Allison Thompson (405) 840-1661
10
OBA Family Law Section Meeting; 3:30 p.m.; Oklahoma Bar Center,
Oklahoma City and OSU Tulsa; Contact: Kimberly K. Hays (918) 592-2800
15
Oklahoma Council of Administrative Hearing Officials; 12 p.m.;
Contact: Carolyn Guthrie (405) 271-1269 Ext. 56212
16
OBA Access to Justice Committee Meeting; 10 a.m.; Oklahoma
Bar Center, Oklahoma City and Tulsa County Bar Center, Tulsa; Contact:
Kade A. McClure (580) 248-4675
OBA Bench & Bar Committee Meeting; 12 p.m.; Oklahoma
Bar Center, Oklahoma City and OSU Tulsa; Contact: Jack Brown
(918) 581-8211
17
OBA Board of Governors Meeting; 9 a.m.; Oklahoma Bar Center,
Oklahoma City; Contact: John Morris Williams (405) 416-7000
18
OBA Young Lawyers Division Board of Directors Meeting;
10 a.m.; Oklahoma Bar Center, Oklahoma City and Tulsa County Bar
Center, Tulsa; Contact: Molly Aspan (918) 594-0595
20
OBA Alternative Dispute Resolution Section Meeting; 4 p.m.;
Contact: Andrea Braeutigam (405) 640-2819
23 - 24 OBA Closed – Christmas Day Observed
31
OBA Closed – New Year Holiday Observed
For more events go to www.okbar.org/calendar
The Oklahoma Bar Association’s official website:
www.okbar.org
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The Oklahoma Bar Journal (ISSN 0030-1655) is published three times
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opinion expressed herein is that of the author and not necessarily that of the Oklahoma Bar Association, or the Oklahoma Bar
Journal Board of Editors.
Vol. 81 — No. 31 — 11/20/2010
2651
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Vol. 81 — No. 31 — 11/20/2010
Oklahoma Bar Association
table of
contents
November 20, 2010 • Vol. 81 • No. 31
page
2651 Events Calendar
2654 Index to Court Opinions
2656 Supreme Court Opinions
2663 Court of Criminal Appeals Opinions
2668 2011 Committee Sign-up Form
2670 Court of Civil Appeals Opinions
2726 Disposition of Cases Other Than by Publication
Vol. 81 — No. 31 — 11/20/2010
2653
Index To Opinions Of Supreme Court
2010 OK 80 STATE OF OKLAHOMA ex rel. OKLAHOMA BAR ASSOCIATION, Complainant, v. JAMES T. ROBINSON, Respondent. SCBD No. 5690.............................................. 2656
2010 OK 81 IN THE MATTER OF C.D.P.F., an alleged deprived child, JOANNA DANIELS, Appellant, v. STATE OF OKLAHOMA, Appellee. No. 106,193....................................... 2658
Index To Opinions Of Court of Criminal Appeals
2010 OK CR 25 MICHAEL G. BURGESS, Appellant, v. THE STATE OF OKLAHOMA,
Appellee. Case No. F-2009-308......................................................................................................... 2663
Index To Opinions Of Court of Civil Appeals
2010 OK CIV APP 112 BAER, TIMBERLAKE, COULSON & CATES, P.C., Plaintiff/Appellee, vs. RAHMANA WARREN, Defendant/Appellant, HERBERT E. WARREN,
JOHN DOE, JANE DOE, GREGORY JACKSON, SPOUSE, IF ANY, OF GREGORY
JACKSON, RODNEY STEWARD, SPOUSE, IF ANY, OF RODNEY STEWARD, MARISHA A. STEWARD, SPOUSE, IF ANY, OF MARISHA A. STEWARD, NAEEMAH B.
STEWARD, and SPOUSE, IF ANY, OF NAEEMAH B. STEWARD, Defendants. Case
No. 106,212.......................................................................................................................................... 2670
2010 OK CIV APP 113 ANGELA EDWARDS, individually, and on behalf of JOHNNY G.
EDWARDS, an incapacitated person, Plaintiff/Appellee, vs. ARDENT HEALTH SERVICES, L.L.C., a Delaware corporation authorized to conduct business in the State of
Oklahoma; AHS WAGONER HOSPITAL, L.L.C., d/b/a WAGONER COMMUNITY
HOSPITAL; and AHS TULSA REGIONAL MEDICAL CENTER, L.L.C., d/b/a
TULSA REGIONAL MEDICAL CENTER, Defendants, and OKLAHOMA HEALTH
CARE AUTHORITY, Defendant/Appellant. Case No. 106,291.................................................. 2674
2010 OK CIV APP 114 IN THE MATTER OF THE ESTATE OF LOLA LADENE WEBB,
DECEASED. CHARLES L. WATKINS, LINDA K. WATKINS, and LAURIE LADENE
COLEMAN, Petitioners/Appellees/Cross-Appellants, vs. ROBIN JEANNE WEBB,
Personal Representative of the Estate of Lola Ladene Webb, Respondent/Appellant/
Cross-Appellee. No. 106,790............................................................................................................. 2677
2010 OK CIV APP 115 NOEL OSBORN, by and through his Legal Guardians, RICK
OSBORN and TERRY OSBORN, Plaintiffs/Appellees, vs. BROOKDALE SENIOR
LIVING, INC.; BROOKDALE SENIOR LIVING, INC., d/b/a ALTERRA STERLING
HOUSE OF EDMOND; and BILL GODWIN, Defendants/Appellants. Case No.
107,070.................................................................................................................................................. 2680
2010 OK CIV APP 123 FOSSIL CREEK ENERGY CORPORATION, Plaintiff/Interested
Party, vs. COOK’S OILFIELD SERVICES, Defendant/Third-Party Plaintiff/Appellant, vs. ADMIRAL INSURANCE COMPANY, Third-Party Defendant/Appellee.
Case No. 106,895................................................................................................................................ 2686
2010 OK CIV APP 124 HIGHLAND CROSSING, L.P., an Oklahoma limited partnership,
Plaintiff/Appellant, vs. KEN LASTER COMPANY, an Oklahoma corporation, Defendant/Appellee, vs. ROYCE WRIGHT, General Partner of Highland Crossing, L.P.,
Third Party Defendant. Case No. 107,196...................................................................................... 2691
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Vol. 81 — No. 31 — 11/20/2010
2010 OK CIV APP 121 IN RE: PROTEST TO THE CERTIFICATE OF TITLE BRAND
ISSUED TO AAAA WRECKER SERVICE, INC. ON A 2004 TOYOTA DBS, VIN #
5TBDT44154S460009. AAAA WRECKER SERVICE, INC., Appellant, vs. OKLAHOMA TAX COMMISSION, Appellee. Case No. 107,456.......................................................... 2694
2010 OK CIV APP 116 CHRIS COOK, RICHARD BERCHER, TONY NEWSOM AND
DERICK PICKARD, individually, and all other similarly situated police officers,
Plaintiffs/Appellants/Counter-Appellees, vs. City of Edmond, Defendant/Appellee/Counter-Appellant. Case Nos. 107,463; Consol. w/107,469................................................ 2698
2010 OK CIV APP 117 CHOICES INSTITUTE, Plaintiff/Appellant, vs. OKLAHOMA
HEALTH CARE AUTHORITY AND MIKE FOGARTY, IN HIS CAPACITY OF CHIEF
EXECUTIVE OFFICER OF THE OKLAHOMA HEALTH CARE AUTHORITY, Defendant/Appellee. Case No. 107,533.................................................................................................... 2702
2010 OK CIV APP 118 MARILYN SUE GOFF, Plaintiff/Appellant, vs. SALAZAR ROOFING & CONSTRUCTION, INC., an Oklahoma Corporation, and ROBERT MAULPIN, individually, a/k/a ROBERT MAUPIN, Defendants/Appellees, and SALAZAR
ROOFING & CONSTRUCTION USA, INC., an Oklahoma Corporation; and/or a/k/
a and/or d/b/a SALAZAR ROOFING CORPORATION, an Oklahoma Corporation;
and/or a/k/a and/or d/b/a SALAZAR CONTRACTING, INC., an Oklahoma Corporation, Defendants. Case No. 107,722......................................................................................... 2705
2010 OK CIV APP 119 DEBBIE WHEAT, Plaintiff/Appellant, vs. STATE OF OKLAHOMA ex rel. TULSA COUNTY DISTRICT ATTORNEY, Defendant/Appellee.
Case No. 107,728................................................................................................................................ 2709
2010 OK CIV APP 125 SHAWVER & SONS, INC. and COMMERCE & INDUSTRY
INSURANCE, Petitioners, vs. JENIFER WISE, COREY WISE (deceased), TRAVELERS INSURANCE CO., and the WORKERS’ COMPENSATION COURT, Respondents. Case No. 107,968..................................................................................................................... 2712
2010 OK CIV APP 126 CHAPARRAL ENERGY, L.L.C., an Oklahoma Limited Liability
Company, Plaintiff/Appellee/Counter-Appellant, vs. PIONEER EXPLORATION,
LTD., a Foreign Limited Partnership, Defendant/Appellant/Counter-Appellee. Case
No. 108,113.......................................................................................................................................... 2716
2010 OK CIV APP 122 REX EVERETT GILWORTH, SR., Plaintiff/Appellant, vs. STATE
OF OKLAHOMA ex rel., DEPARTMENT OF PUBLIC SAFETY, Defendant/Appellee.
Case No. 107,871................................................................................................................................ 2719
2010 OK CIV APP 120 FIRST UNITED BANK & TRUST CO., a state banking corporation,
Plaintiff/Appellee, vs. GLENN S. PENNY, Defendant/Appellant. Case No. 108,207........... 2720
Vol. 81 — No. 31 — 11/20/2010
2655
Supreme Court Opinions
Manner and Form of Opinions in the Appellate Courts;
See Rule 1.200, Rules — Okla. Sup. Ct. R., 12 O.S. Supp. 1996 (1997 T. 12 Special Supplement)
2010 OK 80
STATE OF OKLAHOMA ex rel.
OKLAHOMA BAR ASSOCIATION,
Complainant, v. JAMES T. ROBINSON,
Respondent.
SCBD No. 5690. November 15, 2010
ORDER APPROVING RESIGNATION
FROM OKLAHOMA BAR ASSOCIATION
PENDING DISCIPLINARY PROCEEDINGS
APPLICATION APPROVED.
RESPONDENT’S NAME STRICKEN
FROM THE ROLL OF ATTORNEYS.
¶1Complainant, Oklahoma Bar Association,
filed its Application for Order Approving Resignation on October 22, 2010, asking this court
to enter an order approving the Resignation
Pending Disciplinary Proceedings of James T.
Robinson, pursuant to Rule 8.2, Rules Governing Disciplinary Proceedings (“RGDP”) 5 O.S.
2001, Ch. 1, App. 1-A. Complainant states Respondent’s Resignation Pending Disciplinary
Proceedings was executed in conformity with
the requirements of Rule 8.1, RGDP.
¶2 Upon consideration of this matter, we
find:
1. Respondent’s name and address, according to records maintained by the Oklahoma
Bar Association, are shown as follows:
James T. Robinson, OBA #13552, 328 Wewoka
Drive, Norman, Oklahoma 73071-7210.
2. Respondent is currently suspended from
the practice of law in Oklahoma as a result of
his failure to pay Oklahoma Bar Association
dues by order of the Supreme Court of Oklahoma, SCBD #5654, and his failure to comply
with mandatory continuing legal education
(MCLE) requirements, per Oklahoma Supreme
Court order, SCBD #5655.
3. Respondent’s affidavit states that (a) it was
rendered freely and voluntarily; (b) he was not
subjected to coercion or duress; (c) he was
aware of the consequences of submitting his
resignation and; (d) he was aware that his resignation is subject to the approval of the
2656
Supreme Court of the State of Oklahoma; however, he intends that it be effective from the
date and time of its execution, and he will conduct his affairs accordingly.
¶3 Respondent further states that he is aware
the following grievances have been investigated by the Office of the General Counsel, Oklahoma Bar Association, and the Professional
Responsibility Tribunal has authorized the filing of formal charges against him with this
court in:
Ayers Grievance: Alleges that on or about
October 6, 2008, Respondent was retained to
prepare and file an application for copyright
and federal trademark registrations. Mr. Ayers
advanced payment of $1,370.00 for attorney
fees and filing fees and despite receipt of said
funds, Respondent ceased communicating with
Mr. Ayers and failed to file either application
on his behalf. Respondent repeatedly failed to
respond to the Office of the General Counsel
during its investigation of this matter.
Crowdis Grievance: Alleges that on or about
January 3, 2006, Mr. Crowdis retained and paid
a flat fee of $2,000.00 to Respondent to probate
the estates of Mr. Crowdis’ parents. Respondent ceased work on the probates and ceased
communicating with the client. Additionally,
Respondent repeatedly failed to respond to the
Office of the General Counsel during its investigation of this matter.
Bond Grievance: Alleges Respondent was
paid a $2,500.00 retainer by Mr. Bond in December 2008 to file a patent application on his
behalf. Mr. Bond further alleges after Respondent cashed his check, he neglected to properly
communicate with his client, failed to file the
patent application, and failed to refund the
unearned fees to the client. Additionally,
Respondent repeatedly failed to respond to the
Office of the General Counsel during its investigation of this matter.
Waterhouse Grievance: Alleges that Respondent received $13,546.45 from Mr. Waterhouse
between May 2005 and January 2007 to handle
three patent applications. Grievance alleges
that Respondent incompetently and negligent-
Vol. 81 — No. 31 — 11/20/2010
ly mishandled these patent applications and
ultimately abandoned their prosecution. Grievance further alleges Respondent ceased communicating with Mr. Waterhouse and failed to
refund all unearned fees and costs which
should have been held in trust. Additionally,
Respondent failed to provide a written response
to the Office of the General Counsel during its
investigation of this matter.
General Counsel Grievance: Alleges that a
disciplinary Order of Exclusion was issued
against Respondent by the United States Patent
and Trademark Office (“USPTO”) on May 26,
2010, In the Matter of James T. Robinson, Proceeding No. D2009-48. Said Order of Exclusion
prohibits Respondent from practicing before
the United States Patent and Trademark Office
as a result of a finding that Respondent issued
a series of insufficient checks to the USPTO, he
failed to make good on those dishonored
checks, that he neglected to respond to several
USPTO notices regarding his abandonment of
clients’ matters, he failed to notify clients of his
abandonment of their applications, and that he
failed to submit an accounting or return patent
application files to a client upon request. Additionally, Respondent failed to provide a written
response to the Office of the General Counsel
during its investigation of this matter.
¶4 Respondent is aware that the allegations
concerning his conduct if proven, as set forth in
the above-referenced grievances, would constitute violations of Rules 1.1, 1.3, 1.4, 1.5, 1.16,
16(d), 8.4(b) and 8.4(a)(b)(d) of the Oklahoma
Rules of Professional Conduct (“ORPC”), 5
O.S. 2001, Ch. 1, App. 3-1 and ORPC, 5 O.S.
2001, Ch. 1, App. 3-A (as amended by the Oklahoma Supreme Court, 2007 OK 22) and Rules
1.3 and 5.2, RGDP, and his oath as an attorney.
¶5 Respondent is aware that the burden of
proof regarding the allegations set forth rests
upon the Oklahoma Bar Association. However,
Respondent waives any and all right to contest
the allegations.
¶6 Respondent is aware that, pursuant to
Rule 8.2, RGDP, either the approval or disapproval of this resignation is within the discretion of the Oklahoma Supreme Court.
¶7 Respondent has familiarized himself with
the provisions of Rule 9.1, RGDP, and he hereby agrees to comply with all provisions of Rule
9.1 within twenty days following the date of
this resignation.
Vol. 81 — No. 31 — 11/20/2010
¶8 Respondent acknowledges and agrees he
may be reinstated to the practice of law only
upon full compliance with the conditions and
procedures prescribed by Rule 11, RGDP, and
he may make no application for reinstatement
prior to the expiration of five years from the
effective date of the Order approving this Resignation Pending Disciplinary Proceedings.
¶9 Respondent acknowledges that, as a result
of his conduct, the Client Security Fund may
receive claims from his former clients.
¶10 Respondent agrees that, should the Oklahoma Bar Association approve and pay such
Clients Security Fund claims, he will reimburse
the fund the principal amounts and the applicable statutory interest prior to the filing of any
application for reinstatement.
¶11 Respondent hereby affirms and avows,
under penalty of perjury, that he is unable to
locate his Oklahoma Bar Association membership card and therefore cannot surrender it
contemporaneously with his resignation pending disciplinary proceedings. In the event
Respondent finds the Oklahoma Bar Association membership card previously issued to
him, he hereby affirms, under penalty of perjury, that he will destroy it.
¶12 Respondent acknowledges and agrees
that he will cooperate with the Office of the
General Counsel in the task of identifying any
active clients’ cases wherein documents and
files need to be returned or forwarded to new
counsel, and in any client case where fees or
refunds are owed by him.
¶13 Respondent acknowledges the Oklahoma Bar Association has incurred costs in the
investigation of the above-stated. Nevertheless, the Oklahoma Bar Association has waived
those costs.
¶14 IT IS THEREFORE ORDERED that Complainant’s application and Respondent’s resignation be approved; that Respondent’s name
be stricken from the Roll of Attorneys and that
he make no application for reinstatement to
membership in the Oklahoma Bar Association
prior to five years from the effective date of this
order; that Respondent comply with Rule 9.1,
Rules Governing Disciplinary Proceedings;
that Respondent reimburse the Client Security
Fund of the Oklahoma Bar Association, including interest at the statutory rate, should it pay
any funds to his former clients for claims made
due to his alleged misconduct; and that inves-
2657
tigative costs incurred by the Oklahoma Bar
Association are waived.
DONE BY ORDER OF THE SUPREME
COURT IN CONFERENCE THIS 15th DAY OF
NOVEMBER, 2010.
/s/ James E. Edmondson
CHIEF JUSTICE
EDMONDSON, C.J., TAYLOR, V.C.J., HARGRAVE, KAUGER, WATT, WINCHESTER,
COLBERT, REIF, JJ. — concur.
2010 OK 81
IN THE MATTER OF C.D.P.F., an alleged
deprived child, JOANNA DANIELS,
Appellant, v. STATE OF OKLAHOMA,
Appellee.
No. 106,193. November 16, 2010
ON CERTIORARI TO THE COURT OF CIVIL
APPEALS, DIVISION IV
¶0 After trial for termination of Mother’s
parental rights, a jury found clear and convincing evidence that the Mother, Joanna Daniels,
failed to correct conditions which led to the
deprived adjudication of C.D.P.F. The trial
court entered judgment consistent with the
jury’s findings and terminated Mother’s parental rights. A divided Division IV of the Court of
Civil Appeals disagreed and reversed the trial
court’s findings.
CERTIORARI PREVIOUSLY GRANTED;
OPINION OF THE COURT OF CIVIL
APPEALS VACATED; JUDGMENT OF THE
DISTRICT COURT AFFIRMED.
Eric R. Jones, ERIC R. JONES LAW OFFICE,
Ardmore, Oklahoma, for Appellant.
Craig Ladd, DISTRICT ATTORNEY, and
Heather J. Russell Cooper, ASSISTANT DISTRICT ATTORNEY, Ardmore, Oklahoma, for
Appellee.
WINCHESTER J.,
¶1 This appeal arises from a jury trial that
culminated in a judgment terminating the
parental rights of Mother, JoAnna Daniels, to
her minor daughter C.D.P.F. On June 11, 2007,
while searching a home for suspected drug
use, DHS and local police found C.D.P.F., a
then nine month old infant, crying in the home.
A female resident informed the DHS worker
that the infant’s mother was not in the home
but had been staying there and had left the
2658
infant there to run an errand. Mother returned
to the house two hours later. A search of the car
Mother was driving, as well as her purse, both
yielded drug substances. Mother was arrested
for felony possession of methamphetamines
and C.D.P.F was taken into DHS custody.1
Mother failed a drug test at this time.
¶2 The proceedings against Mother were initiated by the State on June 18, 2007, with a petition to adjudicate C.D.P.F. as a deprived child.
The petition alleged, inter alia, that Mother
could not properly provide a safe, stable home
because she was homeless; that Mother used
illegal drugs; that Mother left the child with
inappropriate caregivers; and that the parents
engaged in domestic violence in the presence
of the child.2 The trial court found C.D.P.F. to be
deprived and at a disposition hearing on July
26, 2007, the trial court provided Mother with a
list of conditions she had to complete to have
C.D.P.F. returned to her custody. Among the
court-ordered conditions were that Mother
must complete a substance abuse treatment
program, that she must not use drugs and that
she submit to random drug tests at the request
of DHS.3
¶3 During the ensuing months, Mother failed
two additional tests and refused several others.
Mother denied the use of drugs and testified
she believed the results were false positives.
There was conflicting evidence regarding
Mother’s attendance at an out-patient substance abuse program; however, Mother admitted that after testing positive in January 2008, a
program counselor indicated to her that she
needed to seek in-patient therapy. Mother’s
DHS workers also requested Mother attend an
in-patient treatment program. Mother refused,
continuing to deny drug use and indicating
that if she were to attend in-patient treatment
she would lose her rental residence. Mother
claims to have paid for her own hair follicle
drug tests, one of which came back positive
and a subsequent test which was negative.
¶4 On May 15, 2008, the State sought to terminate Mother’s parental rights on the grounds
that Mother had failed to correct the conditions
which led to the adjudication of C.D.P.F. as
deprived, even though Mother had been given
in excess of three (3) months to correct the conditions. The State also urged the termination
was in the child’s best interests. A jury trial was
held and the jury rendered a verdict for termination. On July 24, 2008, the trial court entered
judgment consistent with the jury’s verdict and
Vol. 81 — No. 31 — 11/20/2010
Mother appealed this ruling. A divided Division IV of the Court of Civil Appeals reversed
the finding of the trial court and certiorari was
granted to review their opinion.
STANDARD OF REVIEW
¶5 In parental termination cases, the State
must show by clear and convincing evidence
that the child’s best interest is served by the
termination of parental rights. In the Matter of
C.G., 1981 OK 131, ¶ 17, 637 P.2d 66, 70-71. Our
case law provides that clear and convincing
evidence is the measure or degree of proof
which will produce in the mind of the trier of
fact a firm belief or conviction as to the truth of
the allegation sought to be established. In the
Matter of the Adoption of L.D.S., 2006 OK 80, ¶11,
155 P.3d 1, 4, quoting In re C.G., 1981 OK 131,
¶17 n. 12, 637 P.2d 66, 71 n. 12. This standard of
proof “balances the parents’ fundamental freedom from family disruption with the state’s
duty to protect children within its borders.” In
the Matter of Adoption of L.D.S., 2006 OK 80, ¶11,
155 P.3d 1, 4, quoting In re C.G., 1981 OK 131,
¶17, 637 P.2d at 70.
¶6 Likewise, our review on appeal must find
the presence of clear and convincing evidence
to support the trial court’s decision. In the Matter of S.B.C., 2002 OK 83, ¶7, 64 P.3d 1080, 1082.
We must canvass the record to determine
whether the evidence is such that a factfinder
could reasonably form a firm belief or conviction that the grounds for termination were
proven. In the Matter of S.B.C., 2002 OK 83, ¶6,
64 P.3d 1080, 1081. Our appellate review does
not require a re-weighing of the evidence presented at trial.
ANALYSIS
¶7 Mother’s lone argument on appeal is that
the State failed to prove by clear and convincing evidence that termination was in the best
interests of C.D.P.F. Specifically, Mother claims
the State failed to prove that she did not correct
the condition leading to the deprived adjudication, in particular, the claim that she used
drugs.
¶8 We find Mother’s argument unpersuasive.
The jury heard extensive testimony and received
considerable other evidence that would have
allowed them to make an informed determination on the question of whether termination was
in the best interest of the child. The State presented evidence that Mother failed no less than
three drug tests and refused countless other
Vol. 81 — No. 31 — 11/20/2010
drug tests and that, because of this failure,
Mother’s driver’s license had been revoked.
The State further offered evidence that Mother
failed to complete domestic violence counseling
as well as the substance abuse treatment program ordered by the trial court.4 Two DHS
workers provided testimony at trial and, based
on their involvement with Mother, both believed
that termination of Mother’s parental rights was
in the best interest of C.D.P.F. 5
¶9 Despite multiple positive drug tests,
Mother maintains she did not use drugs. She
claims the test results were false positives and
even claimed to have paid for independent
testing which resulted in one positive and one
negative test. Mother argues DHS worked
against her by urging her to do inpatient substance abuse treatment when to do so, she
claims, would have caused her to lose her
rental residence. A DHS worker testified that
after one of Mother’s positive test results
Mother told her that she had accidentally
ingested “blue pills” that she later learned contained methamphetamines. After another positive test result, a different DHS worker testified
that Mother informed her that she must have
tested positive as a result of licking her fingers
after cleaning out a car where her relatives had
used meth.
¶10 In Mother’s favor, a surprise visit by the
CASA worker indicated no evidence of drug
use visible in the home. Mother also testified
that she has two grown children who are professionally employed and an older teenage son
who was a 4.0 student.
¶11 Although the State presented clear and
convincing evidence of a drug problem, Mother
refuses to admit any problem and refuses to
seek the court-ordered help necessary to avoid
the termination of her parental rights to C.D.P.F.
The State met its burden at trial and a jury, after
evaluating Mother’s credibility first-hand, recommended the termination of Mother’s parental rights. The trial court did not err in issuing
the order of termination.
CONCLUSION
¶12 After canvassing the record in the instant
matter to determine if the trial court’s findings
rest on the clear and convincing standard, we
find sufficient evidence exists to terminate
Mother’s parental rights. The verdict of the
jury and the trial court’s subsequent judgment
are affirmed.
2659
OPINION OF THE COURT OF CIVIL
APPEALS VACATED AND THE RULING
OF THE TRIAL COURT AFFIRMED.
CONCUR: EDMONDSON, C.J., TAYLOR,
V.C.J., HARGRAVE, KAUGER, WATT, WINCHESTER, REIF, JJ.
Biscone & Biscone
Attorneys
DISSENTS: COLBERT, J.
1. Evidence in the record indicates that this charge was later dismissed but the grounds for its dismissal are not recorded.
2. Father voluntarily terminated his parental rights.
3. The Order of Disposition, filed August 21, 2007, provided that
Mother must:
Provide a home that is safe, stable, and hygienic, with furniture
and appliances suitable to meet the basic needs of the child;
a. Demonstrate the ability to provide a stable family environment that combines the appropriate support, nutrition, education, protection and nurturing;
b. The mother shall complete a substance abuse treatment program approved by said Department and not use unlawfully or
abuse controlled dangerous substances, nor associate with
those that do, and submit to random drug tests at the request
of the Department of Human Services;
c. Complete a course of counseling approved by said Department designed to teach the impact of domestic violence on
children, eliminate domestic violence from relationships and
demonstrate they can put into practice that which is learned.
4. Mother testified that she completed a six-week outpatient substance abuse course but offered no evidence of completion. In fact,
Mother admitted that due to her failed drug test in January 2008, the
facility called to inform her that she would need to complete a higher
level of care. Mother refused.
5. A CASA worker also gave a guarded opinion that termination
was in the best interests of the child.
We will gladly accept your referrals
for oklahoma workers’ compensation
and social security disability cases.
Association/ referral fees paid
1-800-426-4563
405-232-6490
105 N. Hudson, Suite 100
Hightower Building
Oklahoma City, OK 73102
MEDIATION
WORKS!
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Vol. 81 — No. 31 — 11/20/2010
2010 EMPLOYMENT LAW SEMINAR
presented by the Oklahoma Employment Lawyers Association
Date:
Location:
CLE CREDIT:
Tuition:
Friday, December 3, 2010 at 9 a.m. to 5 p.m.
Crabtown in Bricktown, Okla. City
CLE credit proposed for 8.0 hours including 1.8 hours of ethics.
$200 for registration by Nov 29, 2010. (Buffet lunch included)
$225 for registration Nov. 30 and after.
$ 25 discount for OELA members & government/public service attys
CANCELLATION There will be a $25 charge for cancellations prior to Nov. 30. No
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refunds after Nov. 30, however written materials will be provided.
Materials may be purchased for $75
REGISTRATION: Make checks payable to: OELA
Send registrations to OELA, 325 Dean A. McGee, Okla. City, OK 73102
Fax No: (405) 235-6111
For more information contact Lori Lanon at 235-6100
9:00-10:30 Ethics for the employment lawyer
Ethical issues for the corporate counsel:
Nathan Whatley
Ethical issues for the employee’s counsel:
Mark Hammons
Ethical issues for the government lawyer
David Lee
Ethical issues from a mediator’s perspective
Steve Boaz
Presentation, panel discussion, question and answer session
10:30-10:40 Break
10:40-Noon Gavin W. Manes, Ph.D, President Avansic
Strategies for processing and reviewing emails
Bad corporate decisions on emails
Noon to 1:00 pm
Lunch Buffett (included in seminar cost)
1:00-3:00
Intersecting Leave Rights:
FMLA, ADA, Worker’s Compensation, USERRA and State Law
State Employee Leave Rights
Daniel Gamino
Job Protection Under Worker’s Compensation
Joe Biscone
ADA/FMLA Leave Rights
Stephanie Manning
USERRA: Leave Rights Under The New Law
Amber Hurst
Presentation, panel discussion, question and answer session
3:00-3:10
Break
3:10-4:05
New Developments in Federal Employment Law
Leonard Court
4:05-5:00
New Developments in Oklahoma Employment Law Mark Hammons
Crabtown is located at 303 E. Sheridan. Parking is available at Bricktown/Hampton Inn
Parking, 222 E. Sheridan at a $5 per day (excluding special evidence) parking rate.
Vol. 81 — No. 31 — 11/20/2010
2661
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Vol. 81 — No. 31 — 11/20/2010
Court of Criminal Appeals Opinions
2010 OK CR 25
MICHAEL G. BURGESS, Appellant, v. THE
STATE OF OKLAHOMA, Appellee.
Case No. F-2009-308. November 16, 2010
SUMMARY OPINION
LUMPKIN, JUDGE:
¶1 Appellant, Michael G. Burgess, was tried
by jury and convicted of Engaging in a Pattern
of Criminal Offenses (Count 1) (21 O.S.Supp.
2004, § 425); Sexual Battery (Count 2) (21
O.S.Supp.2002, § 1123); Bribery By Public Official (Counts 6, 26, and 36) (21 O.S.2001, § 382);
Kidnapping (Count 7) (21 O.S.Supp.2004, § 741);
Forcible Oral Sodomy (Counts 8 and 33) (21
O.S.Supp.2006, § 888(B)); and Second Degree
Rape (Counts 9, 27, 29, 32 and 34) (21
O.S.Supp.2002, § 1111) in the District Court of
Major County, Case Number CF-2008-60.1 The
jury recommended as punishment imprisonment for one (1) year and a fine in the amount
of $10,000.00 in Count 1; a fine in the amount of
$5,000.00 in Count 2; imprisonment for three
(3) years in Count 6; imprisonment for five (5)
years in Count 7; imprisonment for ten years in
Count 8; imprisonment for five (5) years in
Count 9; imprisonment for ten years in Count
26; imprisonment for ten years in Count 27;
imprisonment for ten years in Count 29; imprisonment for ten years in Count 32; imprisonment for ten years in Count 33; imprisonment
for ten years in Count 34; and imprisonment
for ten years in Count 36. The trial court sentenced accordingly.2 It is from this judgment
and sentence that Appellant appeals.
¶2 Appellant raises the following propositions of error in this appeal:
I. The Trial Court Abused Its Discretion In
Denying Mr. Burgess’ Motion To Dismiss
Counts 1, 26, 27, 29, 32, 33, And 34 Of The
Amended Information Because The State
Failed To Present Sufficient Evidence At
The Preliminary Hearing To Prove That
Mr. Burgess Committed The Offenses As
Charged In Those Counts.
II. Insufficient Evidence Was Presented To
Support Mr. Burgess’ Convictions.
Vol. 81 — No. 31 — 11/20/2010
III. The Jury Instructions As Given Were Not
Constitutional And Deprived Mr. Burgess
Of His Due Process Rights Under The
Fourteenth Amendment To The United
States Constitution With Respect To All
The Counts For Which He Was Convicted.
IV. In Light Of Unconstitutional Jury Instructions, The Deleterious Effect Of Which
Pervaded And Tainted the Evidence Relating To All Of The Allegations Presented
At Trial, And In Light Of Uncorroborated
And Contradictory Testimony From The
Alleged Victims, A Modification Of Mr.
Burgess’ Clearly Excessive Sentence Is
Warranted.
¶3 After a thorough consideration of these
propositions and the entire record before us on
appeal including the original records, transcripts, and briefs of the parties, we have determined that neither reversal nor modification of
sentence is warranted under the law and the
evidence.
¶4 Appellant was the duly elected Sheriff of
Custer County. Pursuant to his elected position, Appellant was appointed to serve on the
Washita/Custer County Drug Court Team.
Appellant’s office conducted urinalysis testing
of the drug court participants and one of his
deputies was the drug court compliance officer. Appellant actively participated on the
Drug Court Team.
¶5 Appellant befriended drug court participant, J.M. On February 7, 2006, Appellant
repeatedly telephoned J.M. and requested that
she travel from Custer County to his hotel
room in Oklahoma City. J.M. acquiesced when
Appellant demanded that she meet him or he
would vote for her termination from drug
court. When she arrived at the hotel, Appellant
provided J.M. with alcohol, engaged in sexual
intercourse with her, and performed oral sodomy on her person. Thereafter, Appellant
engaged in sexual intercourse with J.M. at her
home, at the home of a friend of the Appellant’s, at a motel, and at Appellant’s home
while his wife was on vacation. At Appellant’s
home, Appellant gave J.M. alcohol, engaged in
several instances of intercourse, and performed
oral sodomy upon J.M. Appellant and J.M.
2663
travelled to Oklahoma City for Drug Court
Day at the State Capitol. Appellant repeatedly
demanded and engaged in instances of sexual
intercourse with J.M. in his hotel room.
proving their sexual relationship. Appellant
offered to help C.T.’s brother get out of prison
if she would obtain the evidence from J.M. and
bring it to him.
¶6 During this timeframe, Appellant intervened in J.M.’s urinalysis testing at the Custer
County Jail. Appellant instructed his employees to permit J.M. to test in the courthouse
bathroom which was nicer than the jail restroom. On at least two separate occasions,
Appellant intervened and stopped the jail
employees from reporting J.M. for a positive
test, took J.M. for a mouth swab test, and had
the jail employees discard the positive urinalysis test.
¶10 The investigation into the circumstances
further revealed that in the fall of 2005, Appellant had groped the buttocks and chest of a
female deputy against her will while she was on
duty inside the county courthouse. She left her
employment with the county soon thereafter.
¶7 On January 3, 2007, Appellant assisted the
drug court compliance officer with an investigation into drug court participant, B.B. Appellant discovered that B.B. was in violation of the
Drug Court’s rules. He contacted the Drug
Court Judge and pursuant to her order took
B.B. into custody. The compliance officer assisted and investigated other drug court participants while Appellant drove B.B. to the jail.
Through repeated comments on her future,
Appellant painted the grim picture of jail, termination from Drug Court, and imprisonment
for B.B. Appellant told B.B. that he could save
her from prison and make her stay in the jail
more comfortable. He pulled off the road near
two barns and told B.B. that he would help her
if she would help him. Appellant directed B.B.
to perform oral sodomy on his person and
engaged in sexual intercourse with B.B. The
records within the sheriff’s department reflected that it took Appellant approximately 44
minutes to transport B.B. the 5 mile distance
from her home to the jail.
¶8 In May, 2007, J.M. informed Appellant
that she could not do it anymore. Appellant
informed her: “Well, you know what that
means.” (Tr. V, 1210, 1453-54). Subsequently,
J.M. tested positive on her urinalysis test at the
Custer County Jail. She tried to get Appellant
to intervene both before and after the test,
however, he ignored her requests. J.M. was
placed in the Custer County Jail and sanctioned to one year inpatient treatment by the
Drug Court. As she left the courtroom, she
screamed: “I’ve effed [sic] the sheriff all this
time, you can’t do this to me.” (Tr. V, 1211,
1490-92).
¶9 J.M.’s cousin, C.T., contacted Appellant
and informed him that J.M. had DNA evidence
2664
¶11 Appellant testified in his own defense at
trial. He denied the incidents with B.B. and the
female deputy. He flatly admitted a sexual relationship with J.M. but denied that there was
anything unlawful about it. Under cross examination, Appellant was forced to admit that the
Drug Court had control or authority over the
lives of its participants.
¶12 In Propositions I and II, Appellant seeks
to attack the special provisions of 21
O.S.Supp.2002, §§ 1111 and 888(B)(4) that make
it a crime for certain government actors to
engage in sex acts with persons under their
supervision. He argues that he was not an
employee of a state agency, county, or political
subdivision that had supervision or authority
over the victim. OUJI-CR(2d) 4-124, 4-128
(Supp.2007).
¶13 This Court has previously recognized
that “any county, precinct, district, city, town or
school district” constitutes a political subdivision. Davenport v State, 20 Okl.Cr. 253, 256, 202
P. 18, 19 (1921); Smith v. State, 1963 OK CR 48, ¶
11, 381 P.2d 900, 903; Guy v. City of Oklahoma
City, 1988 OK CR 148, ¶ 10, 760 P.2d 1312, 1314.
Both the County Sheriff’s office and the District
Court’s Drug Court Team constitute political
subdivisions of the state.
¶14 The Drug Court programs are statutorily
required to provide “vigilant supervision” of
their participants. 22 O.S.2001, § 471.1(G).
“Whenever possible, a Drug Court team is to be
established to oversee implementation of the
Drug Court program with regard to each Drug
Court participant.” Alexander v. State, 2002 OK
CR 23, ¶ 9, 48 P.3d 110, 113. “[T]he judge overseeing a defendant’s Drug Court program is
part of that Drug Court team.” Id., 2002 OK CR
23, ¶ 10, 48 P.3d at 113. At a minimum the team
should consist of the assigned judge, a district
attorney, and a defense attorney. 22 O.S.2001,
§ 471.1(D). The Drug Court Team can designate
other members to assist. Id. By statute, the Sheriff of the county is required to participate in the
Vol. 81 — No. 31 — 11/20/2010
initial review of an offender to determine their
eligibility for the program if they are held in the
county jail. 22 O.S.2001, § 471.2(A). “The Drug
Court Supervising Staff create the treatment
plan for the participants and monitor their
progress. 22 O.S.2001, § 471.4.
¶15 The Legislature has defined the term
“employee” as any person who is authorized to
act in behalf of a political subdivision or the state
with or without being compensated. 51 O.S.
Supp.2010, § 152(7). This includes all elected or
appointed officers, members of governing bodies and other persons designated to act for an
agency or political subdivision. Id.; Instruction
No. 3-16, OUJI-CR(2d) (Supp.2009).
¶16 As to Proposition I, Appellant did not
file a formal motion to quash before the district court arraignment thus he has waived
appellate review of the alleged error for all but
plain error. Primeaux v. State, 2004 OK CR 16,
¶ 18, 88 P.3d 893, 900; Simpson v. State, 1994
OK CR 40, ¶ 2, 876 P.2d 690, 693. At preliminary hearing, the State showed that the offenses set forth in Counts 1, 26, 27, 29, 32, 33, and
34 had been committed and that there was
probable cause that Appellant committed each
offense. Primeaux, 2004 OK CR 16, ¶ 20, 88
P.3d at 900; citing 22 O.S.Supp.2003, § 258;
McCracken v. State, 1994 OK CR 68, ¶ 8, 887
P.2d 323, 327. Probable cause existed that the
victim was under the legal custody or supervision of a political subdivision of the state
and that Appellant was an employee of the
political subdivision that exercised authority
over her. 21 O.S.Supp.2002, § 1111(A)(7). Plain
error did not occur.
¶17 It must be noted that the Oklahoma Legislature has determined that those citizens who
have been entrusted to the custody, supervision or authority of individuals serving in the
capacity of officers, employees, or contractors
with the state or its political subdivisions are
due special protection during the time of custody or supervision. It is readily apparent that
Appellant, as the elected Sheriff of Custer
County, and statutorily designated member of
the Drug Court team, is a person included
within the parameters of the penal statutes in
which the Legislature sought to include as
owing special trust and confidence to those
citizens ordered into their custody or control.
Appellant violated that trust, and the provisions of the penal statutes, drafted to protect
those committed citizens. The provisions of
both 21 O.S.Supp.2002, §§ 1111 and 888(B)(4)
Vol. 81 — No. 31 — 11/20/2010
prohibit a county employee from engaging in
sex acts with an individual under the county’s
supervision. Appellant as County Sheriff and
designated Drug Court Member is included
within both statutes as an individual for whom
it is unlawful to engage in sex acts with persons under their supervision
¶18 As to Proposition II, after reviewing the
evidence in the light most favorable to the
prosecution, any rational trier of fact could
have found that the victims were under the
legal custody or supervision of a political subdivision of the state and that Appellant was an
employee of the political subdivision that exercised authority over the victims beyond a reasonable doubt. Easlick v. State, 2004 OK CR 21,
¶ 15, 90 P.3d 556, 559; Spuehler v. State, 1985 OK
CR 132, ¶ 7, 709 P.2d 202, 203-04.
¶19 Within Proposition II, Appellant also
challenges the sufficiency of the evidence as to
those offenses concerning victim, B.B. We find
that the testimony of prosecuting witness B.B.
did not appear incredible or so unsubstantial
as to make it unworthy of belief. Ray v. State,
1988 OK CR 199, ¶ 8, 762 P.2d 274, 277; Gilmore
v. State, 1993 OK CR 27, ¶ 12, 855 P.2d 143, 145.
The jury rationally concluded that the prosecuting witness was in Appellant’s vehicle a
sufficient period of time for the offenses to
have occurred. Plantz v. State, 1994 OK CR 33,
¶ 43, 876 P.2d 268, 281. Viewing the evidence in
the case in the light most favorable to the State,
we find it was sufficient to prove beyond a
reasonable doubt that Appellant was guilty of
the offenses concerning B.B. Spuehler, 1985 OK
CR 132, ¶ 7, 709 P.2d at 203-04.
¶20 As to Proposition III, Appellant properly
preserved appellate review of his claim that the
jury instructions inaccurately stated the law by
raising a timely objection at trial. Simpson, 1994
OK CR 40, ¶ 2, 876 P.2d at 693. We find that the
trial court did not abuse its discretion as the
jury instructions accurately stated the applicable law. Cipriano v. State, 2001 OK CR 25, ¶ 14,
32 P.3d 869, 873; Patton v. State, 1998 OK CR 66,
¶ 49, 973 P.2d 270, 288.
¶21 Appellant further claims that the jury
instructions removed the State’s burden to
prove all of the essential elements of the offenses. Appellant did not raise this challenge before
the district court, thus he has waived appellate
review of the challenge for all but plain error.
Simpson, 1994 OK CR 40, ¶ 2, 876 P.2d at 693.
Plain error did not occur as the instructions did
2665
not relieve the State of its burden of persuasion
beyond a reasonable doubt of every essential
element of a crime. Birdine v. State, 2004 OK CR
7, ¶ 3, 85 P.3d 284, 285; Francis v. Franklin, 471
U.S. 307, 313, 105 S.Ct. 1965, 1970, 85 L.Ed.2d
344 (1985); Sandstrom v. Montana, 442 U.S. 510,
99 S.Ct. 2450, 61 L.Ed.2d 39 (1979). Regardless,
any error in the instructions was harmless
beyond a reasonable doubt based upon the
overwhelming evidence of Appellant’s guilt.
Birdine, 2004 OK CR 7, ¶ 6, 85 P.3d at 286.
¶22 As to Proposition IV, we find Appellant’s
sentences are within the applicable statutory
ranges and when considered under all the facts
and circumstances of the case, are not so excessive as to shock the conscience of the Court. Rea
v. State, 2001 OK CR 28, ¶ 5, 34 P.3d 148, 149;
Freeman v. State, 1994 OK CR 37, ¶ 38, 876 P.2d
283, 291. We further find Appellant was not
denied a fair trial by cumulative error. Ashinsky
v. State, 1989 OK CR 59, ¶ 31, 780 P.2d 201, 209.
¶23 Accordingly, this appeal is denied.
APPEARANCES ON APPEAL
Alecia Felton George, George Law Office, P.O.
Box 21907, Oklahoma City, OK 73156, Counsel
for Appellant
W.A. Drew Edmondson, Attorney General of
Oklahoma, William R. Holmes, Assistant Attorney General, 313 N.E. 21st St., Oklahoma City,
OK 73105, Counsel for the State
OPINION BY: LUMPKIN, J.
C. JOHNSON, P.J.: CONCUR
A. JOHNSON, V.P.J.: CONCUR
LEWIS, J.: CONCUR IN RESULT
SMITH, J.: CONCUR
1. The jury acquitted Appellant on Counts 3, 4, 5, 10, 11, 12, 13, 14,
15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 28, 30, 31, and 35 of the Amended
Information. The charges were originally filed in Custer County, however, after preliminary hearing bindover, and prior to trial, a change of
venue was granted, and the case was transferred to Major County.
2. Appellant will be required to serve 85% of his terms of imprisonment for forcible sodomy. 21 O.S.Supp.2002, 13.1(15). The trial court
ordered each of Appellant’s sentences to run consecutive to one
another except that the court ordered Count 9 to run concurrent with
Count 8, and Count 33 to run concurrent with Count 32.
DECISION
¶24 The judgment and sentence are hereby
AFFIRMED. Pursuant to Rule 3.15, Rules of the
Oklahoma Court of Criminal Appeals, Title 22, Ch. 18,
App. (2010), the MANDATE is ORDERED issued
upon the delivery and filing of this decision.
AN APPEAL FROM THE DISTRICT COURT
OF MAJOR COUNTY
APPEARANCES AT TRIAL
Steven Huddleston, Timothy R. Henderson,
Huddleston, Pike, Henderson & Parker, P.O.
Box 95146, Oklahoma City, OK 73143, Counsel
for Appellant
James M. Boring, District Attorney, James L.
Swartz, Assistant District Attorney, 319 N.
Main, Guymon, OK 73942, Counsel for the
State
IN HONOR OF THE RETIREMENT OF
OKLAHOMA SUPREME COURT
JUSTICE RUDOLPH HARGRAVE
PLEASE JOIN US FOR A BRIEF CEREMONY
IN THE SUPREME COURT COURTROOM
FOLLOWED BY A RECEPTION
IN THE GRAND HALLWAY
OF THE SUPREME COURT.
MONDAY • DEC. 13, 2010
2 – 4 p.m.
2666
Vol. 81 — No. 31 — 11/20/2010
You are not alone.
Men Helping Men
Women Helping Women
December 9
Time - 5:30-7 p.m.
Location
December 2
Time - 5:30-7 p.m.
Location
The Oil Center – West Building
The Oil Center – West Building
1st Floor Conference Room
2601 NW Expressway
10th Floor
2601 NW Expressway, Suite 1000W
* Food and drink will be provided!
* Meetings are free and open to male OBA members.
* Reservations are preferred. (We want to have enough
space and food for all.)
* Food and drink will be provided!
* Meetings are free and open to female OBA members.
* Reservations are preferred. (We want to have enough
space and food for all.)
For further information and to reserve your spot,
please e-mail [email protected].
For further information and to reserve your spot,
please e-mail [email protected].
L AW YERS HELPING L AW YERS
A SSISTANCE PROGR AM
Vol. 81 — No. 31 — 11/20/2010
2667
Volunteers Critical to OBA Success
I
understand that life is hectic, and you’re busy making a living at practicing law. I’m a small town
lawyer; I know the challenges of making time for volunteer work. But your association needs you.
It’s important that we have new people every year take an interest in the many areas in which we
try to make a difference. Look at the list below, there’s got to be one that’s worth your time.
Most meetings utilize videoconference, so if you are located near Tulsa, you are spared the travel
time with a connection to the bar center in Oklahoma City. I’ve got some exciting plans for next year
— so I hope I can count on you to get involved.
The easiest way to sign up is online at www.okbar.org. Other sign-up options are to complete this
form and either fax or mail it to the OBA. I need to hear from you by Dec. 1, 2010, so I can begin
committee appointments for 2011.
Deborah Reheard, President-Elect
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2668
Vol. 81 — No. 31 — 11/20/2010
2010 LWO Fall Seminar
Friday, December 10th 8 a.m. – 4 p.m. Oklahoma History Center
Case Law Update
Wayne Lee, Attorney, Fred Boettcher Law Office
Bad Faith and Subrogation
Rex Travis, Attorney
How to Recognize Third Party Cases in Our Comp Cases: Crashworthiness – Serious
Injuries Need Not Occur
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New Law
Honorable William F. Foster, Judge of the Workers’ Compensation Court; Tim Cooley, Attorney, Law Firm Looney,
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Major Cause – How it Was and How it is
William Gillock, M.D., Hugh McClure, D.C. and LeRoy E. Young, D.O.
Disqualification – The Bulwark of Impartiality, a Check List of Ethical Considerations
Honorable John F. Reif, Justice of Oklahoma State Supreme Court
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LWO Members $155 Non-Members $175 Legal Staff $100
6.5 CLE Credits (pending)
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Pursuant to Court Order SCBD No. 3159, the Board of Bar Examiners
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Mail to: Oklahoma Board of Bar Examiners, P.O. Box 53036, Oklahoma City, OK 73152.
Vol. 81 — No. 31 — 11/20/2010
2669
Court of Civil Appeals Opinions
Manner and Form of Opinions in the Appellate Courts;
See Rule 1.200, Rules — Okla. Sup. Ct. R., 12 O.S. Supp. 1996 (1997 T. 12 Special Supplement)
2010 OK CIV APP 112
BAER, TIMBERLAKE, COULSON &
CATES, P.C., Plaintiff/Appellee, vs.
RAHMANA WARREN, Defendant/
Appellant, HERBERT E. WARREN, JOHN
DOE, JANE DOE, GREGORY JACKSON,
SPOUSE, IF ANY, OF GREGORY
JACKSON, RODNEY STEWARD, SPOUSE,
IF ANY, OF RODNEY STEWARD,
MARISHA A. STEWARD, SPOUSE, IF ANY,
OF MARISHA A. STEWARD, NAEEMAH B.
STEWARD, and SPOUSE, IF ANY, OF
NAEEMAH B. STEWARD, Defendants.
Case No. 106,212. August 13, 2010
APPEAL FROM THE DISTRICT COURT OF
OKLAHOMA COUNTY, OKLAHOMA
HONORABLE BRYAN C. DIXON,
TRIAL JUDGE
AFFIRMED
R. Greg Andrews, ANDREWS & ECKSTEIN,
Norman, Oklahoma, for Plaintiff/Appellee,
Cynthia Rowe D’Antonio, THE LAW OFFICES
OF SMITH & D’ANTONIO, Oklahoma City,
Oklahoma, for Defendant/Appellant.
Wm. C. Hetherington, Jr., Judge:
¶1 Rahmana Warren appeals a judgment in
favor of attorneys Baer, Timberlake, Coulson &
Cates, P.C., arguing Baer was not a holder of
note and should not be allowed to recover
when a mistake in a payoff amount used in
closing documents was caused by its own calculation error. The judgment of the trial court is
supported by competent evidence and is not
affected by an abuse of discretion or error of
law. Consequently, the trial court’s judgment is
AFFIRMED.
STANDARD OF REVIEW
¶2 “Issues of law are reviewable by a de novo
standard. An appellate court claims for itself
plenary, independent and non-deferential
authority to re-examine a trial court’s legal
rulings.” Brown v. Nicholson, 1997 OK 32, n. 1,
935 P.2d 319, 321. “[A]n adjudication of a fact
2670
by a lower tribunal is reviewed by different
standards according to the type of controversy
and type of adjudication made.” Christian v.
Gray, 2003 OK 10, ¶ 41, 65 P.3d 591, 608. A
clear abuse of discretion standard includes
appellate review of both fact and law issues.
Id., ¶ 43, p. 608. An abuse of discretion occurs
when a court bases its decision on an erroneous conclusion of law or where there is no
rational basis in evidence for the ruling. Fent v.
Oklahoma Natural Gas Co., 2001 OK 35, ¶12, 27
P.3d 477, 481. “When, as here, the case is tried
to the court, its determination of facts are
accorded the same force as those made by a
well-instructed jury. If any competent evidence supports the trial court’s findings of
fact, the same will be affirmed.” K & H Well
Service, Inc. v. Tcina, Inc., 2002 OK 62, ¶9, 51
P.3d 1219, 1223 (footnote omitted). Unless the
record clearly shows an abuse of discretion by
the trial court, its decision will not be disturbed. Id. ¶9, p. 1223.
FACTS
¶3 Warren executed a promissory note for
the principle amount of $180,500 and a mortgage on July 25, 2005.1 As part of the same
transaction, she and Herbert Warren, her husband, signed a mortgage in favor of Argent
Mortgage Company, LLC.
¶4 U.S. Bank National Association, (U.S.
Bank) filed suit on July 25, 2006, claiming
Warren’s payments had fallen into arrears and
her note was in default. U.S. Bank sought foreclosure of the mortgage, a judgment in rem, and
an in personam judgment against Warren.2 Baer,
a law firm with a real estate practice which
represents lenders in the mortgage industry,
initially acted as counsel for U.S. Bank.3
¶5 Meanwhile, Warren found a buyer for the
property. Between August 30, 2006 and October 31, 2006, she obtained three loan pay-off
quotes from Baer, the last of which contained a
column of numbers which were incorrectly
added. The payoff quote advised, “Please note
that the costs listed as ‘estimated costs’ are an
estimate only of the costs which will accrue up
and until the expiration of this quote,” the
Vol. 81 — No. 31 — 11/20/2010
“payoff figure is valid only until November 2,
2006,” and that “[a]ll figures are subject to our
client’s verification after receipt.”
as Attorney in Fact for U.S. Bank National Association, as Trustee,” which was recorded on
January 30, 2007, at the request of ASC.
¶6 As a result of the incorrect addition and
apparently, second error, when the property
was sold at a November 1, 2006 closing, an
incorrect figure was used for the loan pay-off.
The sum used in closing documents and sent
as the payment from closing to Baer was
$191,697.43, i.e., $6.00 more than the pay-off
quote total. The source for the $6.00 discrepancy is not clear from the record. A November
1, 2006 check for the new incorrect amount was
sent to Baer by the title company handling the
closing. Baer sent one of its own checks the
next day, November 2, 2006, for this new incorrect amount ($191,697.43) to its client, Wells
Fargo Home Mortgage d/b/a America’s Servicing Company, (ASC) the company servicing
U.S. Bank’s loan.
¶10 On March 30, 2007, Warren and her husband filed a first amended answer to the first
amended petition in U.S. Bank’s lawsuit, raising affirmative defenses including that U.S.
Bank did not demonstrate it was a real party in
interest; an accord and satisfaction had occurred
when $191,697.43 was delivered on November
1, 2006; it had accepted the payment and was
estopped from claiming an additional amount;
an additional payment would be illegal as
unconscionable and unreasonable; payment
had been made based upon U.S. Bank’s
demand; the debt was released as evidenced
by the letter advising of the mortgage release;
and the right to additional monies was waived
by the acceptance of the monies tendered.
¶7 Warren moved to dismiss U.S. Bank’s
lawsuit on November 29, 2006, arguing acceptance of the $191,691.434 was an accord and
satisfaction of her debt.5 U.S. Bank responded
on December 21, 2006, arguing, in part, there
was not a cancellation or discharge of the
amount due under the note or an accord and
satisfaction because there had been a mistake
or unintentional cancellation. It argued its
agent, Baer, did not intend to accept any
amount less than full payment on the note.
The trial court later denied Warren’s motion
to dismiss.
¶8 In the meantime, Baer’s November 2, 2006
check was returned to it as insufficient to pay
the loan amount. Baer issued a new check,
dated December 14, 2006, for $201,691.43, the
correct amount for payoff as of the November
closing. In a December 27, 2006 facsimile, ASC
advised Baer the pay-off was $9,190.43 short as
of December 28, 2006, because $2,911.00 had
been paid on November 14, 2006 for insurance,
$2,402.20 had been paid on December 14, 2006
for taxes, and ASC wanted to recoup attorney
fees and costs billed by Baer. The notice also
advised the shortage was continuing to accrue
at $42.10 per day. Baer issued a check dated
December 27, 2006 for the $9,190.43 shortage.
¶9 In a letter dated December 29, 2006, ASC
congratulated Warren and informed her it “had
processed funds to pay your loan in full.” Warren received a January 23, 2007 Release of Mortgage from “Wells Fargo Bank, N.A. as successor
by merger to Wells Fargo Home Mortgage, Inc.
Vol. 81 — No. 31 — 11/20/2010
¶11 On August 10, 2007, U.S. Bank moved to
substitute Baer6 as plaintiff, advised Baer “has
been subrogated to the rights of U.S. Bank
under the promissory note,” and asked “that
the caption of this matter be modified” to
reflect Baer as the sole plaintiff. The trial court
granted the motion to substitute on August
22, 2007.
¶12 On November 26, 2007, Baer filed a
motion for summary judgment, claiming there
was no substantial controversy as to any material facts, Warren owed a balance on her note,
and it was entitled to judgment as a matter of
law.7 Warren responded, and then amended
her response to include her own motion for
summary judgment, claiming, among other
things, that a novation occurred and she was
not liable for any balance on the note due to
Baer’s mistakes and lack of care.8
¶13 The case proceeded to a non-jury trial.
Baer contended its cause of action was for
breach of contract due to a failure by Warren to
pay the full amount due on the note. It argued
it was a holder of the note, any cancellation or
discharge was “inoperative due to being an
unintentional mistake made in the calculation
of the payoff,” and such an unintentional act
did not amount to an accord and satisfaction.
¶14 Baer’s president, Donald James Timberlake, Jr., testified his firm never intended to
accept payment of anything less than the full
amount due on the note, Baer had paid the
shortage to facilitate a release of the mortgage
for the benefit of the new purchaser of the
property, and Warren had not paid in full her
2671
note or provided any consideration to Baer for
accepting less than the amount actually owed
under the note. He also testified the note,
which had been indorsed in blank, was a bearer instrument and did not pass via assignment.
He testified the original suit was for a money
judgment based upon the note default which
was a breach of contract. Once a money judgment was obtained, the initial plan had been to
proceed to a foreclosure of the property securing the note.
¶15 Warren testified to receiving the payoff
quote and relying on it to close the sale to a
third-party. She did not dispute an error in
calculation had occurred. She received notice
of underpayment from Baer approximately
three weeks after the closing. Warren testified
she has not received back the original note,
but upon receiving the December 29, 2006
letter from ASC and the release of mortgage,
she believed the note was paid off and both
it and the mortgage had been released and
cancelled.
¶16 After Baer rested its case, Warren moved
for a directed verdict, arguing Baer had not
proven a cause for breach of contract, nothing
in the petition in the case states a claim for
$10,000,9 there was no evidence of an assignment to support subrogation, and “there was
nothing to assign” because “[t]he loan had
been paid” at the time the note was held by
U.S. Bank. Warren also claimed Baer could not
meet the requirements to be a holder in due
course due to its knowledge about the loan’s
default status when suit was filed and its own
involvement in the creation of the $10,000 payment issue. The trial court denied the motion
for directed verdict, the parties were granted
leave to file trial briefs, and the matter was
taken under advisement.
¶17 In its Journal Entry of Judgment, the trial
court found Baer made an unintentional $10,000
mistake when adding up items in a payoff
quote, it did not intend to reduce the amount
owed under the note, Baer was a holder of the
note, Warren knew or should have known the
third payoff total quoted to her was due to a
mistake, she owed $9,994 plus accrued interest
to the date of judgment, and she had not proven her affirmative defenses. The trial court
agreed the additional charges accruing after
the date of closing for items such as taxes and
insurance were caused by “mis-communication and negligence” and found Warren was
not responsible for these charges. The trial
2672
court entered judgment for a total of $11,382.55
for principle and interest with post-judgment
interest,10 in favor of Baer.
ANALYSIS
¶18 Warren appeals, arguing Baer did not
qualify as a holder in due course, the trial court
erred in finding Baer made a simple error
rather than inexcusable neglect for which it
should be accountable, and the trial court erred
in finding she had breached a contract with
Baer. In its answer brief, Baer agrees it is not a
holder in due course11 and claims only to be a
holder of an unsecured note. This was the status as found by the trial court.
¶19 Warren’s reply brief argues Baer should
not be deemed a holder based upon a special
indorsement on the note limiting payment to
Argent Mortgage Company, LLC. The note
contains the special indorsement text “pay to
the order of,” which indicates it may only be
negotiated by the one named, here Argent. 12A
O.S.2001 § 3-205(a). However the note also
bears a subsequent indorsement in blank,
which rendered it payable to bearer and negotiable by transfer of possession alone, 12A O.
S.2001 § 3-205(b), here by U.S. Bank and then
Baer. Indorsements pose no barrier to Baer’s
holder status.
¶20 Warren claims Baer’s errors were “inexcusable negligence,” not simple mistake. She
argues Baer may not be a holder of the note or
recover based upon its own errors, as reflected
by not only the addition miscalculation in the
payoff quote but also by differences between
the quote, the sum used at closing and in Baer’s
original check to ASC, and the need for payment of additional sums due to the shortage in
the first check tendered by Baer. Warren also
contends Baer “should not be allowed to collect its alleged deficiency on the sale of real
property by resorting to the U.C.C.” and the
note should be deemed satisfied as of the property sale because it failed to timely follow statutory requirements to collect a deficiency.
¶21 We address this last contention first. This
case began as an action on a note and to foreclose a mortgage due to Warren’s failure to
timely pay on her note and in accordance with
her mortgage. Warren argues that once litigation began, Baer was required to follow foreclosure statutory procedures and because it did
not timely assert a deficiency following the sale
of the property securing her mortgage according to statutory procedure, it is barred from
Vol. 81 — No. 31 — 11/20/2010
recovery. The words or phrases used by the
Legislature must be understood in the context
of all of a statute, not in an abstract sense, and
understood so as to best harmonize with other
parts. Matter of Estate of Little Bear, 1995 OK 134,
909 P.2d 42.
¶22 In citing to Bank of Oklahoma, N.A. v.
Welco, Inc., 1995 OK CIV APP 43, 898 P.2d 172,
and concentrating her analysis on use of the
word “sale” in that case, Warren fails to give
due consideration to the context for that same
word in § 686, which refers to an “order of
sale” to satisfy a mortgage upon foreclosure.
The “sale” here was a private sale and was not
made pursuant to such an order. There was no
foreclosure in this proceeding. Consequently,
12 O.S.2001 § 686,12 which creates a time limit
for claims for recovery of a post-judgment
deficiency after foreclosure, has no application here.
¶23 There is no dispute as to the mistaken
figure at closing. Warren did not timely deliver
sufficient funds to pay off her note. The payoff
quote warned “[a]ll figures are subject to our
client’s verification after receipt,” and that their
client “reserves the right to adjust the quotation set forth herein.” In bolded type, the payoff quote also warns “[t]hese costs are estimated only as the actual amount cannot be determined as of the date of this letter. . . In the event
that the actual costs exceed the amount of the
estimate, you will be responsible [sic] the
excess amount.”
¶24 The trial court found Warren should
have known the total in the third and last payoff quote was incorrect because she had not
made any additional payments since her
default and since receiving the first and second
quotes, which were both higher. We agree.
Clearly, the mortgage release and the letter
ASC sent to Warren added to the confusion
about her debt on the note. However, no fees,
costs or other items owed were omitted in the
third quote. There is no allegation or proof of
any intentional concealment of the amounts
owed. Nothing prevented anyone from adding
the payoff items up correctly. The evidence
only shows the figures were just totaled up
incorrectly by Baer.
¶25 Cases addressing unintentional or mistaken cancellation of a negotiable instrument
are not on point, but the theories applied provide some guidance in addressing the issues
presented. In Hanna v. Parrish, 1957 OK 277, 317
Vol. 81 — No. 31 — 11/20/2010
P.2d 745, a note was marked “paid” and
returned to the borrower by a lender, and a
mortgage was cancelled. There, the Court
found whether the party claiming the mistake
had met their burden of so proving, thereby
rebutting a presumption of payment created by
the maker’s possession of the note, was a question for the jury.
¶26 The amount Warren paid at closing was
$9,994 less than what was sufficient to pay off
her note. By December of 2006, Baer had paid
ASC this shortage and the charges accruing
after the closing. However, the note was not
cancelled or delivered to Warren, it was transferred to Baer. The addition mistake here is
readily apparent by examining the column of
numbers itself and there is testimony the total
was the result of an error. This presented a
question for the trier of fact, here the trial
court.
¶27 Baer had possession of the bearer note
and, as its holder, was entitled to enforce it.
12A O.S. 2001 § 3-301. No abuse of discretion or
error of law occurred in the trial court finding
Baer’s addition error was an unintentional
mistake, and evidence supports this determination. The judgment is AFFIRMED.
BUETTNER, P.J., and HANSEN, J., concur.
1. The note was secured by a mortgage on property at 810 Northeast 50th Street, Oklahoma City, Oklahoma, described as:
Part of Lot One (1) in Block Six (6), in the resubdivision of Blocks
1, 6 & 7, Block 5, Block 10, Lots 4, 5, 6 & 7 Block 12, ARCADY
STREET and WILLIAMS STREET in THOMPSON’S WOODLAND ADDITION, in Oklahoma County, Oklahoma. as shown
by the recorded plat thereof, more particularly described as follows: BEGINNING at a point on the Southwest line of said Lot 1.
34.50 feet Northwest of the Southwest corner of said Lot, and
THENCE Northwest along the said Southwest line a distance of
185.50 feet to the Southwest corner of said lot; and THENCE
along the Northwest and North lines of said lot to a point on the
North line of said Lot, 36.82 feet West of the Northeast corner of
said lot; and thence in a straight line in a Southwesterly direction
to the point of beginning.
2. A First Amended Petition filed September 26, 2006, named additional defendants who might claim a right “by virtue of a defective sale
proceeding” in a probate proceeding in the administration of “the
Estate of Espinola Elaine Steward, deceased.” The claims against these
defendants and Herbert E. Warren were dismissed without prejudice
on January 7, 2008, leaving Warren as the sole remaining defendant.
3. U.S. Bank is identified in the record as a Trustee under a Trust
Agreement for the Structured Asset Securities Corporation Mortgage
Pass-Through Certificates Series 2005-AR1.
4. This misstates the facts shown in the record, which are that the
payment from closing included an extra $6.00. The trial court’s judgment recognizes this $6.00 discrepancy in its finding Warren still owed
$9,994.00 after the November 2, 2006 closing.
5. According to Warren’s “Summary of Facts Not in Controversy”
in a December 14, 2007 motion to strike or, alternatively, response to a
motion for summary judgment by Baer, Warren received a notice about
five days after the closing from Baer, which was then U.S. Bank’s counsel, informing her Baer had made a mistake in its calculations for
payoff, and the figures used in the HUD 1 Settlement Statement at
closing. In her motion, Warren also states she has no funds at hand
because she paid funds received at closing to her buyer’s contractor for
repairs to the property, and she suggests Baer “go after the title com-
2673
pany for failing to exercise due diligence and meeting the reasonable
standard of care.” However, an affidavit in support of her November
29, 2006 Motion to Dismiss states she “directed” an employee at the
title company “to pay $191,691.43 to satisfy the debt here upon sued.”
6. Docket sheets filed in the record list a motion to allow substitution of counsel filed February 27, 2007, and a substitution of counsel
filed March 8, 2007. Neither document was designated for inclusion in
the appellate record nor do the titles listed on docket sheets suggest
which party’s counsel changed. However, Defendants’ First Amended
Answer to Plaintiff’s First Amended Petition filed March 30, 2007, was
not delivered to Baer but instead was sent to Baer’s appellate counsel,
who also appeared for U.S. Bank on the motion to substitute Baer as
plaintiff and thereafter for Baer as plaintiff in the district court.
7. In its motion, Baer attributes the $10,000 mistake to “failing to
include the categories of fees and costs on the Payoff Quote,” and the
quote “did not contain a list of all amounts due and owing under the
Note and Mortgage.” No evidence was offered to show any amounts
were omitted, only that Baer’s employee made a mistake when adding
the listed amounts.
8. The order overruling the motions for summary judgment was
not designated by the parties for inclusion in the appellate record.
9. During his testimony, Baer’s president, when asked if the petition or amended petition stated a claim for a $10,000 underpayment,
noted that both were filed prior to the creation of the shortage caused
by the insufficient payment out of the closing. He contended the claim
for default on the note was a claim for breach of contract and further
amendment was not necessary while the note remained unpaid.
10. Pursuant to 12 O.S.Supp.2004 § 727.1, the post-judgment interest is equal to the contract rate of the note, 8.55% per annum.
11. At one point in his testimony, Baer’s president responded positively to a question whether his firm was a holder in due course of the
note. The evidence does not support such a status and Baer does not
adopt this contention in this appeal.
12. Section 686 provides, in pertinent part:
The court may, in the order confirming a sale of land under order
of sale on foreclosure or upon execution, award or order the issuance of a writ of assistance by the clerk of the court to the sheriff
of the county where the land is situated, to place the purchaser
in full possession of such land . . . Simultaneously with the making of a motion for an order confirming the sale or in any event
within ninety (90) days after the date of the sale, the party to
whom such residue shall be owing may make a motion in the
action for leave to enter a deficiency judgment.
2010 OK CIV APP 113
ANGELA EDWARDS, individually, and on
behalf of JOHNNY G. EDWARDS, an
incapacitated person, Plaintiff/Appellee, vs.
ARDENT HEALTH SERVICES, L.L.C., a
Delaware corporation authorized to conduct
business in the State of Oklahoma; AHS
WAGONER HOSPITAL, L.L.C., d/b/a
WAGONER COMMUNITY HOSPITAL; and
AHS TULSA REGIONAL MEDICAL
CENTER, L.L.C., d/b/a TULSA REGIONAL
MEDICAL CENTER, Defendants, and
OKLAHOMA HEALTH CARE
AUTHORITY, Defendant/Appellant.
Case No. 106,291. May 7, 2010
TULSA COUNTY, OKLAHOMA
HONORABLE MARY FITZGERALD, JUDGE
REVERSED AND REMANDED
Ashley D. Williams, Lynn Rambo-Jones, Oklahoma City, Oklahoma, for Defendant/Appellant,
2674
Michael N. Brown, ABOWITZ, TIMBERLAKE
& DAHNKE, P.C., Oklahoma City, Oklahoma,
and Ted Sherwood, SHERWOOD LAW FIRM,
Tulsa, Oklahoma, for Plaintiff/Appellee.
BAY MITCHELL, JUDGE:
¶1 This case arises from a medical negligence
suit filed by Plaintiff/Appellee, Angela
Edwards, individually, and on behalf of her
husband, Johnny G. Edwards, an incapacitated
person (Edwards). Ultimately, the underlying
lawsuit was settled and Edwards sought court
approval of the settlement. Defendant/Appellant, Oklahoma Health Care Authority (OHCA),
objected to the settlement on the basis that
Plaintiff’s proposed distribution of settlement
funds reduced the amount of OHCA’s lien for
reimbursement of medical bills paid by Medicaid. Subsequent to hearing, the trial court
entered its Order Approving the Settlement,
Apportionment of Damages and Distribution,
which was filed on July 23, 2008.
¶2 On August 5, 2008, OHCA filed a Motion
for New Hearing, asserting the trial court erred
in reducing OHCA’s lien amount. Plaintiff
responded by asserting its untimeliness.1 Plaintiff additionally argued the underlying merits of
the matter, asserting the correctness of the trial
court’s Order Approving Settlement. The trial
court thereafter denied OHCA’s Motion for
New Hearing without noting any specific basis
for its decision. OHCA appeals from the trial
court’s denial of its Motion for New Hearing.
¶3 First, we note the trial court properly
regarded OHCA’s Motion for New Hearing as
the functional equivalent of a motion for new
trial regardless of its title. See Horizons, Inc. v.
Keo Leasing Co., 1984 OK 24, 681 P.2d 757. We
review a denial of a motion for a new trial for
an abuse of discretion. See Robinson v. Okla.
Nephrology Assocs., Inc., 2007 OK 2, ¶6, 154 P.3d
1250, 1253 (denial of new-trial motion reviewed
“for error of a pure question of law or for an
abuse of discretion which is arbitrary, clearly
against the evidence, and manifestly unreasonable”). Additionally, where a motion for “new
trial is denied, the movant may not, on appeal,
raise allegations of error which were available
to him at the time of the filing of his motion for
new trial, but were not therein asserted.”
Poteete v. MFA Mutual Ins. Co., 1974 OK 110,
¶23, 527 P.2d 18; 12 O.S. §991(b). To the extent
OHCA’s appellate brief contains new arguments on appeal, we will not address them.
Vol. 81 — No. 31 — 11/20/2010
¶4 Plaintiff received medical care and treatment for the injury associated with the underlying lawsuit as a Medicaid recipient. OHCA,
the state agency designated to administer
Oklahoma’s Medicaid program, paid to the
medical providers $381,917.20 of the $432,605.82
it was billed for Plaintiff’s care and treatment.
OHCA was neither a party to the underlying
medical negligence action, nor invited to participate in the settlement negotiations.2 Upon
the settlement of the underlying action for $1.5
million, Plaintiff sought the trial court’s approval of apportionment of damages and payments
in an attempt to distribute funds among Plaintiff’s counsel for attorney fees, an ERISA health
care provider with a medical lien, and OHCA
with its Medicaid lien.
¶5 Although the record reflects OHCA’s lien
amount was $381,917.20 (the amount OHCA
actually paid medical providers on behalf of
Plaintiff), Plaintiff’s “Application for Approval
of Settlement, Order for Apportionment of
Damages and Order Approving Distribution”
proposed the payment of $119,526.353 to OHCA
to fully satisfy OHCA’s lien. Plaintiff arrived at
this proposed number by using a formula
which we understand to be:
$1,173,854.84 (asserted total medical expenses)
÷
$3,000,000 (total value of claim as asserted by
Plaintiff)
=
.3913 or 39.13% (percentage of medical
expense to total asserted claim value)
Plaintiff then contends 60.87% of the $1.5
million settlement (after attorney fees and costs
have been deducted) should go to Plaintiff’s
loss of consortium claims and 39.13% should
be allocated to satisfy the medical liens.
$1,500,000 (settlement amount)
less
$671,072.97 (attorney fees and costs)
=
$828,927.10
$828,927 x 60.87% = $504,568 (allocated for
loss of consortium claims)
$828,927 x 39.13% = $324,359 (allocated for
payment of medical liens)
Of the $324,359 to be allocated for payment of
medical liens, the first $200,000 was allocated
to pay a previously settled ERISA lien (ERISA
initially covered Plaintiff prior to his Medicaid
eligibility4). The remainder of $124,359 was
allocated for the OHCA lien.
Vol. 81 — No. 31 — 11/20/2010
¶6 A hearing was held to obtain court approval of the settlement and allocation. Plaintiff’s
counsel argued that all interested parties should
reduce or compromise their claims or liens.5 Further, Plaintiff contends Arkansas Dep’t of Health &
Human Services v. Ahlborn, 547 U.S. 268 (2006), a
recent U.S. Supreme Court case construing an
Arkansas statute, contravenes 63 O.S. Supp.
2007 §5051.16 , the statutory lien authority relied
upon by OHCA, and mandates the reduction of
OHCA’s lien. Ultimately, the trial court adopted
Plaintiff’s proposed apportionment.
¶7 OHCA contends the ordered reduction of
its lien was contrary to statute and case law
and there was no clear and convincing evidence that might permit a reduction. OHCA
also contends the formula used for reducing its
lien was seriously flawed. OHCA also distinguishes the U.S. Supreme Court Ahlborn case,
arguing it is inapplicable to the facts here.
¶8 OHCA distinguishes Ahlborn on the basis
that the Arkansas statute at issue there failed to
limit the state’s recovery/reimbursement from
a Medicaid recipient’s settlement to payments
for medical care. The Oklahoma statute at issue
here provides OHCA with a lien “to the extent
of the amount so paid . . . up to the amount of
the damages for the total medical expenses . . .
unless a more limited allocation of damages to
medical expenses is shown by clear and convincing evidence.” 63 O.S. Supp. 2007
§5051.1(D)(1)(d). Unlike this Oklahoma statute
that limits the lien recovery to the amount of
damages for medical expenses and permits an
evidentiary showing to justify a more limited
or reduced allocation to OHCA, the Arkansas
statute was broadly written so as to authorize
the satisfaction of the state’s lien from settlement proceeds attributable to damages for
pain and suffering, lost wages, etc., and therefore ran afoul of the federal Medicaid anti-lien
statute. Ahlborn, 547 U.S. at 280.7 In addition to
the statutory language differences, OHCA further noted the circumstances in Ahlborn were
materially different from the circumstances in
this case. In Ahlborn, the parties entered into
the following critical stipulations, which governed the allocation of the Medicaid recipient’s
settlement proceeds: (1) the value of the underlying claim; (2) that the settlement amounted to
only one-sixth of the value of the claim; and (3)
the specific amount representing compensation for medical expenses. Id. at 274. Such
stipulations are absent here.
2675
¶9 While Plaintiff reads the Ahlborn case in
such a way as to wrap all parties in a pro rata
blanket reduction rule, a closer inspection
reveals the Supreme Court in Ahlborn merely
decided that the state’s Medicaid reimbursement extends no further than the portion of the
settlement representing medical expenses (in
that case, the precise amount stipulated by the
parties). In contrast to Ahlborn, the parties here
strenuously contest the value of the claim and the
amount of the settlement that should be attributable
to medical expenses. Further, no party here urges
a construction of Oklahoma law, which would
violate the pronouncement in Ahlborn because
the parties agree the OHCA lien extends no
further than the portion of the recovery representing medical costs.8
tions effectively established the value. It is also
superior to the ERISA lien. From the settlement
proceeds, after payment of Plaintiff’s attorney
fees and costs, OHCA is entitled to payment of
$381,917.20, in full satisfaction of its lien. We
find the reduction of OHCA’s lien is contrary
to Oklahoma law, unsupported by the necessary evidence and an abuse of the trial court’s
discretion. Upon remand, the trial court is
instructed to enter judgment in favor of OHCA
for the full amount of its lien.10
¶10 Because the stipulations present in Ahlborn are absent from the settlement here, a
hearing to satisfy paragraph (D)(1)(d) of §5051.1
was required.9 Although there was a hearing of
sorts, there was no showing “by clear and convincing evidence” to warrant a “more limited
allocation” or reduction of OHCA’s lien.
Because the settlement amount is amply sufficient to pay the Plaintiff’s attorney fee and
satisfy the OHCA’s lien in full, and, because
there was no showing by clear and convincing
evidence that OHCA’s lien should be reduced,
OHCA is entitled to recovery of the full amount
of its lien.
¶14 I would agree with the majority that
notice should be given to all parties regarding
the settlement conference, but I think the distribution of the funds is correct.
¶11 OHCA additionally argues the trial
court’s reduction of its lien is contrary to 63
O.S. Supp. 2008 §5051.1(D) and twenty years of
Oklahoma law including State ex rel. Dep’t of
Human Services v. Allstate Ins. Co., 1987 OK 91,
744 P.2d 186; Young v. Columbia Southwestern
Medical Center, 1998 OK CIV APP 124, 964 P.2d
987. OHCA asserts its statutory entitlement to
the full amount of its lien because the settlement amount of $1.5 million, and particularly
the 39.13% attributed by the trial court to
medical costs, is sufficient to discharge its
$381,917.20 lien in full. We agree. The Oklahoma statute governing OHCA liens for the
recovery of medical expenses expressly provides “damages for medical costs are considered a priority over all other damages and
should be paid by the tortfeasor prior to other
damages being allocated or paid.” 63 O.S.
§5051.1(A)(1). OHCA’s lien is “inferior only to
a lien or claim of the [Plaintiff’s] attorney.” Id.
§(D)(1)(a).
¶12 OHCA’s statutory lien is superior to
Plaintiff’s claim, of which settlement negotia2676
¶13 REVERSED AND REMANDED.
JOPLIN, P.J., concurs.
ROBERT DICK BELL, V.C.J., concurs in part
and dissents in part:
1. On March 24, 2010, this Court entered an Order directing the
parties to show cause as to why this appeal should not be dismissed.
The parties thereafter filed their responses. Upon due consideration,
we find OHCA’s Motion for New Hearing was timely filed in the trial
court and therefore, OHCA retained its right to appeal from the denial
of the motion.
2. OHCA argued as a ground for new trial that it did not receive
sufficient notice of Plaintiff’s Application to Approve Settlement.
OHCA received the Application via facsimile on July 16, 2008 for a
hearing held on July 22, 2008. On appeal, OHCA asserts the “hearing
by ambush” was in violation of procedural due process. Plaintiff
responds by noting OHCA failed to seek a continuance of the hearing
in the trial court. Although OHCA’s brief in support of its Motion for
New Hearing notes counsel for OHCA made an informal attempt to
obtain a continuance, the record is silent as to any formal attempt. “It
is the duty of the party surprised [by new evidence], immediately
upon discovery thereof, to take the proper steps to continue or delay
the trial in order to protect his interests. He may not neglect this duty,
speculate upon the verdict, possibly in the hope of obtaining a favorable decision in spite of such surprise, and then, failing in this, obtain
a new trial on account thereof.” Fairmont Creamery Co. v. Marshall, 1940
OK 377, 105 P.2d 778, 780 (quoting Ryker v. Dickey, 1936 OK 392, 57 P.2d
816). While we note OHCA may have neglected to protect itself by way
of formally seeking a continuance, we nevertheless admonish Plaintiff’s counsel for his failure to timely apprise OHCA prior to settlement
as required by 63 O.S. §5051.1(C), particularly in light of its proposed
allocation, which clearly adversely impacted OHCA’s interest.
3. Although this is the amount stated in Plaintiff’s Application for
Approval of Settlement, Order for Apportionment of Damages and
Order Approving Distribution, the trial court’s Order reflects a slightly
higher amount of $124,359.14 for payment to OHCA in satisfaction of
the lien.
4. The record reflects that the ERISA lien was for medical expenses
in excess of $400,000. This lien amount was compromised to $200,000.
5. Counsel for Plaintiff emphasized that he had reduced his fee
from 50% to 43.33% of the settlement after payment of his expenses
which were taken off the top.
6. §5051.1(A-D) provides in pertinent part as follows:
A.1. The payment of medical expenses by the Oklahoma Health
Care Authority for or on behalf of or the receipt of medical
assistance by a person who has been injured or who has suffered a disease as a result of the negligence or act of another
person creates a debt to the Authority, subject to recovery by
legal action pursuant to this section. Damages for medical
costs are considered a priority over all other damages and
should be paid by the tortfeasor prior to other damages being
allocated or paid.
2. The payment of medical expenses by the Authority for or
on behalf of a person who has been injured or who has suf-
Vol. 81 — No. 31 — 11/20/2010
fered a disease, and either has a claim or may have a claim
against an insurer, to the extent recoverable, creates a debt to
the Authority whether or not such person asserts or maintains
a claim against an insurer.
****
C. The recipient of medical assistance from the Authority for an
injury or disease who asserts a claim or maintains an action against
another on account of the injury or disease, or the recipient’s legal
representative, shall notify the Authority of the claim or action and of
any judgment, settlement or compromise arising from the claim or
action prior to the final judgment, settlement or compromise.
D. If the injured or diseased person asserts or maintains a claim
against another person or tortfeasor on account of the injury or disease,
the Authority:
1. Shall have a lien upon payment of the medical assistance to
the extent of the amount so paid upon that part going or
belonging to the injured or diseased person of any recovery or
sum had or collected or to be collected by the injured or diseased person up to the amount of the damages for the total
medical expenses, or by the heirs, personal representative or
next of kin in case of the death of the person, whether by judgment or by settlement or compromise. The lien authorized by
this subsection shall:
a. be inferior only to a lien or claim of the attorney or attorneys handling the claim on behalf of the injured or diseased person, the heirs or personal representative,
****
and
d. be applied and considered valid as to the entire settlement, after the claim of the attorney or attorneys for fees and costs,
unless a more limited allocation of damages to medical expenses is
shown by clear and convincing evidence; (emphasis added).
7. 42 U.S.C. §1396p(a)(1) prohibits States from imposing liens
“against the property of any individual prior to his death on account
of medical assistance paid . . . on his behalf under the State plan.”
Ahlborn held this federal anti-lien provision prohibits Arkansas from
asserting a lien on the Medicaid recipient’s settlement in an amount in
excess of the medical expense compensation portion of the settlement
(stipulated by the parties at $35,581.47). Ahlborn, 547 U.S. at 292.
8. The Ahlborn Court expressly refrained from deciding whether a
state could adopt special rules or procedures pertaining to allocation
of tort settlement proceeds for the purpose of preventing Medicaid
recipients from seeking to manipulate their damage allocations in
order to limit or prevent states from asserting a claim for reimbursement. Ahlborn, 547 U.S. at n. 18.
9. Although paragraph (D)(1)(d) does not specifically require an
evidentiary hearing, because it does require a showing by clear and
convincing evidence, this implies that such a hearing, or other presentation of, and judicial determination of the evidence, is required for the
judge to order a reduction of the lien.
10. Plaintiff raises a new issue on appeal, questioning the constitutionality of 63 O.S. §§5051.1(A)(1); 5051.1(D)(1) and 5051.1(D)(2), citing
as authority a recent opinion from the U.S. District Court for the Western District of Pennsylvania, Tristani v. Richman, 2009 WL 799747 (2009
W.D., Pa.). Constitutional issues must generally be raised in the trial
court to be reviewable upon appeal. Due process claims, however, are
an exception to this rule. Hoerman v. Western Heights Bd. of Educ., 1995
OK CIV APP 130, 913 P.2d 684, 689, cert. denied, (citation omitted); see
also First Nat’l Bank of Alex v. Southland Prod. Co., 1941 OK 87, ¶67, 112
P.2d 1087, 1098-99 (permitting discretionary review of the constitutionality of a statute when the public interest and welfare require such
consideration for the first time on appeal). Plaintiff does not assert a
due process violation (and notably, the federal Pennsylvania authority
cited by Plaintiff specifically holds the Medicaid recipients there failed
to establish any procedural or substantive due process claims by the
application of Pennsylvania statute authorizing the Pennsylvania
Department of Public Welfare to impose liens and obtain recovery
from the recipients’ settlement proceeds). Considering these authorities, we find Plaintiff’s failure to raise her constitutional issue (limited
to the claim that the Oklahoma statute allegedly runs afoul of the
Supremacy Clause) in the trial court is fatal to consideration of the
issue for the first time on appeal.
2010 OK CIV APP 114
IN THE MATTER OF THE ESTATE OF
LOLA LADENE WEBB, DECEASED.
CHARLES L. WATKINS, LINDA K.
WATKINS, and LAURIE LADENE
Vol. 81 — No. 31 — 11/20/2010
COLEMAN, Petitioners/Appellees/CrossAppellants, vs. ROBIN JEANNE WEBB,
Personal Representative of the Estate of Lola
Ladene Webb, Respondent/Appellant/CrossAppellee.
No. 106,790. September 24, 2010
NOBLE COUNTY, OKLAHOMA
HONORABLE DAN ALLEN, JUDGE
AFFIRMED IN PART, REVERSED IN PART,
AND REMANDED
Bruce A. Spence, Tulsa, Oklahoma, for Appellant.
Kenneth L. Buettner, Presiding Judge:
¶1 Appellant Robin Jeanne Webb, Personal
Representative of the Estate of Lola Ladene
Webb, appeals from the trial court’s order
denying her request for attorney fees. The trial
court found that Appellee Charles L. Watkins’s
Petition for Letters of Administration was not
“totally without merit or frivolous” and therefore declined to award attorney fees to Appellant. This appeal proceeds on Appellant’s brief
only. Appellant’s brief is reasonably supportive
of her claim that the trial court erred in finding
Appellee’s Petition was not totally without
merit and frivolous. As a result, Appellant was
entitled to an award of attorney fees under 12
O.S.2001 §2011. We reverse and remand for
determination of the amount of attorney fees to
be awarded Appellant. Appellee and two heirs
filed a cross-appeal from the final distribution
order. The Oklahoma Supreme Court dismissed
Appellee for lack of standing, and the other
parties failed to file a brief in support of the
cross-appeal. The claims made in the crossappeal are therefore abandoned and we affirm
the final distribution order.
¶2 Lola Ladene Webb (Decedent) died
December 24, 2004. Appellee, a son-in-law of
Decedent, pro se, filed a Petition for Letters of
Administration, Appointment of Personal Representative, [and] Determination of Heirs on
January 13, 2005.1 Appellant, a daughter of
Decedent, filed her Objection to Petition for
Letters of Administration, Objection to Appointment of Personal Representative and Motion to
Dismiss February 4, 2005.2 Linda K. Watkins,
the wife of Appellee and a daughter of Decedent, filed an Answer to Appellant’s Petition
March 7, 2005.3 Another daughter, Laurie Ladene Coleman, filed a similar Answer the same
day. Appellant filed responses asking the court
2677
to dismiss or strike Watkins’s and Coleman’s
Answers.
¶3 Appellant filed her Petition to Admit Will
to Probate, Appointment of Personal Representative, and for Determination of Identity of
Heirs-at-Law, Devisees and Legatees April 1,
2005. Appellant sought to have Decedent’s
June 6, 2003 will admitted to probate and to
have herself named personal representative.
Appellee, Watkins, and Coleman filed an Objection to Appointment of Named Personal Representative April 21, 2005.4
¶4 The record next shows Appellant sought a
contempt citation against Appellee for refusing
to appear for deposition. Appellant later filed a
second motion to compel and application for
contempt based on Appellee’s failure to
respond to discovery requests.
¶5 Appellant sought summary judgment
against Appellee for filing a fraudulent lien
and foreclosure of such lien through probate
proceedings.5 Appellee asserted he filed a
notice of claim, not a lien, but he conceded that
he had been paid $600 of the amount of his
claim. Appellee contended Decedent’s estate
still owed him the $219 balance of his claim.6
¶6 Appellant filed a motion for status conference April 11, 2006. The trial court issued an
order April 18, 2006 in which it “decline(d) to
reconsider prior motions for summary judgment or to have further status conferences
herein until receipt of said suggested pretrial
order.” Appellant filed another motion for status conference August 6, 2007.
probate. Appellee denied he contested the
validity of the will and asserted the proceedings in this case were necessary “for the court
to frame the issues . . . .”
¶10 In her reply, Appellant alleged that after
Appellee read Decedent’s will, he frivolously
filed a pleading to administer the estate claiming Decedent died intestate. Appellant next
noted that in response to the application for
attorney fees, Appellee, Watkins, and Coleman
contended they did not dispute the validity of
Decedent’s will and Appellant quoted the portion of Watkins’s and Coleman’s Answers in
which they averred the will and trust were
invalid. Appellant further asserted that Appellee filed his Petition and his notice of claim
against the estate for the improper and frivolous
purposes of causing unnecessary delay and
increasing costs, and that Appellee stated his
intent to do this in front of witnesses at the time
he received a copy of Decedent’s will. Appellant
asserted that Appellee’s claims were not warranted by existing law and were frivolous arguments without legal support. Appellant argued
that Appellee made false statements and contested the will for three years before conceding
the will’s validity before trial and failing to
appear for trial. Appellant urged the trial court
to exercise its equitable authority to award
attorney fees for bad faith litigation conduct.
Appellant supplemented her application with
affidavits from two witnesses who stated that
after Decedent’s funeral, they witnessed Appellee read Decedent’s will and heard him state
his intent to be vexatious.8
¶8 Appellant filed her Application for Attorney Fees March 27, 2008. Appellant asserted she
was entitled to an award of fees from Appellee
under 58 O.S.2001 §66 and 12 O.S.2001 §928.
Appellant sought $36,285 in fees and $679.36 in
costs; she attached billing records in support of
her request.
¶11 Hearing on Appellant’s application for
fees was held June 20, 2008. The Journal Entry
of Judgment was filed January 9, 2009, in
which the trial court found no statutory authority for awarding fees. The court also declined
to award fees under its equitable authority,
stating “the court can not find that it was
totally without merit or frivolous for [Appellee] to have sought letters and objected to
[Appellant] being personal representative;
however, it appears that [Appellee] abandoned
that in regard to whether or not [Appellant]
should be the personal representative. That’s
clear to the Court because with notice [Appellee] did not appear for that hearing.” The court
awarded costs but denied Appellant’s request
for fees.
¶9 Appellee responded that fees were not
proper under §66, based on his assertion that
section applies only to will contests made after
¶12 Appellant appeals from the January 9,
2009 Journal Entry of Judgment denying attorney fees. Appellee has failed to file a response
¶7 A hearing was held February 6, 2008, at
which Appellant appeared with counsel, and
counsel for Appellee appeared, but Appellee,
Watkins, and Coleman failed to appear. The
trial court filed the Order Admitting Will to
Probate, Appointment of Personal Representative and Determining Heirs, Devisees and
Legatees February 26, 2008.7
2678
Vol. 81 — No. 31 — 11/20/2010
brief and this matter therefore proceeds on
Appellant’s brief only. In the case of an appeal
proceeding on the appellant’s brief only, this
court is under no duty to search the record for a
basis to affirm the judgment, and where the
appellant’s brief is “reasonably supportive of
the allegations of error” this court will ordinarily grant the relief sought by the appellant.
Sneed v. Sneed, 1978 OK 138, 585 P.2d 1363. However, “(r)eversal is never automatic on appellee’s
failure to file answer brief. . . . [Where the]
record presented does not support the error
alleged in appellant’s brief, the trial court’s
judgment cannot be disturbed. It is presumed
correct until the contrary has been shown by the
record.” Hamid v. Sew Original, 1982 OK 46, 645
P.2d 496, 497 (citations omitted).
¶13 The trial court found no statutory basis
for an award of attorney fees and denied
Appellant’s request for attorney fees as a sanction. Appellant does not challenge the finding
that the probate statutes do not support an
award of attorney fees in this case; her claims
on appeal all relate to the denial of fees as a
sanction for improper filing and litigation conduct. We review the trial court’s decision on an
application for sanctions for an abuse of discretion. State ex rel. Tal v. City of Oklahoma City,
2002 OK 97, ¶ 2, 61 P.3d 234. Proceedings for
sanctions are equitable and accordingly, on
appeal we will examine and weigh the proof in
the record, but we must abide by the presumption that the trial court’s decision is legally correct and cannot be disturbed unless contrary to
the weight of the evidence or to a governing
principle of law. Id. at ¶3.
¶14 Although Appellant’s argument for sanctions relies on the trial court’s inherent authority to sanction bad faith litigation conduct, her
contention that Appellee made false statements
in his Petition and notice of claim against the
estate falls under 12 O.S.2001 §2011.9 Sanctions
may not be imposed under §2011 absent a factual determination that the sanctioned party
acted improperly. Matter of the Estate of Ringwald, 1995 OK CIV APP 114, 905 P.2d 833. The
Oklahoma Supreme Court has explained that
under §2011 “(t)he appropriateness of sanctions depends on the pre-filing conduct by
counsel who signed the critical document. That
conduct must be tested by a standard of objective reasonableness under the then-existing
circumstances. Sanctions are appropriate only
for (a) frivolous filing or for (b) filing made
with an improper purpose in mind.” HamVol. 81 — No. 31 — 11/20/2010
monds v. Osteopathic Hosp. Founders Ass’n, 1996
OK, 934 P.2d 319, 323. The court explained that
a filing is frivolous if the signer could not form
a reasonable belief that it was well-founded in
fact. Id. at n. 16. The trial court’s inherent
authority to award attorney fees as a sanction
for litigation misconduct is directed only at
post-filing conduct. Barnes v. Oklahoma Farm
Bureau Mut. Ins. Co., 2004 OK 25, ¶¶13-16, 94
P.3d 25.
¶15 The weight of the evidence, as outlined
above, supports Appellant’s claim that Appellee acted improperly and in bad faith in filing
his Petition and notice of claim, both containing false statements, which caused the litigation to continue three years. The weight of the
evidence shows that Appellee knew of the existence of the will and knew that he had been
paid by Decedent years earlier. Nevertheless,
he filed a notice of claim against the estate and
a petition, both including false statements.
Because of Appellee’s knowledge of the falsity
of his statements in filed pleadings, we objectively find no other reason for Appellee’s
actions but to harass and cause delay. The
weight of the evidence also shows Appellee
announced his intent to harass three weeks
before he made false statements in filings.
Appellee’s intent to be vexatious is further
illustrated by his filing of a cross-appeal in
which he had no standing and which was
abandoned after filing. Appellee offered no
explanation for his false statements in his Petition and notice of claim against the estate. The
weight of the evidence shows that Appellee
violated §2011 and §2011.1 as a matter of law,
and those sections direct that, upon a violation,
the court shall impose a sanction. Appellant’s
brief is reasonably supportive of her claim that
the trial court abused its discretion in finding
that Appellee’s claims were not totally without
merit and in refusing to sanction Appellee’s
conduct. Neither the Appellee nor the trial
court have articulated any argument that
Appellee’s conduct had a reasonable, nonfrivolous basis. We find the trial court abused
its discretion in approving Appellee’s conduct
in this case. We therefore REVERSE the January 9, 2009 Journal Entry of Judgment and
REMAND for determination of the proper
award of attorney fees incurred at trial and on
appeal.10
¶16 Appellee, Watkins, and Coleman filed a
cross-appeal March 30, 2009, in which they
sought to appeal the trial court’s February 25,
2679
2009 Final Order Allowing Final Account;
Determining Heirship; Final Decree of Distribution and Discharge. Appellant filed a motion
to dismiss the cross-appeal and to dismiss
Appellee as a party appellant based on lack of
standing. The Oklahoma Supreme Court issued
its Order May 26, 2009, in which it denied
Appellant’s motion to dismiss the cross-appeal,
but granted Appellant’s motion to dismiss
Appellee as a party appellant in the crossappeal. The Order noted that Appellee is a
non-heir stranger to the appeal and therefore
could not challenge the final accounting or
decree of distribution. The Order directed that
Appellee remained a party to Appellant’s
appeal of the attorney fee decision. Watkins
and Coleman failed to file a brief in support of
the cross-appeal. The claims made in the crossappeal are deemed abandoned and we therefore AFFIRM the February 25, 2009 Final
Order.
HANSEN, J., concurs in result, and HETHERINGTON, J., concurs.
1. Appellee asserted he had not found a will for Decedent. He
alleged that he was a creditor of Decedent’s estate and therefore entitled to letters of administration pursuant to 58 O.S.2001 §122. Appellant filed a notice of claim against the estate the same day.
2. Appellant alleged Appellee made fraudulent statements in his
Petition and failed to provide proof of a debt against Decedent’s estate.
Specifically, Appellant alleged that she and two other witnesses
observed Appellee read Decedent’s will December 27, 2004. Appellant
attached Decedent’s June 6, 2003 will and trust, as well as affidavits of
herself and two others stating they observed Appellee read Decedent’s
will December 27, 2004. Appellant asked the court to dismiss Appellee’s Petition, award Appellant attorney fees and costs, and find
Appellee in contempt for making false statements in his Petition.
3. Watkins objected to Appellant being named Administrator and
asked that Coleman be named Administrator. Watkins further contended that Decedent’s will failed to make a proper distribution of
Decedent’s estate and that the court should therefore find that Decedent died intestate.
4. They claimed Appellant had a conflict of interest because she
was the successor trustee of Decedent’s trust and because she had
named herself trustee of a newly created trust “in order to take possession of all assets of (Decedent’s trust).” They also alleged Appellant
had failed to cooperate in establishing the estate and had failed to
timely file a petition for probate.
5. To her motion, Appellant attached the notice of claim of $819,
which Appellee had filed against Decedent’s estate in January 2005;
the transcript of Appellee’s deposition testimony that he loaned $600
to Decedent to pay for labor used to prepare Decedent’s house for sale
and that he was to be paid back after Decedent’s house sold; the warranty deed showing Decedent sold her home December 6, 2000; and a
$600 canceled check from Decedent to Appellee dated December 14,
2000.
6. The record includes an order in which the trial court found there
was no dispute of fact that Appellee claimed he had an oral agreement
with Decedent to loan her money and Decedent paid the alleged loan
by a check on December 14, 2000. (Attached as Exhibit 6 to Appellant’s
Objection to (Appellee’s) Pretrial Order).
Appellee did not explain the basis for the claimed $219 debt
remaining. Appellee further responded that Decedent’s will failed
because it bequeathed all of Decedent’s property to her trust, which in
turn provided for all trust assets to be distributed, after Decedent’s
death, to Appellant’s trust, which was not in existence at the time
Decedent’s will and trust were executed.
7. In it, the court found that Appellee, Watkins, and Coleman failed
to appear and therefore waived their objections and claims. The court
found that the will disposed of all of Decedent’s estate and admitted it
2680
to probate. The court also appointed Appellant Personal Representative. The court found the heirs were Decedent’s trust and her five
children, that the will made Decedent’s trust the sole devisee and legatee, and that Decedent intentionally made no provision for her children. The trial court denied Appellee’s claims.
8. The affidavits of Johnnie Delbert Marshall and Karen Luanne
Beasley both state that they were present at Decedent’s apartment on
December 27, 2004, after the funeral, when Appellee stated to Marshall
“My wife [Watkins] is soft-spoken but I’m not. I’m here to protect her
interests and you all are getting ready to find out what a horse’s ass I
can be.” In their affidavits Marshall and Beasley further stated they
saw Appellant hand Appellee a copy of Decedent’s will, and saw
Appellee read the will and comment on it.
9. That section, and the one following provide, in part:
§2011
***
B. REPRESENTATIONS TO COURT. By presenting to the court,
whether by signing, filing, submitting, or later advocating, a pleading, written motion, or other paper, an attorney or unrepresented
party is certifying that to the best of the person’s knowledge, information, and belief, formed after an inquiry reasonable under the
circumstances:
1. It is not being presented for any improper or frivolous purpose,
such as to harass or to cause unnecessary delay or needless
increase in the cost of litigation;
2. The claims, defenses and other legal contentions therein are warranted by existing law or by a nonfrivolous argument for the
extension, modification, or reversal of existing law or the establishment of new law;
3. The allegations and other factual contentions have evidentiary
support or, if specifically so identified, are likely to have evidentiary support after a reasonable opportunity for further investigation or discovery; and
4. The denials of factual contentions are warranted on the evidence
or, if specifically so identified, are reasonably based on a lack of
information or belief.
C. SANCTIONS. If, after notice and a reasonable opportunity to
respond, the court determines that subsection B of this section has
been violated, the court shall, subject to the conditions stated below,
impose an appropriate sanction upon the attorneys, law firms, or parties that have violated subsection B of this section or are responsible for the violation.
(Emphasis added.)
§ 2011.1
In any action not arising out of contract, if requested the court
shall, upon ruling on a motion to dismiss an action or a motion for
summary judgment or subsequent to adjudication on the merits,
determine whether a claim or defense asserted in the action by a
nonprevailing party was frivolous. As used in this section, “frivolous” means the claim or defense was knowingly asserted in bad
faith or without any rational argument based in law or facts to
support the position of the litigant or to change existing law. Upon
so finding, the court shall enter an order requiring such nonprevailing
party to reimburse the prevailing party for reasonable costs, including
attorney fees, incurred with respect to this title. (Emphasis added.)
10. Appellant filed an Application for Appeal-Related Attorney
Fees May 3, 2010. Appellee filed his Response September 17, 2010.
Appeal-related attorney fees may be granted where there is statutory
authority for such an award in the trial court. Crutchfield v. Marine
Power Engine Co., 2009 OK 27, ¶32, 209 P.3d 295. For the reasons outlined above, we find Appellant is entitled to an award of appealrelated fees. On remand, the trial court is directed to determine the
amount of attorney fees incurred on appeal and to enter an award
therefor.
2010 OK CIV APP 115
NOEL OSBORN, by and through his Legal
Guardians, RICK OSBORN and TERRY
OSBORN, Plaintiffs/Appellees, vs.
BROOKDALE SENIOR LIVING, INC.;
BROOKDALE SENIOR LIVING, INC., d/b/a
ALTERRA STERLING HOUSE OF
Vol. 81 — No. 31 — 11/20/2010
EDMOND; and BILL GODWIN,
Defendants/Appellants.
Case No. 107,070. July 12, 2010
HONORABLE CAROLYN R. RICKS, TRIAL
JUDGE
AFFIRMED
John Wiggins, Emily D. Nash, WIGGINS
SEWELL & OGLETREE, Oklahoma City, Oklahoma and Jeff D. Marr, MARR LAW FIRM,
Oklahoma City, Oklahoma, for Plaintiffs/
Appellees
John J. Bowling, Thomas A. Le Blanc, Matthew
B. Free, BEST & SHARP, Tulsa, Oklahoma, for
Defendants/Appellants
JOHN F. FISCHER, JUDGE:
¶1 The district court defendants, Brookdale
Senior Living, Inc., and Brookdale Senior Living,
Inc., d/b/a Alterra Sterling House of Edmond
(collectively, Alterra) appeal the district court’s
Order Denying Motion To Compel Arbitration
pursuant to 12 O.S. Supp. 2009 § 1879(A)(1). We
find that the plaintiff’s action is not subject to
arbitration, and, therefore, affirm the order of
the district court.
BACKGROUND
¶2 Alterra operates an assisted living center.
On September 27, 2006, Rick Osborn, as guardian for Noel Osborn, executed Alterra’s Residency Agreement securing care and treatment
for his ward in Alterra’s facility. The Residency
Agreement provided for compulsory arbitration of all claims concerning Osborn’s care.
Noel Osborn resided in Alterra’s facility from
November 2006 until April 2008. Through his
guardians, Osborn filed this suit alleging that
Alterra was negligent in providing care and
that he suffered injuries as a result of that negligence.
¶3 Alterra moved to compel arbitration pursuant to the Residency Agreement. Alterra
argued that it was engaged in interstate commerce because it purchased supplies from outof-state vendors and accepted residents from
states other than Oklahoma. Alterra concluded
that its Residency Agreement was, therefore,
subject to the Federal Arbitration Act (FAA),
and the arbitration provision was enforceable.
Alterra also sought to avoid the statutory proVol. 81 — No. 31 — 11/20/2010
hibition on arbitration provisions in the Oklahoma Nursing Home Care Act by arguing that
it was an assisted living center, not a nursing
home or nursing facility. Alterra appeals from
the district court’s order denying its motion to
compel arbitration.
STANDARD OF REVIEW
¶4 The de novo standard of review applies to
the review of an order granting or denying a
motion to compel arbitration. Thompson v. Bar-S
Foods Co., 2007 OK 75, ¶ 9, 174 P.3d 567, 572.
ANALYSIS
¶5 The Residential Care Act is codified in
Article 8 of Title 63 at sections 1-819 to 1-840.
The Residential Care Act governs, among other
things, the licensure of “homes.” A “home” is
defined as a Residential Care Home. 63 O.S.
Supp. 2003 § 1-820(11). A Residential Care
Home is:
any establishment or institution which
offers, provides or supports residential
accommodations, food service, and supportive assistance to any of its residents or
houses any residents requiring supportive
assistance who are not related to the owner
or administrator of the home by blood or
marriage.
63 O.S. Supp. 2003 § 1-820(12)(a).1
¶6 Residential care homes are required to
comply with certain provisions of the Oklahoma Nursing Home Care Act, 63 O.S.2001
and Supp. 2006 §§ 1-1900.1 to 1-1943.1, and 11950 to 1-1951. Section 1-1939 of that Act prohibits a covered entity from requiring the arbitration of certain disputes between the facility
and its residents: “Any waiver by a resident or
the legal representative of the resident of the
right to commence an action under this section,
whether oral or in writing, shall be null and
void, and without legal force or effect.” 63 O.S.
Supp. 2003 § 1939(D). “Any party to an action
brought under this section shall be entitled to a
trial by jury and any waiver of the right to a
trial by a jury, whether oral or in writing, prior
to the commencement of an action, shall be
null and void, and without legal force or
effect.” 63 O.S. Supp. 2003 § 1939(E). See also
Bruner v. Timberlane Manor Ltd. P’ship, 2006 OK
90, ¶¶ 46-47, 155 P.3d 16, 32 (finding that the
FAA does not pre-empt the Oklahoma Nursing
Home Care Act and that the district court did
not err when it applied § 1-1939(D) and (E) to
2681
an arbitration agreement contained in a nursing home’s admission contract and rendered it
unenforceable).
¶7 Alterra argues that because it operates an
assisted living center rather than a nursing
home, its arbitration agreement is not prohibited. Alterra’s argument is not supported by
traditional principles of statutory construction.
The Continuum of Care and Assisted Living
Act, 63 O.S.2001 §§ 1-890.1 to 1-894, specifically
applicable to the facility operated by Alterra, is
included within Article 8 of Title 63, the same
Title within which the prohibition on arbitration provisions is located. Section 1-890.2(1) of
the Continuum of Care Act defines an assisted
living center as follows:
“Assisted living center” means any home
or establishment offering, coordinating or
providing services to two or more persons
who:
a. are domiciled therein,
b. are unrelated to the operator,
c. by choice or functional impairments,
need assistance with personal care or
nursing supervision,
d. may need intermittent or unscheduled
nursing care,
e. may need medication assistance, and
f. may need assistance with transfer and/
or ambulation.
63 O.S.2001 § 1-890.2 (emphasis added). The
Continuum of Care Act does not separately
define “home.” The only definition of “home”
in Article 8 is found at 63 O.S. Supp. 2003 § 1820(11), which defines “home” as a residential
care home.
¶8 Further, the services provided by an
assisted living center are the same as the services provided by a residential care home. A
residential care home is:
any establishment or institution which
offers, provides or supports residential
accommodations, food service, and supportive assistance to any of its residents or
houses any residents requiring supportive
assistance who are not related to the owner
or administrator of the home by blood or
marriage.
63 O.S. Supp. 2003 § 1-820(12)(a). The “supportive assistance” provided by an assisted
living center is:
2682
the service rendered to any person which is
sufficient to enable the person to meet an
adequate level of daily living. Supportive
assistance includes, but is not limited to,
housekeeping, assistance in the preparation of meals, assistance in the safe storage,
distribution and administration of medications, and assistance in personal care as
necessary for the health and comfort of
such person.
63 O.S. Supp. 2003 § 1-820(21). Finally, it is clear
that the Legislature considered an assisted living center to be a residential care home. See 63
O.S.2001 § 1-890.6(A)2 of the Continuum of
Care Act, excluding from the coverage of that
Act certain, but not all, residential care homes.
¶9 Nonetheless, as Alterra argues, the Nursing Home Care Act provides:
The Nursing Home Care Act shall not
apply to any facility operated by the Oklahoma Department of Veterans Affairs
under control of the Oklahoma War Veterans Commission residential care homes,
assisted living facilities or adult companion
homes which are operated in conjunction with a
nursing facility, or to hotels, motels, boarding houses, rooming houses, or other places
that furnish board or room to their residents.
63 O.S. Supp. 2003 § 1-1903(B) (emphasis
added). Alterra concludes that this provision
excludes assisted living centers from any provision of the Nursing Home Care Act, specifically the provisions of section 1-1939 banning
arbitration agreements.3 Despite the language
of section 1-1903(B), Alterra recognizes that a
continuum of care facility is subject to certain
provisions of the Nursing Home Care Act: “If a
continuum of care facility’s failure to comply
with the Continuum of Care and Assisted Living Act or rules involves nursing care services,
the Commissioner shall have authority to exercise additional remedies provided under the
Nursing Home Care Act.” 63 O.S.2001 § 1890.6(D). Alterra seeks to avoid application of
the Nursing Home Care Act by attempting to
distinguish an assisted living center from a
continuum of care facility. We find that distinction, to the extent it exists, insufficient to avoid
63 O.S.2001 § 1-840: “Residential care homes
subject to the provisions of the Residential
Care Act shall comply with the provisions of
Sections . . . 1-1939 . . . of this title.” As previously discussed, an assisted living center is a
Vol. 81 — No. 31 — 11/20/2010
residential care home. Therefore, because the
Legislature, in section 1-840, specifically subjected assisted living centers to the prohibition
against arbitration agreements in section 11939, it was unnecessary for the Legislature to
add a redundant provision in the Continuum
of Care and Assisted Living Act, accomplishing what had already been done.
CONCLUSION
¶10 Although the facility operated by Alterra
in this case is an assisted living center, it is,
nonetheless, a residential care home. Alterra’s
facility is, therefore, subject to the provisions of
section 1-1939 of the Nursing Home Care Act.
Consequently, the analysis in Bruner controls,
and the arbitration provision in the Osborn/
Alterra Residency Agreement is unenforceable.
Because the arbitration agreement is unenforceable, it is unnecessary to discuss the
remainder of the issues raised by the parties in
this appeal. The district court’s Order Denying
Motion to Compel Arbitration is affirmed.
¶11 AFFIRMED.
GABBARD, P.J., concurs, and RAPP, J., dissents.
1. The exclusions from this definition do not include the facility
operated by Alterra and, therefore, are not relevant.
2. “The Continuum of Care and Assisted Living Act shall not apply
to residential care homes, adult companion homes, domiciliary care
units operated by the Department of Veterans Affairs, the private residences of persons with developmental disabilities receiving services
provided by the Developmental Disabilities Services Division of the
Department of Human Services or through the Home and Community-Based Waiver or the Alternative Disposition Plan Waiver of the
Oklahoma Health Care Authority, or to hotels, motels, boardinghouses, rooming houses, or other places that furnish board or room to their
residents. The Continuum of Care and Assisted Living Act shall not
apply to facilities not charging or receiving periodic compensation for
services rendered and not receiving any county state or federal assistance.” 63 O.S.2001 § 1-890.6(A).
3. Alterra’s construction ignores applicable grammatical rules. The
emphasized “or” refers to both assisted living facilities and adult companion homes because it is not preceded by a comma signifying an
independent clause. Further, the “which” is a restrictive pronoun that
refers to both antecedents (assisted living facilities, adult companion
homes), joined by the coordinate conjunction “or.”
RAPP, J., dissenting
¶1 I dissent. The trial court defendants,
Brookdale Senior Living, Inc. and Brookdale
Senior Living, Inc. d.b.a. Alterra Sterling House
of Edmond (Alterra) appeal an Order Denying
Motion To Compel Arbitration, where the trial
court declined to require arbitration of the
claim of the plaintiffs, Noel Osborn (Osborn)
by and through his legal guardians, Rick
Osborn and Terry Osborn (Guardians).
¶2 Alterra is an assisted living center.1 Osborn
resided there from November 2006 until April
2008. Guardians filed a suit alleging that AlterVol. 81 — No. 31 — 11/20/2010
ra was negligent in providing care and that
Osborn suffered injuries as a result of the negligence.
¶3 On September 27, 2006, Rick Osborn executed the Alterra Residency Agreement (Agreement) on behalf of Osborn and as a Responsible
Party. The Agreement specified the basic services to be provided which included living
accommodations, meals and staffing. Health
care and medical care services were excluded.
¶4 Article V of the Agreement has three
parts, two of which are in issue in this appeal.
The first is Article V(A) Arbitration Provision.
There, the Agreement provided for compulsory
binding arbitration of all claims and set out
extensive provisions relating to the arbitration
procedure.
¶5 The second is Article V(B) Limitation of
Liability Provision and subpart Article V(B)(2),
exclusive of Article V(B)(2)(c), which is not in
issue in this appeal. This Article offsets damages by collateral source recovery and pain and
suffering is limited to a specific dollar amount.
Punitive damages are barred.
¶6 Alterra moved to compel arbitration as
provided in the Agreement. Alterra submitted
an affidavit and a copy of the Agreement in
support of its motion. The affiant stated that
Alterra is an Assisted Living Facility and not a
nursing home or nursing facility.
¶7 Osborn resisted the motion on the grounds
that: (a) The Oklahoma Nursing Home Care
Act applies and bans arbitration clauses; (b)
Neither the State or Federal arbitration statutes
apply to the arbitration clause because the
clause is invalid; (c) The Agreement violates
the Oklahoma Constitution and statutes that
insure access to courts; and (d) The Agreement
is oppressive and unconscionable and thus not
enforceable.2
¶8 Osborn does not dispute that Alterra is a
licensed assisted living center.3 There is no
indication in the record that Alterra is licensed
as a nursing home facility.
¶9 The question is then whether the arbitration provision of the Agreement is banned by
63 O.S. Supp. 2008, § 1-1939(D) and (E).4 The
NHCA bans arbitration provisions in nursing
home agreements. 63 O.S. Supp. 2008, § 11939(D) and (E); Bruner v. Timberlane Manor Ltd.
P’ship, 2006 OK 90, ¶ 47, 155 P.3d 16, 32 (Oklahoma’s Nursing Home Care Act governs over
2683
Oklahoma’s Uniform Arbitration Act in this
case). There is no similar provision in OCCAL,
which governs Assisted Living Centers.
¶10 Thus, Osborn argues, and the Majority
necessarily agrees, “that 63 O.S. § 1-1939(D) of
the Nursing Home Care Act applies to Assisted
Living Centers through Article 8 of Title 63,
entitled ‘Residential Care Act,’ because assisted
living centers fall under the definition of ‘residential care home’ provided in the Residential
Care Act.”5 This argument fails because the
legislature made provisions for care which
addressed different needs and established different types of facilities to provide for those
care needs. Assisted Living Centers are one
type of facility and they are covered under a
separate statutory Article of the Public Health
Code. The legislature did not incorporate the
ban on arbitration contained in the NHCA into
the provisions for Assisted Living Centers.
¶11 Title 63 of the Oklahoma statutes contains the Public Health and Safety Code. The
Code contains a wide-ranging set of statutes
within Chapters and Articles. Chapter 1 is the
Public Health Code. Chapter 1 contains twenty
Articles, which are further divided by category
of facilities. In this appeal, the issues concern
analysis of some of the Articles and their subdivisions in Chapter 1 of Title 63. This analysis
demonstrates that Assisted Living Centers are
distinct types of facilities and governed by a
particular subsection of Article 8 of Chapter 1
and do not ban arbitration clauses.
¶12 Chapter 1 includes Article 8 and covers a
number of facilities, including assisted living
(Alterra), residential care, and other specialized care needs and includes Assisted Living
Centers. The NHCA is separately codified in
Article 19, the Nursing Home Care Act.
¶13 Article 8 of Title 63 is entitled “Nursing
Homes, Rest Homes and Specialized Homes.”
Statutory divisions of Article 8 pertain to Residential Care, Long-term Care, Hospice Care,
Adult Day Care, and what is termed “Continuum of Care and Assisted Living.” Other specialized needs for care are addressed also.
¶14 The current version of Article 19, the
NHCA, began with its enactment in 1980. 1980
Okla. Sess. Laws, c. 241. Section 1-1903(B) then
provided that the NHCA did not apply to
room and board homes, subsequently changed
to residential care homes in the legislation
dealing with Residential Care Facilities. 1987
Okla. Sess. Laws, c. 98, § 23. That provision was
2684
subsequently eliminated. The tenor of the
NHCA shows that it is legislation relating to
the care of persons requiring skilled medical
care.
¶15 The Residential Care Act (RCA), Sections
1-819 and following, began as the “Room And
Board Act,” 1984 Okla. Sess. Laws, c. 128, and
was amended in 1987 to give the Act its present
name. The intent of the Act is to provide care
and services to persons who remain essentially
capable of managing their own affairs and are
ambulatory. 63 O.S. Supp. 2008, § 1-820(12)(a).
¶16 Residential care licensees are required to
comply with specific parts of the NHCA. 63
O.S.2001, § 1-840. Those parts are: Sections 11909 and 1-1910 (records display and inspection); 1-1914.1 and 1-1914.2 (administrative
oversight remedies); 1-1915 (repealed); 1-1918
(patient rights and violations); 1-1919 (authorized access to premises); 1-1920 (protection of
patient funds); 1-1921(requirement to enter a
written agreement); 1-1922 (residents advisory
council); 1-1924 (disclosure of information); 11926 and 1-1927 (provisions for involuntary
transfers); 1-1930 (facility closing); 1-1939 (liability, including ban on arbitration); 1-1940
(remedies for violations); and 1-1941(ombudsman). As noted above, originally the NHCA
specifically provided that it did not apply to
the RCA, but such a general exclusion was
eliminated and portions of the NHCA were
made applicable.
¶17 Thus, a residential care facility agreement, like a nursing home agreement, cannot
preclude access to courts or trial by jury. Nevertheless, a nursing home and a residential care
facility are different from each other. While
construing the provisions of an insurance contract, the Court, in Gillogly v. General Elec. Capital Assurance Co., 430 F.3d 1284 (10th Cir. 2005),
determined that under Oklahoma law, a
licensed residential care home was not a nursing home. This follows from the statute’s definition of “facility” set out in the NHCA to
exclude a residential care home. 63 O.S. Supp.
2008, § 1-1902(9) and (10); Gillogly, 430 F.3d at
1290-91.6
¶18 However, under the record before this
Court, Alterra comes under a third classification called assisted living. This classification is
the subject of the Continuum of Care And
Assisted Living Act codified in Sections 1-890.1
– 1.894 of Title 63.
Vol. 81 — No. 31 — 11/20/2010
¶19 The OCCAL recognizes and regulates
two types of facilities. They are: Assisted Living
Center and Continuum of Care Facility. 63 O.S.
Supp. 2008, § 1-890.2.7 The Continuum of Care
Facility clearly is one of a higher level of care
and includes a component of nursing facility
services. 63 O.S. Supp. 2008, § 1-890.2(4).
¶20 The OCCAL does not apply to residential care homes. 63 O.S.2001, § 1-890.6(A). As a
result, the 63 O.S.2001, § 1-840, connection
between a residential care facility and a nursing facility does not exist for an OCCAL facility.8 Therefore, the Majority’s premise grounded
on the definition in Section 1-820(12) fails
because OCCAL (and its Assisted Living component) does not apply to residential care
homes.
¶21 The definition of a continuum care facility in Section 1-890.2(4), uses the phrase “providing nursing facility services as defined in
Section 1-1902 of this title.” (Emphasis added.)
The definition of a nursing facility set out in
NHCA excludes the “nursing care component
of a continuum of care facility.” 63 O.S. Supp.
2008, § 1-1902(10). These are not inconsistent.
The continuum care facility is one with a higher level of care than the assisted living facility
and has a “component” of nursing care services which by definition are the type of services
provided in a nursing facility subject to NHCA.
However, the use of the same definition in
OCCAL for a level of service does not mean
that the contract provisions of NHCA, effectively barring arbitration, are incorporated into
OCCAL. Statutory provision for services is distinct from statutory provision for what may be
in the contract for those services that concerns
tort remedies and forums. The legislature
could, but did not, include a provision like 63
O.S.2001, § 1-840, making assisted living care
licensees subject to Section 1-1939(D) and (E).
¶22 Therefore, the trial court’s denial of the
motion to compel arbitration on the ground
that the arbitration provision in Alterra’s Agreement was barred by incorporation is error.
SUMMARY AND CONCLUSION
¶23 The Supreme Court has rejected
Osborn’s arguments that arbitration violates
his constitutional and statutory rights. The
Arbitration Provisions in Article V(A) of the
parties’ Agreement are not substantively
unconscionable. Osborn has not demonstrated through evidence that Article V(A) is
procedurally unconscionable.
Vol. 81 — No. 31 — 11/20/2010
¶24 I would hold that a portion of the Limitation of Liability Provisions in Article V(B) is
unconscionable. Specifically, I would hold that
Article V(B)(2)(a) and (b) are invalid and unenforceable. Article V(A)(13) and Article V(B)(1)
are likewise invalid to the extent that these
provisions incorporate Article V(B)(2)(a) and
(b). Article V(B)(2)(c) is outside the scope of
this appeal. I would further hold that the
remaining provisions of Article V are valid and
enforceable. The contract is severable and the
removal of the unenforceable provisions does
not require that the Agreement be voided completely.
¶25 The bar to arbitration contained in 63
O.S. Supp. 2008, § 1939(D) and (E) is not incorporated into the Oklahoma Continuum of Care
and Assisted Living Act. This Act governs
Alterra and its agreements.
¶26 Therefore, the trial court erred in denying
the Motion to Compel Arbitration. The judgment of the trial court should be reversed and
the cause remanded for further proceedings.
1. The parties do not dispute that Alterra is an assisted living facility. An assisted living facility is defined by the Oklahoma Continuum
of Care and Assisted Living Act (OCCAL) and regulated by Chapter
663 of the Oklahoma Administrative Code. Amendments to OCCAL
taking effect November 1, 2009, are not applicable.
As used in OCCAL, an “Assisted living center” is defined as follows:
1. “Assisted living center” means any home or establishment
offering, coordinating or providing services to two or more persons who:
a. are domiciled therein,
b. are unrelated to the operator,
c. by choice or functional impairments, need assistance
with personal care or nursing supervision,
d. may need intermittent or unscheduled nursing care,
e. may need medication assistance, and
f. may need assistance with transfer and/or ambulation
63 O.S. Supp. 2008, § 1-890.2(1).
In addition, the statutes define “Continuum of care facility,” under
OCCAL.
4. “Continuum of care facility” means a home, establishment
or institution providing nursing facility services as defined in
Section 1-1902 of this title and one or both of the following:
a. assisted living center services as defined in the Continuum of Care and Assisted Living Act, and
b. adult day care center services as defined in Section 1-872
of this title.
63 O.S. Supp. 2008, § 1-890.2(4).
The statute defines “Facility” and “Nursing facility” under the
Oklahoma Nursing Home Care Act (NHCA).
9. “Facility” means a nursing facility and a specialized home;
provided this term shall not include a residential care home or an
adult companion home;
10. “Nursing facility” means a home, an establishment or an
institution, a distinct part of which is primarily engaged in providing:
a. skilled nursing care and related services for residents
who require medical or nursing care,
b. rehabilitation services for the rehabilitation of injured,
disabled, or sick persons, or
c. on a regular basis, health-related care and services to
individuals who because of their mental or physical condition require care and services beyond the level of care
provided by a residential care home and which can be
made available to them only through a nursing facility.
2685
“Nursing facility” does not mean, for purposes of Section 1-851.1
of this title, a facility constructed or operated by an entity
described in paragraph 7 of subsection B of Section 6201 of Title
74 of the Oklahoma Statutes or the nursing care component of a
continuum of care facility, as such term is defined under the
Continuum of Care and Assisted Living Act, to the extent that
the facility constructed or operated by an entity described in
paragraph 7 of subsection B of Section 6201 of Title 74 of the
Oklahoma Statutes contains such a nursing care component.
63 O.S. Supp. 2008, § 1-1902(9) and (10).
2. A consequence of my dissent is the necessity to address these
additional issues, which the Majority did not do in light of its disposition of the arbitration motion. I would find pre-dispute arbitration
clauses do not violate the right to a jury trial or the access to courts
provisions of the Oklahoma Constitution. Rollings v. Thermodyne Industries, Inc., 1996 OK 6, ¶ 29, 910 P.2d 1030, 1036 (access to courts); City of
Bethany v. Public Employees Relations Bd. of State of Oklahoma, 1995 OK
99, ¶ 34, 904 P.2d 604, 615 (jury trial).
The validity of the Agreement’s arbitration and liability limitation
provisions depends upon whether those provisions are unconscionable and thus unenforceable. Unconscionabliity has been classified as
“substantative” and “procedural.”
I would hold that the “Limitation of Liability Provision” of Article
V(B)(2) is substantively unconscionable and unenforceable as being in
violation of 23 O.S.2001, § 61. Article V(B)(2)(a), providing for collateral source offsets, is likewise invalid. I would find that Article
V(B)(2)(b) barring punitive damages is valid. Article V(A)(13) and
Article V(B)(1) are likewise invalid to the extent that these provisions
incorporate Article V(B)(2)(a) and (b). These invalid provisions are
severed from the Agreement pursuant to the Agreement’s severability
clause.
3. Osborn appears to accept the characterization of Alterra as an
Assisted Living Facility. The petition alleges that Alterra “had a
responsibility to provide assisted living services.” The part of his position that argues for application of an arbitration ban in the Nursing
Home Care Act to Assisted Living Facilities necessarily assumes that
Alterra is an Assisted Living Facility.
4. Section 1-1939(D) and (E) read:
D. Any waiver by a resident or the legal representative of the
resident of the right to commence an action under this section,
whether oral or in writing, shall be null and void, and without
legal force or effect.
E. Any party to an action brought under this section shall be
entitled to a trial by jury and any waiver of the right to a trial by
a jury, whether oral or in writing, prior to the commencement of
an action, shall be null and void, and without legal force or
effect.
5. The definitions in the Oklahoma Residential Care Act, 63 O.S.
Supp. 2008, § 1-820(12) (unchanged to date), provide, in part:
12. “Residential care home”:
a. means any establishment or institution which offers,
provides or supports residential accommodations, food
service, and supportive assistance to any of its residents or
houses any residents requiring supportive assistance who
are not related to the owner or administrator of the home
by blood or marriage.
6. See n.1.
7. w n.1. The original version of Section 1-890.2, enacted in 1997,
was not changed in relevant provisions by the amendment to Section
1-890.2, effective November 1, 2007. 2007 Okla. Sess. Laws, c. 347 § 1.
The amendment effective in November 2009 also does not affect the
pertinent provisions of the statute.
8. A continuum of care facility in violation of the law may be subject to the remedies under the NHCA. 63 O.S.2001, § 1-890.6(D). No
similar provision exists for Assisted Living Facilities.
2010 OK CIV APP 123
FOSSIL CREEK ENERGY CORPORATION,
Plaintiff/Interested Party, vs. COOK’S
OILFIELD SERVICES, Defendant/ThirdParty Plaintiff/Appellant, vs. ADMIRAL
2686
INSURANCE COMPANY, Third-Party
Defendant/Appellee.
Case No. 106,895. May 7, 2010
CIMARRON COUNTY, OKLAHOMA
HONORABLE GREG A. ZIGLER,
TRIAL JUDGE
REVERSED AND REMANDED FOR
FURTHER PROCEEDINGS
Carla R. Stinnett, Gregory J. Denney, Sheri L.
Eastham, Simon J. Harwood, GREGORY J.
DENNEY & ASSOCIATES, P.C., Sapulpa, Oklahoma, for Defendant/Third-PartyPlaintiff/
Appellant
George W. Dahnke, ABOWITZ, TIMBERLAKE
& DAHNKE, P.C., Oklahoma City, Oklahoma,
for Third-Party Defendant/ Appellee
DEBORAH B. BARNES, JUDGE:
¶1 Cook’s Oilfield Services (Cook’s), brings
this accelerated appeal1 of the trial court’s summary judgment filed on February 12, 2009, in
favor of Admiral Insurance Company (Admiral). Based on our review of the record on
appeal and applicable law, we reverse the
order of the trial court granting summary judgment because there are controverted issues of
material fact. We remand this case for further
proceedings in a manner consistent with this
Opinion.
FACTS AND PROCEDURAL
BACKGROUND
¶2 The following facts are stipulated by the
parties and are not in dispute. Cook’s installed
a drilling-fluid mud-pit liner or “apron” (the
liner) at the site of an oil well (the well site)
operated by Fossil Creek Energy Corporation
(Fossil).2 The well site is located in Cimarron
County, Oklahoma.
¶3 Cook’s office is located in Perryton, Texas.
Cook’s is a sole proprietorship owned by
Charles D. Cook, Sr. Western Surplus Lines
Agency issued a commercial lines policy (the
Policy) on behalf of Admiral to Charles D.
Cook, Sr. The Policy was effective from November 18, 2005, to November 18, 2006.
¶4 On July 28, 2006, the Oklahoma Corporation Commission (the OCC) investigated the
well site and found, as stated in its Incident
and Complaint Investigation Report, that the
liner had not been installed correctly, that sides
Vol. 81 — No. 31 — 11/20/2010
of the liner were down in the pit, and fluids
were “contaminating the vertical walls and
bottom.”3 On August 1, 2006, the OCC issued a
report and recommendation to Fossil to dispose of the drilling fluids, remove the liner,
and perform remedial work.
¶5 On January 30, 2007, Fossil notified Cook’s
that it was seeking to hold Cook’s responsible
for the cost incurred by Fossil in remediating
the seepage of drilling fluids from the mud pit.
This was the first notice to Cook’s of the liner
problem and of the leakage from the mud pit.
Cook’s notified Admiral of Fossil’s claim on or
about February 7, 2007. On February 12, 2007,
and again on June 15, 2007, Admiral notified
Cook’s that there was no coverage under the
Policy.
¶6 Fossil filed a petition against Cook’s on
July 2, 2007, alleging Cook’s was negligent,
breached its contract with Fossil, and caused
Fossil to incur remediation and cleanup expenses. After filing an answer to Fossil’s petition,
Cook’s filed a third-party petition against
Admiral, alleging Admiral had breached its
contract (i.e., the Policy) with Cook’s and acted
in bad faith in denying coverage to Cook’s. In
its answer to Cook’s third-party petition, Admiral denied that the Policy affords coverage for
the claim made by Fossil against Cook’s.
¶7 Admiral filed a motion for summary
judgment, and Cook’s responded. The trial
court heard oral argument and took the matter
under advisement, pending submission of a
reply brief by Admiral. Admiral subsequently
filed a reply brief.
¶8 In a Journal Entry of Judgment filed on
February 12, 2009, the trial court granted Admiral’s motion for summary judgment. The trial
court found, in pertinent part, that (1) the question of coverage under the Policy is governed
by Texas law, (2) the claims asserted by Fossil
against Cook’s fall within the scope of the
absolute pollution exclusion added by endorsement to the Policy and, therefore, Admiral has
no obligation under Part I of the Policy to
indemnify Cook’s for any loss resulting from
those claims, (3) the Policy contains a separate
endorsement entitled “Limited Sudden and
Accidental Pollution Liability-Property Damage Liability and Cleanup Expenses Extension,” but this does not obligate Admiral to
indemnify Cook’s against Fossil’s claims
because there is no evidence that the discharge
of pollutants was sudden and accidental, or,
Vol. 81 — No. 31 — 11/20/2010
alternatively, the undisputed facts show that
Cook’s cannot satisfy Condition c. because the
occurrence did not become known to Cook’s
until more than thirty days after its commencement and it was not reported to Admiral
within ninety days, (4) Admiral was not obligated to provide a defense to Cook’s in this
action because there was no potential coverage
under the Policy for any of the claims asserted
by Fossil against Cook’s, (5) Admiral has not
violated its duty of good faith and fair dealing
because Admiral owed no duty to defend
Cook’s and has no duty to indemnify Cook’s
against any loss in this action, and (6) pursuant
to the undisputed material facts and applicable
law, Admiral is entitled to summary judgment.
From this order of the trial court, Cook’s
appeals.
STANDARD OF REVIEW
¶9 As recently stated by the Oklahoma
Supreme Court:
Under Rule 13(a) of the Rules of District
Courts, 12 O.S.2001, ch. 2, app. (Rules of
District Courts), a party may move for
summary judgment or summary disposition of any issue when the evidentiary
materials filed in support of the motion
show that there is no genuine issue of any
material fact. The moving party must support the motion by attaching and referencing evidentiary materials supporting the
party’s statement of undisputed facts. Id.
The opposing party must state the material
facts which the party contends are disputed and attach supporting evidentiary materials. Id. The court shall grant judgment to
one of the parties if it appears that there is
no substantial controversy as to any material fact and that one party is entitled to
judgment as a matter of law. Id. at Rule
13(e). All reasonable inferences are taken in
favor of the opposing party. Wittenberg v.
Fid. Bank, N.A., 1992 OK 165, ¶ 2, 844 P.2d
155, 156. The party opposing the motion
cannot, on appeal, rely on any fact or evidentiary material not included or referenced in its statement of disputed facts.
Rules of District Courts at Rule 13(b).
Summary judgment settles only questions of
law. Rox Petrol., L.L.C. v. New Dominion, L.L.C.,
2008 OK 13, ¶ 2, 184 P.3d 502, 504. We review
rulings on issues of law by a de novo standard
pursuant to the plenary power of the appellate
courts without deference to the trial court.
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Glasco v. State ex rel. Okla. Dept. Of Corrections,
2008 OK 65, ¶ 8, 188 P.3d 177, 181. Thus, summary judgments are reviewed de novo. Id.
Jennings v. Badgett, 2010 OK 7, ¶¶ 4-5, __ P.3d __.
¶10 To prevail as the moving party on a
motion for summary judgment, one who
defends against a claim by another must either
(a) establish that there is no genuine issue of fact
as to at least one essential component of the
plaintiff’s theory of recovery or (b) prove each
essential element of an affirmative defense,
showing in either case that, as a matter of law,
the plaintiff has no viable cause of action. Akin
v. Missouri Pacific Railroad Co., 1998 OK 102, ¶ 9,
977 P.2d 1040, 1044. A party opposing a motion
for summary judgment must show “the reasonable probability, something beyond a mere contention, that [he] will be able to produce competent, admissible evidence at the time of trial
which might reasonably persuade the trier of
fact in his favor on the issue in dispute.” Davis
v. Leitner, 1989 OK 146, ¶ 15, 782 P.2d 924, 927.
ANALYSIS
I. Choice of Law
¶11 Cook’s argues that Oklahoma law should
be applied by this Court to resolve the issues
presented relating to the Policy. Admiral argues
that Texas law should be applied.
¶12 This suit was brought in Oklahoma;
therefore, Oklahoma choice of law principles
must be applied. Harvell v. Goodyear Tire and
Rubber Co., 2006 OK 24, ¶ 14 n.21, 164 P.3d
1028, 1033 n.21. We must apply Oklahoma’s
“choice of law rule for contract actions4 . . .
unless the contract terms provide otherwise5 . . . .”
Id. at ¶ 14, 164 P.3d at 1033-34 (emphasis
added). That is, in Oklahoma we abide by “the
maxim that a court will not interfere with the
contract of the parties absent fraud, duress,
undue influence or mistake, and that courts are
interested only with the legality of the contract.” Bilbrey v. Cingular Wireless, L.L.C., 2007
OK 54, ¶ 9, 164 P.3d 131, 134 (citing Barnes v.
Helfenbein, 1976 OK 33, 548 P.2d 1014). Where
the language of a contract is clear and unambiguous on its face, that which stands expressed
within its four corners must be given effect.
May v. Mid-Century Insurance Co., 2006 OK 100,
151 P.3d 132. Generally, absent an ambiguity,
insurance contracts are subject to the same
rules of construction as other contracts. Max
True Plastering Co. v. U.S. Fidelity and Guaranty
Co., 1996 OK 28, 912 P.2d 861 (footnote omit2688
ted). However, because of their adhesive nature,
these contracts are liberally construed to give
reasonable effect to all their provisions. Id.
When interpreting an insurance contract,
“words are given effect according to their ordinary or popular meaning.” Id. at 865 (footnote
omitted).
¶13 The Policy contains a Service of Suit
endorsement which “modifies insurance provided in all coverage parts that are contained
in [the Policy].”6 In this endorsement, the parties agreed on the following:
In the event of [Admiral’s] failure to pay
any amount claimed to be due, we, at
[Cook’s] request, will submit to the jurisdiction of any court of competent jurisdiction within the United States of America or
Canada and will comply with all requirements necessary to give such court jurisdiction and all matters arising hereunder shall
be determined in accordance with the law and
practice of such Court. (Emphasis added).
Cook’s argues that pursuant to this language in
the insurance contract, “Admiral has agreed
for this matter to be determined in accordance
with the laws of and practice of Oklahoma.”7
Giving effect to this language according to its
ordinary and popular meaning, we agree.8 We
find that these words clearly and definitely
express the parties’ intent to have this case
determined in accordance with the law of any
court of competent jurisdiction including the
District Court of Cimarron County, Oklahoma,
chosen by Cook’s. Therefore, pursuant to the
agreement of the parties, we find that Oklahoma law governs this dispute.
II. Coverage Pursuant to the Policy
¶14 The Policy contains a Commercial General Liability Coverage Form (the Coverage
Form) which states, in pertinent part:
[Admiral] will pay those sums that the
Insured becomes legally obligated to pay
as damages because of . . . “property damage” to which this insurance applies. We
will have the right and duty to defend the
Insured against any “suit” seeking those
damages. However, we will have no duty
to defend the Insured against any “suit” …
to which this insurance does not apply.
The Coverage Form is then modified by numerous endorsements. The endorsements relevant
on appeal are (1) the Total Pollution Exclusion
Vol. 81 — No. 31 — 11/20/2010
Endorsement, (2) the Limited Sudden and
Accidental Pollution Extension, and (3) the
Texas Changes endorsement.
¶15 The Total Pollution Exclusion Endorsement modifies the Coverage Form by completely excluding from coverage any injury or
damage caused by pollution. Several pages
later, however, the Coverage Form is modified
by the Limited Sudden and Accidental Pollution Extension. This endorsement extends coverage for property damage and clean-up
expenses caused by pollution in limited circumstances. The endorsement only applies to
pollution that is the result of “a sudden and
accidental discharge, dispersal, release or
escape of oil or gas or other derivatives or pollutants (including any oil refuse or oil mixed
with wastes) upon surface land or inland water
and only if the ‘property damage’ and ‘cleanup expenses’ occur from operations or business conducted by or for [Cook’s] . . . .” Furthermore, the extension only applies if both9 of
the following conditions have been met:
a. The occurrence was accidental and was
neither expected nor intended by [the
insured]. An accident will not be considered unintended nor unexpected unless
caused by some intervening event neither
expected nor intended by [the insured].
...
c. The occurrence became known to or by
[the insured] within 30 days after its commencement and is reported to [Admiral]
within 90 days.
Finally, the Coverage Form is modified by an
endorsement entitled Texas Changes. This
endorsement states, in pertinent part:
With regard to liability for . . . Property
Damage[,] . . . unless [Admiral is] prejudiced by the Insured’s . . . failure to comply
with the requirement, no provision of this
Coverage Part requiring . . . any insured to
give notice of “occurrence”, claim or “suit”,
or forward demands, notices, summonses
or legal papers in connection with a claim
or “suit” will bar coverage under this Coverage Part.
a. Coverage for Accidental Pollution
¶16 Admiral argues that there is no coverage
pursuant to the Limited Sudden and Accidental Pollution Extension because the pollution
was not sudden and accidental. Admiral states
Vol. 81 — No. 31 — 11/20/2010
that “there is no evidence that the leakage from
the mud pit at the . . . well was ‘sudden and
accidental.’”10 To overcome Admiral’s argument at this summary judgment stage, Cook’s
must show “the reasonable probability, something beyond a mere contention, that [it] will
be able to produce competent, admissible evidence at the time of trial which might reasonably persuade the trier of fact in [its] favor on
the issue in dispute.” Davis v. Leitner, 1989 OK
146, ¶ 15, 782 P.2d 924, 927. Cook’s has already
presented evidence “that the problem” at the
well site possibly arose “within a 7-14 day time
span (July 14-28, 2006).”11 Having already come
forward with evidence that may narrow the
range of time during which the pollution could
have occurred to only one to two weeks, we
find not only that Cook’s has shown a reasonable probability that it will be able to produce
competent, admissible evidence at trial which
might reasonably persuade the trier of fact that
the pollution was sudden and accidental, but
also that the evidence already presented raises
a genuine issue of material fact.
b. Failure to Comply with Notice Requirement
¶17 Admiral argues that “it is clear that
[Cook’s] cannot satisfy Condition c [of the Limited Sudden and Accidental Pollution Extension], which requires that the occurrence
became known to the insured within 30 days of
its occurrence and be reported to Admiral
within 90 days.”12 “[I]n cases of doubt, words
of inclusion are liberally applied in favor of the
insured and words of exclusion are strictly construed against the insurer [and] an interpretation which makes a contract fair and reasonable is selected over that which yields a harsh
or unreasonable result . . . .” Max True Plastering
Co. v. U.S. Fidelity and Guaranty Co., 1996 OK
28, ¶ 8, 912 P.2d 861, 865.
¶18 It is undisputed that the occurrence did
not become known to Cook’s within 30 days.
In fact, the pollution occurred sometime in July
of 2006 and did not become known to Cook’s
until January 30, 2007, over six months later.
Based solely upon the language found in the
Limited Sudden and Accidental Pollution
Extension, no coverage could extend to the
occurrence because the notice requirement was
not met. However, in Oklahoma “[t]he whole
of a contract is to be taken together, so as to
give effect to every part, if reasonably practicable, each clause helping to interpret the others.” 15 O.S.2001 § 157.13 As stated above, the
Coverage Form is modified not only by the
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Total Pollution Exclusion Endorsement and the
Limited Sudden and Accidental Pollution
Extension, but also by the Texas Changes
endorsement. Just as the limited pollution
extension affects the total pollution exclusion,
the Texas Changes endorsement affects the
limited pollution extension. In sum, all three
endorsements, by modifying the Coverage
Form, are part of the Coverage Form.
¶19 The Texas Changes endorsement, quoted
in part above, states that no failure to comply
with a notice requirement will bar coverage
unless Admiral is prejudiced thereby. Therefore, although Cook’s failed to comply with the
notice requirement (Condition c.) in the Limited Sudden and Accidental Pollution Extension,
Admiral must show that it has been prejudiced
by Cook’s failure to timely notify Admiral of
the occurrence in order for coverage to be
excluded based upon this failure. “[A]n insurance policy, a contract of adhesion, is construed
to give reasonable effect to its provisions.”
Brown v. Patel, 2007 OK 16, ¶ 11 n.8, 157 P.3d
117, 122 n.8 (citations omitted).
¶20 The above analysis reveals that whether
Admiral was required under the insurance
policy to pay Cook’s claim is a genuine issue of
material fact. The resolution of this issue
depends upon the resolution of two sub-issues
of disputed fact: (1) whether the leakage from
the mud pit was sudden and accidental, and
(2) whether Admiral was prejudiced by Cook’s
failure to comply with the notice requirement.
Although only one of these two sub-issues
needs to be found in Admiral’s favor in order
for coverage to be denied, neither can be determined as a matter of law at the summary judgment stage.14
III. Bad Faith
¶21 Cook’s argues that Admiral acted in bad
faith because it did not undertake any investigation into the facts and circumstances of the
case and because it based its denial entirely on
an inaccurate reading of the Policy in its file. In
order to prove a claim of breach of an insurer’s
duty of dealing fairly and in good faith, a
plaintiff must prove the following elements: 1)
the insurer was required under the insurance
policy to pay the insured’s claim; 2) the insurer’s refusal to pay the claim in full was unreasonable under the circumstances because
either: a) it had no reasonable basis for the
refusal, b) it did not perform a proper investigation of the claim, or c) it did not evaluate the
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results of the investigation properly; 3) the
insurer did not deal fairly and in good faith
with the insured; and 4) the insurer’s violation
of its duty of good faith and fair dealing was
the direct cause of the injury sustained by the
insured. Andres v. Oklahoma Farm Bureau Mutual Insurance Co., 2009 OK CIV APP 97, ¶ 16, __
P.3d __; see Oklahoma Uniform Jury Instructions - Civil (2d) No. 22.2. The Oklahoma
Supreme Court has stated:
Every insurance contract carries with it
the duty to act fairly and in good faith in
discharging its contractual responsibilities.
A party prosecuting a claim of bad faith
carries the burden of proof and must plead
all the elements of the intentional tort. The
essence of the tort is the unreasonable, badfaith conduct of the insurer. A central issue
is whether the insurer had a good faith
belief in some justifiable reason for the
actions it took or omitted to take that are
alleged to be violative of the duty of good
faith and fair dealing.
Garnett v. Government Employees Insurance Co.,
2008 OK 43, ¶ 22, 186 P.3d 935, 944 (footnotes
omitted).
“Before the issue of an insurer’s alleged bad
faith may be submitted to the jury, the trial court
must first determine as a matter of law, under
the facts most favorably construed against the
insurer, whether the insurer’s conduct may be
reasonably perceived as tortious.” Id.
¶22 The trial court granted summary judgment in favor of Admiral on the issue of bad
faith. The trial court stated that “[b]ecause
there was no potential coverage under the
Policy for any of the claims asserted by [Fossil]
against [Cook’s], Admiral was not obligated to
provide a defense to [Cook’s] in this action,”
and “[b]ecause Admiral owed no duty to
defend [Cook’s] and has no duty to indemnify
[Cook’s] against any loss in this action, Admiral has not violated its duty of good faith and
fair dealing.” However, as stated in the preceding section of this Opinion, whether Admiral
was required under the Policy to pay Cook’s
claim is a genuine issue of material fact. Therefore, a determination as to whether Admiral
acted in bad faith is premature, and we must
find that the trial court erred in granting summary judgment on this issue.
Vol. 81 — No. 31 — 11/20/2010
CONCLUSION
¶23 Based on our review of the record on
appeal and applicable law, we reverse the
order of the trial court granting summary judgment because we find genuine issues of material fact remain on the issue of coverage. Furthermore, we find the decision on the issue of
bad faith is premature. We remand this case for
further proceedings in a manner consistent
with this Opinion.
¶24 REVERSED AND REMANDED FOR
FURTHER PROCEEDINGS.
WISEMAN, C.J., and FISCHER, P.J., concur.
1. Rule 1.36, Okla. Sup. Ct. Rules, 12 O.S. Supp. 2004, ch. 15, app.
1. Pursuant to this rule, this appeal stands submitted without appellate
briefing.
2. Fossil was formerly known as Spectra Energy. Record (R.), p. 90.
3. R., p. 201.
4. “An insurance policy is a contract. The rules of construction and
analysis applicable to contracts govern equally insurance policies.”
May v. Mid-Century Insurance Co., 2006 OK 100, ¶ 22, 151 P.3d 132, 140
(footnotes omitted).
5. Generally, “[t]he law of the state chosen by the parties to govern
their contractual rights and duties will be applied . . . .” Restatement
(Second) of Conflict of Laws, § 187 (1971). See also Telex Corp. v. Hamilton, 1978 OK 32, ¶¶ 7-8, 576 P.2d 767, 768 (implying that, even if the
contract had not been entered into and performed in Oklahoma, Oklahoma law would have been applied because the contract so provided);
43 Am. Jur. 2d Insurance § 347 (“[w]here it is provided by the contract
of insurance itself that it shall be construed in accordance with the laws
of a designated place and the stipulation is valid, such stipulation as a
general rule controls the construction and effect of the contract . . .”).
However, “if the particular issue is one which the parties could not
have resolved by an explicit provision in their agreement directed to
that issue [then the law of the state chosen by the parties will be
applied unless] either (a) the chosen state has no substantial relationship . . . and there is no other reasonable basis for the parties’ choice,
or (b) application of the law of the chosen state would be contrary to a
fundamental policy of a state which has a materially greater interest
than the chosen state . . . and which . . . would be the state of the applicable law in the absence of an effective choice of law by the parties.”
Restatement (Second) of Conflict of Laws, § 187 (1971). Even if the
Restatement analysis for issues that could not have been resolved by
an explicit provision in the agreement was applied, Oklahoma law, if
found to be chosen by the parties (infra), would govern this dispute.
Oklahoma has a substantial relationship to the parties and no state has
a materially greater interest in the determination of the issues presented in this case because the performance and the pollution all
occurred in Oklahoma.
6. R., p. 99.
7. R., p. 178. Admiral does not argue that Oklahoma courts are not
courts of competent jurisdiction. We note that a court of competent
jurisdiction is one having jurisdiction of a person and the subject matter and the power and authority of law at the time to render the particular judgment. Cossey v. Cherokee Nation Enterprises, LLC, 2009 OK 6,
¶ 15, 212 P.3d 447, 454. Oklahoma has personal and subject matter
jurisdiction over the parties and this dispute. See Reeds v. Walker, 2006
OK 43, ¶ 11, 157 P.3d 100, 107; and Gilbert v. Security Finance Corporation
of Oklahoma, Inc., 2006 OK 58, ¶ 16, 152 P.3d 165, 173.
8. See, e.g., TH Agriculture & Nutrition, LLC v. Ace European Group
Ltd., 488 F.3d 1282, 1286 (10th Cir. 2007) (confronted with the phrase,
“[a]ll matters arising hereunder shall be determined in accordance
with the law and practice of such Court,” the court stated that this
addressed the parties’ choice of law).
9. The endorsement requires that four conditions be met, but only
two (a. and c.) are relevant to this appeal.
10. R., p. 94.
11. R., p. 178. Cook’s has attached an OCC report (R., p. 201) and
an excerpt from a deposition of Peter Massion, the president of Fossil
(R., p. 205), in support of its assertion that the “problem [at the well
site] arose within a 7-14 day time span (July 14-28, 2006).” The OCC
report is dated July 28, 2006. In this report the OCC investigator, Rich-
Vol. 81 — No. 31 — 11/20/2010
ard Kersey (“RKY” in the report), determined that the mud put liner,
according to him, was “not installed correctly, sides of liner down in
pit, fluids contaminating the vertical walls and bottom.” Kersey made
this determination during an “Inspection Discovery.” Massion’s deposition reveals that one to two weeks before Kersey notified Fossil of the
leakage Fossil made a determination that the oil well in question was
“going to be an unsuccessful reentry.” Even though Fossil examined
the well presumably around the time its determination regarding reentry was made, Massion received no information from his employees
about the mud pit liner or the need to clean up any leakage. The first
indication of any leakage was not until Kersey’s OCC report. Based on
this evidence it can reasonably be inferred by a trier of fact that Fossil
examined its well just one to two weeks prior to the OCC report and
that the leakage did not occur until sometime during the two weeks
prior to July 28, 2006. Although Admiral nevertheless claims that there
is no evidence that the accident was sudden and accidental, we note
that Admiral has not cited to any evidence that the leakage was not
sudden and accidental (e.g., evidence that it occurred over an extended
period of time).
12. R., p. 94.
13. See also Oklahoma Oncology & Hematology P.C. v. US Oncology,
Inc., 2007 OK 12, ¶ 27, 160 P.3d 936 (the courts will read the provisions
of a contract in their entirety to give effect to the intention of the parties
as ascertained from the four corners of the contract).
14. It also cannot be determined at this stage whether Admiral
owed Cook’s a duty to defend. In First Bank of Turley v. Fidelity and
Deposit Insurance Company of Maryland, 1996 OK 105, ¶ 13, 928 P.2d 298,
303-304, the Oklahoma Supreme Court set forth the parameters of the
duty to defend:
The duty to defend is separate from, and broader than, the duty
to indemnify, but the insurer’s obligation is not unlimited. The
defense duty is measured by the nature and kinds of risks covered by the policy as well as by the reasonable expectations of the
insured. An insurer has a duty to defend an insured whenever it
ascertains the presence of facts that give rise to the potential of
liability under the policy. The insurer’s defense duty is determined on the basis of information gleaned from the petition (and
other pleadings), from the insured and from other sources available to the insurer at the time the defense is demanded (or tendered) rather than by the outcome of the third-party action.
(Emphasis and footnotes omitted.)
Whether Admiral owed Cook’s a duty to defend also depends upon
the resolution of genuine issues of material fact and, therefore, summary judgment is improper.
2010 OK CIV APP 124
HIGHLAND CROSSING, L.P., an Oklahoma
limited partnership, Plaintiff/Appellant, vs.
KEN LASTER COMPANY, an Oklahoma
corporation, Defendant/Appellee, vs.
ROYCE WRIGHT, General Partner of
Highland Crossing, L.P., Third Party
Defendant.
Case No. 107,196. June 25, 2010
HONORABLE JEFFERSON D. SELLERS,
JUDGE
AFFIRMED
Kenneth M. Smith, RIGGS, ABNEY, NEAL,
TURPEN ORBISON & LEWIS, Tulsa, Oklahoma, for Plaintiff/Appellant,
Joe M. Fears, BARBER & BARTZ, Tulsa, Oklahoma, for Defendant/Appellee.
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¶1 Highland Crossing, L.P., Plaintiff/Appellant (“Owner”), seeks review of an order confirming an arbitration award in favor of Defendant/Appellee Ken Laster Company (“Subcontractor”).1 The trial court denied Owner’s
Petition to Vacate the arbitration award and
granted Subcontractor’s Cross-Application for
Order Confirming Arbitration Award against
Owner.
¶2 Owner was a developer of a construction
project in Sand Springs, Oklahoma, which
secured the services of Texas BBL, L.P. (“General Contractor”). In furtherance of this project,
in August 2005, Owner entered into a written
contract (“Contract”) with General Contractor
for the construction of multi-family apartments. This Contract contained an express
agreement to arbitrate “any claim arising out
of or related to the Contract.” Subsequently, in
furtherance of the apartment construction project, General Contractor entered into a subcontract agreement (“Subcontract”) with Subcontractor in September 2005 whereby Subcontractor agreed to perform the dirt work, underground utilities and infrastructure work for a
lump sum price of $825,384. The Subcontract
expressly included an agreement to arbitrate
“in the same manner and under the same procedure as provided in the Contract.” The construction project was completed in the spring
of 2007. During the course of construction,
Subcontractor submitted claims to the General
Contractor, some of which were denied. In
2007, Subcontractor commenced an arbitration
proceeding against General Contractor seeking
to recover over $200,000 it claimed remained
due pursuant to the Subcontract. Later, Subcontractor filed a motion to join Owner in the
arbitration to which Owner filed an objection
on the basis that Owner had “no known contract with any of the parties” that would
require Owner’s participation in arbitration.2
After Subcontractor filed a response to Owner’s objection, the arbitrator held a hearing
then ruled in Subcontractor’s favor, ordering
that Owner be joined as an additional party.
¶3 Arbitration hearings were held in December 2007 and January 2008. The arbitrator
entered his award on April 28, 2008 (and modified on May 27) which determined that Subcontractor was entitled to judgment against
Owner in the amount of $67,940.75 plus reasonable attorney fees of $50,000 and expenses
in the amount of $11,000. Additionally, the
arbitrator awarded Subcontractor $3,700
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against General Contractor. Owner was also
ordered to pay the administrative fees for the
arbitration and the expenses and compensation of the arbitrator. Owner thereafter filed its
Petition to Vacate the arbitration award in the
district court based upon the lack of an agreement to arbitrate claims of the Subcontractor
pursuant to 12 O.S. Supp. 2008 §1874(a)(5).
Ultimately, the trial court confirmed the modified arbitration award and entered judgment
against Owner in the amount of $67,940.75,
with interest, together with arbitration attorney fees in the amount of $50,000 and arbitration expenses of $22,097.67. The trial court
further found Subcontractor entitled to an
award of reasonable attorney fees incurred in
the trial court proceeding in accordance with
12 O.S. Supp. 2008 §936 and costs pursuant to
12 O.S. 2001 §928.
¶4 The only issue on appeal is whether the
Owner was subject to an agreement to arbitrate
upon which the arbitration award could be
based.3 We hold that under the facts of this
case, Owner was a party to an agreement to
arbitrate the disputes arising from the Contract
and Subcontract, and the trial court correctly
confirmed the arbitration award.
¶5 The interpretation of an arbitration agreement is governed by state law principles of
general contract interpretation. Wilkinson v.
Dean Witter Reynolds, 1997 OK 20, 933 P.2d 878.
The courts will read the provisions of a contract in their entirety, Mortgage Cleaning Corp. v.
Baughman Lumber Co., 1967 OK 232, ¶11, 435
P.2d 135, 138, to give effect to the intention of
the parties as ascertained from the four corners
of the contract, and where the language is
ambiguous, it will be interpreted in a fair and
reasonable sense. Id., at ¶13, 435 P.2d at 139.
¶6 Generally, the courts will enforce arbitration agreements according to the terms of the
parties’ contract, as arbitration “is a matter of
consent, not coercion.” Volt Info. Sciences, Inc. v.
Bd. Of Trustees, 489 U.S. 468, 479 (1989). To
ensure that the parties have consented to arbitration, the courts will decide whether there is
a valid enforceable arbitration agreement,
whether the parties are bound by the arbitration
agreement, and whether the parties agreed to
submit a particular dispute to arbitration. Oklahoma Oncology & Hematology, P.C. v. U.S. Oncology, Inc., 2007 OK 12, ¶22, 160 P.3d 936, 944-45; See
First Options of Chicago, Inc. v. Kaplan, 514 U.S.
938 (1995). There is a “strong presumption in
favor of arbitration.” Towe, Hester & Erwin, Inc. v.
Vol. 81 — No. 31 — 11/20/2010
Kansas City Fire & Marine Ins. Co., 1997 OK CIV
APP 58, ¶24, 947 P.2d 594, 599. “Ambiguities are
resolved in favor of finding the dispute is arbitrable.” Farrell v. Concept Builders, Inc., 2008 OK
CIV APP 34, ¶7, 208 P.3d 483, 485; City of Muskogee v. Martin, 1990 OK 70, ¶8, 796 P.2d 337, 340
(“Arbitration should be allowed unless the court
can say with ‘positive assurance’ the dispute is
not covered by the arbitration clause.”). The
question as to the existence of a valid, enforceable agreement to arbitrate is a question of law
reviewed de novo. Oklahoma Oncology & Hematology, P.C., ¶19 at p. 944.
¶7 In Oklahoma, there are limited circumstances set forth by statute under which a party’s motion to vacate an arbitration award may
be granted. See 12 O.S. Supp. 2008 §1874(A).
That statute provides in pertinent part as follows:
(A.) Upon an application and motion to the
court by a party to an arbitration proceeding, the court shall vacate an award
made in the arbitration proceeding if:…
(5.) There was no agreement to arbitrate,
unless the person participated in the arbitration proceeding without raising the
objection under subsection C of Section 16
of this act not later than the beginning of
the arbitration hearing;…
(Emphasis added). 12 O.S. §1874(A)(5).
¶8 In this case, Owner argues it did not sign
and was not a party to the Subcontract, and
thus should not be required to arbitrate disputes arising from the Subcontract. Owner
would apparently have us ignore its Contract
with General Contractor, which binds Owner
to arbitrate “any claim arising out of or related
to the Contract.” That Contract demonstrates
Owner’s agreement to arbitrate claims related
to the construction project.
¶9 The parties’ respective contractual obligations, the facts giving rise to the dispute, and
the interrelationship of relevant contractual
provisions in both contracts demonstrate the
inseparable nature of Subcontractor’s claims
against General Contractor and Owner. Pursuant to the Contract, Owner agreed to pay General Contractor for the cost of construction, and
the Contract expressly contemplates the subcontracting of work as part of the project. The
Contract specifies that “[e]ach subcontract
agreement . . . shall allow to the Subcontractor .
. . the benefit of all rights, remedies and redress
Vol. 81 — No. 31 — 11/20/2010
against the Contractor that the Contractor, by
the Contract Documents, has against the
Owner.” Further, we note “[t]he very concept of
a subcontract is that of an agreement by which
performance of a portion of the prime contract
is delegated to another.” 6 Philip L. Bruner &
Patrick J. O’Connor, Bruner & O’Connor on Construction Law §20:32 (May 2010).
¶10 General Contractor’s primary defense to
non-payment of Subcontractor’s claims was on
the basis of the terms of the Subcontract, which
included a provision rendering Owner’s payment to General Contractor a condition precedent to General Contractor’s obligation to pay
Subcontractor. The parties refer to this provision as a “pay-if-paid provision.” In the course
of the arbitration proceeding, General Contractor asserted a crossclaim for indemnity against
Owner, asking that any amounts still owing to
Subcontractor on the project should be paid by
Owner to General Contractor for payment to
Subcontractor. Given the interdependent contractual obligations of the parties, relief could
not be afforded Subcontractor unless and until
Owner was joined as a party in the arbitration.
¶11 Several specific provisions in both contracts demonstrate the interrelationship
between the parties and their respective contractual duties and obligations. The Contract
entered into by Owner and General Contractor
includes an agreement to arbitrate “[a]ny
claim arising out of or related to the Contract.” The Subcontract expressly provides,
“Subcontractor agrees to abide by the terms,
conditions and covenants of the Contract Documents between the Owner and [General Contractor]. . . . The Contract Documents consist of
this AGREEMENT, . . . the Agreement between
Owner and [General Contractor], and any and
all conditions of the Contract (General, Supplementary and other) . . . .” The Subcontract further specifies that “in the event the Contractor
becomes a party to binding arbitration arising
out of or relating to the Contract, which binding arbitration involves the work required
under this Subcontract, Contractor shall have
the right, in its sole discretion to join Subcontractor to such binding arbitration.”4 Finally,
the agreement-to-arbitrate provision in the
Subcontract expressly provides “[a]ny controversy of claim between [General Contractor]
and the Subcontractor arising out of or related
to this Subcontract, or the breach thereof, shall
be settled by arbitration, which shall be con-
2693
ducted in the same manner and under the
same procedure as provided in the Contract
with respect to claims between the Owner
and [General Contractor]. . . .”
¶12 “Where two contracts, not executed at
the same time, refer to the same subject matter
and show on their face that one was executed
to carry out the intent of the other, it is proper
to construe them together as if they were one
contract.” Bixler v. Lamar Exploration Co., 1987
OK 15, ¶5, 733 P.2d 410, 411-12. It is clear that
the parties’ respective contracts relate to the
same construction project, reference the parties’ respective related duties and obligations,
and were both executed to carry out the mutual intent of completion of the project. Further,
the Subcontract expressly incorporates the
Contract, binding Subcontractor to the terms
and conditions thereto. We therefore interpret
the express contractual language of both contracts together, the meaning of which is plain
and unambiguous. Had Owner intended to
exclude Subcontractors from his agreement to
arbitrate, the Contract’s arbitration provision
should have included express language of
limitation as to such claims or parties.5 The
express arbitration provision in the Subcontract, the broad language of the arbitration
provision in the Contract, coupled with the
Subcontract’s express reference to that agreement are substantially sufficient to permit a
finding that all three parties intended to arbitrate all disputes arising out of the construction
project.6 Thus, Owner’s contention that there
was no agreement from which it could be compelled to arbitrate is unpersuasive.7
¶13 Upon review of the facts of the dispute,
the terms of the respective construction contracts revealing all parties’ agreement to arbitrate, we affirm the trial court’s Order Confirming the Arbitration Award.
¶14 AFFIRMED.
JOPLIN, P.J., and BELL, V.C.J., concur.
2010 OK CIV APP 121
IN RE: PROTEST TO THE CERTIFICATE
OF TITLE BRAND ISSUED TO AAAA
WRECKER SERVICE, INC. ON A 2004
TOYOTA DBS, VIN # 5TBDT44154S460009.
AAAA WRECKER SERVICE, INC.,
Appellant, vs. OKLAHOMA TAX
COMMISSION, Appellee.
Case No. 107,456. July 7, 2010
APPEAL FROM THE OKLAHOMA TAX
COMMISSION
KRIS D. KASPER, ADMINISTRATIVE
LAW JUDGE
REVERSED AND REMANDED WITH
DIRECTIONS
David Dunlap, DUNLAP LAW FIRM, Oklahoma City, Oklahoma, for Appellant
Marjorie Welch, INTERIM GENERAL COUNSEL, Sean R. McFarland, ASSISTANT GENERAL COUNSEL, OKLAHOMA TAX COMMISSION, Oklahoma City, Oklahoma, for Appellee
JERRY L. GOODMAN, JUDGE:
1. The trial court entered an Order Certifying Final Judgments on
May 29, 2009, certifying two judgments as final pursuant to 12 O.S.
2001 §994(A). The two judgments so certified were as follows: the
Journal Entry of Judgment filed February 6, 2009 and the Agreed Journal Entry of Judgment as to fees and costs filed February 25, 2009. Each
of these Orders was attached to Owner’s Petition in Error.
2. In its Petition to Vacate, Owner specifically points to the absence
of any agreement to arbitrate between itself and Subcontractor, while
it is silent on the fact of its agreement to arbitrate disputes in its Contract with General Contractor.
3. Subcontractor contends Owner waived its objection to arbitration and/or independent appellate review by conduct manifesting
consent to having the arbitrator decide the issue of arbitrability. The
record reflects that Owner timely raised its objection to arbitration at
the commencement of proceedings in conformance with 12 O.S.
2694
§1874(A)(5) and therefore, we find no waiver of Owner’s objection to
arbitrate and/or the right to a de novo review. See First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938 (1995) (holding the arbitrability of a
dispute was subject to independent review by the courts).
4. General contractor raised no objection to the joinder of Owner as
an additional party to the arbitration proceeding and, in fact, filed a
cross-claim against Owner for indemnity.
5. In fact, §4.64 of the General Conditions of the Contract expressly
prohibits the joinder of the architect in arbitration. That provision
additionally expressly prohibits joinder of “parties other than the
Owner, Contractor, a separate contractor as described in Article 6 and
other persons substantially involved in a common question of fact or
law whose presence is required if complete relief is to be accorded
in arbitration.” (Emphasis added).
6. As a general rule, broad general incorporation language in a
construction contract is sufficient to capture an arbitration provision. 6
Philip L. Bruner & Patrick J. O’Connor, Bruner & O’Connor on Construction Law §20:32 (May 2010); See Carter v. Schuster, 2009 OK 94, ¶14, 227
P.3d 149, 153 (finding incorporation by reference as one of five recognized theories for binding nonsignatories to arbitration agreements).
7. Subcontractor asserts additional theories (i.e., equitable estoppel, agency, direct benefits doctrine, and third-party beneficiary theories) under which it contends it is entitled to arbitration of its claims
against Owner. Because our review of the Contract and Subcontract
satisfies us that all parties agreed to arbitrate, we need not determine
if the arbitration award would be confirmed under the other asserted
theories.
¶1 Appellant AAAA Wrecker (AAAA) seeks
review of the Oklahoma Tax Commission’s
(OTC) order finding that AAAA was only
entitled to obtain a “junk” vehicle title rather
than a “salvage” vehicle title. Based on our
review of the facts and applicable law, we
reverse and remand with directions.
Vol. 81 — No. 31 — 11/20/2010
FACTS
STANDARD OF REVIEW
¶2 A 2004 Toyota DBS (Tundra pickup),
when first registered in Oklahoma was issued
a “rebuilt vehicle” pursuant to 47 O.S.2001 and
Supp. 2009, § 1105(B)(3). It was later stolen.
¶7 Title 75 O.S. 2001, § 322 sets forth those
situations in which the District Court and this
Court can set aside or modify the order of an
administrative agency. It provides in pertinent
part:
¶3 Columbia National Insurance Company
(Columbia) after paying the loss claim, issued
an “Automobile Loss Notice” indicating the
vehicle’s loss of value as 100%. On December
19, 2008, OTC issued Columbia an “unrecovered theft” title pursuant to § 1105(B)(7).
¶4 On December 31, 2008, the stolen Tundra
was found in Oklahoma City. The Oklahoma
City Police Department requested AAAA to
tow the vehicle. AAAA stored the Tundra for
one year, incurring storage fees. AAAA sought
to recover its towing and storage fees by foreclosing on the title and selling the truck at public auction, pursuant to 42 O.S.2001 and Supp.
2008, §§ 91 through 132. AAAA published
notice of the sale to Columbia, which demanded return of the vehicle without compensating
AAAA or making any further efforts to recover
the vehicle. AAAA sold the truck to a third
party and requested a “salvage” certificate of
title to complete the sale. OTC refused to issue
a salvage title unless AAAA provided another
statement of loss issued by Columbia which
showed the loss of value of the vehicle to be
less than 100%. Columbia refused to provide
the amended statement and OTC refused to
issue a salvage title. OTC’s position is that the
loss remains at 100% until it is notified otherwise; thus it can only issue a junk title. AAAA
sued to force OTC to issue a salvage title so it
can complete the sale of the truck and recoup
its storage fees.
¶5 An administrative law judge (ALJ) conducted an evidentiary hearing. The truck was
subsequently inspected. It was found operable
and in “good” condition except for minor body
damage, an off-center steering wheel, and a
faulty air bag light.
¶6 On June 8, 2009, the ALJ entered an order
containing findings of fact, conclusions of law,
and recommendations. The ALJ found OTC’s
issuance of a junk vehicle title was correct and
denied AAAA’s protest. On review by the OTC
sitting en banc, it adopted the findings of fact
and conclusions of law entered by the ALJ and
entered judgment accordingly, resulting in this
appeal.
Vol. 81 — No. 31 — 11/20/2010
(1) In any proceeding for the review of an
agency order, the Supreme Court or the
district court, as the case may be, in the
exercise of proper judicial discretion or
authority, may set aside or modify the
order, or reverse it and remand it to the
agency for further proceedings, if it determines that the substantial rights of the
appellant or petitioner for review have
been prejudiced because the agency findings, inferences, conclusions or decisions,
are:
(a) in violation of constitutional provisions; or
(b) in excess of the statutory authority or
jurisdiction of the agency; or
(c) made upon unlawful procedure; or
(d) affected by other error of law, or
(e) clearly erroneous in view of the reliable,
material, probative and substantial competent evidence, as defined in Section 10 of
this act including matters properly noticed
by the agency upon examination and consideration of the entire record as submitted; but without otherwise substituting its
judgment as to the weight of the evidence
for that of the agency on question of fact;
or
(f) arbitrary or capricious; or
(g) because findings of fact, upon issues
essential to the decision were not made
although requested.
¶8 Appellate courts review the entire record
made before an administrative agency acting
in its adjudicatory capacity to determine
whether the findings and conclusions set forth
in the agency order are supported by substantial evidence. Dugger v. State ex rel. Oklahoma
Tax Comm’n, 1992 OK 105, ¶ 9, 834 P.2d 964,
968. Adjudicatory orders will be affirmed if the
record contains substantial evidence in support
of the facts upon which the decision is based,
and if the order is otherwise free of error. Id.
¶9 In determining whether an administrative
agency’s findings and conclusions are sup-
2695
ported by substantial evidence, the reviewing
court will consider all the evidence including
that which fairly detracts from its weight. State
ex rel. Cartwright v. Oklahoma Corp. Comm’n,
1982 OK 11, ¶ 15, 640 P.2d 1341, 1347; El Paso
Natural Gas Co. v. Corporation Comm’n, 1981 OK
150, ¶ 9, 640 P.2d 1336, 1338. However, great
weight is accorded the expertise of an administrative agency. On review, a presumption of
validity attaches to the exercise of expertise. An
appellate court may not substitute its judgment for that of an agency, particularly in the
area of expertise which the agency supervises.
Denney v. Scott, 1992 OK 134, ¶ 8, 848 P.2d 1142,
1143; Abstracts of Oklahoma, Inc. v. Payne County
Title Co., 1992 OK 13, ¶ 13, 825 P.2d 1334, 1339;
Tulsa Area Hosp. Council, Inc. v. Oral Roberts
Univ. 1981 OK 29, ¶ 10, 626 P.2d 316, 320.
¶10 However, an administrative agency
order interpreting law is reviewed using a de
novo standard. Samman v. Multiple Injury Trust
Fund, 2001 OK 71, ¶ 8, and n.5, 33 P.3d 302, 305.
It has been noted that “an administrative agency’s statutory interpretation must be reasonable, and the agency cannot extend its power
beyond that granted by statute.” Henderson v.
Maley, 1991 OK 8, n.7, 806 P.2d 626, 633. Furthermore:
An administrative order is subject to
reversal if an appealing party’s substantial
rights are prejudiced because the agency’s
decision is entered in excess of statutory
authority or jurisdiction, or if an order is
entered based on an error of law, or if the
agency’s findings are clearly erroneous in
view of the reliable, material, probative
and substantial competent evidence in the
record.
Tubbs v. State ex rel., Teachers’ Retirement System
of Oklahoma, 2002 OK 79, ¶¶ 16-18, 57 P.3d 571,
578-79 (citing City of Tulsa v. State ex rel. Public
Employees Relations Bd., 1998 OK 92, ¶¶ 12-13,
967 P.2d 1214, 1219).
THE APPLICABLE STATUTES
¶11 Title 47 O.S.2001 and Supp. 2008, §
1105(A) defines six types of vehicles in Oklahoma and § 1105(B) defines seven types of
titles which OTC may issue:
years and which has been damaged by collision or other occurrence to the extent that
the cost of repairing the vehicle for safe
operation on the highway exceeds sixty
percent (60%) of its fair market value, . . .
immediately prior to the damage. . . .
2. “Rebuilt vehicle” means any salvage
vehicle which has been rebuilt and inspected for the purpose of registration and title;
3. “Flood-damaged vehicle” means a
salvage or rebuilt vehicle which was damaged by flooding or a vehicle which was
submerged at a level to or above the dashboard of the vehicle and on which an
amount of loss was paid by the insurer;
4. “Unrecovered-theft vehicle” means a
vehicle which has been stolen and not yet
recovered;
5. “Recovered-theft vehicle” means a
vehicle, including a salvage or rebuilt vehicle, which was recovered from a theft; and
6. “Junked vehicle” means any vehicle
which is incapable of operation or use on
the highway, has no resale value except as
a source of parts or scrap and has an eighty
percent (80%) loss in fair market value.
B. The owner of every vehicle in this
state shall possess a certificate of title as
proof of ownership of such vehicle . . . .
There shall be seven types of certificates of
title:
1. Original title for any motor vehicle
which is not a remanufactured, salvage,
unrecovered-theft, rebuilt or junked vehicle;
2. Salvage title for any motor vehicle
which is a salvage vehicle or is specified as
a salvage vehicle or the equivalent thereof
on a certificate of title from another state;
3. Rebuilt title for any motor vehicle
which is a rebuilt vehicle;
4. Junked title for any motor vehicle
which is a junked vehicle or is specified as
a junked vehicle or the equivalent thereof
on a certificate of title from another state;
A. As used in the Oklahoma Vehicle License
and Registration Act:
5. Classic title for any motor vehicle,
except a junked vehicle, which is twentyfive (25) model years or older;
1. “Salvage vehicle” means any vehicle
which is within the last ten (10) model
6. Remanufactured title for any vehicle
which is a remanufactured vehicle; and
2696
Vol. 81 — No. 31 — 11/20/2010
7. Unrecovered-theft title for any motor
vehicle which has been stolen and not
recovered.
Application for a certificate of title, whether the initial certificate of title or a duplicate, may be made to the Tax Commission
or any motor license agent. …
¶12 Further, relevant to this appeal is § 1105(O):
The ownership of any unrecovered vehicle which has been declared a total loss by
an insurer because of theft shall be transferred to the insurer by an unrecoveredtheft vehicle title; provided, the ownership
of any such vehicle which has been declared
a total loss by an insurer licensed by the
Insurance Department of the State of Oklahoma and maintaining a multi-state motor
vehicle salvage processing center in this
state shall be transferred to the insurer by a
salvage or an unrecovered-theft title without the requirement of a visual inspection
of the vehicle identification number by the
insurer. Upon recovery of the vehicle, the
ownership shall be transferred by an original title, salvage title, or junked title, as
may be appropriate based upon an estimate of the amount of loss submitted by
the insurer.
¶13 OTC claimed without an estimate of loss
showing less than a total loss, it was bound by
§ 1105(O) to issue only a junk title.
ANALYSIS
¶14 AAAA’s primary argument is that
§ 1105(O) does not provide OTC a legal basis
to issue a junk vehicle title, but rather creates
an exception to acquiring title which applies
only to insurance companies. First, it notes
that in certain cases, before an insurance company can be issued title, a visual inspection of
the car and its VIN number is required. However, § 1105(O) creates an exception to this
rule. AAAA argues the language specifically
addresses a situation where an insurance
company who insures a vehicle which is later
stolen and pays for its loss may first obtain an
“unrecovered theft” title without the necessity
of a VIN inspection. (“[P]rovided, . . . any . . .
vehicle which has been declared a total loss by
an insurer . . . shall be transferred to the insurer by a salvage or an unrecovered-theft title
without the requirement of a visual inspection
of the vehicle identification number by the
insurer.” § 1105 (O)) If the stolen vehicle is
Vol. 81 — No. 31 — 11/20/2010
later recovered, an insurer may be issued an
original title, a salvage title, or a junk title,
depending on the insurer’s opinion of the
value of the now-recovered vehicle.
¶15 AAAA argues § 1105(O) applies only to
an insurer in order to facilitate the swift transfer
of title, but that it should not be interpreted to
apply to a non-insurer seeking title to a nowrecovered vehicle. Otherwise, the very situation
now before us arises: that a towing company,
seeking to sell the vehicle, is at the mercy of a
non-cooperative insurance company which
refuses to amend its statement of loss, thus preventing the towing company from completing
the sale. AAAA contends OTC’s choice to issue
a junk title under § 1105(O) is erroneous as a
matter of law. We agree and reverse.
¶16 We begin by repeating the statutory definitions of “junked vehicle” and “junked title”
as set out in 47 O.S.2001 and Supp. 2008,
§§ 1105 (A)(6) and (B)(4):
“Junked vehicle” means any vehicle which
is incapable of operation or use on the
highway, has no resale value except as a
source of parts or scrap and has an eighty
percent (80%) loss in fair market value.
The only vehicle which may be issued a junked
title is a junked vehicle:
Junked title for any motor vehicle which is
a junked vehicle or is specified as a junked
vehicle or the equivalent thereof on a certificate of title from another state;
According to the undisputed facts in this
case, as found by the ALJ, the Tundra in question does not meet the definition of junked
vehicle. The evidence shows it to be in good
condition, operable, and with a resale value as
demonstrated by its tentative sale at auction.
Significantly, by OTC’s tacit admission, it could
have been issued a salvage title but for the lack
of a loss statement by Columbia. OTC’s choice
of title it offered was not based on a determination of the true nature of the vehicle, but rather
by a strained interpretation of law. OTC’s issue
of a junked vehicle title to a vehicle which does
not meet that definition was erroneous as a
matter of law.
¶17 We next address the interpretation given
to 47 O.S.2001 and Supp. 2008, § 1105(O) set
out below in relevant part.
The ownership of any unrecovered vehicle which has been declared a total loss by
2697
an insurer because of theft shall be transferred to the insurer by an unrecoveredtheft vehicle title; … transferred to the
insurer by a salvage or an unrecoveredtheft title without the requirement of a
visual inspection of the vehicle identification number by the insurer. Upon recovery
of the vehicle, the ownership shall be transferred by an original title, salvage title, or
junked title, as may be appropriate based
upon an estimate of the amount of loss
submitted by the insurer.
¶21 Those titles include: Original (B)(1); Salvage (B)(2); Rebuilt (B)(3); Junk (B)(4); Classic
(B)(5); Remanufactured (B)(6) and; Unrecovered-theft (B)(7). Since under these facts AAAA
is not entitled as a non-insurer to an Unrecovered-theft title, and the vehicle in question
does not meet the statutory definition of Junk
or Classic, and AAAA is not entitled to an
Original title, it stands to reason the only types
of title for which this vehicle qualifies is Salvage, Rebuilt, or Remanufactured.
¶18 OTC’s interpretation of this statute led it
to conclude it could only issue a junk title and
must therefore deny AAAA’s request for a salvage or original title.
¶22 We conclude the ALJ erred as a matter of
law in the interpretation of the law, and OTC
erred in adopting the findings of the ALJ, and
denying AAAA’s request for a title other than
that of a junked vehicle. We reverse and remand
with directions to OTC to issue an appropriate
title consistent with this opinion.
¶19 We disagree. We hold this section only
applies to titles issued to an insurer; it does not
apply to titles issued to non-insurers. Read in
context, this provision (a) requires title to a
non-recovered stolen vehicle be given to the
insurer only in the form of an unrecovered
theft title; (b) waives the requirement of a
visual inspection of the VIN before transferring
title (obviously because the vehicle is unavailable for inspection) and; (c) requires an insurer,
upon recovery of the stolen vehicle, to relinquish the unrecovered theft title and receive
instead either an original, a salvage, or a junked
title, depending upon the amount of loss
incurred by the insurer. We reject the application of § 1105(O) to a non-insurer who has not
previously been issued an unrecovered theft
title who now seeks a different title. To hold
otherwise results in an absurdity wherein, as
here, a stolen vehicle is recovered in otherwise
good condition, and yet its new bona fide purchaser cannot acquire any title other than a
junk title (which in most instances renders the
vehicle unmarketable) simply because an
insurer who paid the original loss cannot or
will not revise its loss statement.
¶20 AAAA sought title pursuant to the provisions of 42 O.S.2001 and Supp. 2008, §§ 91
through 132. Those provisions provide procedures by which a towing company such as
AAAA may recover its storage costs by the
perfection and foreclosing of its lien. These
provisions do not, however, specify the type of
title to be given a subsequent bona fide purchaser for value. For guidance, one must refer
back to 47 O.S.2001 and Supp. 2008, § 1105,
which specifies the seven types of vehicle titles
which may be issued by the OTC.
2698
CONCLUSION
¶23 REVERSED AND REMANDED WITH
DIRECTIONS.
GABBARD, P.J., concurs; RAPP, J., not participating.
2010 OK CIV APP 116
CHRIS COOK, RICHARD BERCHER,
TONY NEWSOM AND DERICK PICKARD,
individually, and all other similarly situated
police officers, Plaintiffs/Appellants/
Counter-Appellees, vs. City of Edmond,
Defendant/Appellee/Counter-Appellant.
Case Nos. 107,463; Consol. w/107,469
June 29, 2010
HONORABLE CAROLYN R. RICKS,
TRIAL JUDGE
REVERSED AND REMANDED WITH
DIRECTIONS
James R. Moore, Sue Wycoff, MOORE & VERNIER, P.C., Oklahoma City, Oklahoma, for
Appellants
Andrew W. Lester, George S. Freedman, LESTER, LOVING & DAVIES, P.C., Edmond, Oklahoma, for Appellee
¶1 City of Edmond (City) appeals the trial
court’s July 28, 2009, final judgment which
granted Police Officers’ Chris Cook, Richard
Bercher, Tony Newsom, and Derick Pickard
Vol. 81 — No. 31 — 11/20/2010
(collectively “Officers”) Title 40 O.S.2001 and
Supp. 2005, § 165.1 et seq. wage claim. Officers
also appeal, asserting the trial court applied the
incorrect statute of limitation. Based upon our
reverse and remand with directions.1
FACTS
¶2 Officers filed a petition on August 11,
2003, asserting a claim for back wages pursuant to Title 40 O.S.2001 and Supp. 2005, § 165.1
et seq. Officers asserted their Collective Bargaining Agreement (CBA) with the City established their standard workweek was 42.5 hours,
although the City only compensated them for
40 hours. In February of 2004, the trial court
certified the class as all uniformed officers
employed with the City after August 11, 1998.
¶3 On June 6, 2005, Officers filed a motion for
partial summary judgment on the issue of liability. Officers asserted the CBA required officers to work 42.5 hours a week. Officers contended that in addition to an 8 hour work shift,
all officers are required to report to work 15
minutes before the shift starts and to remain
on-duty and be available for dispatch for 15
minutes after the shift ends. Although officers
are required to be at work and on-duty for 15
minutes before and after the shift, thus working 8.5 hours a day and 42.5 hours a week,
supervisors only enter 8 hours a day and 40
hours a week on time sheets. Thus, Officers are
not compensated for the additional 2.5 hours
they work.
¶4 City responded and filed its own motion
for summary judgment on August 31, 2005,
which it supplemented on September 2, 2005,
and April 7, 2006. City asserted it pays Officers
according to the CBA’s terms, which sets forth
a “standard work week,” not the “hours of
work” for each Officer. City contended §11.2 of
the CBA was established to set a threshold for
overtime, not a promise to pay additional
wages, and was in response to Garcia v. San
Antonio Metro. Transit Auth., 469 U.S. 528 (1985).2
City asserted an officer’s hours of work is
reduced by his use of personal time, vacation,
sick leave, et seq., and officers generally work 35
hours per week, although they are paid for 40
hours. City noted the CBA grants an officer 1.5
hours of personal time each day for lunch and 2
breaks, which it is not obligated to pay, and an
officer may utilize this time for personal activities. The only restrictions placed on officers are
to remain in city limits, be available to respond
Vol. 81 — No. 31 — 11/20/2010
if needed, monitor the radio, remain with their
patrol cars, and remain in uniform. With respect
to the 15 minutes before and after their shifts,
City asserted officers are permitted to attend to
the same personal activities as during their
breaks. City contends the extra 5 hours of pay a
week covers the rare situation when an officer is
dispatched during this time.3
¶5 City further cited the Evans Grievance,
asserting the Fraternal Order of Police had
agreed in 1993 the CBA did not require payment of 42.5 hours of wages. In 1993, then Fraternal Order of Police President Joe Evans filed
a grievance asserting he was not compensated
for the 15 minute pre- and post-shift time. The
CBA in 1992-1993 had a 40 hour work week
and had eliminated provisions requiring the
City to provide meal and break periods.4 The
Fraternal Order of Police and City ultimately
settled the grievance, agreeing the officers
were paid correctly. City asserted the parties to
the 1993-1994 CBA, which was negotiated
while the Evans Grievance was pending, memorialized the parties’ intent that no additional
pay would be required in the future. City contends after these negotiations, the parties have
operated under the same CBA for ten years
without complaint until this suit and that the
parties’ conduct in carrying out the CBA establishes the parties’ intent. Finally, City asserted
Officers failed to present any evidence to prove
they actually worked more than 40 hours per
week entitling them to additional pay.
¶6 On September 15, 2005, Officers filed an
application to hold the motions for summary
judgment in abeyance pending arbitration.
Officers asserted their bargaining agent, the
Fraternal Order of Police Lodge 136 (FOP), had
filed a contract grievance.5 City objected, asserting the grievance had no impact on the present
case, a Title 40 claim, and regardless of how the
arbitrator decided the grievance, the trial court
would still be required to determine whether
Officers actually worked more hours than they
were paid and that this was exclusively for the
court’s determination.
¶7 The trial court ultimately granted Officer’s motion, holding the summary judgment
motions in abeyance pending arbitration. On
November 16, 2005, City filed an application to
assume original jurisdiction and petition for
writ of prohibition with the Oklahoma Supreme
Court, requesting the Court order the trial
court to proceed with the litigation pending
below. The Supreme Court agreed and issued
2699
the writ, directing the trial court to hear and
determine the parties’ cross motions for summary judgment without undue delay.
¶8 On July 7, 2006, later memorialized by
order filed on December 7, 2006, the trial court
issued a letter denying City’s motion for summary judgment and granting Officer’s motion
for partial summary judgment, finding the
CBA clearly states the regular work week is
42.5 hours. However, the court found City does
not pay Officers for the additional 15 minutes
pre- and post-shifts per day required to be on
duty in violation of 40 O.S.2001, § 165.9.
¶9 Also on July 7, 2006, the arbitrator issued
his ruling, denying the grievance. The arbitrator noted that nothing in the CBA states there
is an 8.5 hour work day or a 42.5 hour work
week minimum pay guarantee. Rather, “Article
11.2’s only specific time reference is 42.5 hours,
Saturday to Saturday, in a clause that does not
mention pay.”
¶10 The arbitrator further found the Evans
Grievance compelling. When the Evans Grievance arose, FOP understood that before the
1992-1993 Article 11 contract changes, the 15
minutes pre- and post-shift periods were
included in the work day and were not compensated; the settlement returned to the pre
1992-1993 language with FOP assurance the
dispute was over; and 1993-1994 negotiations
retained the settlement language that survives
today.
¶11 Finally, the arbitrator stated it was
“unnecessary to say if the pre and post 15 minute periods are compensable by themselves or
if meal/break times within the shift are paid or
deducible. However characterized, the current
pay calculation results from an express and
established bargain. The Board is obliged to
enforce it.”
¶12 Thereafter, City filed a motion to reconsider or in the alternative a motion to certify an
interlocutory appeal, asserting the arbitrator
was vested with preclusive authority to interpret the CBA and because the CBA formed the
only basis for the court’s finding of unpaid
work, the court’s decision must be reconsidered. The trial court denied the motion on
December 7, 2006.
¶13 On November 29, 2007, City filed a second
motion for summary judgment, asserting the
trial court lacked subject matter jurisdiction
because Officers failed to comply with the Gov2700
ernmental Tort Claims Act (GTCA), 51 O.S.2001,
§ 151 et seq. The court denied City’s motion.
¶14 On January 7, 2008, Officers filed a second motion for partial summary judgment,
requesting prejudgment interest. On January
25, 2008, City filed a motion asserting the statute of limitations was 3 years. The trial court
ultimately ruled Officers were entitled to prejudgment interest and the proper statute of
limitations was 3 years.
¶15 In June of 2008, City filed an offer of
proof. Officers objected, asserting it was inappropriate because there had never been a trial,
inter alia. Officers ultimately withdrew their
objection. The parties entered into stipulations
and final judgment was entered on July 28,
2009. Officers were subsequently awarded an
attorney’s fee. Both parties appealed and
appeals were consolidated under surviving
appeal No. 107,463.
STANDARD OF REVIEW
¶16 Summary judgment is used to reach a
final judgment where there is no dispute as to
any material fact, and where one party is entitled to judgment as a matter of law. Indiana Nat’l
Bank v. Department of Human Servs., 1993 OK
101, ¶ 10, 857 P.2d 53, 59; Sellers v. Oklahoma Pub.
Co., 1984 OK 11, ¶ 23, 687 P.2d 116, 120. We
review a grant of summary judgment de novo.
Young v. Macy, 2001 OK 4, ¶ 9, 21 P.3d 44, 47. In
a de novo review, we have plenary, independent,
and nondeferential authority to determine
whether the trial court erred in its application of
the law. Id.
ANALYSIS
¶17 Before addressing the merits of either
parties’ propositions of error on appeal, this
Court must first address Officers’ assertion
City may only appeal the denial of its’ motion
to reconsider because City did not file the
motion within 10 days of the order granting
Officers’ motion for partial summary judgment
on the issue of liability. Officers further assert
City waived or abandoned appeal of the denial
of its motion to reconsider by failing to address
it in its brief on appeal.
¶18 City disagrees, asserting the summary
judgment ruling was an intermediate, nonfinal order which remained under the trial
court’s plenary control until the controversy
ended. City notes the issue of damages
remained before the court.
Vol. 81 — No. 31 — 11/20/2010
¶19 The July 7, 2006, letter ruling granting
Officers’ motion for partial summary judgment, later memorialized by order on December 7, 2006, was addressed solely to the issue of
liability. Issues remained pending in the suit.
Thus, the decision did not rise to the level of a
judgment pursuant to 12 O.S.2001, § 681. “No
judgment may arise from a ruling that disposes
of but a portion of an entire claim and leaves
unresolved other issues joined by the pleadings.” LCR, Inc. v. Linwood Prop., 1996 OK 73,
¶ 9, 918 P.2d 1388, 1393. Accordingly, City’s
appeal is proper.
¶20 The parties assert several propositions of
error on appeal. However, one proposition of
error has merit and warrants reversal of the
trial court’s July 28, 2009, final judgment.
¶21 City contends the trial court did not have
the authority to ignore and reject the arbitrator’s decision and supplant its own interpretation of the CBA. Thus, the final judgment must
be reversed.
¶22 Officers disagree, and contend this case
is a claim for unpaid wages authorized by 40
O.S.2001 and Supp. 2005, § 165.1 et seq., not a
breach of contract claim. Officers do assert,
however, their claim is based on a “written
contract that requires the Officers to be on duty
42.5 hours per week,” i.e., the CBA with City. A
copy of the CBA was attached and referred to
in their Petition. Officers agree the issue of
interpreting the CBA resides with the arbitrator, although they assert the issue of whether
City violated Title 40 properly resided with the
trial court.
¶23 The Fire and Police Arbitration Act
(FPAA), 11 O.S.2001, § 51-101 et seq., requires
the “determination of any dispute which may
arise involving the interpretation or application of any of the provisions of such agreement
or the actions of any of the parties thereunder”
be submitted to final and binding arbitration.
See 11 O.S.2001, § 51-111.
“ [t]he Fire and Police Arbitration Act, 11
O.S.1991 § 51-101 et seq. provides the statutory authority for collective bargaining
agreements between firefighters, police
officers and municipalities.” City of Muskogee v. Martin, 1990 OK 70, ¶ 2, 796 P.2d 337,
339 n. 1. Under the Act, “[a]rbitration is the
prime vehicle for resolving a dispute concerning the interpretation of a collective
bargaining agreement.” Id. at ¶ 5, 796 P.2d
at 339.
Vol. 81 — No. 31 — 11/20/2010
[F]or quick resolution of these disputes,
the role of the district court is limited to
determining whether the dispute is one
that is covered by the contract. In the presence of any dispute regarding the interpretation of a collective bargaining agreement,
the first remedy lies with the contractually-agreed-upon arbitration, and the district
court has no authority to disturb the function of arbitration.
City of Warr Acres v. The Int’l Assoc. of Firefighters, Local No. 2374, 2002 OK CIV APP 124, ¶ 6,
64 P.3d 1118, 1121 (citations omitted).
¶24 The main purpose of arbitration is to
prevent court intrusion into the merits of disputes when there is an agreement to arbitrate
disputes concerning contract interpretation.
City of Warr Acres, 2002 OK CIV APP 124, at
¶ 6, 64 P.3d at 1121. “The function of the court
is generally limited to ascertaining whether the
party is making a claim which is governed by
the contract when the parties have agreed to
submit all questions of contract interpretation
to an arbitrator.” Taylor v. Johnson, 1985 OK 69,
¶ 5, 706 P.2d 896, 898. “Any question regarding
the application and interpretation of the CBA is
subject to arbitration, and the district court is
without jurisdiction to usurp this function.” Id.
at ¶ 6, 706 P.2d at 898. Arbitration should be
allowed unless the court can say with “positive
assurance” the dispute is not covered by the
arbitration clause. City of Warr Acres, at ¶ 6, 64
P.3d at 1121. “Doubts should be resolved in
favor of coverage.” City of Muskogee v. Martin,
1990 OK 70, ¶ 8, 796 P.2d 337, 339-340.
¶25 City and FOP are parties to a CBA. Officers are not a party to the CBA but are beneficiaries of its terms. City of Warr Acres, 2002 OK
124, at ¶ 2, 64 P.3d at 1120. Article 10 sets forth
the grievance procedure and incorporates the
FPAA’s arbitration requirements. Article 10,
Section 10.2 provides a grievance is any dispute on any issue over the “meaning, interpretation, application or alleged violation of the
terms and provisions” or “alleged violation of
policies and procedures of the Edmond Police
Department.” A grievance is subject to the
grievance procedure outlined in Article 10,
including binding arbitration. Either the FOP
or any officer may file a grievance.
¶26 In the present case, the trial court was
presented with a Title 40 wage claim which
required the court to interpret and apply the
CBA. In granting Officers’ motion for partial
2701
summary judgment, the court clearly interpreted and applied provisions of the CBA,
ultimately rendering a decision finding City
liable for the additional wages. Pursuant to the
CBA and the FPAA, the appropriate remedy
lies first with the contractually agreed upon
arbitration. Although the trial court has the
authority to determine a Title 40 wage claim
and whether a dispute is arbitrable, it does not
have the authority to determine the “meaning,
interpretation, application or alleged violation
of the terms and provisions” of the parties’
CBA when the parties have contractually
agreed otherwise. The fact Officers filed a
claim pursuant to Title 40 does not alter this
finding. Any doubt should be resolved in favor
of coverage. The trial court did not have
authority to usurp the function of arbitration.6
¶27 Accordingly, once the trial court determined Officers’ Title 40 wage claim involved
an interpretation and application of the CBA,
the trial court had a duty to submit the dispute
to binding arbitration. It erred in failing to do
so. The trial court did, however, correctly stay
the proceedings upon learning of FOP’s grievance filing and the pending arbitration.
¶28 The trial court further erred in failing to
grant City’s motion to reconsider the court’s
interlocutory order granting Officer’s motion
for partial summary judgment. A grievance
was properly filed by FOP, as Officers’ bargaining agent, pursuant to the CBA. FOP did not
seek a decision on Officers’ Title 40 claim. After
considering the CBA and evidentiary material
presented by the FOP and City, the arbitrator
denied the grievance. Neither party appealed
the arbitrator’s decision. The decision was
therefore final and binding on the parties,
including Officers. Upon presentation of the
arbitrator’s decision to the trial court, the court
was obligated to revisit its interlocutory summary adjudication and reconsider whether
Officers’ Title 40 wage claim was viable based
on the arbitrator’s interpretation of the CBA.
CONCLUSION
¶29 Accordingly, the trial court’s July 28,
2009, final judgment is reversed and the matter
remanded to the trial court for further proceedings. The trial court is directed to determine
whether Officers are entitled to wages pursuant to Title 40 consistent with the arbitrator’s
interpretation of the CBA. Because of our resolution of this issue, we need not address the
2702
remaining issues on appeal. However, the parties are free to reassert the issues on remand.
¶30 REVERSED AND REMANDED WITH
DIRECTIONS.
1. City’s Motion to Strike Officers’ Reply Brief is granted.
2. Garcia required state and local governments to comply with the
Fair Labor Standards Act (FLSA), 29 U.S.C. § 201 et seq. In response,
Congress enacted several provisions to reduce public employers’ concerns. Title 29 U.S.C. § 207(k), although originally passed in 1974, permitted state and local governments to elect alternative overtime
thresholds for police and fire personnel in excess of 40 hours. City
asserts § 11’s predecessor, Article 10, § 2, changed the standard work
week from 40 to 42.5 hours to take advantage of the exemption and
that it was not a promise to pay officers for 42.5 hours of work. See 29
U.S.C. § 207(k).
3. City asserts it pays Officers for 40 hours of work a week. Officers
have 1.5 hours of personal time a day x 5 days = 7.5 hours a week.
42.5-7.5 = 35 hours a week. 40 - 35 = 5 hours extra pay a week.
4. The 1992-1993 CBA was the only contract year since 1987 that
contained a “standard work week” other than the 42.5 hours at issue
in the present case. As a result, the Evans Grievance sought not only
regular pay for the 2.5 hours but also overtime because the CBA did
not include the § 207(k) election.
5. The FOP filed the grievance on September 14, 2005, asserting
City breached Article 11 of the CBA by failing to pay officers for all
compensable work-time contrary to the CBA’s plain language.
6. Title 40 O.S.2001 and Supp. 2005, § 165.1 et seq. merely provides
a procedural mechanism for employees to seek redress when an
employer fails to pay wages for work actually performed. It does not
provide a substantive right to wages in addition to those provided in
an agreement, such as the CBA, between an employee and employer.
See Reynolds v. Advanced Alarms, Inc., 2009 OK 97, — 3.d —; 40 O.S.2001
and Supp. 2005, § 165.1 et seq.
2010 OK CIV APP 117
CHOICES INSTITUTE, Plaintiff/Appellant,
vs. OKLAHOMA HEALTH CARE
AUTHORITY AND MIKE FOGARTY, IN
HIS CAPACITY OF CHIEF EXECUTIVE
OFFICER OF THE OKLAHOMA HEALTH
CARE AUTHORITY, Defendant/Appellee.
Case No. 107,533. September 24, 2010
GARFIELD COUNTY, OKLAHOMA
HONORABLE RONALD G. FRANKLIN,
JUDGE
Tom Q. Ferguson, James R. Bullard, DOERNER, SAUNDERS, DANIEL & ANDERSON,
L.L.P., Oklahoma City, Oklahoma, for Plaintiff/Appellant,
Christopher J. Bergin, Heather M. Poole,
OKLAHOMA HEALTH CARE AUTHORITY,
Oklahoma City, Oklahoma, for Defendant/
Appellee.
Vol. 81 — No. 31 — 11/20/2010
¶1 This is an appeal by Choices Institute
(Institute) from an order of the district court
dismissing Institute’s appeal from a decision of
the Administrator of the Oklahoma Health
Care Authority (OHCA).1 OHCA sought dismissal on the basis of Institute’s failure to have
summons issued and failure to file proof of
service within ten (10) days which, OHCA
claims, violates §318(C) of the Administrative
Procedures Act, 75 O.S. 2001 §250 et seq. After
oral argument, the trial court announced it
“had no jurisdiction to hear the appeal” due to
these alleged deficiencies and granted OHCA’s
Motion to Dismiss. Institute’s motion to reconsider was denied. Upon review of the matter,
we reverse and remand.
¶2 The granting of a 12 O.S. §2012(B) motion
to dismiss is reviewed de novo. Indiana Nat’l
Bank v. Dep’t of Human Services, 1994 OK 98, ¶2,
880 P.2d 371, 375. The purpose of a motion to
dismiss is to test the law that governs the claim
in litigation, not the underlying facts. Darrow v.
Integris Health, Inc., 2008 OK 1, ¶7, 176 P.3d
1204, 1208. To the extent these are jurisdictional
issues, the standard of review is no different.
MLC Mortgage Corp., v. Sun America Mortgage
Co., 2009 OK 37, ¶6, 212 P.3d 1199, 1202 (jurisdictional issues present questions of law,
reviewable de novo).
¶3 This case arises from an administrative
proceeding brought by Institute2 before OHCA
to protest OHCA’s audit findings and OHCA’s
decision directing Institute to reimburse OHCA
for medicaid overpayments. After several
administrative appeals within the agency,
OHCA issued its final agency order on April
30, 2009 directing Institute to reimburse OHCA
the amount of $53,666. Institute timely filed a
Petition initiating its appeal to the district court
on May 29, 2009.3 Institute served the Petition
by certified mail on OHCA’s General Counsel
on June 3, 2009 and OHCA’s CEO on June 8th.
An Affidavit of Service with attached certified
mail return receipts was filed on June 10, 2009.
Institute did not have summons issued or
served with the Petition.4
¶4 OHCA filed its Motion to Dismiss on June
15, 2009. It contends dismissal was required
due to Institute’s failure to comply with statutory jurisdictional prerequisites of 75 O.S.
§318(B and C), which provide as follows:
B. (2) ... proceedings for review shall be
instituted by filing a petition, in the district court of the county in which the party
Vol. 81 — No. 31 — 11/20/2010
seeking review resides or at the option of
such party where the property interest
affected is situated, within thirty (30) days
after the appellant is notified of the final
agency order as provided in Section 312 of
this title.
C. Copies of the petition shall be served
upon the agency and all other parties of
record, and proof of such service shall be
filed in the court within ten (10) days after
the filing of the petition. The court, in its
discretion, may permit other interested
persons to intervene.
Id. (emphasis added). Specifically, OHCA contends Institute failed to comply with §318 in
two respects: (1) it failed to have summons
issued and served with the Petition within ten
days; and (2) it failed to file proof of service
within ten days. OHCA interprets the language of §318, particularly the term “service,”
as impliedly including the service of summons
requirement generally applicable in district
court actions per 12 O.S. §2004.
¶5 OHCA strenuously argues, and cites several authorities in support, that the procedural
requirements for an appeal under the Administrative Procedures Act are mandatory and
must be strictly complied with for the district
court to have jurisdiction for its review. See,
Conoco, Inc. v. State Dep’t of Health, 1982 OK 94,
651 P.2d 125; and State ex rel. Okla. Employment
Security Comm’n v. Emergency Physicians, Inc.,
1981 OK 82, 631 P.2d 743 (timely filing of appeal
is jurisdictional); Edmondson v. Siegfried Ins.
Agency, Inc., 1978 OK 45, 577 P.2d 72; H & EN,
Inc. v. Okla. Dep’t of Labor, 2006 OK CIV APP 70,
136 P.3d 1070; and Oklahoma Found. for Medical
Quality v. Dep’t of Central Services, 2008 OK CIV
APP 30, 180 P.3d 1 (naming/joining necessary
parties is jurisdictional).
¶6 It is clear that timely service of the petition is mandatory. §318(C)(“Copies of the petition shall be served upon the agency and all
other parties of record...”); See also Oklahoma
Found. for Medical Quality, ¶17, 180 P.3d at 2, 5;
Transwestern Publishing, L.L.C. v. Langdon, 2004
OK CIV APP 21, 84 P.3d 804, 805-06; H & EN,
Inc. v. Okla. Dep’t of Labor, ¶¶10-14, 136 P.3d at
1072. However, OHCA cites no authority, nor
do we find any, holding that an appeal to the
district court from an administrative agency
pursuant to 75 O.S. §318 requires the issuance
and service of summons.
2703
¶7 While §318 the Administrative Procedures
Act expressly requires timely filing and service
of the petition to perfect an administrative
appeal, it is silent as to any summons requirement.5 Had the legislature intended to require
a summons in perfecting an administrative
appeal pursuant to §318, it seems likely the
statute would so provide. See, e.g., 12 O.S.
§1033 (providing “a summons shall issue and
be served” with the filing of a petition to vacate
a judgment, decree or appealable order if more
than thirty days after its filing). Paragraphs B
and C of §318 are clear, specific and unambiguous.6 We see no reason to read into §318 a
requirement for the issuance and service of
summons when no reason for such has been
articulated and it would serve no useful purpose that we can discern. OHCA insists that
§318 be strictly complied with and this Court
agrees. The Administrative Procedures Act,
with its plain and unambiguous express terms,
does not contain a summons requirement and
the trial court erred in imposing one.
¶8 OHCA’s second ground for dismissal was
that Institute failed to file proof of service
within ten days as required by §318(C). As
noted above, the Petition was filed on Friday,
May 29, 2009 and Institute’s Affidavit of Service was filed on Wednesday, June 10, 2009.
The ten days following May 29, 2009 included
two weekends (four weekend days). OHCA
construes this ten-day deadline calculation to
include the weekend days. Thus, if weekend
days are to be counted, the deadline fell on Monday, June 8, 2009. If weekend days are not to be
counted, the deadline was Friday, June 12th.
¶9 Including weekend days in the ten-day
deadline calculation deprives appellants in
administrative appeals the benefit of the common-sense rule applicable to civil proceedings
generally, codified at 12 O.S. 2001 §2006(A)(1),
which provides:
Except for the times provided in Sections
765, 990.3, 1148.4, 1148.5, 1148.5A, and 1756
of this title, when the period of time prescribed or allowed is less than eleven (11)
days, intermediate legal holidays and any
other day when the office of the court clerk
does not remain open for public business
until the regularly scheduled closing time,
shall be excluded from the computation.7
¶10 Although Appellants in administrative
appeals are held to strictly comply with the
statutory procedural requirements, there is no
2704
answer in the Administrative Procedures Act
for whether the intermediate weekends or
holidays should be counted in computing the
ten-day deadline set forth in §318(C). Determining how this ten-day deadline is to be computed requires construction. Accordingly, it is
appropriate to look for guidance where this
issue has been addressed outside the Administrative Procedures Act. Title 12 O.S. §2006(A)(1)
specifically addresses this short-deadline computation question, and applies to civil cases
generally.8 This statute serves a practical purpose and was possibly enacted in recognition
of the fact that with a deadline as short as ten
days it might occasionally be impossible for
even the most diligent litigant to complete his
procedural requirements in such brief time. In
the instant case, if it does not apply, Institute
would have had only six business days to find
the parties it must serve, have them served and
then file proof of service to meet the deadline
for perfecting its appeal. It is doubtful that the
Legislature intended such an onerous construction. Accordingly, we hold that the computation method in 12 O.S. §2006(A)(1) applies to
the ten-day deadline in 75 O.S. §318(C).
¶11 This Court concludes that Institute complied with §318(C) in its timely filing and service of its Petition and the timely filing of its
proof of service.9 Given Institute’s strict compliance with the mandatory procedural requirements for initiating an appeal under the Administrative Procedures Act, the trial court had
jurisdiction over the appeal and it erred in
granting OHCA’s motion to dismiss.
¶12 REVERSED AND REMANDED.
JOPLIN, P.J., and BELL, V.C.J., concur.
1. An appeal from a decision of the Administrator of the Oklahoma
Health Care Authority to the district court is authorized by 63 O.S.
2001 §5052.
2. Institute is a behavioral health services provider under contract
with OHCA to provide services to SoonerCare members. OHCA
administers the state Medicaid program.
3. Title 63 O.S. 2001 §5052 provides in pertinent part:
C. ... The decision of the Administrator may be appealed to the
district court ... within thirty (30) days of the date of the decision
of the Administrator as provided by the provisions of subsection
D of this section.
D. Any applicant or recipient under this title who is aggrieved by
a decision of the Administrator rendered pursuant to this section
may petition the district court ... pursuant to the provisions of
Sections 318 through 323 of Title 75 of the Oklahoma Statutes. A
copy of the petition shall be served by mail upon the general
counsel of the Authority.
Title 75 O.S. 2001 §318(B)(2) provides in pertinent part:
(P)roceedings for review shall be instituted by filing a petition, in
the district court ... within thirty (30) days after the appellant is
notified of the final agency order... .
Title 12 O.S. 2001 §951(b) also provides that appeals to the district court
from “any tribunal, board or officer exercising judicial junctions” shall
Vol. 81 — No. 31 — 11/20/2010
be commenced by filing a petition within thirty days of the date the
order appealed was mailed to the appellant.
4. Later, Institute did have summons issued (on June 16, 2009),
after OHCA filed its Motion to Dismiss.
5. In that district court appeals to the Oklahoma Supreme Court do
not require a summons, having a summons requirement in an appellate procedure would be an exception to usual procedure.
6. Only where the legislative intent cannot be determined from the
statutory language due to ambiguity or conflict, should the rules of
statutory construction be employed. Keating v. Edmondson, 2001 OK
110, ¶8, 37 P.3d 882, 886. However, “[w]here the language of a statute
is clear and unambiguous, the language will be given its plain meaning.” Humphries v. Lewis, 2003 OK 12, ¶7, 67 P.3d 333, 335.
7. This language was enacted in 1999.
8. Where two statutes may be construed to apply to the same subject matter, one specific and one general, the specific statute controls.
Phillips v. Hedges, 2005 OK 77, ¶12, 124 P.3d 227, 231; Pickett v. Dep’t of
Human Services, 1996 OK CIV APP 142, ¶6, 932 P.2d 543, 545.
9. Regarding the §318(C) requirement that proof of service be filed
within ten days, we need not address what specifically must be filed to
satisfy that requirement, and whether all or any part of that requirement is jurisdictional.
2010 OK CIV APP 118
MARILYN SUE GOFF, Plaintiff/Appellant,
vs. SALAZAR ROOFING &
CONSTRUCTION, INC., an Oklahoma
Corporation, and ROBERT MAULPIN,
individually, a/k/a ROBERT MAUPIN,
Defendants/Appellees, and SALAZAR
ROOFING & CONSTRUCTION USA, INC.,
an Oklahoma Corporation; and/or a/k/a and/
or d/b/a SALAZAR ROOFING
CORPORATION, an Oklahoma Corporation;
and/or a/k/a and/or d/b/a SALAZAR
CONTRACTING, INC., an Oklahoma
Corporation, Defendants.
CANADIAN COUNTY, OKLAHOMA
HONORABLE EDWARD C. CUNNINGHAM,
TRIAL JUDGE
AFFIRMED IN PART, REVERSED IN PART
Michael L. Velez, MICHAEL L. VELEZ, LLC,
Oklahoma City, Oklahoma, and Jacque Bergman-Pearsall, JACQUE PEARSALL, P.L.L.C,
Oklahoma City, Oklahoma, for Appellant
Warner E. Lovell, Oklahoma City, Oklahoma,
for Appellees
¶1 Marilyn Sue Goff (Goff) appeals the trial
court’s October 7, 2009, order granting Salazar
Roofing & Construction, Inc. (Salazar) and
Robert Maupin’s (Maupin) (collectively
“Appellees”) motion for summary judgment.1
Goff further appeals a December 4, 2009, order
awarding Appellees an attorney’s fee and costs
in the amount of $15,755.09. Based upon our
Vol. 81 — No. 31 — 11/20/2010
affirm in part and reverse in part.
FACTS
¶2 In September of 2008, Salazar hired Goff,
purportedly by its agent or employee Maupin,
to work in its Norman satellite office as a secretary. Goff and Maupin were the only employees located in the Norman office. After working in the office for several weeks, an incident
occurred between Goff and Maupin on November 6, 2008, resulting in Goff’s employment
ending with Salazar. The parties dispute whether Goff was terminated. Goff filed suit against
Appellees pursuant to the Americans with Disabilities Act (ADA) of 1990, 42 U.S.C. § 12111 et
seq.2 She further asserted claims for assault,
negligent hiring, training, and supervision of
Maupin, and intentional infliction of emotional
distress.
¶3 Goff alleged that after her employment
with Salazar began, Maupin started acting in
an increasingly intimidating, demeaning, and
erratic manner towards her, saying things like
“What’s up dog?” or “What’s up, girl dog.”
Goff noted she is diabetic, she has to eat at
regular intervals throughout the day, and that
Maupin demeaned and humiliated her about
eating and the smell of her food, stating “God
that stinks. What is that? Man that stinks.”3 On
one occasion, Goff, her husband, and her
grandson were eating fried chicken in the
office. Maupin came in and said “What’s that
smell? It stinks. What stinks?” Goff admitted
no one prevented her from eating multiple
times throughout the day, although she tried to
eat when Maupin was out of the office.
¶4 On the morning of November 6, 2008,
Maupin arrived at the office and said, “What’s
up, girl dog.” Goff did not respond. After a
while Maupin asked Goff if she was okay. A
few minutes later, Maupin stated “Look, why
don’t you just take the rest of the day off? Just
go home. Just get the f*** out and don’t come
back.” Goff was stunned. Maupin continued,
“Look, I don’t have to take your shit, I don’t
have to take your attitude. You’re not going to
treat me like this and get away with it. I got
you this job.” Maupin then drew his left fist
back and Goff stepped back around the desk,
twisting her back, causing immediate pain.
Goff did not fall down, bump, or hit anything.
In addition, Maupin did not hit or otherwise
touch Goff. Maupin left the office.
2705
¶5 Goff contacted the Norman office and told
them Maupin had fired her. Goff also contacted
her husband and told him the events of the
morning. Goff called the Norman office again
and spoke with another person, whom she also
told Maupin had fired her. Maupin then
returned to the office and asked her again if she
was okay. Goff informed Maupin she was not
okay. Maupin asked her to stay and explained
he had been upset earlier because of a client
who refused to pay. Goff was thrilled because
she thought she had her job back. Maupin left
again. Goff contacted the Norman office and
informed them she had been rehired. When
Maupin returned, he and Goff’s husband had a
verbal altercation in the parking lot over Goff
and Maupin’s earlier quarrel. Goff gathered up
her belongings and left, subsequently filing
suit against Appellees.
¶6 On April 1, 2009, Appellees filed a motion
for summary judgment or in the alternative a
motion to dismiss, asserting, inter alia, that Goff
had failed to allege a disability under the ADA
or that her impairment was the basis or cause
of her injury or damages. Goff filed a response
on April 16, 2009, asserting material questions
of facts remained precluding summary judgment. Goff contended a rational juror could
find she has a disability, i.e., her complications
from diabetes cause her to be disabled under
the ADA, and Salazar discriminated against
her when it terminated her employment. Goff
requested the court hold its ruling in abeyance
pending additional discovery.
¶7 After discovery was completed, Appellees
filed a motion to dismiss for lack of jurisdiction
and a renewed motion for summary judgment
on August 13, 2009. Appellees asserted Goff’s
suit falls within the purview of the workers’
compensation laws, more specifically 85 O.
S.2001 and Supp. 2006, § 11, because Goff
alleged she sustained an injury to her back at
work. In addition, Appellees asserted none of
the exceptions in § 11(A) applied and thus,
Goff was not entitled to seek relief in district
court.
¶8 With respect to its summary judgment
motion, Appellees again asserted Goff could
not prove a disability under the ADA or that
her physical impairment formed the basis
which she claims caused her injury or damages. Appellees noted Goff alleged her diabetes
caused her to have a disability in the nature of
having to eat at regular intervals and having
pain in her feet and legs when required to
2706
stand for prolonged periods of time. However,
Goff testified in her deposition that Appellees
permitted her to bring food to work and that
no one prevented her from eating on the job. In
addition, Goff testified her job as a secretary
allowed her to sit to fulfill her duties. Moreover, Goff never described the events leading
up to the purported termination on November
6 to include her alleged disability as a cause or
factor.
¶9 Goff filed a response on August 31, 2009,
asserting a question of fact existed as to whether an exception existed under § 11(A). With
respect to her ADA claim, Goff again asserted a
material question of fact existed as to whether
her diabetes was a disability and whether
Appellees discriminated against her on the
basis of this disability. Thus, Goff asserted
summary judgment was inappropriate.
¶10 By order dated October 7, 2009, the trial
court granted Appellees’ motion to dismiss for
lack of jurisdiction “[s]ubject to [Goff’s] right to
file a claim in the Workers’ Compensation
Court… . [I]n the event that the Workers’ Compensation Court … does not accept jurisdiction
of [Goff’s] claim pertaining to her alleged injuries of November 6, 2008 and following, [Goff]
shall be entitled to revive her claim for assault
and intentional infliction of emotional distress
in this Court.” The court further granted Appellees’ motion for summary judgment on Goff’s
cause of action for a violation of the ADA “[f]or
the reason that the facts of this case when given
the weight most favorable to [Goff] does not
bring [Goff’s] claim against [Appellees] within
the scope of the [ADA] of 1990. The Court finds
[Goff] was either not disabled and/or did not
suffer any adverse employment action as
defined by the [ADA] of 1990.” The trial court
subsequently entered an order awarding
Appellees’ an attorney’s fee and costs in the
amount of $15,755.09. Goff appeals.
STANDARD OF REVIEW
¶11 We review the award of summary judgment de novo, giving no deference to the trial
court’s legal rulings. Copeland v. Lodge Enters.,
Inc., 2000 OK 36, ¶ 8 fn. 11, 4 P.3d 695, 699 fn.11.
Summary judgment is only appropriate when
the pleadings, affidavits, depositions, admissions and other evidentiary materials establish
there are no genuine issues as to any material
fact and the moving party is entitled to judgment as a matter of law. Id. at ¶ 8, 4 P.3d at 699.
Vol. 81 — No. 31 — 11/20/2010
ANALYSIS
¶12 On appeal, Goff contends the trial court
erred in granting Appellees’ summary judgment on her ADA claim because the issue of
whether she has a disability and whether
Appellees discriminated against her based on
this disability is a question of fact to be decided
by the trier of fact.4
I. Americans With Disabilities Act
¶13 A plaintiff alleging employment discrimination under the ADA bears the initial
burden of establishing a prima facie case. Cody v.
County of Nassau, 577 F.Supp.2d. 623, 637
(E.D.N.Y. 2008). To establish a claim under the
ADA, Goff must establish the following: 1) she
is a disabled person within the meaning of the
ADA; 2) she is qualified to perform the essential functions of the job with or without a reasonable accommodation;5 and 3) she suffered
an adverse employment action because of her
disability. Id., see also Diaz Rivera v. BrowningFerris Indus. of Puerto Rico, Inc., 626 F.Supp.2d.
244, 254 (D.P.R. 2009); Cravens v. Blue Cross &
Blue Shield of Kansas City, 214 F.3d 1011, 1016
(8th Cir. 2000).
¶14 If the plaintiff establishes a prima facie
case, the burden of production shifts to the
defendant to offer a legitimate, non-discriminatory reason for its actions. Cody, 577 F.Supp.2d.
623, 637 (citations omitted). The employer merely needs to explain what it has done. Id. (citations omitted). “Should the employer satisfy its
burden, the analysis is complete and ‘the presumption [of discrimination], having fulfilled
its role of forcing the defendant to come forward with some [non-discriminatory] response,
simply drops out of the picture.’” Id. (citations
omitted). The “ultimate burden” resides with
the plaintiff, who must prove “the employer’s
proffered reason is merely a pretext for its intentional discrimination.” Id. (citations omitted).
“If the plaintiff cannot prove intentional discrimination motivated by [her] disability, then
the defendant is entitled to summary judgment.” Id. (citations omitted).
A. Disability
¶15 “The sine qua non requirement for ADA
protection is whether the individual has a ‘disability’ as defined by the ADA.” Diaz Rivera v.
Browning-Ferris Indus. of Puerto Rico, 626
F.Supp.2d. 244, 254 (citing Castro-Medina v.
Procter & Gamble Comm. Co., 565 F.Supp.2d 343,
358 (D.P.R. 2008)). The statute’s definition of
Vol. 81 — No. 31 — 11/20/2010
“disability” includes: “(A) a physical or mental
impairment which substantially limits one or
more of an individual’s major life activities; (B)
a record of such impairment; or (C) being
regarded as having such an impairment.”6 See
42 U.S.C. § 12102(2); 29 C.F.R. § 1630(2)(g).
Major life activities are those activities of central importance to life. Toyota Motor Mfg., Kentucky, Inc. v. Williams, 534 U.S. 184 (2002)(Overturned by Legislative Action in Pub.L. 110-325
(2009)). “Major life activities include functions
such as caring for one’s self, performing manual tasks, walking, seeing, standing, hearing,
speaking, breathing, learning, and working.
Walton v. U.S. Marshals Serv., 492 F.3d 991, 1010
(9th Cir. 2007) (quoting Bragdon v. Abbott, 524
U.S. 624, 638)); see also 29 C.F.R. § 1630.2(i).
¶16 Furthermore, “to constitute a disability,
an impairment must not merely affect a major
life activity, it must ‘substantially limit’ that
activity.” Cody, 577 F.Supp.2d. 623, 639 (citations omitted). To be substantially limiting, an
impairment must cause a person to be “unable
to perform a major life activity that an average
person in the general population can perform,”
or to be significantly restricted as to the condition, manner, or duration under which the
average person in the general population can
perform that major life activity. 29 C.F.R. §
1630.2(j); Ramirez v. Salvation Army, 2008 WL
670153 (N.D. Cal. 2008).
¶17 In the present case, Goff asserts her diabetes substantially limits one (1) or more of her
major life activities, including eating, seeing,
working, and walking. Whether an individual’s diabetes constitutes a disability under the
ADA is an individualized inquiry.7
¶18 We find Goff has raised a genuine issue
of material fact as to whether her diabetes substantially limits one (1) or more of her major
life activities. Goff asserts she is required to eat
several small snacks during the day in addition
to three (3) regular meals; she has to constantly
monitor her blood sugar levels; she is required
to take medication to maintain her blood sugar
levels; her diabetes is so severe it has resulted
in neuropathy in her feet; she suffers from
numbness or tingling in her feet and has fallen;
her mobility is limited; and she can become
weak and dizzy without warning. Based on
this evidence, we find a jury could conclude
Goff has a physical impairment which substantially limits one (1) or more of her major life
activities and thus, she is a disabled person
under the ADA. Therefore, the trial court erred
2707
in granting Appellees’ motion for summary
judgment on this ground.
B. Adverse Employment Action8
¶19 Goff did not, however, present sufficient
evidence to establish the third element of her
prima facie case, i.e., that she suffered an adverse
employment action because of her disability.
Although Goff presented evidentiary material
that Maupin harassed, demeaned, or intimidated her about eating and complained about
the smell of her food, she presented no evidence that she was terminated because of it.
Goff testified that on the morning of November
6, 2008, Maupin arrived at the office, said
“What’s up, girl dog,” and then asked her if
she was okay. Maupin subsequently stated
“Look, why don’t you just take the rest of the
day off? Just go home. Just get the f*** out and
don’t come back.” Goff was stunned. Maupin
continued, “Look, I don’t have to take your
shit, I don’t have to take your attitude. You’re
not going to treat me like this and get away
with it. I got you this job.” Maupin then drew
his left fist back and Goff stepped back around
the desk, twisting her back, causing immediate
pain. Goff did not fall down, bump, or hit anything. In addition, Maupin did not hit or otherwise touch Goff. Maupin later returned to the
office and asked Goff to stay, explaining he had
been upset because a client refused to pay. Goff
testified she was thrilled because she thought
she had her job back. Maupin left the office
again and when he returned, Maupin and
Goff’s husband quarreled in the parking lot, at
which time Goff gathered up her belongings
and left.
¶20 Based on the record before the court,
there is no evidence Goff was terminated
because of a disability. Although there is evidence in the record Maupin did not care for the
smell of Goff’s food and had previously commented on it, there is absolutely no evidence in
the record that this had anything to do with the
events of November 6, 2008. Rather, the evidence provides that on the day in question,
Maupin was irritable when he entered the
office and that he and Goff had a heated, verbal
altercation that ended with Goff leaving Salazar’s employment. There is no indication Goff
was eating when the altercation occurred or
that her disability had anything to do with the
adverse employment action. Consequently,
Goff has failed to establish the third element of
her ADA claim and the trial court correctly
entered summary judgment for Appellees. The
2708
trial court’s order granting Appellees summary
judgment is therefore affirmed in accordance
with this opinion.
II. An Attorney’s Fee and Costs
¶21 Goff further appeals the trial court’s
December 4, 2009, order awarding Appellees
an attorney’s fee and costs in the amount of
$15,755.09.
¶22 On October 7, 2009, Appellees sought an
attorney’s fee and costs pursuant to the ADA.
The ADA provides a trial court may, in its discretion, allow a reasonable attorney’s fee and costs
to a prevailing party. See 42 U.S.C. § 12205. This
language is analogous to a provision governing an attorney’s fee in Title VII of the Civil
Rights Act of 1964, 42 U.S.C. § 2000e-5(k). Thus,
courts have applied the same standard to both
Acts. See Parker v. Sony Pictures Ent., Inc., 260
F.3d 100, 111 (2nd Cir. 2001)(citing Bercovitch v.
Baldwin Sch., Inc., 191 F.3d 8, 10-11 (1st Cir.
1999); Bruce v. City of Gainesville, 177 F.3d 949,
951 (11th Cir. 1999)). With respect to a prevailing defendant, a fee should only be awarded
when a plaintiff’s “claim was frivolous, unreasonable, or groundless, or ... the plaintiff continued to litigate after it clearly became so.” Id.
(citing Christiansburg Garment Co. v. EEOC, 434
U.S. 412, 422 (1978)). This standard is necessary
to avoid the chilling effect such fees could have
upon a plaintiff’s commencement of ADA
claims. Palmer v. Chelsea Fin. Ptnshp., LP, 423
F.Supp.2d 1092, 1093 (E.D.Cal.2006).
¶23 A trial court’s decision granting or denying fees and costs will be reversed when it
abuses its discretion. See American Fed’n of
State, County, and Mun. Employees, AFL CIO
(AFSCME) v. County of Nassau, 96 F.3d 644, 650
(2nd Cir. 1996). We find such an abuse here.
¶24 In the present case, the trial court did not
make the requisite finding that Goff’s claim
was frivolous, unreasonable, or groundless, or
that Goff continued to litigate after it clearly
became so, thereby entitling Appellees to fees
and costs. Accordingly, the trial court’s December 14, 2009, order granting Appellees an
attorney’s fee and costs pursuant to the ADA is
reversed.
¶25 AFFIRMED IN PART, REVERSED IN
PART.
Vol. 81 — No. 31 — 11/20/2010
1. In the trial court’s October 7, 2009, order granting Appellees
summary judgment the court noted the following parties had been
dismissed without prejudice: Salazar Roofing & Construction, USA,
Inc., Salazar Roofing Corporation, and Salazar Contracting, Inc.
2. The ADA Amendments Act of 2008 (ADAAA), Pub.L.No. 110325, 122 Stat. 3553 (2008), applies to employment decisions made on or
after January 1, 2009. The ADAAA reverses two seminal Supreme
Court cases, Toyota Motor Mfg., Kentucky, Inc. v. Williams, 534 U.S. 184
(2002), and Sutton v. United Airlines, Inc., 527 U.S. 471 (1999). Because
the employment action Goff complains of occurred prior to January 1,
2009, the ADAAA is not applicable and Toyota Motor Mfg. and Sutton
are still applicable.
3. Goff was diagnosed with diabetes in October of 1996.
4. Goff did not appeal the trial court’s order granting Appellees’
motion to dismiss for lack of jurisdiction on her remaining claims.
5. Neither party has contested this element of the ADA claim.
6. Goff has not alleged she has a record of an impairment or that
Appellees regarded her as disabled. In fact, on page 7 of Goff’s
Response to Appellees’ First Motion for Summary Judgment or in the
Alternative, Motion to Dismiss, Goff contended her diabetes was a
disability under subsection (A) only. As a result, this Court will only
address subsection (A).
7. Diabetes by itself does not constitute a disability under the ADA
unless it impairs an individual’s ability to work or engage in other
major life activities. Diaz Rivera, 626 F.Supp.2d. 244, 254 fn. 9 (D.P.R.
2009) (citing Scheerer v. Potter, 443 F.3d 916, 919 (7th Cir. 2006)(“[D]iabetic
status, per se, does not qualify a plaintiff as disabled under the
ADA.”)).
8. As previously noted, neither party contested the second element
of the ADA claim, i.e., that Goff was qualified to perform the essential
functions of the job with or without a reasonable accommodation.
2010 OK CIV APP 119
DEBBIE WHEAT, Plaintiff/Appellant, vs.
STATE OF OKLAHOMA ex rel. TULSA
COUNTY DISTRICT ATTORNEY,
Defendant/Appellee.
Case No. 107,728. June 30, 2010
HONORABLE DAMAN CANTRELL,
TRIAL JUDGE
REVERSED AND REMANDED FOR
FURTHER PROCEEDINGS
N. Kay Bridger-Riley, BRIDGER-RILEY &
ASSOCIATES, Tulsa, Oklahoma, for Plaintiff/
Appellant
W. Kirk Turner, NEWTON, O’CONNOR,
TURNER & KETCHUM, Tulsa, Oklahoma, for
Defendant/Appellee
DOUG GABBARD II, PRESIDING JUDGE:
¶1 Plaintiff, Debbie Wheat, appeals the trial
court’s dismissal of her age discrimination lawsuit against Defendant, State of Oklahoma ex
rel. Tulsa County District Attorney (State). We
reverse and remand for further proceedings.
FACTS
¶2 Wheat was employed by the Tulsa County
District Attorney’s office (TCDA), a state agency.
TCDA terminated her employment on May 14,
Vol. 81 — No. 31 — 11/20/2010
2003. Wheat asserted she was first told her services were no longer needed, and was later told
she was being let go because of budget cuts.
¶3 Wheat asserted she had been replaced “by
a less qualified younger male,” and attempted
to pursue a tort claim for age discrimination
under the Oklahoma Governmental Tort Claims
Act (GTCA). Her attorney mistakenly sent
notice of her claim to Tulsa County rather than
to State as required by the GTCA. Notice was
received by a TCDA assistant district attorney,
because TCDA was responsible for giving legal
advice to Tulsa County.
¶4 Wheat later sued TCDA for age discrimination, initially under federal and state antidiscrimination statutes. Later, she asserted her
claim was a common law public policy tort
based on Burk v. K-Mart Corp., 1989 OK 22, 770
P.2d 24.1 State filed a motion for summary
judgment, based on Wheat’s failure to give
proper notice. The trial court granted the
motion, and Wheat appealed.
¶5 In 2007, another division of this Court
reversed and remanded. In Appeal No. 103,599,2
COCA Division II held that the notice given to
the TCDA assistant district attorney amounted
to actual notice to State and substantially complied with the GTCA.
¶6 On remand, Wheat filed an amended petition, asserting two claims: “unlawful termination in violation of Oklahoma public policy,”
referring to 25 O.S.2001 § 13023 of Oklahoma’s
anti-discrimination statutes, 25 O.S.2001 &
Supp. 2009 §§ 1101 through 1901, and “unlawful termination in violation of Oklahoma public policy and the policies and procedures for
state employees,” referring to the State Government Reduction-In-Force and Severance
Benefits Act, 74 O.S.2001 & Supp. 2009 §§ 8402.27A, et seq. (RIF Act), which is part of the
Oklahoma Personnel Act (OPA), 74 O.S.2001 &
Supp. 2009 §§ 840-1.1 et seq.4
¶7 State filed a motion to dismiss, asserting
Wheat had failed to state a cognizable Burk
claim because (1) she was not an at-will employee; and (2) she had the same, adequate statutory remedy as the entire class of victims of
discrimination in state employment. Both parties filed numerous briefs, focusing on the
effect of recent Supreme Court decisions dealing with the requirements of Burk.
¶8 The trial court granted State’s motion to
dismiss. While the court disagreed with State’s
2709
argument that Wheat was not an at-will
employee, it found that the OPA created a
“class of State employees that is distinct from
the broader class of all Oklahoma employees”
and that this class had “the same remedies
under the OPA for alleged violations of the
State RIF Act and for alleged discrimination in
State employment on the basis of race, color,
religion, sex, national origin, age, and handicap.” Therefore, the court concluded, because
Wheat had access to the same remedies as
other victims of alleged RIF Act violations and
State employment discrimination, she failed to
state a legally cognizable Burk tort claim.
¶9 Wheat appeals.
STANDARD OF REVIEW
¶10 Motions to dismiss should not be granted “for failure to state a legally cognizable
claim unless the allegations indicate beyond
any doubt that the litigant can prove no set of
facts which would entitle him to relief.” Frazier
v. Bryan Mem. Hosp. Auth., 1989 OK 73, ¶ 13,
775 P.2d 281, 287 (emphasis in original; footnote omitted).
ANALYSIS
¶11 In general, “[a] viable Burk claim must
allege (1) an actual or constructive discharge
(2) of an at-will employee (3) in significant part
for a reason that violates an Oklahoma public
policy goal (4) that is found in Oklahoma’s
constitutional, statutory, or decisional law or in
a federal constitutional provision that prescribes a norm of conduct for Oklahoma, and
(5) no statutory remedy exists that is adequate
to protect the Oklahoma policy goal.”5 Vasek v.
Bd. of County Comm’rs, 2008 OK 35, ¶ 14, 186
P.3d 928, 932. In such cases, the employer commits “a tortious breach of contractual obligations, compensable in damages.” Tate v. Browning-Ferris, Inc., 1992 OK 72, ¶ 9, 833 P.2d 1218,
1225 (emphasis and footnote omitted).
1. The “at-will” requirement
¶12 The trial court correctly concluded that
Wheat met the requirement of being an at-will
employee. “At-will employment means the
master may hire or discharge at will and the
servant may work or refuse to work at will. The
at-will employment doctrine applies to employment contracts that have no definite duration
and recognizes that either the master or servant
may end the employment at will.” Glasco v. State
ex rel. Okla. Dep’t of Corr., 2008 OK 65, n. 9, 188
2710
P.3d 177. Simply put, Oklahoma “defines an
employee-at-will as one who is hired for a period of indefinite duration.” Dixon v. Bhuiyan,
2000 OK 56, ¶ 8, 10 P.3d 888, 891 (emphasis in
the original; footnote omitted).
¶13 Wheat’s status fits the standard definition
of an at-will employee. She did not agree to a
contract or otherwise obligate herself to work
for a certain period of time. Also, her employer,
TCDA, did not obligate itself to employ her for
a definite duration. Wheat’s employment status
is clearly different than that of the plaintiff in
Dixon, who was hired one semester at a time,
and, thus, was not an at-will employee.6 Wheat
was clearly hired for an indefinite period, and
was an at-will employee.
¶14 However, in the trial court, State asserted
that the RIF Act guarantees employees like
Wheat “a minimum period of fixed employment of at least 60 days in duration by requiring the employer to provide at least 60 days
advance notice of a discharge due to a reduction
in force.” Therefore, State concluded that Wheat
“could not as a matter of law be terminated at
any time at the will of TCDA,” and was not an
at-will employee. State argued that an at-will
employee should be defined as one with respect
to whom an employer enjoys “an unfettered
right . . . to discharge . . . without notice . . .
without incurring liability,” and because TCDA
had to give notice, Wheat was not at-will.7
¶15 We disagree. Oklahoma law focuses on
whether an employee is hired for an indefinite
period, not whether the employee has to be
given advance notice of termination. Here,
while the RIF Act required 60 days’ notice of
termination, it did not limit TCDA’s right to
terminate Wheat at any time. Wheat’s employment had no definite duration, and there is no
indication the statute intended to alter the atwill status of the employees covered by it.
¶16 Alternatively, State relied on the often
repeated language in Burk that, in an at-will
relationship, an employer may discharge an
employee for good cause, no cause, or even
morally wrong cause. 1989 OK 22 at ¶ 5, 770
P.2d at 26. State argued that because a section
of the OPA, 74 O.S.2001 § 840-2.9, forbids firing
a State employee for certain discriminatory
reasons, Wheat cannot be discharged for any
reason, and, thus, is not an at-will employee.
¶17 The fact that Oklahoma law gives every
employee, whether in government or the private sector, basic anti-discrimination rights
Vol. 81 — No. 31 — 11/20/2010
does not change the at-will doctrine. Burk itself
recognizes these rights, and states that they are
simply a statutory exception to the at-will doctrine. Id. at ¶ 6 and n. 4, 770 P.2d at 26. To hold
otherwise would effectively abolish the at-will
doctrine in Oklahoma. Thus, the trial court
properly concluded that Wheat was an at-will
employee for purposes of the first requirement
of the Burk test.
2. The “adequate statutory remedy”
requirement
¶18 The trial court granted State’s motion to
dismiss based on the argument that Wheat
failed to meet the fifth Burk requirement that
“no statutory remedy exists that is adequate to
protect the Oklahoma policy goal.” Vasek v. Bd.
of County Comm’rs, 2008 OK 35, ¶ 14, 186 P.3d
928, 932. This requirement has been the subject
of a series of Supreme Court decisions recently
summarized in Kruchowski v. Weyerhaeuser Co.,
2008 OK 105, 202 P.3d 144.
¶19 As that case explains, Burk was followed
by Tate v. Browning-Ferris, Inc., 1992 OK 72, 833
P.2d 1218, which held that a Burk tort could be
asserted for racial discrimination. The Supreme
Court in Tate based its decision in part on Art.
5, § 46 of the Oklahoma Constitution, which
prohibits local and special laws on certain subjects. As the Court explained, although all victims of discrimination form one class, Oklahoma’s anti-discrimination statutes provided a
private right of action for discrimination based
on handicap, but not for other types of statusbased discrimination, such as race. This created
an unconstitutional “dichotomous division of
discrimination remedies.” Tate at ¶ 18, 833 P.2d
at 1230 (emphasis omitted). To cure this constitutional infirmity, the Court held that the remedies under the statutes were not exclusive but
“cumulative,” and a Burk tort could be asserted
for racial discrimination.
¶20 Next came List v. Anchor Paint Manufacturing Co., 1996 OK 1, 910 P.2d 1011, which the
Kruchowski Court recognized as a “diverg[ence]”
from Tate because it was decided on the basis of
whether the plaintiff’s remedies were “adequate,” rather than on constitutional grounds
of equal treatment. Kruchowski at ¶ 11, 202 P.3d
at 149. The List Court declined to extend the
Burk tort remedy to a claim involving age discrimination because the plaintiff in that case
had adequate statutory remedies. This decision
was followed by several others also applying
the rule that, where a statutory remedy is adeVol. 81 — No. 31 — 11/20/2010
quate for protecting public policy, a common
law tort remedy such as that afforded by Burk
is not needed. Id. at ¶ 19, 202 P.3d at 150.
¶21 However, in 2006, the Court refocused its
analysis on the equality of the remedy, rather
than its adequacy. In Saint v. Data Exchange,
Inc., 2006 OK 59, 145 P.3d 1037, the Court overruled List, as it subsequently explained in
Kruchowski:
[R]ather than discuss the adequacy of the
remedies, we spoke [in Saint] in terms of
disparate remedies and determined that, as
required by the Constitution, the same remedies must be made available for everyone
within the class of employment discrimination-handicap, race, sex and age.
Accordingly, pursuant to Saint v. Data
Exchange, Inc., 2006 OK 59, 145 P.3d 1037,
and in order to provide clarity to the bench
and bar, we hold that a plaintiff may pursue a state law claim for wrongful discharge in violation of public policy when
the available remedies to the same class of
employment discrimination victims are not
uniform and evenhanded-regardless of
whether the remedies originate under Federal or State law. It is only when the available remedy to the victim is not commensurate with that which is provided for like
or similar discrimination to vindicate an
on-the-job tort that we will craft an appropriate common law remedy.
Id. at ¶¶ 30-31, 202 P.3d at 153. The Court also
stated, “[T]he plaintiff must make a showing
that a breach of Oklahoma’s public policy
occurred for which (a) there is no available
statutory-crafted remedy or (b) the available
statutory remedy is not commensurate with that
which is provided for similar work-related discrimination.” Id. at ¶ 37, 202 P.3d at 154
(emphasis added.) Id. at ¶ 37. The Kruchowski
Court concluded that, because the remedies are
not the same for everyone in the class, “there is
a Burk tort remedy for those who allege employment age discrimination.” Id. at ¶ 35.
¶22 Recently, the Court has expressed its
position more explicitly, acknowledging that it
has “clearly abandon[ed] the adequacy of remedies test in cases of wrongful termination
involving status based discrimination,” i.e.,
“race, color, religion, sex, national origin, age,
and handicap.” Shephard v. CompSource Oklahoma, 2009 OK 25, ¶ 11, 209 P.3d 288, 293
(emphasis added). As noted above, the Court
2711
has replaced that test with a “commensurate
remedy rule,” requiring that in cases of status
based discrimination all victims of handicap,
race, gender, religion, national origin, and age
discrimination receive similar remedies. Id. at
¶ 10, 209 P.3d at 292. The adequacy of remedies
test only remains alive for cases where a plaintiff’s conduct (such as whistleblowing) is
alleged to have triggered the discharge. Id.
¶23 Although the Supreme Court has not yet
applied Kruchowski in an at-will government
employee case, the constitutional basis of the
Court’s decision in Kruchowski compels that
result in the case at bar. Therefore, Wheat is not
barred from bringing a Burk claim, even though
she is a member of a legislatively created class
of employees (made up of state government
employees) distinct from the broader class of
all Oklahoma employees.
¶24 It is true that for some purposes, the state
can create a separate class composed of its
employees and still pass constitutional muster.
For example, in Glasco v. State ex rel. Oklahoma
Department of Corrections, 2008 OK 65, 188 P.3d
177, the Court upheld a statute permitting the
state to discharge employees who had been on
leave without pay for a year even though the
plaintiff asserted the statute targeted state
employees for different treatment than other
injured workers. In the instant case, however,
there is no legitimate reason for denying state
employees the same basic anti-discrimination
rights as other employees. Although State may
terminate employees pursuant to the RIF Act,
it may not select which employees to terminate
on the basis of age or any other basis prohibited by the anti-discrimination statutes. Thus,
for comparative purposes, the relevant class
here must be composed of all victims of employment discrimination.
¶25 Any doubts about this conclusion were
recently resolved in Smith v. Pioneer Masonry,
Inc., 2009 OK 82, 226 P.3d 687. In that case, the
Court held that “victims of employment discrimination form a single class and the Burk
tort is available to all members of this class.” Id.
at ¶ 11, 226 P.3d at 689. Smith held that a victim
of racial discrimination could pursue a Burk
tort under the public policy expressed in Oklahoma anti-discrimination law, even though the
law explicitly excluded his employer because it
employed less than 15 workers. The Court in
Smith stated that the statutory and common
law remedies exist to vindicate violations of
2712
the anti-discrimination statutes as to all victims
of racial discrimination.
CONCLUSION
¶26 In summary, State employees who allege
age discrimination are part of a larger, single
class composed of all victims of employment
discrimination, and, because the remedies for
the different forms of discrimination are disparate, “there is a Burk tort remedy for those who
allege employment age discrimination.”
Kruchowski at ¶ 35, 202 P.3d at 154. For these
reasons, Wheat is entitled to pursue her claim.
The trial court’s dismissal order is hereby
reversed and this matter is remanded for further proceedings.
¶27 REVERSED AND REMANDED FOR
FURTHER PROCEEDINGS.
GOODMAN, J., and FISCHER, J. (sitting by
designation), concur.
1. Burk is the landmark Oklahoma Supreme Court decision that
carved out an exception to the employee at-will doctrine for instances
of employee terminations that are contrary to a clear mandate of public
policy. A Burk claim can be brought against the State, because the
GTCA does not provide immunity to the State from common law tort
liability for wrongful discharge under Burk. Gunn v. Consol. Rural Water
and Sewer Dist. No. 1, 1992 OK 131, ¶ 12, 839 P.2d 1345, 1351.
2. Mandate issued September 28, 2007.
3. Section 1302 states it shall be a discriminatory practice for an
employer “[t]o fail or refuse to hire, to discharge, or otherwise to discriminate against an individual with respect to compensation or the
terms, conditions, privileges, or responsibilities of employment,
because of race, color, religion, sex, national origin, age, or handicap. .
. .”
4. At the time of Wheat’s termination, § 840-2.27C(A) required the
appointing authority to provide a plan for any reduction-in-force at
least 60 days before the reductions began, and § 840-2.27B(2) defined
“[a]ffected employees” as “classified and unclassified employees in
affected positions.” These statutes have since been amended. Wheat
claimed that TCDA discharged her without giving her 60 days advance
notice and without paying severance benefits, both required by the RIF
Act.
5. The latter requirement is different for alleged victims of statusbased discrimination, such as Wheat, as discussed in part two of this
opinion.
6. We also note that Wheat’s employment with TCDA does not fit
any of the categories which the current Discussion Draft of the Restatement of Employment Law states are non-at-will employment arrangements: “(a) a collective-bargaining agreement between an employer
and an authorized collective-bargaining agent requiring cause for termination; (b) a bilateral agreement between an employer and employee for a definite or indefinite term; (c) a unilateral employer commitment limiting the employer’s power to terminate at will; or (d) a limitation on the employer’s power to terminate at will required by the
implied duty of good faith and fair dealing.” Restatement (Third) of
Employment Law, § 3.02 (Discussion Draft 2006). The instant case
further does not involve the special instances listed in the Restatement’s § 3.06 for retaliatory firings or dismissals made to prevent the
vesting of a right.
7. Record, Tab # 30, Defendant’s motion to dismiss at pp. 7-8.
2010 OK CIV APP 125
SHAWVER & SONS, INC. and COMMERCE
& INDUSTRY INSURANCE, Petitioners, vs.
JENIFER WISE, COREY WISE (deceased),
TRAVELERS INSURANCE CO., and the
Vol. 81 — No. 31 — 11/20/2010
WORKERS’ COMPENSATION COURT,
Respondents.
Case No. 107,968. August 16, 2010
PROCEEDING TO REVIEW AN ORDER OF
A THREE-JUDGE
PANEL OF THE WORKERS’
COMPENSATION COURT
HONORABLE MARY A. BLACK, TRIAL
JUDGE
SUSTAINED IN PART, VACATED IN PART,
AND REMANDED FOR FURTHER
PROCEEDINGS
Robert E. Applegate, Michael W. McGivern,
PERRINE, McGIVERN, REDEMANN, REID,
BERRY & TAYLOR, P.L.L.C., Tulsa, Oklahoma,
for Petitioners
PAUL A. SCOTT, Oklahoma City, Oklahoma,
for Respondent Travelers Insurance Co.
¶1 Shawver & Sons, Inc. (Employer) and
Commerce & Industry Insurance (C&I) (collectively, Petitioners) seek review of an order of a
three-judge panel of the Workers’ Compensation Court filed on January 6, 2010, affirming
the trial court’s order dismissing Travelers
Insurance Co. (Travelers). This case involves a
claim by Jenifer Wise (Wife) on behalf of her
deceased husband, Cory Wise (Deceased),1 for
death benefits. The primary issue presented on
appeal is whether Employer’s insurer at the
time of Deceased’s on-the-job injury, C&I, or
Employer’s insurer at the time of Deceased’s
death, Travelers, should be liable for any death
benefits that may be due.
¶2 We also address whether the trial court’s
order constitutes an appealable order. The trial
court’s order, filed on September 8, 2009, dismissed Travelers without prejudice, and found
C&I “liable for any benefits that may be due in
the claim for death benefits,” reasoning that
“[t]he death claim is derivative in nature to the
original on the job accident and the carrier with
coverage on that day is liable.” The order of the
three-judge panel affirmed the trial court’s order.
The order of the three-judge panel stated, in
addition, that the trial court’s order “IS NOT
AN APPEALABLE ORDER[] BECAUSE IT
DOES NOT AWARD OR DENY BENEFITS.”
¶3 Based on our review of the record and
applicable law, we vacate the order of the
Vol. 81 — No. 31 — 11/20/2010
three-judge panel insofar as it held that the trial
court’s order is not appealable. We sustain the
order of the three-judge panel in all other
respects and remand this case to the trial court
for further proceedings.
FACTS AND PROCEDURAL
BACKGROUND
¶4 In 2005, Deceased filed a workers’ compensation claim against Petitioners alleging
that he sustained injuries while working for
Employer. On April 13, 2006, this claim was
settled by joint petition.
¶5 Wife now seeks death benefits from
Employer for Deceased’s death. On December
16, 2008, Wife filed a Form 3-A, entitled “Claimant’s First Notice of Death and Claim for Compensation.”2 Wife claims that Deceased died on
November 21, 2008, as a result of a cardiac
arrest. According to Wife’s responses in the
Form 3-A, Deceased suffered from “[p]ain due
to [his] injury,” and the cardiac arrest was
caused by “[p]ain medications due to [his]
injury[.]”
¶6 Petitioners deny coverage. Moreover, on
February 18, 2009, Petitioners filed a Form 13
to join Travelers, stating that Travelers is “the
correct carrier for the date of the death
claim.”3
¶7 The trial court dismissed Travelers “without prejudice” from Wife’s claim for death
benefits, and found C&I liable for any death
benefits that may be owed to Wife. On appeal,
the three-judge panel affirmed in an order filed
on January 6, 2010; however, the three-judge
panel’s order further states that the trial court’s
order is not an appealable order because it
does not award or deny benefits. From this
order, Petitioners appeal.
STANDARD OF REVIEW
¶8 The two issues presented on this appeal
— (1) whether the trial court’s order is appealable, and (2) whether Employer’s insurer at the
time of Deceased’s on-the-job injury, or Employer’s insurer at the time of Deceased’s death,
should be liable for any death benefits that
may be due - are issues of law. When confronted with issues of law, this Court exercises de
novo review. American Airlines v. Hervey, 2001
OK 74, ¶ 11, 33 P.3d 47, 50. Pursuant to this
standard, we have plenary, independent and
non-deferential authority to determine whether the trial court erred in its legal rulings. Id.
2713
ANALYSIS
I. Appealable Order
¶9 Title 85 O.S. Supp. 2005 § 26(B) provides
in pertinent part:
The [Workers’ Compensation] Court . . .
shall make or deny an award determining
such claim for compensation . . . together
with the statement of its conclusion of fact
and rulings of law. . . . The decision of the
[Workers’ Compensation] Court shall be
final as to all questions of fact, and except
as provided in Section 3.6 of this title, as to
all questions of law.
Pursuant to this language, “[a]n order [of the
Workers’ Compensation Court] that is reviewable must be one which either grants or denies
an award of compensation or otherwise constitutes
a final determination of the rights between the parties.” Arrow Tool & Gauge v. Mead, 2000 OK 86,
¶ 21, 16 P.3d 1120, 1127 (footnote omitted).
¶10 In American Investigative & Security v.
Hamilton, 1998 OK 134, 969 P.2d 975, the order
of the Workers’ Compensation Court declared
that the employer’s insurer “did not, at the
critical time in question, provide insurance
coverage for the employer’s liability,” and,
therefore, the Workers’ Compensation Court
dismissed the insurer from the case. Id. On
appeal, and pursuant to a sua sponte inquiry
into its jurisdiction, the Oklahoma Supreme
Court concluded that this was an appealable
order because “[it] is the functional equivalent
of a disposition that denies the insurer’s liability for an award.” Id.
¶11 Here, the trial court’s order dismissed
Travelers because it found, in essence, that
Travelers did not, at the critical time in question,4 provide insurance coverage. We find that,
pursuant to American Investigative & Security v.
Hamilton, the trial court’s order is the “functional equivalent” of a disposition that denies
Travelers’ liability for an award and, therefore,
the order is appealable.
II. Insurer at the Time of the On-the-Job Injury is
Liable for Death Benefits
¶12 Petitioners argue that the trial court
erred in dismissing Travelers and finding that
C&I, Employer’s insurer at the time of
Deceased’s on-the-job injury, is liable for any
death benefits that may be due. They argue, in
other words, that the trial court erred in finding that Wife’s death claim is “derivative in
2714
nature to the original on the job accident and
the carrier with coverage on that day[, C&I,] is
liable.” They argue that Travelers, Employer’s
insurer at the time of Deceased’s death, should
be held liable because Wife’s claim “is a new
claim” that did “not vest until . . . the date of
[Deceased’s] death.”5
¶13 In support of their argument, Petitioners
cite to Viersen & Cochran Drilling Co. v. Ford,
1967 OK 12, 425 P.2d 965, where it is stated:
We think it clear from the constitutional
and legislative history of the death benefit
provision of our Workmen’s Compensation Law that the two actions[, one for onthe-job injuries and the other for death
benefits,] are separate and distinct.
Id. at ¶ 12 (emphasis added). The Court in
Viersen & Cochran Drilling Co. was confronted
with the issue of whether an employee’s joint
petition settlement with his employer of a
claim for compensation for an on-the-job injury
bars an action by the employee’s dependents
for death benefits. The Court determined that
an action by the employee’s dependents for
death benefits is separate and distinct from the
deceased employee’s claim for compensation
and, therefore, is not barred by the employee’s
settlement made during his lifetime. However,
in finding “that the[se] are two independent
and separate rights of recovery,” the Court
stated that these separate actions are nevertheless “based on the same accident . . . .” Id. at
¶ 10 (quoting Kay v. Hillside Mines, Inc., 91 P.2d
867, 870 (Ariz. 1939).
¶14 Petitioners also cite to Lekan v. P & L Fire
Protection Co., 1980 OK 56, 609 P.2d 1289, where
it is stated:
The claim for benefits and the correlative duty to pay them are governed by the
provisions of the law in effect when injury
or death occurs. It is at this point in time
that the right becomes vested and the obligation is fixed. The compensation rate to be
applied in each case is that which was prescribed by statute for the period during
which the compensable event — injury or
death — takes place.
Id. at ¶ 4 (footnotes omitted). Thus, “[b]enefits
for an injury shall be determined by the law in
effect at the time of injury; benefits for death
shall be determined by the law in effect at the
time of death.” 85 O.S.2001 § 3.6(F). We note
that this is consistent with the determination
Vol. 81 — No. 31 — 11/20/2010
by the Oklahoma Supreme Court in Viersen &
Cochran Drilling Co. that an action by a deceased
employee’s dependents for death benefits is
“separate and distinct” from the employee’s
prior action for on-the-job injury compensation. In fact, not only is a claim for death benefits separate and distinct from the prior claim,
but, of course, it does not even arise until the
employee’s death.
¶15 That a death benefits claim is governed by
the law at the time of death is also consistent
with the intention of workers’ compensation
law to compensate employees for their lost
earning power. Matter of Death of Knight, 1994
OK 74, ¶ 7, 877 P.2d 602, 604. If an employee had
not died as a result of an on-the-job injury, that
employee would still be earning wages at the
most recent rate. An employee’s dependents
should, therefore, be compensated accordingly.
¶16 Pursuant to the law set forth above, we
agree with Petitioners that (1) a claim for death
benefits by an employee’s dependents is not
barred by the settlement by joint petition of the
deceased employee’s prior claim for injury
compensation because the death benefits claim
is considered to be “separate and distinct,” and
(2) a claim for death benefits and the amount
owed on a successful claim are governed by
the provisions of the law in effect when the
death occurs. However, we disagree with Petitioners that these rules dictate that an employer’s insurer at the time of an employee’s death
should be liable for death benefits rather than
the employer’s insurer at the time of the
deceased employee’s on-the-job injury. Such a
result would undermine the basis for death
benefits compensation, and it would contravene the legislative intent expressed in 85 O.S.
Supp. 2006 §§ 11(B) and 64.6
¶17 Regarding the standard analysis for a
single event, on-the-job injury, the Court in
Viersen & Cochran Drilling Co., 1967 OK 12, 425
P.2d 965, quoted above, stated that a “separate
and distinct” claim for death benefits, like the
original claim for on-the-job injury compensation, is still “based on the same accident . . . .”
Id. at ¶ 10 (quoting Kay v. Hillside Mines, Inc., 91
P.2d 867, 870 (Ariz. 1939). That is, an employer’s actions with regard to, and its relationship
with, its former employee at the time of that
employee’s death are irrelevant in a claim for
death benefits. Instead, courts focus on the
work-related incident and must determine “[i]f
the [on-the-job] injury . . . cause[d] death . . . .”
Vol. 81 — No. 31 — 11/20/2010
85 O.S. Supp. 20057 § 22(8). Title 85 O.S. Supp.
2006 § 11 provides in pertinent part:
A. Every employer subject to the provisions of the Workers’ Compensation Act
shall pay … compensation according to the
schedules of the Workers’ Compensation
Act for the … death of an employee resulting from an accidental personal injury sustained by the employee arising out of and in
the course of employment, without regard
to fault as a cause of such injury ….
That is, death benefits are only claimable when
the former employee’s death “result[s]” from
an on-the-job injury. Id. Therefore, regarding
the employer and the employer’s insurer in a
death benefits claim, the critical time is the date
of the on-the-job injury, and the critical issue is
whether that injury caused the subsequent
death. To hold a later insurer, such as Travelers,
liable for the results (including death) of an onthe-job injury that occurred during the policy
period of a predecessor insurer would undermine the basis for death benefits compensation.
¶18 In finding that Employer’s insurer at the
time of Deceased’s on-the-job injury is liable
for death benefits that may be due, we find
strong support in 85 O.S. Supp. 2006 §11(B).
Section 11(B) provides in pertinent part:
4. Where compensation is payable for an
occupational disease, the employer in
whose employment the employee was last
injuriously exposed to the hazards of such
disease and the insurance carrier, if any, on the
risk when such employee was last so exposed
under such employer, shall alone be liable therefor, without right to contribution from any
prior employer or insurance carrier . . . .
(Emphasis added.) Section 11(B) further provides, in pertinent part:
5. Where compensation is payable for an
injury resulting from cumulative trauma,
the last employer in whose employment
the employee was last injuriously exposed
to the trauma during a period of at least
ninety (90) days or more, and the insurance
carrier, if any, on the risk when the employee
was last so exposed under such employer, shall
alone be liable therefor, without right to contribution from any prior employer or insurance carrier. . . .
2715
(Emphasis added.) These statutory excerpts
address situations in which an employee’s
injury has occurred over time rather than during a single, work-related event. Nevertheless,
they set forth the intent of the Legislature to
limit liability to the employer’s insurance carrier that was “on the risk when the employee
was last . . . exposed . . . .” Although Deceased
was injured during a single event accident
rather than over time, we find that holding
liable Employer’s insurer at the time of
Deceased’s death, rather than Employer’s
insurer at the time of Deceased’s on-the-job
injury, would contravene the legislative intent
expressed in § 11(B) to hold liable the last
insurance carrier “on the risk” during the time
of the on-the-job injury.
¶19 Finally, we also find strong support in 85
O.S. Supp. 2006 § 64, which provides in pertinent part:
A. Every policy of insurance covering
the liability of the employer for compensation . . . shall contain a provision setting
forth the right of the Administrator to
enforce in the name of the state, for the
benefit of the person entitled to the compensation insured by the policy either by
filing a separate application or by making
the insurance carrier a party to the original
application, the liability of the insurance
carrier in whole or in part for the payment
of such compensation . . . .
B. Every such policy shall contain a provision that, as between the employee and
the insurance carrier, the notice to or knowledge of the occurrence of the injury on the part
of the employer shall be deemed notice or
knowledge, as the case may be on the part of the
insurance carrier, that jurisdiction of the
employer shall, for the purpose incorporated in
this title, be jurisdiction of the insurance carrier, and that the insurance carrier shall in all
things be bound by and subject to the orders,
findings, decisions or awards rendered against
the employer for the payment of compensation
under the provisions incorporated in this title.
(Emphasis added.) That is, notice of the occurrence of an on-the-job injury binds the insurance carrier on the risk at the time of the injury
to subsequent orders, findings, decisions or
awards rendered against the employer for that
injury. Pursuant to this language, we find that
the Legislature intended that an employer’s
insurer on the risk at the time of an employee’s
2716
on-the-job injury be liable for a potential award
of death benefits that may be ordered following that employee’s resultant death.
CONCLUSION
¶20 The trial court did not err by dismissing
Travelers from this case and finding C&I liable
for any death benefits that may be due. Travelers should not be held liable for the potential
results of an incident, Deceased’s on-the-job
injury, that occurred during the policy period
of the predecessor insurer, C&I. Such a result
would undermine the basis for death benefits
compensation, and it would contravene the
legislative intent expressed in 85 O.S. Supp.
2006 §§ 11(B) and 64.
¶21 For these reasons, we vacate the order of
the three-judge panel insofar as it held that the
order is not appealable. We sustain the order of
the three-judge panel in all other respects and
remand this case to the trial court for further
proceedings. We express no view upon the
merits of Wife’s claim for death benefits.
¶22 SUSTAINED IN PART, VACATED IN
PART, AND REMANDED FOR FURTHER
PROCEEDINGS.
1. Although in the Oklahoma Supreme Court’s record Deceased’s
name is spelled “Corey Wise,” we refer to him with the spelling found
on the Form 3-A filed by Wife.
2. Record (R.), p. 3.
3. R., p. 6.
4. This Court’s determination regarding the “critical time in question” — i.e., whether Employer’s insurer at the time of Deceased’s on-thejob injury, C&I, or Employer’s insurer at the time of Deceased’s death,
Travelers, should be liable for any death benefits that may be due — is
set forth below.
5. Petitioners’ Brief-in-chief, p. 2.
6. Regarding statutory interpretation, the Oklahoma Supreme
Court recently stated:
The fundamental rule of statutory construction is to ascertain
and give effect to legislative intent. That intent is first divined
from the language of a statute. If a statute is plain and unambiguous, it will not be subjected to judicial construction but will receive
the interpretation and effect its language dictates. Only where the
intent cannot be ascertained from a statute’s text, as when ambiguity or conflict with other statutes is shown to exist, may rules of
statutory construction be invoked. When possible, different provisions must be construed together to effect a harmonious whole
and give intelligent effect to each. An absurd result cannot be
presumed to have been intended by the drafters.
Rogers v. QuikTrip Corp., 2010 OK 3, ¶ 11, 230 P.3d 853, 859 (footnotes
omitted).
7. As pointed out by Petitioners as part of their argument, Wife’s
claim for death benefits is governed by the provisions of the law in
effect when Deceased’s death occurred on November 21, 2008. However, as stated above, this does not answer the question of which insurance provider (the provider at the time of the injury or at the time of
death) should be liable for death benefits.
2010 OK CIV APP 126
CHAPARRAL ENERGY, L.L.C., an
Oklahoma Limited Liability Company,
Vol. 81 — No. 31 — 11/20/2010
Plaintiff/Appellee/Counter-Appellant, vs.
PIONEER EXPLORATION, LTD., a Foreign
Limited Partnership, Defendant/Appellant/
Counter-Appellee.
Case No. 108,113. August 13, 2010
HONORABLE PATRICIA G. PARRISH,
TRIAL JUDGE
Toby M. McKinstry, TOMLINSON &
O’CONNELL, P.C., Oklahoma City, Oklahoma,
and Keith D. Tracy, Oklahoma City, Oklahoma,
for Plaintiff/Appellee,
Michael E. Smith, Sharon T. Thomas, HALL,
ESTILL, HARDWICK, GABLE, GOLDEN &
NELSON, P.C., Oklahoma City, Oklahoma, for
Defendant/Appellant.
CAROL M. HANSEN, Judge:
¶1 This appeal arises from the action of
Plaintiff/Appellee/Counter-Appellant, Chaparral Energy, L.L.C. (Chaparral), against Defendant/Appellant/Counter-Appellee, Pioneer
Exploration, Ltd. (Pioneer), to recover for a gas
imbalance. Both parties seek review of the trial
court’s order granting summary judgment in
favor of Chaparral for conversion and setting
damages based on the imbalance’s value as of
the date the trial court found the conversion
claim accrued. We reverse, holding the parties’
accounting dispute did not as a matter of law
give rise to a conversion claim.
interests, and mineral leases in the described
lands, as well as in associated contracts, including operating agreements. The conveyance
excepted gas imbalances from a reservation of
rights or choses in action arising prior to the
effective date of the conveyance.
¶4 Pioneer took the position the conveyance
did not address the underproduction prior to
July 1, 2000. It therefore continued to show the
gas imbalance attributable to Chaparral in its
records as beginning with July 1, 2000 production. It did not attribute Bristol’s imbalance
(Historic Imbalance) to Chaparral.
¶5 Chaparral sued Pioneer for an accounting,
in-kind or cash balancing, breach of contract,
conversion, and violation of the Natural Gas
Market Sharing Act (Sweetheart Gas Act), 52
O.S.2001 §§581.1-581.10. Pioneer answered and
denied liability. Chaparral moved for summary
judgment on its claim for conversion, arguing
Pioneer wrongfully converted the Historic
Imbalance when it “eliminated” the imbalance
instead of transferring it to Chaparral. In
response, Pioneer conceded Chaparral assumed
Bristol’s position as an underproduced or overproduced party when it acquired Bristol’s
interests in the McLain wells, but argued Chaparral had only a chose in action for gas balancing, and not a tort claim for conversion.
¶2 The gas imbalance arose before the parties
acquired their interests in the two wells at
issue, the McLain F Nos. 1-32 and 4-32 wells.
Pioneer acquired its interest and assumed
operations from Phillips Petroleum Corporation in July 1999. Chaparral purchased its interest from the bankruptcy estates of Bristol
Resources Corporation and its affiliates (collectively Bristol) effective July 1, 2000.
¶6 Pioneer counter-moved for partial summary judgment as to Chaparral’s claims for
conversion and violation of the Sweetheart Gas
Act, arguing (1) Pioneer’s failure to show on
the gas balancing statements a gas imbalance
attributable to Chaparral’s interest in the
McLain wells prior to July 1, 2000 does not
constitute a conversion of tangible personal
property as a matter of law, and (2) the Sweetheart Gas Act does not apply where an operating agreement provides for the taking, sharing,
and marketing of gas even if the agreement
does not contain a gas balancing agreement.
¶3 In 2006, Chaparral requested gas balancing statements for the time period immediately
prior to July 1, 2000. In response, Pioneer
requested documentation showing Chaparral
was entitled to the gas balancing adjustments
prior to July 1, 2000. Chaparral provided a
copy of the conveyance document from Bristol
to Chaparral, which transferred all of Bristol’s
“rights, titles, and interests” in the mineral
interests, royalty interests, overriding royalty
¶7 The trial court granted summary judgment in favor of Chaparral on its conversion
claim and denied Pioneer’s counter-motion on
the claim. The trial court denied Pioneer’s
motion for summary disposition as to the
Sweetheart Gas Act claim based upon Chaparral’s voluntary dismissal of its claim. The trial
court dismissed Chaparral’s breach of contract
claim based upon its ruling at a hearing not
included in the appellate record.
Vol. 81 — No. 31 — 11/20/2010
2717
¶8 After a separate hearing on damages, the
trial court entered an order finding the amount
of Historic Imbalance from the McLain F Nos.
1-32 and 4-32 wells attributable to Chaparral
and converted by Pioneer was 6,559 mcf1 and
19,364 mcf, respectively. The trial court denied
Chaparral’s request to value damages pursuant to 23 O.S.2001 §64(2) at the highest market
value of the property at any time between the
conversion and the verdict, finding Chaparral
did not exercise due diligence in pursuing its
conversion claim. However, it did grant Chaparral’s alternative request to value damages
pursuant to §64(1) at the value of the property
at the time of conversion on November 14,
2007, with interest from that time. The trial
court granted judgment to Chaparral in the
amount of $311,919.14. It dismissed Chaparral’s remaining claims without prejudice.
¶9 Both sides appeal from the judgment. Pioneer contends the trial court erred in granting
judgment for conversion because an underproduced party has a claim for equitable gas balancing in the absence of a gas balancing agreement, not for conversion. Chaparral contends
the trial court erred in refusing to award damages based on the highest market value of the
Historic Imbalance between the date its conversion claim accrued and the date the trial
court granted summary judgment.
¶10 Because a grant of summary judgment
involves purely legal determinations, we will
review the trial court’s decision under a de novo
standard. Carmichael v. Beller, 1996 OK 48, 914
P.2d 1051, 1053. Summary judgment is appropriate only when there is no substantial controversy as to any material fact and one of the
parties is entitled to judgment as a matter of
law. 12 O.S.Supp. 2002, Ch. 2, App. 1, Rule 13.
¶11 Conversion is an act of dominion wrongfully exerted over another’s tangible personal
property in denial of or inconsistent with the
owner’s rights in the property. Conversion
does not lie for a debt. Welty v. Martinaire of
Oklahoma, Inc., 1994 OK 10, 867 P.2d 1273, 1275.
Oil and gas do not become personal property
until produced and severed from the leasehold.
When they are in situ, they are considered part
of the realty. Halliburton Oil Producing Co. v.
Grothaus, 1998 OK 110, 981 P.2d 1244, 1251.
Therefore, oil and gas in situ are not subject to
conversion.
2718
¶12 After oil or gas is produced, it is tangible
personal property and is subject to conversion.
However, under the common law in Oklahoma, working interest owners in an oil or gas
well are tenants in common. Each cotenant has
the right to develop the property and market
production, subject only to the duty to account
to other cotenants. Therefore, under ordinary
circumstances, the sale of gas to a purchaser by
a cotenant without the consent of other cotenants is lawful and does not constitute conversion on the part of either the working interest
cotenant or the purchaser. Anderson v. Dyco
Petroleum Corp., 1989 OK 132, 782 P.2d 1367,
1371-1372.
¶13 The provision of the operating agreement that permits each owner to take and market its share of production in kind anticipates
that any owner may take at any time. When
one working interest cotenant sells more than
its share of gas and there is no gas balancing
agreement, the equitable remedy available to
the other cotenants is either balancing in kind,
periodic cash balancing prior to depletion, or
cash balancing at depletion, depending upon
the circumstances. Harrell v. Samson Resources
Co., 1998 OK 69, 980 P.2d 99, 105.
¶14 In the present case, Chaparral asserts
Pioneer converted the Historic Imbalance by
zeroing-out the gas volume held for Chaparral’s account on the gas balancing statement.
The gas represented by the Historic Imbalance
was not converted because it was produced
and sold by a cotenant with the right to do so.
The Historic Imbalance itself is not tangible
personal property but is an accounting entry.
The allegation Pioneer eliminated the Historic
Imbalance is in essence an allegation Pioneer
has improperly accounted to its cotenant,
Chaparral, for its overproduction. Chaparral’s
cause of action is not for conversion but for
accounting and gas balancing.
¶15 The trial court improperly granted summary judgment to Chaparral for conversion. Its
judgment is REVERSED and this matter is
REMANDED for further proceedings consistent with this opinion.
BUETTNER, P.J., and HETHERINGTON, J.,
concur.
1. Mcf = one thousand cubic feet.
Vol. 81 — No. 31 — 11/20/2010
2010 OK CIV APP 122
REX EVERETT GILWORTH, SR., Plaintiff/
Appellant, vs. STATE OF OKLAHOMA ex
rel., DEPARTMENT OF PUBLIC SAFETY,
Defendant/Appellee.
HONORABLE JAMES B. CROY, JUDGE
AFFIRMED
Aaron T. Corbett, Oklahoma City, Oklahoma,
for Plaintiff/Appellant,
Douglas R. Young, John K. Lindsey, Oklahoma
City, Oklahoma, for Defendant/Appellee.
ROBERT DICK BELL, VICE-CHIEF JUDGE:
¶1 Plaintiff/Appellant, Rex Everett Gilworth,
Sr., appeals from the district court’s order
denying his request to modify the one-year
revocation of his driver’s license. Defendant/
Appellee, Oklahoma Department of Public
Safety (DPS), revoked Gilworth’s driver’s
license because he had a prior conviction within ten years of the arrest giving rise to the most
recent conviction for driving under the influence of alcohol (DUI). For the reasons set forth
below, we affirm.
¶2 Gilworth is an eighty-three year old driver
who lives alone in Oklahoma City. On July 26,
2008, Gilworth was arrested by an Oklahoma
City police office for DUI. Gilworth entered a
guilty plea on July 17, 2009. Because Gilworth
had a prior revocation within ten years of the
arrest giving rise to the DUI conviction, DPS
revoked Gilworth’s driving privileges for one
year pursuant to 47 O.S. Supp. 2007 §6205.1(A)(2). Gilworth sought modification of
the revocation from the district court.
¶3 The modification hearing was held
November 10 and 19, 2009. We note Gilworth’s
attorney requested that the court reset the
modification hearing for a date in November,
2009. The rescheduling of the hearing date
appears to be a maneuver to take advantage of
a recent amendment to §6-205.1. Prior to
November 1, 2009, the district court had no
power to modify the one-year license revocation under 47 O.S. Supp. 2007 §6-205.1(A)(2).
Section 6-205.1(A)(2) was amended by Laws
2009, c.388, §3, effective November 1, 2009. By
this amendment, the Oklahoma Legislature
Vol. 81 — No. 31 — 11/20/2010
specifically allowed the district court to modify
a one-year order of revocation. Because the
hearing took place after the effective date of the
amendment, all parties proceeded under the
amended language. “[W]e hold any rights [Gilworth] had to modification were controlled by
the law delineating the powers of the district
court to grant such modification in effect at the
time the district court sought to grant that
relief.” Carl v. State, ex rel. Dept. of Public Safety,
1995 OK CIV APP 147, ¶7, 909 P.2d 1196, 1198.
¶4 After hearing evidence, the court denied
Gilworth’s motion to modify the revocation.
Gilworth appeals. In an appeal from a driver’s
license revocation, this Court will not disturb
the factual findings of the district court “if
there is any evidence in the record to support
them and they are free of legal error.” Polk v.
State ex rel. Dept. of Pub. Safety, 1996 OK CIV
APP 100, ¶4, 927 P.2d 55, 56. Accord Smith v.
State ex rel. Dept. of Pub. Safety, 1984 OK 16, ¶7,
680 P.2d 365, 368.
¶5 The district court may modify a revocation
when it determines the person whose driver’s
license has been revoked has no other adequate
means of transportation and it may enter an
order directing DPS to allow driving, subject to
the limitations of §6-205.1, and the installation
of an ignition interlock device. See 47 O.S.
Supp. 2005 §§754.1 and 755. Gilworth argues
the district court erred, as a matter of law,
when it denied his modification request because
he met his burden of proving he had no adequate means of transportation. According to
Gilworth, §755’s language indicates the Legislature’s intent to mandate the granting of a
modification upon such a showing by an affected driver.
¶6 We disagree with Gilworth’s interpretation of §755. Gilworth has no vested right to
the issuance of a driver’s license; the issuance
of a driver’s license amounts to the grant of a
privilege. Carl, 1995 OK CIV APP 147at ¶7, 909
P.2d at 1198. Furthermore, the Legislature’s use
of the term “may” in §755 has a well-established discretionary or permissive connotation.
See Shea v. Shea, 1975 OK 90, ¶10, 537 P.2d 417,
418. Thus, even if Gilworth demonstrates he
has no other means of transportation, the district court still has the discretion to deny his
request for modification of the order revoking
his driving privileges.
¶7 We next consider whether the district
court abused its discretion when it denied Gil-
2719
worth’s request to modify the revocation of his
driver’s license. Gilworth submits the district
court abused its discretion because he demonstrated his need for a driver’s license to secure
transportation to his part-time job at Wheeler
Chevrolet in Hinton, Oklahoma. He established there are no public buses or other forms
of public transportation from Oklahoma City
to Hinton. He also testified his job duties
included driving his employer’s vehicles to
other locations. Gilworth stated he needed to
maintain this job to supplement his monthly
social security income of $776.00.
¶8 Even though Gilworth may have established that he has “no other adequate means of
transportation” to his employment, we find the
district court did not abuse its discretion when
it denied the modification. Gilworth’s need for
a driver’s license is trumped by his extensive
history of traffic violations. Since 1976, Gilworth’s driving record indicated eight alcohol
violations, seventeen suspensions or revocations of driving privileges, five accidents, twenty-six speeding violations, eight failures to
appear for court, two prior modifications and
two letters in lieu of license — both of which
were violated by Gilworth, and numerous failures to have a driver’s license in his possession.
In addition, of the eight alcohol violations
resulting in eight revocations of his driving
privilege, three were based on DUI convictions,
one revocation was based on testing .10 or more,
and four were based on his refusal to submit to
the State of Oklahoma’s test for alcohol. Based
on this driving record, we cannot find the district court abused its discretion in denying Gilworth’s requested relief.
¶9 Gilworth next argues the court erred by
considering more than ten years of his driving
record. He claims the district court’s review
was limited by 47 O.S. Supp. 2009 §6-205.1 to a
maximum ten year look back period. Gilworth’s argument lacks merit. Section 6-205.1
prescribes periods of revocation which are
dependent on a motorist’s ten year history of
prior revocations and convictions. This section
instructs DPS on how to calculate the proper
period or length of revocation. This section
does not limit DPS or the district court’s consideration of a motorist’s driving record to that
ten year period, for purposes of exercising its
discretion to modify the revocation.
¶10 Because he has an interlock device on his
vehicle, Gilworth next submits the district
2720
court’s decision disregarded the public policy
to reduce drunk driving by implementing the
monitoring of such drivers with an interlock
device. Title 47 O.S. Supp. 2009 §754.1 requires
that an approved ignition interlock device be
placed, at the person’s own expense, upon
every motor vehicle operated by that person as
a prerequisite and condition to the district
court’s powers of modification. Contrary to
Gilworth’s contention, this section does not
mandate the district court to grant a modification when an interlock device is installed.
¶11 On the basis of the foregoing, we conclude the district court did not abuse its discretion when it denied Gilworth’s request to
modify the revocation of his driver’s license.
The judgment of the district court is affirmed.
¶12 AFFIRMED.
JOPLIN, P.J., and MITCHELL, J., concur.
2010 OK CIV APP 120
FIRST UNITED BANK & TRUST CO., a
state banking corporation, Plaintiff/
Appellee, vs. GLENN S. PENNY, Defendant/
Appellant.
BRYAN COUNTY, OKLAHOMA
HONORABLE MARK R. CAMPBELL,
TRIAL JUDGE
AFFIRMED
Heather Burrage, BURRAGE LAW FIRM,
Durant, Oklahoma, for Plaintiff/Appellee
William A. Gossett, Duncan, Oklahoma, for
Defendant/Appellant
¶1 This accelerated appeal1 involves a lender’s action to collect on amounts owed by a
debtor on a promissory note. Glenn S. Penny
(Debtor) appeals the trial court’s Journal Entry
of Judgment, filed on March 17, 2010, granting
appellee First United Bank & Trust Co.’s (Bank)
motion for summary judgment. Debtor executed a promissory note (the Note) in favor of
Bank in the amount of $4,306,510, secured by
stock. Debtor defaulted within a few months.
Although Bank liquidated the collateral, there
remained $615,058.71, plus accruing interest
and reasonable attorney fees owed, as set forth
in the Judgment.
Vol. 81 — No. 31 — 11/20/2010
¶2 On appeal, Debtor argues that the trial
court erred in granting summary judgment in
favor of Bank because genuine issues of material fact exist as to whether Bank failed to discharge the duty to liquidate collateral in a commercially reasonable manner by either failing
to properly monitor the market price of certain
shares of stock or by ignoring the decreasing
market value thereof.2 Upon our review of the
record and applicable law, we find the trial
court did not err in granting summary judgment in favor of Bank. We affirm.
UNDISPUTED MATERIAL FACTS
¶3 The following are the material facts as to
which there is no substantial controversy:
1. On January 17, 2008, Debtor, for value
received, made, executed and delivered to
Bank, the Note of that date, in writing,
whereby Debtor promised to pay the sum
of $4,306,510, plus interest as stated, with a
maturity date of January 17, 2009.3
2. Pursuant to the terms of the Note,4 the loan
was secured by a brokerage account in
Debtor’s name. The account contained
$4,100,000 in cash.5 Debtor also pledged to
Bank as collateral 50,000 shares of a publicly traded company named Flotek Industries, Inc. (Flotek).6
3. The Note provides7 that “Lender may
delay or forgo enforcing any of its rights or
remedies under this Note without losing
them. . . . Lender may renew or extend
(repeatedly and for any length of time) this
loan or release any party or guarantor or
collateral; or impair, fail to realize upon or
perfect Lender’s security interest in the
collateral; and take any other action
deemed necessary by Lender without the
consent of or notice to anyone.”
4. On April 17, 2008, Bank’s officer, Jerrad
Besch, sent an email to Debtor, requesting
Debtor provide more shares for collateral
for the loan. Besch notes the trading value
of the Flotek stock and states that “we are
currently short about $390K. Is it possible
to send more [F]lotek shares either to
myself or to Danny? At today’s price you
would need approx. 35,000 shares more.”8
5. In the spring of 2008, Debtor became delinquent on payments due pursuant to the
Note.9 In an effort to assist Debtor, and at
the request of Debtor, Bank worked with
Vol. 81 — No. 31 — 11/20/2010
him to assist Debtor in bringing the loan
current and allowed Debtor ample time to
procure additional collateral to secure the
Note.10
6. In October 2008, it became clear to Bank
that Debtor would not bring the loan current or pledge additional collateral to
secure the loan.11
7. Bank liquidated the stock by selling it on
the open market for fair market value in
late October 2008 and early November
2008, for $3.00 per share.12
8. The market price for the Flotek shares
dropped after the Note was executed and
before Debtor defaulted.13 The price ranged
from a low of $10.00 per share to a high of
over $21.00 per share during the time
period from April 2008 until early October
2008.14
9. The proceeds of the sale of collateral were
insufficient to cover the outstanding balance on the loan. As of December 11, 2008,
Debtor was still indebted to Bank for
$615,058,15 with interest accruing at the
agreed default rate of 21 percent per
year.16
10. Bank sued Debtor on December 17, 2008,
seeking payment of the $615,058 outstanding loan balance plus interest, as
well as reasonable attorney fees and costs
of collection.17 Debtor answered and counterclaimed for “damages greater than the
amount sued for by [Bank], with such difference being in the amount of more than
$10,000.00.”18
¶4 On January 13, 2010, Bank filed its motion
for summary judgment, asserting there was no
substantial controversy as to any material fact
regarding its claim or Debtor’s counterclaims,
to which Debtor responded. The trial court
granted Bank’s motion for summary judgment
in its Judgment filed on March 17, 2010, from
which Debtor now appeals.
STANDARD OF REVIEW
¶5 Summary judgment may be granted when
there is no substantial controversy as to any
material fact. Rule 13(a), Rules for District
Courts, 12 O.S. Supp. 2002, ch. 2, app. The standard of review on the entry of judgment granting summary relief is de novo. Jennings v.
Badgett, 2010 OK 7, ¶ 5, 230 P.3d 861, 864. We
review rulings on issues of law pursuant to the
2721
plenary power of the appellate courts without
deference to the trial court. Id.
ANALYSIS
¶6 Summary judgment is appropriate when
the pleadings, affidavits, depositions, admissions or other evidentiary materials show there
is no substantial controversy as to any material
fact and one party is entitled to judgment as a
matter of law. Tucker v. ADG, Inc., 2004 OK 71,
¶ 11, 102 P.3d 660, 665. A party opposing a
motion for summary judgment must show
“the reasonable probability, something beyond a
mere contention, that the opposing party will be
able to produce competent, admissible evidence at the time of trial which might reasonably persuade the trier of fact in his favor on
the issue in dispute.” Davis v. Leitner, 1989 OK
146, ¶ 15, 782 P.2d 924, 927. (Emphasis added.)
Rule 13(b), Rules for District Courts, 12 O.S.
Supp. 2002, ch. 2, app., provides, in part, that
“[a]ll material facts set forth in the statement of
the movant which are supported by acceptable
evidentiary material shall be deemed admitted
for the purpose of summary judgment or summary disposition unless specifically controverted by the statement of the adverse party
which is supported by acceptable evidentiary
material.” Where no effort has been made to
refute an argument, the correctness of the argument may be deemed to be conceded. Sasseen v.
State Board of Equalization, 1961 OK 152, ¶ 5, 363
P.2d 252, 253-54.
¶7 Sale of collateral must be conducted in a
commercially reasonable manner. Title 12A
O.S.2001 § 1-9-610(b) provides that: “Every
aspect of a disposition of collateral, including
the method, manner, time, place, and other
terms, must be commercially reasonable.”
¶8 Debtor specifically limits his collateral
sale challenge on appeal. He states he does not
challenge Bank’s sale of the stock under 12A
O.S.2001 § 1-9-627(b),19 but rather alleges a
claim, outside the Uniform Commercial Code
(Code) provisions, that Bank “was negligent in
either failing to monitor the price of the Flotek
Shares after [Debtor’s] default, or in ignoring
the market value decline of the Flotek
Shares.”20
¶9 The record does not specify the specific
market in which Bank sold the Flotek shares;21
however, there was undisputed evidence that
Bank sold the shares at their then fair market
value, thus satisfying § 1-9-627(b)(2). Although
2722
the comments to the Code and corresponding
Oklahoma statutes are not binding, we do find
them persuasive. See Wilkerson Motor Co. v.
Johnson, 1978 OK 12, ¶ 7, 580 P.2d 505, 507. The
Oklahoma Code comments state in relevant
part that “[t]he reasonableness of the sale is
determined by the manner of the sale and not
the price. Price is a component of the sale
which a court may consider, but is not alone
determinative.” Comment 5 to § 1-9-610. (Citations omitted.) The comment to § 1-9-627 cites
First National Bank and Trust Company of Enid v.
Holston, 1976 OK 196, ¶ 10, 559 P.2d 440, 444,
for the proposition that the “price received is
not determin[a]tive of the issue” of commercial
reasonableness.
¶10 Further, the Oklahoma Supreme Court
has established that:
The secured party is required to utilize
his best efforts to sell the collateral for the
best price and to have a reasonable regard
for the debtor’s interest. The commercial
realities are that the secured creditor will
generally try to obtain the highest possible
price for collateral since recovery of any
deficiency is usually dubious. He is not,
however, required to anticipate the course a
market will take. If the secured party sells
the collateral in the usual manner in any
recognized market, or if he sells at a price
current in the market at the time of his sale,
or if he has otherwise sold in conformity
with commercially reasonable practices
among dealers in the type of property sold,
he has sold in a commercially reasonable
manner. The fact that a better price could
have been obtained by a sale at a different
time or in a different method from that
selected by the secured party is not of itself
sufficient to establish that the sale was not
made in a commercially reasonable manner.
Id. at ¶ 10, 559 P.2d at 444-45. (Footnotes omitted and emphasis added.)
¶11 Noting the Code provisions have been
satisfied, Debtor specifically states22 that he is
“not alleging that the fact that the disposition
of the Flotek Shares could have brought more
money if sold at a different time was, in and of
itself, the cause of such disposition being commercially unreasonable.”23 Debtor also does not
dispute the fact that Bank did not dispose of
the collateral during the time it gave Debtor
time to get his loan out of default, a fact sup-
Vol. 81 — No. 31 — 11/20/2010
ported by the affidavit of Dennis Garrett, an
officer of Bank.24
bank the right, but not the obligation, to sell the
stock.
¶12 Instead, Debtor alleges a lack of commercial reasonableness in the sense that Bank was
“negligent in either failing to monitor the price
of the Flotek Shares after [Debtor’s] default, or
in ignoring the market value decline of the
Flotek Shares.”25 To defeat summary judgment,
Debtor would have to establish the existence of
this alleged duty of Bank to monitor the price
of the shares and disputed facts as to whether
Bank breached this duty. In effect, Debtor’s
argument would have this Court place Bank in
the position of Debtor’s investment advisor.
This we decline to do.
¶15 Likewise, in Capos v. Mid-America National Bank of Chicago, 581 F.2d 676 (7th Cir. 1978),
the debtor sued the bank for breach of an
alleged duty to foreclose on stock given as collateral when its value fell to the vicinity of the
amount owed. The Capos debtor, like Debtor in
this case, never instructed the bank to sell the
stock. The loss was, “quite simply, an investment loss, the investment was Capos’, not [the
bank’s] ….” Id. at 680. The Capos court stated:
¶13 The loan transaction, secured by stock, is
governed by the Code.26 The Code provides
that “a secured party shall use reasonable care
in the custody and preservation of collateral in
the secured party’s possession.” 12A O.S. Supp.
2006 § 1-9-207(a). Although the Code requires a
secured party (Bank) to maintain custody and
preserve stock as collateral in its possession,
this does not mean Bank will be liable for a fall
in stock prices.
¶14 Whether there is a duty of Bank, as a
pledgee of stock (the value of which is subject
to fluctuating market conditions) that secures a
promissory note to the Debtor as pledgor to
preserve the stock’s value during the period of
pledge pursuant to § 1-9-207 appears to be an
issue of law and a matter of first impression in
Oklahoma.27 Other jurisdictions have found
that a pledgee’s duty with regard to pledged
stock is confined to physical care, and a pledgee will not be liable for a decline in value.28 In
Tepper v. Chase Manhattan Bank, N.A., 376 So.2d
35 (Fla. Dist. Ct. App. 1979), the trial court’s
grant of summary judgment on the debtor’s
counterclaim against the bank for failure to
preserve the value of pledged securities for a
promissory note the bank recovered a judgment upon was upheld by the appellate court
pursuant to § 9-207. In Tepper, the court stated
that “the general law is that a pledgee’s duty
with regard to the care of the pledged chattel is
confined solely to the physical care of the chattel and a pledgee is not liable for a decline in
the value of pledged instruments. In other
words, the burden is upon the pledgor to preserve the value of the security.” Id. at 36. The
Tepper court also noted that the promissory
note, as in the case before this Court, gave the
Vol. 81 — No. 31 — 11/20/2010
[The bank] urges us to affirm the district
court judgment on the alternative ground
that a bank has no duty to its borrower to
sell collateral stock of declining value. We
think it appropriate to do so. It is the borrower who makes the investment decision
to purchase stock. A lender in these situations merely accepts the stock as collateral,
and does not thereby itself invest in the
issuing firm. Nor, unless otherwise agreed,
does the lender undertake to act as an
investment adviser, although imposing a
duty on the lender to sell the stock at the
“reasonable” time would foist that role
upon it. Not surprisingly, Illinois common
law did not impose a duty on a pledgee to
sell shares of stock at any time or liability
for depreciation of the shares’ value while
in his possession.”
Id. (Citation omitted.)29
¶16 In a case similar to the one before this
Court, New Jersey Bank v. Toffler, 353 A.2d 116
(N.J.Super.A.D. 1976), the bank sued to recover
the balance of a loan collateralized by pledged
stock. The debtor counterclaimed, alleging the
bank neglected to protect and to preserve the
value of the securities pledged and that along
with this duty of reasonable care come disputed factual questions as to whether the bank
acted reasonably. The bank notified the debtor
of the decline in value and the debtor made no
request that the collateral be sold. Relying on
Code § 9-207, the trial court rejected the debtor’s assertion and granted summary judgment
in favor of the bank. The debtor appealed. In
affirming the trial court’s grant of summary
judgment, the Toffler court found that § 9-207’s
“custody and preservation of collateral” obligation did not extend to holding a pledgee liable for a decline in the value of pledged instruments as a matter of law, absent a showing of
bad faith or negligent refusal to sell after
2723
demand, neither of which occurred in the
Toffler case or in the case before this Court.
¶17 In this case, Debtor does not dispute he
requested Bank not to sell the Flotek stock
while Debtor tried to become current on his
Note obligation. Debtor does not dispute that
Bank, in fact, emailed Debtor about the decline
in share value and demanded additional collateral. The Note provides that Bank had no
duty to preserve the value of the stock or to take
any action in connection with management of
the collateral. In fact, the Note provided:
Lender may delay or forgo enforcing any
of its rights or remedies under this Note
without losing them. . . . Lender may renew
or extend (repeatedly and for any length of
time) this loan or release any party or guarantor or collateral; or impair, fail to realize
upon or perfect Lender’s security interest
in the collateral; and take any other action
deemed necessary by Lender without the
consent of or notice to anyone.
¶18 The party opposing the motion for summary judgment must attach supporting evidentiary materials to show there is a material
disputed fact. See Tucker v. New Dominion,
L.L.C., 2010 OK 14, ¶ 11, 230 P.3d 882, 885. This
Debtor failed to do.
¶19 Therefore, as a matter of law, we find
pursuant to these undisputed facts, Bank had
no duty to “monitor” the decline of Flotek’s
shares. As stated in the Capos case, it is the borrower who makes the investment decision
regarding stock. In accepting stock as collateral, a bank does not take on the responsibility of
becoming the borrower’s investment advisor.
Without a duty owed, Debtor’s negligence
theory cannot be sustained. Sloan v. Owen, 1977
OK 239, ¶ 7, 579 P.2d 812, 814.
¶20 In the case of a default secured by a stock
pledge, the pledgee’s duty of reasonable care
pursuant to § 1-9-207 to preserve the collateral
is satisfied when the collateral is sold in good
faith and in a commercially reasonable manner.
Title 12A O.S.2001§ 1-9-627(b), provides that a
disposition of collateral is made in a commercially reasonable manner if the disposition is
made at the price current in any recognized
market at the time of the disposition. There is
no dispute that this is exactly what Bank did.
2724
CONCLUSION
¶21 Based on our review of the record, the
undisputed facts, and the law, we affirm the
trial court’s grant of summary judgment.
¶22 AFFIRMED.
1. This appeal has been assigned to the accelerated docket and
stands submitted without appellate briefing pursuant to Okla.Sup.
Ct.R. 1.36, 12 O.S. Supp. 2004, ch. 15, app. 1.
2. Record (R.), Tab 6, “[Debtor’s] Response and Objection to
[Bank’s] Motion for Summary Judgment,” pp. 3, 6, and 7.
3. R., Tab 5, “Promissory Note,” which is a renewal of an existing
debt.
4. R., Tab 5, at p. 2 of the Note, at the paragraph entitled “Collateral.” Apparently, there was a separate “Collateral Pledge Agreement”
involved in this transaction; however, it is not part of the appellate
record before this Court.
5. Id.
6. R., Tab 5 and Tab 6, at p. 2.
7. R., Tab 5, at p. 2 of the Note, at the paragraph entitled “General
Provisions.”
8. R., attachment to Tab 6.
9. R., Tab 5, attached Affidavit of Dennis Garrett, Bank’s officer.
10. Id.
11. Id.
12. Id., and R., Tab 6, attached Affidavit of Debtor.
13. R., Tab 6, Exh. 4.
14. Id.
15. R., Tab 5, “[Bank’s] Motion for Summary Judgment,” p. 3.
16. Id.
17. R., Tab 2, “Petition.”
18. R., Tab 3, “Answer and Counterclaim.”
19. Title 12A O.S.2001§ 1-9-627(b), provides that :
(b) A disposition of collateral is made in a commercially reasonable manner if the disposition is made:
(1) in the usual manner on any recognized market;
(2) at the price current in any recognized market at the time of
the disposition; or
(3) otherwise in conformity with reasonable commercial practices among dealers in the type of property that was the subject
of the disposition.
20. R., Tab 6, at p. 6.
21. Evidence was submitted that shares of Flotek were traded on
the New York Stock Exchange. R., Tab 6, Exh. 3. Assuming Bank sold
the shares on the New York Stock Exchange, this would constitute a
“recognized market” under § 1-9-627(b)(1). See Code, 12A O.S.2001 §
1-9-627, comment 4 (“[T]he concept of a ‘recognized market’ in subsections (b)(1) and (2) is quite limited; it applies only to markets in which
there are standardized price quotations for property that is essentially
fungible, such as stock exchanges.”).
22. R., Tab 6, at p. 6.
23. Id.
24. R., Tab 5, Affidavit of Dennis Garrett.
25. R., Tab 6, at p. 6.
26. Title 12A O.S.2001 §§1-9-101 et seq.
27. But see Dunbar v. Commercial Electrical Supply Co., 1912 OK 292,
123 P. 417, a case decided long before the Code, first enacted in 1952,
wherein the Court considered an issue regarding which of two statutes
(one applying a grace period, the other did not) applied to a promissory note. The Dunbar Court noted that the stock pledged to secure the
promissory note had greatly declined in value. “True the pledgee did
not sell the stock immediately after the expiration of the 24 hours; but
this is a fact of which the [debtor] cannot complain. In fact, he sought
the postponement of the sale himself . . . and it was doubtless due to
this fact, in part at least, that the sale was not made at that time.” Id. at
¶ 6, 123 P. at 418. The Court, quoting Robinson v. Hurley, 11 Iowa 410,
79 Am. Dec. 497, stated:
There is nothing in the language or terms of this receipt which
obliged the plaintiff to sell these collaterals at the maturity of the
note. . . . A postponement of the exercise of this right is a thing of
which the debtor cannot very well complain; it only enlarges his
opportunity to redeem, and thereby prevent any sacrifice that
might result from a forced sale of the pledge. The depreciation in
this case, which the [stock] in question suffered between the
Vol. 81 — No. 31 — 11/20/2010
maturity of the note and the sale of the same, was without fault
or power of prevention on the part of the [bank].
Id. at ¶ 7, 123 P. at 418.
28. Cf., see Citibank, N.A. v. Data Lease Financial Corp., 828 F.2d 686,
697 (11th Cir. 1987)(where the pledged stock represented a controlling
interest of the corporation and the pledgee bank became involved in
the management of the company, an exception to the general rule —
that the care of a pledged chattel is confined solely to the physical care
of it and that a pledgee is not liable for a decline in value — may allow
a breach of duty to be found.) Such is not the case before this Court,
however.
29. Likewise, see Federal Deposit Insurance Corporation v. Floyd, 854
F.Supp. 449, 452 (N.D.Tex. 1994)(bank as pledgee was under no duty to
sell the depreciating collateral stock, absent a reasonable request by the
pledgor: “[t]here is no reason why the secured party should have to
bear the risk of a rise or fall in price. . . .”); Federal Deposit Insurance
Corporation v. Webb, 464 F.Supp. 520, 526 (E.D. Tenn. 1978)(“The reader
is referred to Restatement of Security . . . . Comment (a) . . . provides,
‘The pledgee is not liable for a decline in the value of the pledged
instruments, even if timely action could have prevented such
decline.’”); Federal Deposit Insurance Corporation v. Air Atlantic, Inc., 452
N.E.2d 1143, 1147 (Mass. 1983)(court rejected the debtor’s argument
that summary judgment was improper on its counterclaim alleging
commercial unreasonableness when pledged stock was not sold
sooner and the market declined “ruinously . . . [and] notorious[ly] and
a matter of public knowledge.”); Marriott Employees’ Federal Credit
Union v. Harris, 897 S.W.2d 723 (Ct.App. Tenn. 1995)(citing Capos, the
court rejected the debtor’s claim that the lender had a duty to monitor
the market value of the pledged stock securing the loan.)
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NOTICE OF JUDICIAL VACANCY
The Judicial Nominating Commission seeks applicants to fill the following judicial office:
District Judge • Twenty-third Judicial District, Office 2 • Pottawatomie County
This vacancy is due to the appointment of the Honorable Douglas L. Combs, to the Supreme
Court effective January 1, 2011.
To be appointed to the office of District Judge one must be a registered voter of Pottawatomie County at the time (s)he takes the oath of office and assumes the duties of
office. Additionally, prior to appointment, such appointee shall have had a minimum
of four years experience as a licensed practicing attorney, or as a judge of a court of
record, or both, within the State of Oklahoma.
Application forms can be obtained online at www.oscn.net under the link to Judicial Nominating Commission or by contacting Tammy Reaves at (405) 521 2450. Applications must be
submitted to the Chairman of the Commission at the address below no later than 5:00 p.m.,
Monday, November 29, 2010. If applications are mailed, they must be postmarked by midnight, November 29, 2010.
Allen Smallwood, Chairman
Oklahoma Judicial Nominating Commission
Administrative Office of the Courts
1915 North Stiles, Suite 305
Oklahoma City, Oklahoma 73105
Vol. 81 — No. 31 — 11/20/2010
2725
Disposition of Cases
Other Than by Published Opinion
COURT OF CRIMINAL APPEALS
SUMMARY OPINION
Thursday, October 28, 2010
by: Lumpkin, J.; C. Johnson, P.J., concur; A.
Johnson, V.P.J., concur in result; Lewis, J., concur in result; Smith, J., concur.
F-2009-915 — Appellant Vitaly Burleovitsh
Kolosha was tried by jury and convicted of
four counts of Lewd Molestation, Case No. CF2007-3180, in the District Court of Tulsa County. The jury recommended as punishment
twenty (20) years imprisonment in each of
Counts I, II and IV, and seven (7) years imprisonment in Count III. The trial court sentenced
accordingly, ordering the twenty (20) year sentences (Counts I, II, and IV) run concurrently
and the seven (7) year sentence (Count III) run
consecutively. It is from this judgment and sentence that Appellant appeals. AFFIRMED.
Opinion by: Lumpkin, J.; C. Johnson, P.J., concur; A. Johnson, V.P.J., concur in result; Lewis,
J., concur in result; Smith, J., recuse.
S-2009-944 — Appellee, Timothy Lynn Smith,
was charged by Information February, 18, 2009,
in the District Court of Roger Mills County,
Case No. CF-2009-4, with Failure To Register
As Sex Offender. The order of the District
Court of Roger Mills County refusing to bind
Appellee over on the offense of Failure to Register as a Sex Offender is AFFIRMED. The matter is REMANDED for further proceedings
consistent with this Opinion. Opinion by:
Lumpkin, J.; C. Johnson, P.J., concur; A. Johnson, V.P.J., concur; Lewis, J., concur; Smith, J.,
concur.
C-2010-141 — Petitioner William Jackson
Murray was charged in the District Court of
Custer County, Case No. CF-2007-336 with
First Degree Burglary (Count I) and Aggravated Assault and Battery (Count II), both counts
After Former Conviction of a Felony. On October 10, 2008, Petitioner entered blind pleas of
no contest in Count I and guilty in Count II.
The Honorable Jacqueline Duncan, Associate
District Judge, accepted the pleas and sentencing was set for November 14, 2008. On that
date, Petitioner was sentenced to imprisonment for twenty-five (25) years in Count I and
ten (10) years in Count II. The sentences were
ordered to be served consecutively. On November 17, 2008, Petitioner filed a Motion to Withdraw Plea. The motion was denied without a
hearing on November 24, 2008. Petitioner filed
a Writ of Certiorari with this Court and on
January 8, 2010, this Court granted the Writ
and remanded the case to the District Court of
Custer County for a hearing on the motion to
withdraw. A hearing was held February 8,
2010, before the Honorable Charles L. Goodwin, District Judge. At the conclusion of the
hearing, the motion to withdraw pleas was
denied. It is that denial which is the subject of
this appeal. Accordingly, the order of the district court denying Petitioner’s motion to withdraw pleas of guilty is AFFIRMED. Opinion
2726
Tuesday, November 2, 2010
C-2010-181 — Jeffrey Donald Patterson, Petitioner, entered blind pleas of guilty to the
crimes of Unlawful Possession of a Controlled
Dangerous Substance, After Former Conviction of Five Felonies (Count I), and Possession
of Drug Paraphernalia (Count 2), in Case No.
CF-2009-352 in the District Court of Garfield
County. The Honorable Dennis W. Hladik, District Judge, accepted his pleas. Following completion of a presentence investigation report,
Judge Hladik sentenced Patterson to sixteen
years imprisonment on Count I and one year
imprisonment on Count 2, with credit for time
served. Judge Hladik ordered the sentences to
be served concurrently with each other, but consecutively to his sentences in CF-2003-707 and
CF-2004-180 which were revoked in full. Patterson’s timely motion to withdraw plea was
denied after a hearing. He now appeals that
denial and asks this Court to issue a Writ of
Certiorari allowing him to withdraw his pleas
and proceed to trial, or in the alternative, to
favorable modify his sentence. The Petition for
Writ of Certiorari is DENIED. The Judgment
and Sentence of the District Court is AFFIRMED.
Opinion by: A. Johnson, V.P.J.; C. Johnson, P.J.,
concurs; Lumpkin, J., concurs in results; Lewis,
J., concurs; Smith, J., concurs.
Monday, November 8, 2010
F-2010-110 — Appellant, Jason Nathaniel
Holland, was tried by jury and convicted of
Vol. 81 — No. 31 — 11/20/2010
Conjoint Robbery (Count I) (21 O.S.2001, § 800,
After Two or more Previous Convictions, and
misdemeanor Breaking and Entering(Count II)
in the District Court of Ottawa County, Case
Number CF-2009-188a. The jury recommended
as punishment Forty-five (45) years imprisonment in Count I and One (1) year incarceration
in the county jail and a Five Hundred dollar
($500.00) fine in Count II. The trial court sentenced accordingly, ordering the sentences to
be served concurrently. It is from this judgment
and sentence that Appellant appeals.
AFFIRMED. Opinion by: Lumpkin, J.; C. Johnson, P.J., concur; A. Johnson, V.P.J., concur;
Lewis, J., concur in results; Smith, J., concur.
Wednesday, November 10, 2010
F-2008-592 — Kevin Terrell Stewart, Appellant, was tried by jury for the crime of Murder
in the First Degree in Case No. CF-2007-3516 in
the District Court of Tulsa County. The jury
returned a verdict of guilty and recommended
as punishment Life Imprisonment With the
Possibility of Parole. The trial court sentenced
accordingly. From this judgment and sentence
Kevin Terrell Stewart has perfected his appeal.
The Judgment and Sentence of the District
Court is AFFIRMED. Stewart’s Application for
Evidentiary Hearing is DENIED. Opinion by:
A. Johnson, V.P.J.; C. Johnson, P.J., concurs;
Lumpkin, J., concurs in result; Lewis, J., concurs; Smith, J., concurs.
Friday, November 12, 2010
RE-2010-96 — Jeremy Allen Mitchell, Appellant, in the District Court of Tulsa County, Case
No. CF-2008-1118, was found guilty of Trafficking in Illegal Drugs (Cocaine Base) and sentenced to ten (10) years imprisonment and a
fine of $25,000.00, all suspended except for
$500.00 of the fine. On January 22, 2010, the
Honorable Clancy Smith, District Judge,
revoked a five (5) year portion of the order
suspending execution of Appellant’s sentence
of imprisonment. Appellant appeals the final
order of revocation. AFFIRMED. C. Johnson,
P.J., concurs; A. Johnson, V.P.J., concurs; Lumpkin, J., concurs Lewis, J., concurs; Smith, J.,
recused.
F-2009-901 — Dustin C. Nakvinda, Appellant, was tried in a one-day bench trial for the
crimes of Assault and Battery Upon Police Officer (Counts I, II, and III) in Case No. CF-2008572, in the District Court of Garfield County.
Nakvinda’s sentence was deferred on all three
counts until September 28, 2014, and he was
Vol. 81 — No. 31 — 11/20/2010
ordered to serve thirty (30) days in county jail
with credit for time served, with all three
counts to be served concurrently. From this
judgment and sentence Dustin C. Nakvinda
has perfected his appeal. Judgment and Sentence in this case is hereby AFFIRMED. However, this case is REMANDED to the district
court for an order nunc pro tunc, clarifying that
Nakvinda was found guilty after a bench trial,
rather than as a result of a guilty plea. Opinion
by: Smith, J.; C. Johnson, P.J., Concur; A. Johnson, V.P.J., Concur; Lumpkin, J., Concur in
Results; Lewis, J., Concur.
RE-2009-819 — Kimberly Evette Jackson,
Appellant, entered a plea of guilty to Breaking
and Entering without Permission, Count I, and
Assault and Battery with a Dangerous Weapon,
Counts II and II, in Creek County District
Court Case No. CF-2004-228. Jackson was sentenced to one year incarceration on Count I and
five years incarceration on Counts II and III.
The sentences were ordered to run concurrently and suspended, pursuant to terms and
conditions of probation. Subsequently, three
years of Jackson’s suspended sentence were
revoked by the Honorable Douglas W. Golden,
District Judge. From this order of partial revocation, Jackson has perfect her appeal. The
District Court’s order revoking part of Jackson’s suspended sentence is AFFIRMED. Opinion by Lumpkin, J.; C. Johnson, P.J., concur; A.
Johnson, V.P.J., concur; Lewis, J., concur; Smith,
J., concur.
C-2010-393 — Petitioner, Deral Everett Manley, Jr., was charged in the District Court of
Tulsa County, Case No. CF-20099-1923, with
Lewd Molestation. On February 2, 2010, Petitioner entered a blind plea of guilty before the
Honorable Kurt G. Glassco, District Judge.
Petitioner’s plea was accepted and the matter
was set for sentencing on March 22, 2010,
pending receipt of the pre-sentence investigation report. The trial court sentenced Petitioner
to eighteen (18) years imprisonment with all
but the first fifteen (15) years suspended and a
fine in the amount of $10,000.00. On March 26,
2010, Appellant timely filed his Application to
Withdraw Plea. On April 8, 2010, the trial court
appointed Appellant separate counsel for the
purpose of his Application to Withdraw Plea.
At a hearing held on April 19, 2010, the trial
court denied the application to withdraw the
guilty plea. It is that denial which is the subject
of this appeal. The order of the district court
denying Petitioner’s application to withdraw
plea of guilty is AFFIRMED. Opinion by:
2727
Lumpkin, J.; C. Johnson, P.J., concur in result;
A. Johnson, V.P.J., concur; Lewis, J., concur in
result; Smith, J., concur.
F-2009-613 — Jonny Lee Sargent, Appellant,
was found guilty in a bench trial of rape by
instrumentation of a person under the age of
fourteen (14), in violation of 21 O.S. 1990,
§ 1114(A)(5), in the District Court of McCurtain
County, Case No. CF-2007-394. The Honorable
Michael DeBerry, Associate District Judge, set
punishment at ten (10) years imprisonment
with all but the first two (2) years suspended.
From this judgment and sentence, Appellant
has perfected his appeal. AFFIRMED. Opinion
by: Lewis, J.; C. Johnson, P.J., concurs; A. Johnson, V.P.J., concurs; Lumpkin, J., concurs; Smith,
J. concurs.
F-2009-620— Appellant, Steven Dwayne
Bledsoe, was tried by jury and convicted of
Trafficking in Illegal Drugs (cocaine) (Count I),
After Former Conviction of a Felony and misdemeanor Unlawful Possession of Controlled
Drug (marijuana) (Count II) in the District
Court of Tulsa County, Case Number CF-20075850. The jury recommended as punishment
Forty (40) years imprisonment and a Fifty
thousand dollar ($50,000) fine in Count I and
One (1) year incarceration in the county jail
and a One thousand dollar ($1,000) fine in
Count II. The trial court sentenced accordingly,
ordering the sentences to be served consecutively. It is from this judgment and sentence
that Appellant appeals. AFFIRMED. Opinion
by: Lumpkin, J.; C. Johnson, P.J., concur; A.
Johnson, V.P.J., concur; Lewis, J., concur in
results.
COURT OF CIVIL APPEALS
(Division No. 1)
Friday, October 29, 2010
107,470 — In the Matter of the Marriage of
Bean. Gregory Alan Bean, Petitioner/Appellee,
vs. Barbara Ann Bean, Respondent/Appellant.
Appeal from the District Court of Marshall
County, Oklahoma. Honorable Charles Roberts, Judge. Respondent/Appellant Barbara
Ann Bean appeals the property division award
made in the Decree of Dissolution of Marriage,
which ended the marriage of Wife and Petitioner/Appellee Gregory Alan Bean. The trial
court’s decision is not clearly against the weight
of the evidence, nor did the trial court abuse its
discretion. AFFIRMED. Opinion by Buettner,
P.J.; Hansen, J., and Hetherington, J., concur.
2728
107,595 — Maxie Thompson and Patty Thompson, his wife, Plaintiffs/Appellants, vs. Walt
Faglie d/b/a O.G. Sawmill, Defendant/Appellee. Appeal from the District Court of Cherokee
County, Oklahoma. Honorable G. Bruce Sewell,
Trial Judge. Appellants Maxie and Patty Sue
Thompson, who have a remainder interest,
appeal the entry of judgment in favor of Appellee Walt Faglie d/b/a O.G. Sawmill following
summary proceedings in their lawsuit seeking
damages for wrongful injury to timber arising
from the harvesting of timber from their property. The trial court had concluded their suit
was time-barred. HELD: Due to the live estate
owner and Appellee’s failure to memorialize
their agreement and Appellee’s failure to
comply with 2 O.S.2001 § 16-64, Appellants
were unable to ascertain Appellee’s identity
until April 2006, thus creating a question of
fact as to tolling of the statute of limitations
defeating summary judgment. The judgment
of the trial court is REVERSED and the case is
REMANDED for further proceedings. Opinion by Hetherington, J.; Hansen, J., concurs;
Buettner, P.J., dissents.
107,617 — (Cons. w/107,621) Kerri Robinson,
Plaintiff/Appellee/Counter-Appellant, vs. Sunshine Homes, Inc., an Alabama Corporation,
Defendant/Appellant/Counter-Appellee, and
Broadway Homes, an Oklahoma Company;
Bruce Brown, Defendants/Appellees/CounterAppellees, and Jeffery Goodrich; and Jack Meeks
d/b/a Jack’s Mobile Home Service, Defendants.
Appeal from the District Court of Kay County,
Oklahoma. Honorable Leslie D. Page, Trial
Judge. Sunshine appeals [#107,617] the September 16, 2009, Final Journal Entry of Judgment
and the October 19, 2009, Order denying its
Motion for New Trial. Broadway and Brown
appeal [#107,621] the September 16, 2009, Final
Journal Entry of Judgment. The Supreme Court
consolidated the appeals under #107,617 as the
surviving appeal number. Robinson appeals
the court’s decision refusing to submit the
issue of punitive damages to the jury and the
October 21, 2009, Order overruling her posttrial request for prejudgment interest and for
penalties under the Oklahoma Consumer Protection Act. First, there was competent evidence Sunshine represented, through its limited warranty, the manufactured home was new
although Sunshine knew it was reconditioned.
Sunshine’s written limited warranty, warranting the home as free from structural defects,
could have misled Robinson to purchase the
home to her detriment. There is competent evi-
Vol. 81 — No. 31 — 11/20/2010
dence reasonably tending to support the special verdict against Sunshine for violation of 15
O.S.2001 §753(6). A jury found there was competent evidence that Broadway was in violation of the Act and Broadway does not argue
this finding on appeal. This Court will not disturb the special verdict against Broadway for
violation of the Act. Regarding Brown, it is
undisputed Brown did not enter into any written or oral agreement with Robinson. Because
there is an absence of proof showing Robinson’s right to recover on any of her claims
against Brown, the trial court erred in refusing
to direct a verdict in Brown’s favor on all of
Robinson’s claims and in entering judgment on
the jury verdict against him on all Robinson’s
claims. Because there is competent evidence to
support a special verdict for violations of the
Act against Sunshine and Broadway, it is
unnecessary to determine whether the trial
court also properly entered judgment on general verdict against Sunshine and Broadway.
There is competent evidence to support the
jury’s award of damages in the amount of
$249,858.85. The trial court did not abuse its
discretion in denying Sunshine a new trial
based on its contention the award to Robinson
was excessive. Robinson contends the trial
court erred in failing to submit the issue of
punitive damages to the jury. The court determined the requisite showing was not made.
The record on appeal does not contain competent evidence from which a reasonable jury
could find reckless disregard sufficient to support an inference of evil intent and malice on
the part of Defendants toward Robinson. We
hold the trial court was correct to withhold the
issue of punitive damages from jury consideration. The damage award was based on Robinson’s actual expenses in connection with her
purchase of the manufactured home; they were
damages for economic loss, not injury to her
personal rights. The court did not err in denying Robinson’s request for prejudgment interest. The trial court heard all the evidence which
resulted in the special verdict against Sunshine
and Broadway for violation of the Act. In overruling Robinson’s request for penalties, it
apparently did not find the acts or practices of
Sunshine and Broadway also unconscionable.
Accordingly, this Court cannot say it was error
for the trial court to overrule Robinson’s request
for penalties under the Act. Robinson’s request
for judgment on Sunshine’s supersedeas bond
is granted and the matter is remanded to the
trial court for determination of the amount of
the judgment. AFFIRMED IN PART, REVERSED
Vol. 81 — No. 31 — 11/20/2010
IN PART. Opinion by Hansen, J.; Buettner, P.J.,
concurs in part and dissents in part; Hetherington, J., concurs in part and dissents in part.
107,714 — Public Service Company of Oklahoma, Plaintiff/Appellee, vs. Duncan Public
Utilities Authority, d/b/a Duncan Power &
Light, Defendant/Appellant. Appeal from the
District Court of Stephens County, Oklahoma.
Honorable Joe H. Enos, Trial Judge. Appellant,
Duncan Public Utilities Authority, d/b/a Duncan Power and Light (DP&L) appeals from an
order granting a temporary injunction. HELD:
The seminal legal issue in this case is whether
or not the entities involved in the change of
electric utility service agreed by “mutual consent, in writing, to such transaction” because
an electric utility service provider is prohibited
from furnishing electric service to an electric
consuming facility which is currently being
served by another electric utility provider
without the written consent of all entities
involved in the transaction. 17 O.S.Supp.2001
§ 190.7(A); 11 O.S.Supp.1998 § 21-121. There is
no dispute there was no written agreement
here demonstrating mutual consent to this
change of service. The trial court correctly concluded the change violated both state law and
Duncan Municipal Code Part 17, Chapter 4,
§§ 17-401(B) and 17-402. To accept DP&L’s
argument on the change of status quo would
be to condone the wrongful act and confirm
that status as the status to be preserved. Equity
will not allow one with unclean hands to benefit from its wrongful act. The trial court did
not abuse its discretion and the clear weight of
the evidence demonstrates clearly and convincingly that temporary injunctive relief criteria were established. DP&L’s second proposition on appeal raises an in-depth constitutional
challenge to the statutory scheme and argues
they should not be applied in what DP&L characterizes as a pre-statute special circumstance,
asserts there was a violation of Article 18,
§§ 5(a) and 5(b) of the Oklahoma Constitution
and argues municipal electors were deprived
of the right to grant, extend or renew a franchise. This is a matter of great public interest
which triggers the 12 O.S.Supp.2003 § 2024(D)
mandates to give notice to the State Attorney
General and permit state intervention. This
was not done. As failure of constitutional due
process is not in question, we decline to undertake analysis of the constitutionality of this
statutory regulatory scheme. AFFIRMED.
Opinion by Hetherington, J.; Buettner, P.J., and
Hansen, J., concur.
2729
108,318 — Robert N. Preston, Plaintiff/
Appellee, vs. Jeff W. Bruns, PH.D. and Nicholas D. Saunders, Defendants/Appellants.
Appeal from the District Court of Tulsa County, Oklahoma. Honorable Deborah C. Shallcross, Judge. Defendants/Appellants Jeff W.
Bruns, Ph.D. and Nicholas D. Saunders appeal
from summary judgment entered in favor of
Plaintiff/Appellee Robert M. Preston. AFFIRMED. Opinion by Buettner, P.J.; Hansen, J.,
and Hetherington, J., concur.
108,348 — Deborah Ward, Petitioner, vs.
River Parks Authority, CompSource Oklahoma,
f/k/a State Insurance Fund, and The Workers’
Compensation Court, Respondents. Proceeding to Review an Order of The Workers’ Compensation Court. Honorable William R. Foster,
Trial Judge. In this Review Proceeding, Petitioner Deborah A. Ward challenges the Workers’ Compensation Court’s order denying
Ward’s motion to reopen on a change of condition based on expiration of the statutory time
period for reopening a claim. Respondents
River Parks Authority and CompSource Oklahoma successfully argued that Ward sought to
reopen more than three years after the last
order substantially affecting the monetary,
medical, or rehabilitative benefits conferrable
and, as a result, the Workers’ Compensation
Court was without jurisdiction to reopen her
claim. SUSTAINED. Opinion by Buettner, P.J.;
Hetherington, J., concurs; Hansen, J., dissents.
108,417 — Oklahoma Natural Gas, Inc., and/
or Oneok, Inc., Petitioners, vs. Stephen D.
Messer, and The Workers’ Compensation
Court, Respondents. Proceeding to Review an
Order of a Three-Judge Panel of The Workers’
Compensation Court. Petitioners Oklahoma
Natural Gas, Inc. and/or ONEOK (collectively,
Employer) seek review of an order of a Workers’ Compensation Court, affirmed after modification by a three-judge panel, authorizing
consequential psychological overlay treatment
for Stephen Musser and denying Employer’s
res judicata defense. Employer has not demonstrated the panel’s order is contrary to law or
unsupported by competent evidence. SUSTAINED. Opinion by Hetherington, J.; Buettner,
P.J., and Hansen, J., concur.
108,478 — Bernie Scott Stocking and Murelyn Stocking, Husband and Wife, Plaintiff/
Appellants, vs. Duane Waugh and Charles
Waugh, Individually and in Partnership, Defendant/Appellees. Appeal from the District Court
of Alfalfa County, Oklahoma. Honorable Loren
2730
Angle, Trial Judge. Appellants (Stocking) seek
review of the trial court’s order granting summary judgment in favor of Appellees (Waugh)
in the Stockings’ action for negligence. We
reverse as to the Stockings’ claim against
Charles Waugh, holding the Stockings established a contested issue of fact as to whether
Charles exercised due care in supervising his
child. We otherwise affirm the order and
remand for further proceedings consistent with
this opinion. AFFIRMED IN PART, REVERSED
IN PART AND REMANDED. Opinion by Hansen, J.; Hetherington, J., concurs; Buettner, P.J.,
concurs in part and dissents in part.
106,995 — In the Matter of the Estate of Florence H. Brown, Deceased. Most Worshipful
Grand Lodge Ancient Free and Accepted
Masons of the State of Oklahoma, Appellant,
vs. Guthrie Scottish Rite a/k/a Guthrie Scottish Rite Charitable and Educational Foundation, Appellee. Appeal from the District Court
of Tulsa County, Oklahoma. Honorable Jesse
Harris, Trial Judge. In this probate matter,
Appellant Most Worhipful Grand Lodge
Ancient Free and Accepted Masons of the State
of Oklahoma appeals a trial court’s interlocutory order appealable by right, finding a latent
ambiguity existed in the Deceased’s will concerning the identity of one of her residuary
beneficiaries and Appellee Guthrie Scottish
Rite a/k/a Guthrie Scottish Rite Charitable
and Educational Foundation is the intended
beneficiary. After review of the briefs and the
record, we find no reversible error appears and
the findings of fact and conclusions of law of
the trial court adequately explain the decision.
The trial court’s order filed March 19, 2009 is
affirmed under Okla.Sup.Ct.R. 1.202(d).
AFFIRMED. Opinion by Hetherington, J.;
Buettner, P.J., and Hansen, J., concur.
108,046 — In the Matter of Adoption of A.R.C
Jeffrey Jones, Petitioner/Appellee, vs. Johnny
Ray West, Respondent/Appellant. Appeal
from the District Court of Rogers County,
Oklahoma. Honorable Sheila Condren, Judge.
Respondent/Appellant Johnny Ray West
(Father) appeals from the trial court’s judgment
finding the minor child A.R.C eligible for adoption without Father’s consent. The trial court
found Father had failed to maintain a relationship with the child and failed to support the
child for 12 of the most recent 14 months, and
therefore determined the child was eligible for
adoption without Father’s consent. The judg-
Vol. 81 — No. 31 — 11/20/2010
ment is supported by clear and convincing evidence and we affirm. AFFIRMED. Opinion by
Buettner, P.J.; Hansen, J., and Hetherington, J.,
concur.
108,304— In the Matter of A.B.J. and S.S.J.,
Alleged Deprived Children. State of Oklahoma, Petitioner/Appellee, vs. Wendy Moore,
Respondent/Appellant, and Frank Johnson,
Respondent. Appeal from the District Court of
Muskogee County, Oklahoma. Honorable
Thomas Alford, Judge. Respondent/Appellant
Wendy Moore (Mother) appeals from the trial
court’s order which removed A.B.J. and S.S.J
(Children) from Mother’s home and placed
Children with Respondent Frank Johnson
(Father) during a deprived proceeding. The
trial court had authority to make such an order
and Mother has failed to prepare a record supporting her claim for relief. We affirm.
AFFIRMED. Opinion by Buettner, P.J.; Hansen,
J., and Hetherington, J., concur.
(Division No. 2)
Wednesday, October 27, 2010
107,195 — Cynthia Boatright, Plaintiff/
Appellee, v. Roger Butterfield, Richard R. Butterfield, and Maryann Butterfield, Defendants/
Appellants, v. David and Patt Butterfield, Intervenors/Appellants. Appeal from the District
Court of Tulsa County, Hon. Carl Funderburk,
Trial Judge. Defendants/appellants appeal the
trial court’s judgment granting in part and
denying in part plaintiff/appellee’s writ of
habeas corpus to regain physical custody of
her minor child. The trial court granted the
writ to the extent that sole physical custody of
the minor child was awarded to plaintiff/
appellee in Oklahoma, but denied the writ in
part to allow the minor child to complete the
2008-09 school year in California. Defendants/
appellants also appeal the trial court’s order
denying their motion for reconsideration of
this judgment. Based on our review of the
record, we find that the trial court did not
abuse its discretion in awarding physical custody of the minor child to plaintiff/appellee
following the 2008-09 school year and, in effect,
finding that “the guardianship is no longer
necessary.” 30 O.S.2001 § 4-804. A guardianship
is not a proceeding for termination of parental
rights; rather, a guardianship is temporary
until such time as the factors leading to the
guardianship are remedied. Matter of Guardianship of M.R.S., 1998 OK 38, ¶ 9, 960 P.2d 357. In
addition, we find that the trial court did not err
in denying defendants/appellants’ motion to
Vol. 81 — No. 31 — 11/20/2010
reconsider. AFFIRMED. Opinion from Court of
Civil Appeals, Division II, by Barnes, J.; Wiseman, C.J., and Fischer, P.J., concur.
107,493 — In the Matter of: S.B., E.B., H.J.,
J.B., N.B., and T.J., Alleged Deprived Children.
Brandon Brown and Donna Brown, Appellants, v. State of Oklahoma, Appellee. Appeal
from the District Court of Cleveland County,
Hon. Stephen W. Bonner, Trial Judge. Parents
appeal from jury verdicts and the trial court’s
orders terminating their parental rights based
on Brandon Brown’s heinous and shocking
child sexual abuse and Donna Brown’s failure
to protect. They challenge the sufficiency of the
evidence, evidentiary rulings, lack of a corrective plan, and whether they received adequate
due process. We find no reversible error.
AFFIRMED. Opinion from Court of Civil
Appeals, Division II, by Barnes, J.; Wiseman,
C.J., and Fischer, P.J., concur.
106,947 — State of Oklahoma ex rel. Department of Transportation, Plaintiff/Appellant, v.
Joleta Kay Ingersoll n/k/a Joleta Kay Spurlock
a/k/a Joleta Kay Ingersoll Spurlock and Larry
Dean Spurlock, wife and husband; Winthrop
W. Ingersoll Trust Under Agreement dated
June 1, 1995, Winthrop W. Ingersoll, Trustee;
1st Bank Oklahoma; and The Rogers County
Treasurer, Defendants/ Appellees. Appeal from
the District Court of Rogers County, Hon.
Sheila A. Condren, Trial Judge. The State of
Oklahoma ex rel. Department of Transportation
(ODOT) appeals from the trial court’s judgment awarding compensation to Appellees
(Landowners) in the amount of $277,000 for the
taking by eminent domain of a portion of their
land. ODOT also appeals from the trial court’s
order awarding fees and costs to Landowners.
Based on our review of the record and applicable law, we affirm the trial court’s judgment,
and we affirm in part, reverse in part, and
remand with directions the trial court’s order.
The trial court’s order is reversed in part to the
extent that it awards mediation costs and
expenses and witness travel expenses. We
remand with directions that the trial court
enter an order awarding fees and costs in a
manner consistent with section IV of the Opinion. We deny Landowners’ request for appealrelated attorney fees. AFFIRMED IN PART,
REVERSED IN PART, AND REMANDED
WITH DIRECTIONS. Opinion from Court of
2731
108,203 — Vatterott College and Accident
Fund Insurance Co., Petitioners, v. Andrea
Fletcher and The Oklahoma Workers’ Compensation Court, Respondents. Proceeding to
Review an Order of a Three-Judge Panel of The
Workers’ Compensation Court, Hon. Bob Lake
Grove, Trial Judge. Vatterott College and Accident Fund Insurance Co. (collectively, Employer) appeal the order of the three-judge panel
affirming in part and modifying in part the
trial court’s order. The three-judge panel found,
in pertinent part, that Andrea Fletcher (Claimant) sustained a compensable injury to her
neck. On appeal, Employer argues that Claimant’s injury, although sustained in the course of
her employment, did not arise out of her
employment. Upon considering all the circumstances, we find competent evidence exists
from which the three-judge panel reasonably
could have inferred that a causal connection
exists between the risk that resulted in Claimant’s injury and the conditions of Claimant’s
employment. Therefore, we find that the threejudge panel’s order finding, in pertinent part,
that Claimant’s injury arose out of her employment is supported by competent evidence. We
sustain. SUSTAINED. Opinion from Court of
106,939 — Ted Evans, Jr., Plaintiff/Appellee,
v. Oklahoma Employment Security Commission, Defendant/Appellant, and Board of
Review, Appeal Tribunal, and the Oklahoma
State Department of Health, Employer, Defendants. Appeal from the District Court of
Comanche County, Hon. Mark R. Smith, Trial
Judge. Appeal from the trial court’s order
reversing the Board of Review’s decision that
denied unemployment compensation benefits
to Evans pursuant to 40 O.S.2001 § 2-406,
because he was terminated for “misconduct.”
We find Evans’ actions do not disqualify him
from unemployment benefits because they do
not constitute “misconduct” as a matter of law.
Appeals, Division II, by Barnes, J.; Fischer, P.J.,
concurs, and Wiseman, C.J., concurs in result.
108,285 — Bronco Drilling, Petitioner, and Liberty Mutual Group, Interested Party, v. In the
Matter of the Death of Gerald Watts and The
Oklahoma Workers’ Compensation Court,
Respondents. Proceeding to review an order of
a three-judge panel of The Workers’ Compensa2732
tion Court, Hon. Mary A. Black, Trial Judge.
Bronco Drilling and its insurance carrier appeal
a three-judge panel’s order sustaining in part
and modifying in part a trial court decision.
The three-judge panel found that Gerald Watts
(Deceased) suffered an injury in the form of
heart failure arising out of and in the course of
his employment and that he died as a result of
this injury. The three-judge panel found this
death to be compensable under the name of
Deceased’s widow. Based on our review of the
record and applicable law, and for the reasons set
forth in the Opinion, we sustain the order of the
three-judge panel. SUSTAINED. Opinion from
Court of Civil Appeals, Division II, by Barnes, J.;
Wiseman, C.J., and Fischer, P.J., concur.
Monday, November 15, 2010
108,150 — Richard L. Mumford, Jr., Plaintiff/
Appellant, v. The State of Oklahoma ex rel. The
Board of Regents of Oklahoma Agricultural
and Mechanical Colleges, a constitutional state
agency, Defendant/Appellee. Appeal from an
order of the District Court of Logan County,
Hon. Donald L. Worthington, Trial Judge,
granting summary judgment in favor of Defendant. Plaintiff alleged his employer terminated
his employment because of his age and in
retaliation for his protected activities in referring two employees to the Equal Employment
Opportunity Commission (EEOC). Defendant
presented evidence Plaintiff was not discharged
due to his age but instead for his negligent
supervision of an employee who embezzled
approximately $30,000. We conclude Plaintiff’s
evidence fails to place into controversy as a
matter of disputed fact, either directly or by
reasonable inference, either that his age was a
significant factor in his termination or that the
reasons given by Defendant for Plaintiff’s termination were a pretext for age discrimination.
Defendant also presented undisputed evidence
that the person who terminated Plaintiff’s
employment was unaware at the time Plaintiff
was discharged that Plaintiff had referred two
employees to the EEOC. Even taking the evidence in the light most favorable to Plaintiff,
we cannot conclude that there is a dispute of
material fact about whether he was discharged
in retaliation for referring employees to the
EEOC. AFFIRMED. Opinion from the Court of
Civil Appeals, Division II, by Wiseman, C.J.;
Fischer, P.J., and Barnes, J., concur.
106,398 — Pamela L. Casey, Petitioner/Appellant, vs. William F. Casey, Respondent/Appel-
Vol. 81 — No. 31 — 11/20/2010
lee. Appeal from Order of the District Court of
Garvin County, Hon. Charles M. Gray, Trial
Judge, amending a divorce decree on remand
from a prior appeal. Wife claims that the trial
court erred in its valuation and distribution of
marital property. Wife has demonstrated no
basis for this Court to modify the terms of the
amended Decree. There are no issues regarding
alleged district court bias preserved for our
review. AFFIRMED. Opinion from Court of
Civil Appeals, Division II by Fischer, P.J.; Wiseman, C.J., and Barnes, J., concur.
(Division No. 3)
Wednesday, October 27, 2010
107,034 — In the Matter of the Marriage of
Jeremy Michael Lukowski, Petitioner/Appellant, vs. April Nicole Etzler, Respondent/
Appellee. Appeal from the District Court of
Oklahoma County, Oklahoma. Honorable
Geary Walke, Judge. Father seeks review of the
trial court’s orders setting child support, determining arrearages, and awarding attorney’s
fees to Mother. The trial court imputed to
Father income commensurate with his income
as an Air Force pilot. Although Father was dishonorably discharged from the armed services,
Father tacitly conceded that the circumstances
of his discharge affected mainly the pay he
might receive, and did not completely foreclose his further employment as a pilot, and
Father’s family owns a flying service in Florida
where he had been employed. We cannot say
the trial court abused its discretion in imputing
income to Father commensurate with his
income as an Air Force pilot. Father concedes
that he was obligated, by the terms of the parties’ divorce decree, to pay approximately
eighty-nine percent of the child’s daycare
expenses. Mother testified to Father’s history
of domestic violence for which he received
treatment while in the service, and to a pattern
of threatening and abusive contact by Father,
by phone and e-mail, during the course of
these proceedings, supporting issuance of a
VPO. We discern no abuse of discretion by the
trial court in allowing Mother her attorney’s
fees. AFFIRMED. Opinion by Joplin, P.J.; Bell,
V.C.J., and Mitchell, J., concur.
107,207 — In the Matter of D.H. and D.H.,
Children Under the Age of 18 Adjudicated
Deprived as Defined by the Laws of Oklahoma,
State of Oklahoma, Plaintiff/Appellee, vs.
Laura Teel-Howard, Defendant/Appellant.
Appeal from the District Court of Pontotoc
County, Oklahoma. Honorable Martha J.
Vol. 81 — No. 31 — 11/20/2010
Kilgore, Judge. Mother seeks review of the trial
court’s order granting judgment on a jury verdict to terminate her parental rights on the Petition of State. The record clearly reveals Mother
received actual notice, at every critical stage, of
the allegations sought to be proven, Mother at
no time raised any challenge to the sufficiency
of service of process on her lawyer, and, by
appearing with counsel and proceeding without
objection, waived any objection she might have
had. The evidence in the present case establishes
the likelihood of mental or physical harm to the
children if returned to Mother’s custody and
termination of her parental rights in the children’s best interests. The jury verdict and judgment thereon is supported by competent, clear
and convincing evidence establishing the requisites for termination of Mother’s parental rights
on account of her failure to correct the conditions leading to the deprived adjudication, and
the consequent placement of her children in
foster care for longer than the statutory period.
AFFIRMED. Opinion by Joplin, P.J.; Bell, V.C.J.,
and Mitchell, J., concur.
107,344 — Great Plains National Bank, a
national banking association, Plaintiff, vs. Jabez
Farms, L.L.C., an Oklahoma limited liability
company; and Ronald Ladd and Patricia Ladd,
individuals, and sometimes doing business as
Ronald Ladd and Patricia Ladd Joint Venture,
Defendants, and Liberty National Bank, a national banking association, Additional Defendant/
Appellee, Stockmans Bank, an Oklahoma
banking corporation; Liberty National Bank, a
national banking association; Deer & Company,
a Delaware corporation; and Farm Credit of
Western Oklahoma, PCA, Additional Defendants, First State Bank of Altus, Intervening
Defendant and Third-Party Plaintiff, vs. Barbee-Neuhaus Implement Co., Third-Party
Defendant/Appellant, and R&P Farms, Inc.;
Boaz Land and Cattle, LLC; Triple 777 Farm,
LLC; Martha Farm, LLC; Quality Implement
Co., Ryan Robbins; Timothy Wayne McDaniel;
and Western Equipment, LLC, Danny McCustin, and Larry McLaughlin, Third-Party
Defendants. Appeal from the District Court of
Jackson County, Oklahoma. Honorable Allen
McCall, Judge. This case arises from a foreclosure action initiated by Plaintiff (Great Plains)
against Defendants (Ladd). Several other banks
were joined in the action. Liberty National
Bank (Liberty) filed a Third-Party Petition
against Barbee-Neuhaus Implement Company
(Barbee), alleging conversion of a certain John
Deere tractor by Barbee. Liberty claimed a
2733
security interest in the tractor purchased by
Barbee from Ladd and/or Boaz Land & Cattle,
L.L.C. (Boaz) and/or the proceeds resulting
from its resale. Liberty filed a Motion for Summary Judgment, asserting there was no genuine issue of material fact whether Barbee had
exercised wrongful dominion and control over
the tractor contrary to Liberty’s rights. The trial
court granted summary judgment to Liberty,
finding Barbee had actual knowledge that
Ladd operated as Boaz Land & Cattle based
upon previous transactions with Ladd/Boaz.
The court further found Liberty had filed a
UCC financing statement naming Liberty as
secured party, Boaz as debtor, and specifically
identified the tractor as collateral. Additionally,
the court found that the failure of Barbee to
check UCC records under the debtor name of
Boaz was negligent, and that Barbee failed to
make Liberty a joint payee on the check issued
for the purchase of the farm equipment at
issue. In its entry of judgment against Barbee,
the court ultimately concluded there was no
genuine issue of material fact that Barbee
wrongfully exerted dominion and control over
the tractor proceeds inconsistent with Liberty’s
rights and that Liberty was entitled to judgment as a matter of law against Barbee for
conversion of property. Barbee appeals from
the judgment entered in Liberty’s favor. Barbee
primarily seeks to challenge the established
fact of its purchase of the farm equipment from
Boaz, which was previously admitted upon its
failure to respond to Liberty’s Requests for
Admissions. Barbee contends its status as an
innocent purchaser protected it from liability
for conversion due to lack of notice of Liberty’s
security interest. Barbee argues it did not
purchase anything from Boaz, but rather, purchased the tractor from the Martha Farms
entity. Thus, because it claims it had no knowledge of the entity Boaz, it did not search UCC
records under the debtor name Boaz. In this
case, it is conclusively established (in accordance with the deemed admissions of Barbee)
that Barbee purchased the farm equipment
from Boaz, which accordingly establishes the
fact that Barbee had actual knowledge of Boaz
as the entity with which it was doing business.
Despite this knowledge, it is also conclusively
established that Barbee failed to check records
under the debtor name Boaz. Additionally, it is
conclusively established that Barbee failed to
make Liberty a joint payee on the checks to
Defendant for the purchase of the tractor. The
record reflects that if Barbee had checked the
UCC records under the debtor name Boaz, it
2734
would have discovered Liberty’s properly perfected security interest in the tractor. Barbee
thus had constructive notice of Liberty’s security interest in the farm equipment. Further,
because Barbee failed to conduct a reasonably
diligent inquiry of the UCC records, it is
estopped from asserting the financing statement filed in this case was misleading and/or
otherwise improperly filed. The material facts
were conclusively established and show that
Barbee exerted dominion and control over the
tractor inconsistent with Liberty’s rights therein. Accordingly, Liberty was entitled to judgment as a matter of law on its conversion claim.
AFFIRMED. Opinion by Mitchell, J.; Joplin, P.
J., concurs; Bell, V.C.J., dissents.
107,345 — Great Plains National Bank, a
national banking association, Plaintiff, vs. Jabez
Farms, L.L.C., an Oklahoma limited liability
company; and Ronald Ladd and Patricia Ladd,
individuals, and sometimes doing business as
Ronald Ladd and Patricia Ladd Joint Venture,
Defendants, and Liberty National Bank, a
national banking association, Additional
Defendant/Appellee, Stockmans Bank, an
Oklahoma banking corporation; Deer & Company, a Delaware corporation; and Farm Credit of Western Oklahoma, PCA, Additional
Defendants, First State Bank of Altus, Intervening Defendant and Third-Party Plaintiff, vs.
Western Equipment, LLC, Third-Party Defendant/ Appellant, and R&P Farms, Inc.; Boaz
Land and Cattle, LLC; Triple 777 Farm, LLC;
Martha Farm, LLC; Barbee-Neuhaus Implement Co.; Quality Implement Co., Ryan Robbins; Timothy Wayne McDaniel; and Western
Equipment, LLC; Danny McCustin, and Larry
McLaughlin, Third-Party Defendants. Appeal
from the District Court of Jackson County,
Oklahoma. Honorable Allen McCall, Judge.
This case arises from a foreclosure action initiated by Plaintiff (Great Plains) against Defendants (Ladd). Several other banks were joined
in the action. Liberty National Bank (Liberty)
filed a Third-Party Petition against Western
Equipment, L.L.C. (Western), alleging conversion of a certain cotton picker by Western. Liberty claimed a security interest in the cotton
picker purchased by Western from Ladd and/
or Boaz Land & Cattle, L.L.C. (Boaz) and/or
the proceeds resulting from its resale. Liberty
filed a Motion for Summary Judgment, asserting there was no genuine issue of material fact
whether Western had exercised wrongful
dominion and control over the cotton picker
contrary to Liberty’s rights. The trial court
Vol. 81 — No. 31 — 11/20/2010
granted summary judgment to Liberty finding
Western had actual knowledge that Ladd
operated as Boaz Land & Cattle based upon
previous transactions with Ladd/Boaz. The
court further found Liberty had filed a UCC
financing statement naming Liberty as secured
party, Boaz as debtor, and specifically identified the cotton picker as collateral. Additionally, the court found that the failure of Western to
check UCC records under the debtor name of
Boaz was negligent, and that Western failed to
make Liberty a joint payee on the check issued
for the purchase of the farm equipment at
issue. In its entry of judgment against Western,
the court ultimately concluded that there was
no genuine issue of material fact that Western
had wrongfully exerted dominion and control
over the cotton picker proceeds inconsistent
with Liberty’s rights and that Liberty was
therefore entitled to judgment as a matter of
law against Western for conversion of property.
Western appeals from the judgment entered in
Liberty’s favor. Western primarily seeks to
challenge the established fact of its purchase of
the farm equipment from Boaz, which was
previously admitted upon its failure to respond
to Liberty’s Requests for Admissions. Western
contends its status as an innocent purchaser
protected it from liability for conversion due to
lack of notice of Liberty’s security interest.
Western argues it did not purchase anything
from Boaz, but rather, purchased the cotton
picker from Ronald and Patricia Ladd Joint
Venture. Thus, because it claims it had no
knowledge of the entity Boaz, it did not search
UCC records under the debtor name Boaz. In
this case, it is conclusively established (in
accordance with the deemed admissions of
Western) that Western purchased the farm
equipment from Boaz, which accordingly
establishes the fact that Western had actual
knowledge of Boaz as the entity with which it
was doing business. Despite this knowledge, it
is also conclusively established that Western
failed to check records under the debtor name
Boaz. Additionally, it is conclusively established that Western failed to make Liberty a
joint payee on the check to Defendant for the
purchase of the cotton picker. The record reflects
that if Western had checked the UCC records
under the debtor name Boaz, it would have discovered Liberty’s properly perfected security
interest in the cotton picker. Western thus had
constructive notice of Liberty’s security interest
in the cotton picker. Further, because Western
failed to conduct a reasonably diligent inquiry
of the UCC records, it is estopped from assertVol. 81 — No. 31 — 11/20/2010
ing the financing statements filed in this case
were misleading and/or otherwise improperly
filed. The material facts were conclusively established and show that Western exerted dominion
and control over the cotton picker inconsistent
with Liberty’s rights therein. Accordingly, Liberty was entitled to judgment as a matter of law
on its conversion claim. AFFIRMED. Opinion
by Mitchell, J.; Joplin, P.J., concurs; Bell, V.C.J.,
dissents.
107,939 — In the Matter of M.H., a Deprived
Child, State of Oklahoma, Petitioner/Appellee,
vs. Tiffany Smith, Respondent/Appellant.
Appeal from the District Court of Tulsa County, Oklahoma. Honorable Edward J. Hicks, III,
Judge. Appellant (Mother) appeals an order
denying her Motion for New Trial and Motion
to Vacate the order terminating Mother’s parental rights to her minor child. When the termination proceeding was set for trial Mother was
served by publication. She failed to appear at
trial and her parental rights were ordered terminated. Mother contends she was denied due
process based upon lack of actual notice of the
Motion to Terminate or the termination hearing. Although Mother was represented by
counsel, Appellee (State) concedes it did not
provide a copy of the Notice of Hearing and
Summons to Mother’s attorney. State argues
that notice to Mother’s attorney was not
required pursuant to 10A O.S. Supp. 2009 §1-4905. Although true, this argument misses the
point. This statute and its predecessor, 10 O.S.
2001 §7006-1.2, require personal service by
summons on the parent whose rights are being
terminated. Those specific statutes do not
address the situation where that parent is
already represented by an attorney who has
entered his appearance in the case. In no way
do those statutes even imply that notice to an
attorney of record is not required. Although
the attorney was not required to be “served”
with the summons and notice of hearing as the
State was required to “serve” Mother, he was
entitled to a copy of anything filed in the case,
especially the motion to terminate his client’s
parental rights and the notice of the hearing on
that motion. Because of the fundamental right
which parents have in the custody of their children and the gravity of the sanction imposed
by termination, there is no substitute to fully
complying with all procedural safeguards. Terminating a mother’s parental rights is too serious to permit procedural shortcuts. REVERSED
AND REMANDED. Opinion by Mitchell, J.;
Bell, V.C.J., concurs; Joplin, P.J., dissents.
2735
108,252 — In the Matter of J.C., a Deprived
Child, the State of Oklahoma, Petitioner/
Appellee, vs. Regina Campbell, Respondent/
Appellant. Appeal from the District Court of
Oklahoma County, Oklahoma. Honorable
Roger Stuart, Judge. Appellant (Mother)
appeals a post-judgment denial of her Motion
to Vacate the earlier termination of her parental
rights to J.C., the youngest of her three children. The underlying termination order, which
is not appealed from, is referred to by the parties as a default judgment because Mother
failed to appear for the scheduled trial. Mother
contended that although she was aware of the
trial date, she was unable to arrange transportation; she tried unsuccessfully to contact DHS
in order to request their assistance; she has a
meritorious defense; and that default judgments are not favored. Mother argues on appeal
that denying her motion to vacate is a violation
of due process depriving her of the constitutionally protected liberty interest she has in her
parent/child bond. She also alleges violations
of statutory rights, that default judgments are
not favored, and termination was not shown to
be in the best interests of the child. Mother’s
testimony directly conflicts with that of the
case worker who testified she visited Mother at
Mother’s home twelve days prior to the date of
trial at which time Mother, who was working
on a truck, told her that her motorcycle had
been repossessed. The case worker testified she
offered Mother transportation assistance, but
Mother assured her that the truck would be
“up and running.” The case worker also testified she received no call from Mother between
the time of her in-home visit and the scheduled
trial date. Upon our careful review of the
record, we find clear and convincing evidence
supports the trial court’s determination that
termination of Mother’s parental rights is in
the best interest of the child. No abuse of discretion is found in the denial of Mother’s
Motion to Vacate. Mother’s request for oral
argument is denied. AFFIRMED. Opinion by
Mitchell, J.; Joplin, P.J., and Bell, V.C.J., concur.
106,463 — In Re the Marriage of Kursten G.
Remer and Wesley K. Remer: Kursten G. Remer,
Petitioner/Appellant, vs. Wesley K. Remer,
Respondent/Appellee. Appeal from the District Court of Pontotoc County, Oklahoma.
Honorable William C. Hetherington, Jr., Judge.
Petitioner (Wife) appeals a post-divorce decision of the trial court ordering Respondent
(Husband) to pay Wife an arrearage of
2736
$19,577.06, part of Husband’s military retirement that had previously been awarded to
Wife. Wife argues the trial court erroneously
denied her claim for damages arising from
Husband’s alleged breach of fiduciary duty/
breach of trust for not paying the share of military retirement benefits awarded to her during
the pendency of the earlier appeal of the court’s
property division determination. Wife also
argues the court erred in failing to award her
costs and attorney fees. While Wife argues
Husband kept his retirement a secret for a year
and breached the fiduciary duty he owed as
the trustee of the constructive trust created in
the Military Order by intentionally withholding payment of her portion of the retirement
benefit, and wrongfully converting it to his
own use, the court’s order makes no express
finding on the breach of trust, and/or conversion claims (nor did Wife request specific findings of fact and conclusions of law). Because
the trial court denied her claim for damages,
we can reasonably infer that the trial court
denied the breach of trust and/or conversion
claims. Aside from Wife’s allegation of Husband’s malfeasance, the record does not disclose evidence of conversion by Husband.
Husband voluntarily initiated payments (albeit
with an erroneous deduction for the VA waiver) directly after mandate issued in the appeal
of the property division. While Wife claims an
entitlement to damages for breach of trust
beyond an arrearage award, we note that even
if the trial court were to find a breach of trust
here, its decision to award a remedy for breach
of trust is purely discretionary. The court correctly awarded Wife the arrearage of $19,577.06,
plus interest on the award as previously awarded in the court’s April 2008 order. We find no
abuse in the court’s failure to award Wife “use
of funds” damages. The failure to award Wife
additional compensation arising from Husband’s “use of funds” to which she was entitled
was clearly within the court’s discretion, equitable given the facts of this case and not clearly
against the weight of the evidence. Wife failed
to file a request for attorney fees and costs pursuant to 12 O.S. §696.4(B). We will not entertain
that issue for the first time on appeal. Furthermore, Wife’s request for appeal-related attorney fees is denied. The court’s order of September 28, 2008 is AFFIRMED. Opinion by Mitchell, J.; Joplin, P.J., and Bell, V.C.J., concur.
107,353 — Bobby Ray Dunlap, Jr., Petitioner,
vs. The Multiple Injury Trust Fund, and The
Workers’ Compensation Court, Respondents.
Vol. 81 — No. 31 — 11/20/2010
Proceeding to Review an Order of a ThreeJudge Panel of The Workers’ Compensation
Court. Claimant seeks review of an order of a
three-judge panel of the Workers’ Compensation Court denying his claim to benefits against
the Respondent Multiple Injury Trust Fund
(Fund) for permanent total disability (PTD) as a
result of the combination of disabilities. There is
competent evidence in the record to support the
three-judge panel’s order denying the claim for
PTD benefits. The finding of the trial court concerning Claimant’s continued work after the
latest injury is consequently irrelevant. SUSTAINED. Opinion by Joplin, P.J.; Bell, V.C.J., and
Mitchell, J., concur.
107,857 — Chet R. Garretson, Petitioner/
Appellant, vs. Tonya M. Garretson, Respondent/Appellee. Appeal from the District Court
of Garfield County, Oklahoma. Honorable
Dennis Hladik, Judge. Appellant (Father)
appeals the trial court’s order denying his
motion to modify custody and application for
citation of contempt against Appellee (Mother).
The parties have been embattled in a prolonged
and bitter custody dispute for many years.
Child custody is a matter of equitable cognizance and is left to the sound discretion of the
trial court. We will not disturb the trial court’s
decision regarding a motion to modify custody
unless it is clearly against the weight of the
evidence so as to constitute an abuse of discretion. In reviewing a trial court’s custody order,
we will give deference to the trial court’s findings since the trial court is better able to determine controversial evidence by its observation
of the parties, the witnesses and their demeanor. We find the trial court properly applied the
elements of Gibbons v. Gibbons, 1968 OK 77, 442
P.2d 482 in rendering its decision. The court
found the first two elements of Gibbons were
met. The record supports this finding. We cannot say the trial court abused its discretion
when it determined the minor children would
not be substantially better off, with respect to
their temporal, mental and moral welfare, if
the requested change in custody were ordered.
Father argues, for the first time on appeal, that
the trial judge had the duty to disqualify himself because the trial court’s rulings caused
doubt as to the judge’s partiality, bias or prejudice and deprived Father of a trial by an unbiased judge. A litigant may not urge such
grounds for disqualification for the first time
on appeal unless the demands of public policy
require disqualification. The record fails to contain any such objection or request for disqualiVol. 81 — No. 31 — 11/20/2010
fication or any evidence of a public policy
concern. Father waived any such objection by
failing to timely raise the disqualification issue.
The trial court’s order denying Father’s motion
to modify custody and denying Father’s application for citation of contempt is AFFIRMED.
Opinion by Bell, V.C.J.; Joplin, P.J., and Mitchell, J., concur.
108,274 — In the Matter of the Guardianship
of S.C., Abel Garza, Petitioner/Appellant, vs.
Nona O. Deming, Respondent/Appellee.
Appeal from the District Court of McClain
County, Oklahoma. Honorable Charles Gray,
Judge. Appellant (Father) appeals from the
trial court’s order denying his motion to terminate the guardianship of his minor child and
modifying his visitation. Appellee is the maternal grandmother and Guardian. Father has the
burden of showing the condition which resulted in the establishment of the guardianship –
Father’s lack of a relationship with his child –
has changed and he is now able to take care of
his child. The clear and convincing evidence
demonstrated the annual summer visitations
resulted in the establishment of a positive relationship between Father and the child. Such
evidence further demonstrated Father is able
to provide a loving and stable home for his
child. The trial court’s denial of Father’s request
to terminate the guardianship was against the
clear weight of the evidence. We reverse the
trial court’s journal entry and remand this
cause with directions to enter a judgment terminating Grandmother’s guardianship and
granting Father custody of his child. REVERSED
AND REMANDED. Opinion by Bell, V.C.J.;
Mitchell, J., concurs; Joplin, P.J., dissents.
(Division No. 4)
Tuesday, October 19, 2010
107,839 — Oklahoma Gas and Electric Company, an Oklahoma corporation, Plaintiff/
Appellee, vs. Gerald A. Beecher and Lucy
Beecher, husband and wife, Defendants/
Appellants, and Board of County Commissioners of Kingfisher County, a body corporate and
politic; and Karen Mueggenborg, Kingfisher
County Treasurer, Defendants. Appeal from
Order of the District Court of Kingfisher County, Hon. Tom L. Newby, Trial Judge, denying
Defendant Landowners’ exception to the
Report of Commissioners in an action by Plaintiff, a public utility company, to condemn rightof-way easements for the construction of electrical transmission lines to wind farms in
northwestern Oklahoma. Landowners argued
2737
that the project does not have a public purpose
because most of its electrical transmission
capacity will be used by out-of-state customers, and because the transmission line will
actually be subject to the control of the Southwest Power Pool, a federally regulated, regional transmission organization. Even if OG&E’s
customers use only 22 percent of the lines’
capacity by 2020, Landowners did not present
evidence that the remaining 78 percent would
actually be used by out-of-state customers, or
that OG&E customers would not ultimately
use most of the line capacity over the 50-year to
60-year effective life of the project. In fact,
Oklahoma consumers will benefit from the
availability of more reliable, efficient, and economical electricity due to regional control and
tariff reimbursements by any out-of-state entities using the lines. In addition, in cases involving electrical power, the authority to condemn
is generally approved even where condemnation is sought by an intermediate agency that
does not control the use of the proposed project, as long as the ultimate use is public. We
hold that the primary intended beneficiaries of
the project are Plaintiff’s customers, and that
the project constitutes a public use. AFFIRMED.
Opinion from Court of Civil Appeals, Division
IV, by Gabbard, P.J.; Goodman, J., concurs, and
Rapp, J., not participating.
Appellee, vs. Jasp, Inc., an Oklahoma corporation, Defendant/Appellant, and Jim Olig and
Ed Olig; Board of County Commissioners of
Kingfisher County, a body corporate and politic; and Karen Mueggenborg, Kingfisher County Treasurer, Defendants. Appeal from Order
of the District Court of Kingfisher County,
Hon. Tom L. Newby, Trial Judge, denying
Defendant Landowner’s exception to the
Report of Commissioners in an action by
Plaintiff, a public utility company, to condemn
right-of-way easements for the construction of
electrical transmission lines to wind farms in
northwestern Oklahoma. Landowner argued
actually be subject to the control of the Southwest Power Pool, a federally regulated, regional
transmission organization. Even if OG&E’s customers use only 22 percent of the lines’ capacity
by 2020, Landowner did not present evidence
that the remaining 78 percent would actually be
2738
used by out-of-state customers, or that OG&E
customers would not ultimately use most of the
line capacity over the 50-year to 60-year effective
life of the project. In fact, Oklahoma consumers
will benefit from the availability of more reliable, efficient, and economical electricity due to
regional control and tariff reimbursements by
any out-of-state entities using the lines. In addition, in cases involving electrical power, the
authority to condemn is generally approved
even where condemnation is sought by an intermediate agency that does not control the use of
the proposed project, as long as the ultimate use
is public. We hold that the primary intended
beneficiaries of the project are Plaintiff’s customers, and that the project constitutes a public use.
Appeals, Division IV, by Gabbard, P.J.; Goodman, J., concurs, and Rapp, J., not participating.
Appellee, vs. Arnold L. Smith and Phyllis J.
Smith, Trustees or their Successors in Trust
under the Arnold L. Smith and Phyllis J. Smith
Living Trust Dated April 27, 1988, Defendants/
Appellants, and Board of County Commissioners of Kingfisher County, a body corporate and
politic; and Karen Mueggenborg, Kingfisher
County Treasurer, Defendants. Appeal from
Order of the District Court of Kingfisher County, Hon. Tom L. Newby, Trial Judge, denying
Defendant Landowners’ exception to the
Report of Commissioners in an action by Plaintiff, a public utility company, to condemn rightof-way easements for the construction of electrical transmission lines to wind farms in
northwestern Oklahoma. Landowners argued
actually be subject to the control of the Southwest Power Pool, a federally regulated, regional transmission organization. Even if OG&E’s
customers use only 22 percent of the lines’
capacity by 2020, Landowners did not present
evidence that the remaining 78 percent would
actually be used by out-of-state customers, or
that OG&E customers would not ultimately
use most of the line capacity over the 50-year to
60-year effective life of the project. In fact,
Oklahoma consumers will benefit from the
tariff reimbursements by any out-of-state entities using the lines. In addition, in cases involv-
Vol. 81 — No. 31 — 11/20/2010
ing electrical power, the authority to condemn
is generally approved even where condemnation is sought by an intermediate agency that
does not control the use of the proposed project, as long as the ultimate use is public. We
the project are Plaintiff’s customers, and that
the project constitutes a public use. AFFIRMED.
Appellee, vs. Wade L. Patterson and Linda Patterson, husband and wife, Defendants/Appellants, and Kenneth Yost; Board of County
Commissioners of Kingfisher County, a body
corporate and politic; and Karen Mueggenborg, Kingfisher County Treasurer, Defendants.
Appeal from Order of the District Court of
Kingfisher County, Hon. Tom L. Newby, Trial
Judge, denying Defendant Landowners’ exception to the Report of Commissioners in an
action by Plaintiff, a public utility company, to
condemn right-of-way easements for the construction of electrical transmission lines to
wind farms in northwestern Oklahoma. Landowners argued that the project does not have a
public purpose because most of its electrical
transmission capacity will be used by out-ofstate customers, and because the transmission
line will actually be subject to the control of the
Southwest Power Pool, a federally regulated,
regional transmission organization. Even if
OG&E’s customers use only 22 percent of the
lines’ capacity by 2020, Landowners did not
present evidence that the remaining 78 percent
would actually be used by out-of-state customers, or that OG&E customers would not ultimately use most of the line capacity over the
50-year to 60-year effective life of the project. In
fact, Oklahoma consumers will benefit from the
tariff reimbursements by any out-of-state entities using the lines. In addition, in cases involving electrical power, the authority to condemn is
generally approved even where condemnation
is sought by an intermediate agency that does
not control the use of the proposed project, as
long as the ultimate use is public. We hold that
the primary intended beneficiaries of the project
are Plaintiff’s customers, and that the project
constitutes a public use. AFFIRMED. Opinion
from Court of Civil Appeals, Division IV, by
Vol. 81 — No. 31 — 11/20/2010
Gabbard, P.J.; Goodman, J., concurs, and Rapp,
J., not participating.
Appellee, vs. Sandra Niles, Defendant/Appellant, and Kenneth Yost; Board of County Commissioners of Kingfisher County, a body corporate and politic; and Karen Mueggenborg,
Kingfisher County Treasurer, Defendants.
Appeal from Order of the District Court of
Kingfisher County, Hon. Tom L. Newby, Trial
Judge, denying Defendant Landowner’s exception to the Report of Commissioners in an
action by Plaintiff, a public utility company, to
condemn right-of-way easements for the construction of electrical transmission lines to
wind farms in northwestern Oklahoma. Landowner argued that the project does not have a
public purpose because most of its electrical
transmission capacity will be used by out-ofstate customers, and because the transmission
line will actually be subject to the control of the
Southwest Power Pool, a federally regulated,
regional transmission organization. Even if
OG&E’s customers use only 22 percent of the
lines’ capacity by 2020, Landowner did not
present evidence that the remaining 78 percent
would actually be used by out-of-state customers, or that OG&E customers would not ultimately use most of the line capacity over the
50-year to 60-year effective life of the project. In
fact, Oklahoma consumers will benefit from
the availability of more reliable, efficient, and
economical electricity due to regional control
and tariff reimbursements by any out-of-state
entities using the lines. In addition, in cases
involving electrical power, the authority to condemn is generally approved even where condemnation is sought by an intermediate agency
that does not control the use of the proposed
project, as long as the ultimate use is public. We
the project are Plaintiff’s customers, and that the
project constitutes a public use. AFFIRMED.
107,447 — In the Matter of K.D. and D.D.,
Alleged Deprived Children. Kathleen Dutton,
Appellant, v. State of Oklahoma, Appellee.
Appeal from the District Court of Oklahoma
County, Hon. Stephen P. Alcorn, Trial Judge.
Kathleen Dutton (Mother) appeals from the trial
court’s July 21, 2009, order terminating her
2739
parental rights in her minor children, KD and
DD, following a jury trial. State sought termination of Mother’s rights pursuant to 10 O.S.2001,
§ 7006-1.1(A)(5) and (A)(15), alleging Mother
had failed to correct the conditions which led to
the children’s deprived status and that the children had been in the custody of the Department
of Human Services (DHS) for fifteen (15) of the
most recent twenty-two (22) months, respectively. Based upon our review of the facts and
applicable law, we affirm. AFFIRMED. Opinion
from the Court of Civil Appeals, Division IV, by
Goodman, J.; Gabbard, P.J., concurs; Rapp, J.,
not participating.
108,214 — McCoy Tree Surgery and American Interstate Insurance Company, Petitioners, vs. Andrew B. Cooper and The Workers’
Compensation Court, Respondents. Proceeding to review an Order of a Three-Judge Panel
of The Workers’ Compensation Court, Hon.
William R. Foster, Trial Judge, affirming an
award of temporary total disability benefits to
Claimant. Claimant’s injuries are within the
85 O.S. Supp. 2009 § (3)(d)(2) exclusion for soft
tissue injuries. SUSTAINED. Opinion from
Court of Civil Appeals, Division IV, by Gabbard, P.J.; Goodman, J., concurs, and Rapp, J.,
not participating.
107,766 — Sam and Nicole Craven, Plaintiffs/Appellees, v. Southcreek Construction,
L.L.C., Defendant/Appellant, and Logworks,
Etc., L.L.C., and Robert Altmiller, Defendants.
Appeal from an Order of the District Court of
Caddo County, Hon. Richard Van Dyck, Trial
Judge, denying Southcreek’s motion to compel
arbitration and to stay the legal proceedings
pending arbitration. The primary issue on
appeal is whether the trial court erred in determining that it must make an initial determination of whether there is valid contract before
addressing whether the dispute is governed by
the arbitration clause contained in the Construction Contract. This Court finds the trial
court did not err in finding it was required to
make a threshold determination of contract
validity due to fraud before addressing the
arbitration issue. This Court therefore finds the
trial court did not err in denying Southcreek’s
motion to compel arbitration and to stay the
2740
legal proceedings before the trial court.
Appeals, Division IV, by Rapp, J.; Gabbard, P.J.,
concurs, and Goodman, J., concurs in result.
107,563 — Kathy Plecinski, Plaintiff/Appellee, vs. Ronald W. Plecinski, Defendant/Appellant. Appeal from the District Court of Tulsa
County, Hon. Carlos J. Chappelle, Trial Judge,
awarding past due child support and past due
medical and child care expenses to Plaintiff.
The case was initially assigned to one judge,
and then heard by the above-named judge.
Defendant asserts the second judge had no
authority to hear the case. However, Defendant
waived the matter by failing to object at the
trial court level. This matter is not jurisdictional, because jurisdiction lies in the district
court. As for the trial court’s award, no abuse
of discretion was shown. AFFIRMED. Opinion
from Court of Civil Appeals, Division IV, by
Gabbard, P.J.; Goodman, J., concurs, and Rapp,
J., not participating.
107,205 — In Re: The Marriage of: Nancy
Elizabeth Hilterman, Petitioner/Appellee, v.
John William Hilterman, Jr., Respondent/
Appellant. Appeal from an Order of the District Court of Oklahoma County, Hon. Allen J.
Welch, Jr., Trial Judge. The trial court respondent, John William Hilterman (Husband),
appeals certain provisions of a Decree of Dissolution of Marriage entered in an action instituted by the petitioner, Nancy Elizabeth Hilterman (Wife). Husband presents four issues in
his appeal. He maintains that the trial court
erred in treating property in South Carolina
and the entirety of a Morgan Stanley account as
joint property. Next, he challenges the award
and amount of support alimony. Last, Husband contends that the trial court erred by
assessing previously ordered temporary attorney fees of $10,000.00, against his share of the
Morgan Stanley account. Both parties seek
appeal-related attorney fees. The decision of the
trial court on all issues was not against the clear
weight of the evidence nor contrary to law.
Under the circumstances in this case, and after
balancing the equities, this Court finds that both
parties shall bear their own appeal-related attorney fees. AFFIRMED. Opinion from Court of
Civil Appeals, Division IV, by Rapp, J.; Gabbard, P.J., and Goodman, J., concur.
Vol. 81 — No. 31 — 11/20/2010
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INTERESTED IN PURCHASING PRODUCING &
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NORTHWEST OKLAHOMA CITY FIRM has a position available for an oil and gas title attorney with
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but not required. Position will be strictly aviation transaction work. Aircraft Transaction Senior Associate or of
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confidentially. Please submit resume and law school
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2741
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AV RATED OKC INSURANCE DEFENSE LITIGATION FIRM seeks associate with 3-5 years experience.
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2742
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Vol. 81 — No. 31 — 11/20/2010
Vol. 81 — No. 31 — 11/20/2010
2743

Vol 81 No 31 (Nov 20) - Oklahoma Bar Association

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