Holbert v. Echeverria

• Decision Date: 20 October 1987
• Docket Number: Nos. 61422,61212,s. 61422
• Citation: 744 P.2d 960,1987 OK 99
• Parties: Pansy M. HOLBERT and David Dumas, Plaintiffs-Appellants and Counter-Appellees, Defendant-Appellee and Counter-Appellants. v. Nelson ECHEVERRIA d/b/a Nelson Construction Company, Defendant-Appellee and Counter-Appellants.
• Court: Oklahoma Supreme Court

Page 960

744 P.2d 960

1987 OK 99

Pansy M. HOLBERT and David Dumas, Plaintiffs-Appellants and Counter-Appellees, Defendant-Appellee and Counter-Appellants. v. Nelson ECHEVERRIA d/b/a Nelson Construction Company,

Defendant-Appellee and Counter-Appellants.

Nos. 61422, 61212.

Supreme Court of Oklahoma.

Oct. 20, 1987.

Charles W. Brown, Oklahoma City, for plaintiffs-appellants and counter-appellees.

Reginald D. Gaston, Gaston & Meadows, Norman, for defendant-appellee and counter-appellants.

OPALA, Justice.

The two issues presented for decision are: Does an aggrieved individual have an implied private right of action to recover for a violation of the Oklahoma Consumer Protection Act? ¹ and May the defendant, as prevailing party in this breach-of-contract action, recover a counsel-fee award? We answer both questions in the negative.

Pansy M. Holbert and David Dumas [Purchasers] entered on July 29, 1980 into a contract with Nelson Echeverria, d/b/a Nelson Construction Company [Seller], to sell realty with a home to be constructed upon the premises. Seller, who started building the house after Purchasers had obtained financing, asserted the plans were changed several times and he advised Purchasers their modifications would increase the price. Purchasers, on the other hand, disputed that the changes modified the original plans or that Seller discussed with them a contemplated increase in price. After Seller completed the house and declined to convey title for the original contract price, the instant suit was brought. Purchasers alleged under three separate

claims ² that Seller had: (1) breached a contract to construct, sell and convey a house; (2) committed fraud, deceit, misrepresentation and negligent misrepresentation against them and (3) violated the Oklahoma Consumer Protection Act [Act]. ³

The trial court ruled for Seller on Purchasers' consumer protection claim. Its decision was grounded on their lack of standing to invoke the remedy provided by the Act. The case then proceeded to trial on the remaining two theories and judgment was rendered for Seller on a jury verdict in his favor. Although in the petition-in-error Purchasers complain both of trial errors and of the pretrial elimination of their consumer protection claim, only the latter issue is argued in their brief. ⁴

In a postjudgment proceeding the trial court denied, as unauthorized by law, Seller's plea for a counsel-fee award against Purchasers. Seller brings a counter-appeal from that decision. ⁵ All pleas for corrective relief stand consolidated for disposition by a single opinion.

I IMPLYING A PRIVATE RIGHT OF ACTION FROM A REGULATORY (PUBLIC-LAW) STATUTE

Purchasers' contention that the Act implies a private right of action rests on the wording in 15 O.S.1981 § 761.1(A) whose text provides:

"The commission of any act or practice declared to be a violation of the Consumer Protection Act shall render the violator liable to the aggrieved consumer for the payment of actual damages sustained by the customer and costs of litigation including reasonable attorney's fees." [Emphasis supplied.]

An ambiguity in the Act becomes apparent, Purchasers assert, when § 761.1(A) is read with § 756.1(A). ⁶ The latter authorizes actions to be brought by the Attorney General or a district attorney. The Act is silent as to whether a private party may invoke the remedy created by its terms.

Purchasers contend that the language of § 761.1(A)--allowing an aggrieved consumer "costs of litigation including reasonable attorney fees"--implies a private right of action. Seller, on the other hand, urges a much narrower reading of § 756.1(A), which would confine the authority for bringing an action under the Act to those who are named in § 756.1(A)--the Attorney General or a district attorney.

The concept of implying a private right of action from a regulatory (public-law) statute has never been expressly addressed

by Oklahoma jurisprudence. The United States Supreme Court in Cort v. Ash ⁷ established a four-prong test for determining whether there may be an implied private right of action in the face of legislative silence. Under this test, a cause of action could be inferred from a federal public-law statute only if: (1) the plaintiff is one of the class for whose especial benefit the statute was enacted; (2) some indication of legislative intent, explicit or implicit, suggests that Congress wanted to create a private remedy and not to deny one; (3) implying a remedy for the plaintiff would be consistent with the underlying purposes of the legislative scheme and (4) the cause of action is not one traditionally relegated to state law, in an area basically the concern of the states, so that it would be inappropriate to infer a cause of action based solely on federal law. ⁸

The fourth factor, which clearly has no application to us as a state forum construing a state statute, is disregarded here. We adopt today the first three factors of Cort v. Ash to serve as a multi-prong test for determining whether a private right of action may be implied from a regulatory (public-law) state statute. ⁹

Before applying the Cort test to the present case we must initially determine whether Purchasers were members of some class of persons for whose "especial benefit" the Act was enacted. The determination of a special class is to be effected by a narrow construction. The mere state of being "especially harmed" as the result of an act's violation does not make one a member of a special class the act might seek to protect. ¹⁰ To adopt a broad construction for establishing a class would render the first factor of Cort virtually meaningless. When a statute is created for the benefit of the public at large, no special class is created in its wake simply because a remedy for injured persons is fashioned. ¹¹

It is difficult to think of a term broader or more general than "consumer." Every individual, regardless of one's occupation, does in some respect occupy on a daily basis the status of consumer. Because everybody stands included, the term "consumer" does not describe any special class, but rather the public at large. Inasmuch as the Act is for the benefit of the general public, no special class is established for whose especial benefit it was created. Purchasers' contention that a private right of action is implied in the Act cannot hence pass muster under the first factor of the Cort analysis.

The second Cort factor--one upon which recent Supreme Court decisions have placed special emphasis ¹²--is whether there is any indication of legislative intent, explicit or implicit, either to create a private remedy or to deny one. ¹³ A reading of the Act does not reveal any explicit intent on the part of the legislature to create or deny a private right of action. Its text must be scrutinized for any implicit indication of intent to create or deny private redress. Legislative intent is ascertained by looking at the precise wording of the Act and studying its history. Established rules of statutory construction are then applied to resolve any ambiguity.

The lack of precise wording yields little information for determining the legislature's intent. Section 756.1 does specifically allow the Attorney General or a district attorney to collect actual damages for an aggrieved consumer and to recover reasonable expenses and investigation fees. ¹⁴ Whether these items of recovery are intended to be the "costs of litigation including reasonable attorney's fees" that are mentioned in § 761.1(A) is not crisply articulated. The fact that the Attorney General or a district attorney is specifically authorized to recover for the aggrieved consumer all the elements of actual damage--normally a function of a privately procured consumer's advocate--is of some importance in our search for the presence of legislative intent to fashion a private remedy for the individual consumer.

The legislative history of the Act is silent with regard to a private right of action. ¹⁵ The House Journal entries for the date of the Act's passage are of no assistance. They provide merely a record of the vote. There is no mention of any debate in the course of which an allusion was made to a private right of action. ¹⁶ A comparison of the present act with its predecessor version is more helpful.

When the Act was originally adopted in 1972 the authority to bring an action was vested solely in the Attorney General. ¹⁷ A 1980 amendment authorized district attorneys as well as the Attorney General to prosecute consumer protection claims. ¹⁸ This serves as an indication that at least in 1980 the law-making body concerned itself specifically with the problem of who should be able to bring an action under the Act and it then resolved not to confer a remedy on private individuals.

Applying the maxim expressio unius est exclusio alterius ¹⁹--by whose teaching the mention of one thing in a statute implies exclusion of another--we conclude that a private individual is neither explicitly nor implicitly authorized to prosecute a consumer protection claim. The power to seek redress for the Act's violations is expressly conferred on the Attorney General or a district attorney. The Act's failure to sanction invocation of redress by an aggrieved consumer serves to exclude any private right of action. ²⁰

Finally, were we to assume that the legislature simply failed to consider a private right of action, the same conclusion would have to be reached. This is so because we cannot infer from the statute any right which the legislature did not show some intent to imply. Since under the first two factors of the Cort test the Act before us does not pass muster for creating an implied private right of action, there is no need to examine further. ²¹ The trial court was correct in its pretrial ruling against Purchasers on their consumer protection theory of recovery.

II

COUNSEL FEE RECOVERY IS NOT STATUTORILY AVAILABLE TO A

PREVAILING PARTY IN AN...