Hubbard v. Kaiser–francis Oil Co.

Citation256 P.3d 69,2011 OK 50
Decision Date07 June 2011
Docket NumberNo. 105,701.,105,701.
PartiesVick Allen HUBBARD, Plaintiff/Appellant,v.KAISER–FRANCIS OIL COMPANY, a Delaware corporation, Texas Southwest Gas, L.L.C., a Texas corporation, and GBK Corporation, Defendants/Appellees.
CourtSupreme Court of Oklahoma

OPINION TEXT STARTS HERE

ON CERTIORARI TO THE COURT OF CIVIL APPEALS, DIVISION4¶ 0 Vick Allen Hubbard, Plaintiff, appeals from a post-judgment order of the district court granting litigation costs and attorney fees to Kaiser–Francis Oil Company, Texas Southwest Gas, L.L.C., and GBK Corporation, Defendants. The district court relied on offers of judgment made pursuant to 12 O.S. Supp.2002, § 1101.1(B) as authorization for the award of fees and costs. The Court of Civil Appeals, Division IV, affirmed and this Court granted certiorari to decide issues of first impression.CERTIORARI PREVIOUSLY GRANTED; OPINION OF THE COURT OF CIVIL APPEALS VACATED; JUDGMENT OF THE DISTRICT COURT AFFIRMED.Laurence L. Pinkerton, Judith A. Finn, Pinkerton & Finn, P.C., Tulsa, Oklahoma, for Plaintiff/Appellant.Keith F. Sellers, Sellers Law Firm, and Frederic G. Dorwart, Erica A. Dorwart, Paul DeMuro, Michael J. Medina, Frederic Dorwart Lawyers, Tulsa, Oklahoma, for Defendants/Appellees.COMBS, J.:

¶ 1 This cause presents questions of first impression in Oklahoma law: (1) whether a judgment in favor of a defendant triggers the application of 12 O.S. Supp.2002, § 1101.1(B); 1 (2) whether a judgment that has been appealed and remanded negates a defendant's offer of judgment made prior to the appeal; (3) when is a judgment final for purposes of § 1101.1(B); and (4) must an offer of judgment be reasonable.

¶ 2 In a 2–1 decision, the Court of Civil Appeals (COCA), Division IV, affirmed the district court's award of costs and attorney fees to Defendants pursuant to offers of judgment made by Defendants under 12 O.S. Supp.2002, § 1101.1(B). We previously granted certiorari to decide the first-impression questions.

BACKGROUND

¶ 3 On May 5, 2004, Hubbard filed suit against Defendants for breach of an oil and gas lease, and gas purchase contract regarding a royalty interest owned by him. On May 25, 2004, Kaiser–Francis Oil Company filed an offer of judgment pursuant to 12 O.S. Supp.2002, § 1101.1(B), offering $275 for each of the seven counts against it. Texas Southwest Gas, L.L.C., and GBK Corporation followed suit with similar offers on June 4, 2004. Hubbard did not accept Defendants' offers or submit a counteroffer and, by statute, the offers were deemed rejected.

¶ 4 Defendants filed a motion for summary judgment which was granted and entered on March 28, 2005. Hubbard appealed. Thereafter, Defendants filed a joint motion to recover their costs and fees based on Hubbard's failure to obtain a judgment for more than the amount of Defendants' § 1101.1(B) offers. On or around July 6, 2005, the parties reached an agreement on the amount of litigation costs and attorney fees to be paid by Hubbard. Hubbard paid this amount and Defendants withdrew their motion.

¶ 5 As a result of the appeal, the case was remanded and ordered to include a judgment roll from a related case to be filed with the district court. 2 Defendants again moved for summary judgment, as did Hubbard. The district court granted the motions of Defendants and denied Hubbard's motion. Judgment for the Defendants was entered on November 8, 2007, and Hubbard appealed this judgment on December 7, 2007.3 On the same day, Defendants filed a supplemental joint combined motion for attorney fees seeking the amount of costs and fees they had incurred subsequent to July 7, 2005. 4 On January 28, 2008, a Joint Stipulation was filed. On February 27, 2008, the district court granted Defendants' motion, awarding the amount that the parties stipulated Defendants had incurred. It is from this order that Hubbard appeals.

DISCUSSION

¶ 6 The issues in this case revolve around the construction of 12 O.S. Supp.2002, § 1101.1(B). In cases involving questions of law relating to statutory interpretation, the appropriate standard of review is de novo, “i.e., a non-deferential, plenary and independent review of the trial court's legal ruling[s].” Fulsom v. Fulsom, 2003 OK 96, ¶ 2, 81 P.3d 652, 654, citing Samman v. Multiple Injury Trust Fund, 2001 OK 71, ¶ 8 and n. 5, 33 P.3d 302, 305 and n. 5.

1. Prevailing Defendants Are Entitled to Seek Fees and Costs Under 12 O.S. Supp.2002, § 1101.1(B).

¶ 7 As recognized by this Court in Boston Ave. Mgmt., Inc. v. Associated Res., Inc., 2007 OK 5, ¶ 13 and n. 7, 152 P.3d 880, 885 and n. 7, we have never addressed the issue of whether a prevailing defendant, i.e., a defendant who obtains a judgment in his favor, may recover fees and costs pursuant to a § 1101.1(B) offer of judgment.5 Although not precedential, it should be noted that the Oklahoma Court of Civil Appeals has held several times that a prevailing defendant may recover its attorney fees and costs pursuant to § 1101.1(B).6 Resolution of this issue depends upon our interpretation of the statutory phrase “the judgment awarded the plaintiff.”

¶ 8 Generally, statutes are to be interpreted in accordance with their plain, ordinary meaning according to the import of the language used. In re Certification of Question of State Law, 1977 OK 16, 560 P.2d 195. Nevertheless, where the literal meaning of a statute would result in great inconvenience or lead to absurd consequences the Legislature could not have contemplated, we are bound to presume such consequences were not intended, and must adopt a construction which will promote the ends of justice and avoid the absurdity. Cox v. Dawson, 1996 OK 11, ¶ 20, 911 P.2d 272, 281; Oliver v. City of Tulsa, 1982 OK 121, ¶ 25, 654 P.2d 607, 612; Taylor v. Langley, 1941 OK 67, ¶ 0, 112 P.2d 411, 412.

¶ 9 Hubbard correctly notes that no judgment was awarded him in this case because the district court granted Defendants' motions for summary judgment and awarded judgment in their favor. Indeed, Hubbard argues that because he was not awarded a judgment, the Defendants' § 1101.1(B) offers of judgment are invalid or ineffective. Hubbard claims the statute is triggered only when the plaintiff is the prevailing party in the underlying action.

¶ 10 Hubbard asserts that only a judgment awarded to a plaintiff can trigger a § 1101.1(B) award of fees and costs. If we accept that argument, we would be constrained to hold that the Legislature intended to advance fees and costs to a defendant where the plaintiff recovers only $1 but not where the defendant receives an outright judgment in its favor. Such an absurd result would not further the purpose of § 1101.1(B) which is to encourage settlement by creating the possibility of fee-shifting.

¶ 11 Hubbard urges us to follow the United States Supreme Court opinion of Delta Air Lines, Inc. v. August, 450 U.S. 346, 101 S.Ct. 1146, 67 L.Ed.2d 287 (1981), which interpreted Rule 68 of the Federal Rules of Civil Procedure.7 Delta involved the application of Rule 68 to an unsuccessful plaintiff pursuing claims of employment discrimination. The Court determined that Rule 68, by its plain language, does not apply to a case in which judgment is entered against the plaintiff-offeree and in favor the defendant-offeror.

¶ 12 F.R.C.P. Rule 68 is fundamentally different from § 1101.1(B), as admitted by Hubbard, in that Rule 68 only applies to costs, not attorney fees, and it does not permit counter-offers by plaintiffs. These differences are critical.

¶ 13 The purpose of § 1101.1(B) is to “encourage judgments without protracted litigation” by “provid[ing] additional incentives to encourage a plaintiff to accept a defendant's offer to confess judgment” and to encourage a defendant “to offer an early confession of judgment [to] avoid further increases in costs which may be incurred [for] trial preparation.” Boston Ave. Mgmt., Inc. v. Associated Res., Inc., 2007 OK 5, ¶ 13, 152 P.3d 880, 885. Section 1101.1(B) encourages a meaningful exchange between the parties by allowing a plaintiff to make a counter-offer and reallocate the risk of incurring fees and costs back to the defendant. F.R.C.P. 68 does not permit such an exchange.

¶ 14 We see no reason to distinguish between an outright defense judgment and a plaintiff's judgment for less than the amount of a defendant's offer of judgment. A plaintiff who lost a case entirely should not be in a better position than a plaintiff who obtained only a small judgment. Thus, we hold the Legislature intended that a judgment entered in favor of a defendant can be the basis for an award of attorney fees and costs under § 1101.1(B). The trial court correctly awarded such fees and costs to Defendants in this case.

II. Defendants Were Not Required to Renew their Offers of Judgment on Remand.

¶ 15 The next issue raised by Hubbard is whether Defendants' offers survived the appeal and subsequent remand of the case concerning the March 28, 2005, summary judgment. Hubbard maintains that because Defendants did not renew their offers post-remand, they cannot seek the fees and costs they incurred after the remand. Hubbard's requirement that Defendants' offers should have been renewed is unsupported by statute or case law.

¶ 16 In Oklahoma, there is but one judgment for each cause of action. Oklahoma City Urban Renewal Authority v. Oklahoma City, 2005 OK 2, ¶ 10, n. 16, 110 P.3d 550, 557, n. 16; FDIC v. Tidwell, 1991 OK 119, ¶ 5, 820 P.2d 1338, 1341. A judgment is the final determination of the rights of the parties in an action. 12 O.S.2001, § 681. While there was a judgment in this case on March 28, 2005, that judgment was remanded back for further proceedings. On November 8, 2007, the district court again granted summary judgment on all claims included in the offers of judgment in favor of the Defendants. Hubbard appealed this second summary judgment on December 7, 2007. On September 16, 2008, the Court of Civil Appeals affirmed the November 8, 2007, judgment and mandate was issued...

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