Nayles v. Dodson
| Decision Date | 07 April 2020 |
| Docket Number | Case No. 117,457 |
| Parties | Lee NAYLES and Lana Nayles, Plaintiffs/Appellants, v. Kelvin DODSON, d/b/a Broken Arrow Motor Company, Defendant/Appellee. |
| Court | United States State Court of Criminal Appeals of Oklahoma. Court of Civil Appeals of Oklahoma |
Caleb M. Salmon, SALMON LAW FIRM, PLLC, Tulsa, Oklahoma, for Plaintiffs/Appellants
Alexander F. King, Christopher B. Woods, KING WOODS, PLLC, Tulsa, Oklahoma, for Defendant/Appellee
OPINION BY P. THOMAS THORNBRUGH, PRESIDING JUDGE:
¶1 Lee Nayles and Lana Nayles appeal a decision of the district court denying their application for attorney fees. On review, we reverse the decision of the district court and remand for the determination of a reasonable attorney's fee.
¶2 As the underlying case was settled by an agreed journal entry before any hearing on the merits, the district court did not pass judgment on the facts. As stated by Plaintiffs in their motion for summary judgment, they made a $1,000 deposit against the purchase of a vehicle, but, after discussing a loan with their bank, decided that the vehicle was over-priced and not to buy it. Defendant refused to refund the deposit, stating it was "non-refundable."
¶3 Defendant disputes this claim and stated in a narrative filed as his answer that Plaintiffs paid a deposit to "hold" the vehicle and fund some requested modifications, and he was entitled to retain the deposit because it was intended to be non-refundable. Defendant further states he suffered a loss by holding the vehicle for 10 days when he had an opportunity to sell it to another buyer.
¶4 Defendant, who was represented by counsel by that time, did not respond to Plaintiffs' motion for summary judgment, and the parties settled the contract claims in an agreed journal entry of judgment, leaving only the question of attorney fees open.
¶5 Plaintiffs applied for fees pursuant to 12 O.S. § 936, arguing that this was a case involving a contract for the sale of goods. Defendant responded arguing (among several theories) that, because the sale was never completed, there had been no "sale of goods," and no fees were available. The district court apparently agreed, and denied Plaintiffs' fee request. Plaintiffs now appeal.
¶6 When the appeal raises an issue of the reasonableness of an attorney's fee awarded by the trial court, then the standard of review is whether there has been an abuse of discretion by the trial judge. State ex rel. Burk v. Oklahoma City , 1979 OK 115, ¶ 22, 598 P.2d 659. However, the question here—whether a party is entitled to an award of attorney fees and costs—presents a question of law subject to the de novo standard of review. Hastings v. Kelley , 2008 OK CIV APP 36, ¶ 8, 181 P.3d 750.
¶7 Section 936 of Title 12 of the Oklahoma Statutes provides: "In any civil action to recover for ... [a] contract relating to the purchase or sale of goods ... the prevailing party shall be allowed a reasonable attorney fee to be set by the court, to be taxed and collected as costs." Defendant argues that a case in which a deposit is paid for the purchase of goods, but the transaction is not completed, does not involve a "contract relating to the purchase or sale of goods," because the case is premised on the "absence of the sale of the goods" rather than on the "sale of the goods."
¶8 Oklahoma courts have limited the application of § 936 in several circumstances. Kay v. Venezuelan Sun Oil Co ., 1991 OK 16, 806 P.2d 648, provides the most comprehensive guide to the interpretation of § 936, citing four examples of the types of cases that will not support fees pursuant to § 936. The cases noted by Kay were Russell v. Flanagan , 1975 OK 173, 544 P.2d 510 (); Ferrell Construction Co., Inc. v. Russell Coal Co. , 1982 OK 24, 645 P.2d 1005 (); Holbert v. Echeverria , 1987 OK 99, 744 P.2d 960 (), and ABC Coating Company, Inc. v. J. Harris & Sons Limited , 1987 OK 125, 747 P.2d 271 (). Kay itself held that an assignment of an overriding royalty interest is not one of the contracts enumerated as fee-bearing in § 936. Since Kay was decided, Brisco v. State ex rel. Bd. of Regents of Agric. & Mech. Colleges, 2017 OK 35, ¶ 11, 394 P.3d 1251, has also held that an alleged breach of contract for future employment is not a "labor and services" case. The Legislature amended § 936 in 2002, and Kay discusses an earlier version of the statute. See Subsection ‘B’ below.
¶9 Two clear, general rules appear from these cases: 1) the provision of goods, labor or services must be central to the case , not a peripheral matter; and 2) cases merely arising from a "contract related to" labor and services, or involving the breach of a future potential of employment or services (such as those noted in Russell and Brisco ) are not fee bearing under § 936. Defendant argues, however, that Kay went well beyond these established exceptions and held that § 936 applies only to a contract for goods actually sold and delivered. As the vehicle was never "delivered," Defendant argues that § 936 does not apply.
¶10 The reference to goods "sold and delivered" as opposed to the statutory language regarding a "contract relating to the purchase or sale of goods" comes from footnote 11 of Kay, which states in part:
These amendments indicate legislative intent to mandate, "shall be allowed", attorney fees in actions to collect money promised, whether evidenced by a promissory note, a negotiable instrument, an account whether for sale of tangible property or labor and services and a bill or a contract for goods sold and delivered.
Defendant argues that this footnote establishes precedent that § 936 applies only in "goods and services" cases where the goods were actually delivered.
¶11 Although we know of no absolute rule that a footnote, standing alone, cannot constitute precedent, footnotes are generally considered to be dicta, and are usually in the form of an "aside" that may expand on facts or principles to assist the comprehension of the reader.1 Footnote 11 of Kay refers back to ¶ 10 of that opinion, and ¶ 10 does not repeat the "goods delivered" versus "goods not delivered" dichotomy Defendant suggests. We do not regard footnote 11 of Kay as binding precedent. Nor do we believe that the Kay court intended to exclude any and all cases where goods were not delivered from the reach of § 936 and contradict the text of § 936, which simply states that fees are available in cases based on "a contract relating to the purchase or sale of goods."
¶12 The primary goal of statutory interpretation is to ascertain and follow the intent of the Legislature. Where a statute's meaning is ambiguous or unclear, we employ rules of statutory construction to give the statute a reasonable construction that will avoid absurd consequences. It is important in construing the legislative intent behind a word to consider the whole act in light of its general purpose and objective, considering relevant portions together to give full force and effect to each. Estes v. ConocoPhillips Co. , 2008 OK 21, 184 P.3d 518.
¶13 We first note that the Legislature clearly indicated in 2002 that a different treatment for "contracts for labor and services" was warranted as compared to contracts for the "purchase or sale of goods." In Russell v. Flanagan , the "for labor and services" provisions of § 936 were strictly limited to actions brought to recover for labor and services actually rendered. The Supreme Court specifically rejected an interpretation of § 936 which would authorize the courts to award attorney fees to the prevailing party in an action alleging injury from a contract relating to labor and services. The legislative response to the Russell decision guides our decision here. The 1970 version of § 936 stated:
In any civil action to recover on an open account, a statement of account, account stated, note, bill, negotiable instrument, or contract relating to the purchase or sale of goods, wares, or merchandise, or for labor or services , unless otherwise provided by law or the contract which is the subject to the action, the prevailing party shall be allowed a reasonable attorney fee to be set by the court, to be taxed and collected as costs. (Emphasis added).
¶14 This statute as written at that time raised some confusion, settled by Russell, as to whether a matter was fee-bearing if it arose from a "contract relating to labor and services," versus the stricter interpretation that fees were only available if a case sought recovery for "labor and services actually rendered." In 2002, the Legislature amended § 936. According to the Oklahoma comments, it did so to conform the statute to Russell. The 2002 version stated:
In any civil action to recover for labor or services rendered , or on an open account, a statement of account, account stated, note, bill, negotiable instrument, or contract relating to the purchase or sale of goods, wares, or merchandise, unless otherwise provided by law or the contract which is the subject of the action, the prevailing party shall be allowed a reasonable attorney fee to be set by the court, to be taxed and collected as costs. (Emphasis added).
¶15 We find it clear that, to reflect the Russell decision, the Legislature deliberately divorced the "labor or services" provisions of § 936 from the "contract relating to" language. In doing so, it made it clear that this "contract relating to" language did not apply to...
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