Nayles v. Dodson

• Citation: 2020 OK CIV APP 53
• Decision Date: 21 October 2020
• Docket Number: Case Number: 117457
• 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

2020 OK CIV APP 53

LEE NAYLES and LANA NAYLES, Plaintiffs/Appellants,
v.
KELVIN DODSON, d/b/a Broken Arrow Motor Company, Defendant/Appellee.

Case Number: 117457

COURT OF CIVIL APPEALS OF THE STATE OF OKLAHOMA, DIVISION IV

Decided: April 7, 2020
Mandate Issued: October 21, 2020

APPEAL FROM THE DISTRICT COURT OF TULSA COUNTY, OKLAHOMA
HONORABLE KIRSTEN PACE, TRIAL JUDGE
REVERSED AND REMANDED FOR FEE DETERMINATION

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

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.

BACKGROUND

¶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.

STANDARD OF REVIEW

¶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.

ANALYSIS

I. A CONTRACT RELATING TO THE PURCHASE OR SALE OF GOODS

¶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."

A. The Limits of § 936

¶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(failure to honor a warranty on work that later became defective was not a "labor and services" case); Ferrell Construction Co., Inc. v. Russell Coal Co., 1982 OK 24, 645 P.2d 1005 (damages for loss of anticipated profits do not fall under the "labor and services" provision of § 936); Holbert v. Echeverria, 1987 OK 99, 744 P.2d 960 (real property is not "goods, wares or merchandise" and breach of a contract to convey improved real property is not a "labor and services" case), and ABC Coating Company, Inc. v. J. Harris & Sons Limited, 1987 OK 125, 747 P.2d 271 (breach of quasi-contract for the use of a secret manufacturing process is not a "labor and services" case). 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...