State ex rel. State Ins. Fund v. JOA, INC.

• Decision Date: 07 October 2003
• Docket Number: No. 96,157.,96,157.
• Citation: 2003 OK 82,78 P.3d 534
• Parties: STATE of Oklahoma, ex rel. STATE INSURANCE FUND, Plaintiff/Appellant, v. JOA, INC., d/b/a J & A Peanut Company, Defendant/Appellee.
• Court: Oklahoma Supreme Court

78 P.3d 534

2003 OK 82

STATE of Oklahoma, ex rel. STATE INSURANCE FUND, Plaintiff/Appellant, v. JOA, INC., d/b/a J & A Peanut Company, Defendant/Appellee.

No. 96,157.

Supreme Court of Oklahoma.

October 7, 2003.

As Corrected October 8, 2003.

W. Rogers Abbott, Abbott & Associates, Oklahoma City, OK, for Plaintiff/Appellant.

Micah D. Knight, Duncan, OK, for Defendant/Appellee.

SUMMERS, J.

¶ 1 The controversy involves an action brought by the State Insurance Fund¹ against JOA, Inc., d/b/a J & A Peanut Company (JOA) for workers' compensation insurance premiums. The matter went to bench trial in the District Court of Oklahoma County, and the court granted a judgment in favor of defendant JOA. Thereafter JOA filed a motion for attorney's fees and costs based upon 12 O.S.2001 §§ 936 and 941. The State Insurance Fund responded by arguing that sovereign immunity barred any award of attorney's fees against it except when this immunity was removed. The Fund argued that its immunity had been removed for § 941 but not § 936. The District Court granted the motion and awarded JOA $8,763.90 for attorney's fees and costs. ¶ 2 The State Insurance Fund appealed the post-judgment order granting attorney's fees and costs. The Court of Civil Appeals, Division I, affirmed the award. The Fund then sought certiorari in this Court.

¶ 3 JOA's motion in the trial court for attorney's fees and costs was based upon 12 O.S.2001 § 936, claiming that the action was based upon an open account, statement of account, or account stated. It also sought in the alternative attorney's fees pursuant to § 941.

The trial court determined that:

... [T]hat the Fund, in filing this lawsuit, was not acting in a governmental; or sovereign capacity. Instead, the Fund was acting in a private or proprietary capacity, in the same manner as any other private insurance company. Therefore, the standard of § 941 is inapplicable to determining whether attorney's fees and costs should be awarded. The Court, however, finds that the Fund was not acting in a frivolous manner or without a reasonable basis in bringing this lawsuit. The Court then accepted the parties stipulation that 12 O.S. § 936 applies in this case. By so stipulating, plaintiff did not waive its objection, overruled by the Court, to the award of fees based on 12 O.S. § 941.

The State Insurance Fund argues on appeal and on certiorari that the trial court committed error by awarding attorney's fees pursuant to § 936 because the Fund possesses sovereign immunity.

¶ 4 Generally, Oklahoma does not allow awarding attorneys fees based upon prevailing party status unless such fees are provided for by statute or by contract.² Here the issue presented by the parties is whether either of two attorney's fee statutes, 12 O.S.2001 §§ 936 or 941, apply in the case. The Fund now argues that § 936 does not apply to the Fund because of the sovereign immunity of the State.

¶ 5 But in the District Court the Fund stipulated that § 936 applied to this controversy. On certiorari JOA argues that the Fund is now attacking its own stipulation, and that it may not do so. JOA argues that this case is different from State of Oklahoma, ex rel. State Insurance Fund v. Great Plains Center, Inc., 2003 OK 79, 78 P.3d 83³ in that no stipulation was made by the Fund in that case that § 936 applied. JOA is correct.

¶ 6 Generally, stipulations as to facts are binding upon the parties and the courts. State ex rel. Trimble v. City of Moore, 1991 OK 97, n. 14, 818 P.2d 889, 894; Mullins v. Ward, 1985 OK 109, n. 24, 712 P.2d 55, 63. Here we are not presented with a stipulation of fact, but of law. Some limitations exist on stipulations concerning questions of law.

¶ 7 Personal and private rights may be waived, but law involving the power or structure of government may not be waived. Commodity Futures Trading Commission v. Schor, 478 U.S. 833, 848-851, 106 S.Ct. 3245, 92 L.Ed.2d 675 (1986), (contrasting personal constitutional rights to the separation of powers principle). This rule is followed in Oklahoma where subject matter jurisdiction may not be established by waiver, consent, or stipulation.⁴ We need not decide whether the Fund's sovereign immunity claim coincides perfectly with the contours of subject matter jurisdiction.⁵ For the purpose of our analysis we treat the Fund's sovereign immunity argument as challenging the trial court's power to act.⁶ We thus address the immunity issue.

I. Sovereign Immunity and 12 O.S. § 941

¶ 8 First, we identify the particular cause of action involved in a controversy, and then determine if immunity bars that type of action. For example, in Sholer v. State ex rel. Dept. of Public Safety, 1995 OK 150, 945 P.2d 469, we explained that an action against D.P.S. to recover unauthorized reinstatement fees was brought as an action for money had and received. Id. at ¶ 29, We concluded therein that the action in that case was not in tort, and thus not barred by an immunity established by the Governmental Tort Claims Act. Id. at ¶ 15. We thus must examine whether an immunity applies to a particular cause of action.

¶ 9 The State Insurance Fund is an "agency" for the purpose of the Governmental Tort Claims Act (51 O.S.2001 § 151 et seq.), and thus possesses sovereign immunity from certain tort actions. Fehring v. State Insurance Fund, 2001 OK 11, ¶ 22, 19 P.3d 276, 283. But sovereign immunity does not bar an action against the State Insurance Fund when the action is based upon the Fund's contractual obligations. See, e.g., State Insurance Fund v. Taron, 1958 OK 282, ¶ 15, 333 P.2d 508

; State Ins. Fund v. Feldgreber, 1957 OK 249, 317 P.2d 203, 207.⁷

Sholer and Fehring are consistent with the principle that sovereign immunity is not a shield to actions based upon the contractual obligations of a state entity. See U.C. Leasing, Inc. v. State ex rel. State Bd. of Public Affairs, 1987 OK 43, 737 P.2d 1191, 1195.

¶ 10 The State Insurance Fund possesses statutory authority to sue and be sued in state courts.⁸ Statutory language stating a state entity's ability to "sue and be sued" refers to the power of the agency to prosecute and defend actions in state courts where those actions are not barred by sovereign immunity. Terry v. Edgin, supra, 598 P.2d at 232-233. The "sue and be sued" language does not preclude the government's immunity in certain legal controversies, but rather, makes a specific class of legal controversies cognizable at law. Mustain v. Grand River Dam Authority, 2003 OK 43, ¶ 22, 68 P.3d 991, 999.

¶ 11 In the case before us today the State Insurance Fund brought a cause of action that was based upon alleged contractual obligations of the Fund and its insured. Further, the cause of action was expressly authorized by statute.⁹ The cause of action is not barred by sovereign immunity.

¶ 12 Generally, when a state agency does not possess sovereign immunity with respect to a particular cause of action, then general procedural statutes that apply to that particular cause of action also apply when that action is brought against the state entity. For example, in Sholer v. State ex rel. Dept. of Public Safety, supra,

in addition to concluding that the Governmental Tort Claims Act did not apply to a non-tort action brought against a state agency, we also concluded that a general statute of limitations, 12 O.S.1991 § 95 (Second), applied to that non-tort action brought against a state entity. Sholer, 945 P.2d at 474-475.

¶ 13 This concept has also applied when assessing litigation costs. We have said that a state agency must be responsible for the "usual incidents of litigation that fall upon private litigants," and pay costs when the Legislature vests authority in the agency to sue or be sued in the courts of this State. Grand River Dam Authority v. Grand-Hydro, 1941 OK 79, 111 P.2d 488, 489-490. This concept is not unique to actions authorized by the "sue and be sued" statutes in that both the Governmental Tort Claims Act¹⁰ and the Administrative Procedures Act¹¹ also link an obligation to pay litigation costs to particular types of actions cognizable in the State courts.

¶ 14 It is correct that in State ex rel. Dept. of Highways v. Marshall, 1974 OK 150, 530 P.2d 1023, 1024, this Court cited a legal encyclopedia for the proposition that statutory authorization for imposition of costs against the State, or one of its agencies, must be express, and it cannot be implied from a general statute relating to costs. However, in Chase v. State ex rel. Dept. of Public Safety, 1990 OK 78, n. 10, 795 P.2d 1048, 1050, we approved a post-decisional order by the Court of Civil Appeals that imposed appeal-related costs upon the Department of Public Safety pursuant to the authority of 12 O.S.1981 §§ 66,¹² 978.¹³ In Fehring v. State Ins. Fund, 2001 OK 11, 19 P.3d 276, we noted that we had previously held that § 66 applied to the State Insurance Fund. Id. 2001 OK 11, at ¶ 17, 19 P.3d at 281,citing, O.K. Constr. Co. v. Burwell, 1939 OK 248, 185 Okla. 444, 93 P.2d 1092, 1094. Section 66 provides for payment of costs from the funds of the State entity (department) appearing as a party to the action when the costs are taxable against the State upon an adverse decision. The sovereignty of the State Insurance Fund is not lessened by a § 936 attorney's fee imposed as a cost as part of the usual incidents of a particular type of litigation. Grand River Dam Authority v. Grand-Hydro, supra.

¶ 15 Although sovereign immunity does not, as a general principle, bar application of 12 O.S.2001 § 936 to state agencies in the appropriate controversies, the Fund argues that § 941 is the exclusive statute for awarding attorney's fees against a state agency, and this exclusivity bars application of § 936.

¶ 16 Section 936 does not expressly mention actions involving state agencies. It states as follows:

In any civil action to recover on an open account, a statement of account, account stated, note, bill, negotiable instrument,

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