State ex rel. Tal v. City of Oklahoma City

• Decision Date: 17 December 2002
• Docket Number: No. 271, No. 741., No. 95
• Parties: The STATE of Oklahoma, ex rel., Moshe TAL, resident taxpayer of the City of Oklahoma City, Oklahoma & Taxpayers Against Ripoffs ("T.A.R."), an association of more than ten resident taxpayers of the City of Oklahoma City, Plaintiffs/Appellees, and MaryGaye LeBoeuf, Appellee, v. The CITY OF OKLAHOMA CITY ("City"), Oklahoma, a municipal corporation; Ronald J. Norick, in his personal and official capacity as former Mayor of the City; Kirk D. Humphreys, in his personal and official capacity as the Mayor of the City; James E. Thompson, in his personal and official capacity as Assistant City Manager & former MAPS Director; William O. West, in his personal and official capacity as City's Municipal Counselor; Daniel T. Brummitt, in his personal and official capacity as City's Assistant Municipal Counselor; The Oklahoma Urban Renewal Authority ("Urban Renewal"), a public body corporate; Tiana P. Douglas, in her personal and official capacity as the Executive Director of Urban Renewal; Stanton L. Young, Fred Jones Hall, J. Larry Nichols, Warren Gardner, and James R. Tolbert III, in their personal and official capacities as Commissioners of the Urban Renewal; William ("Bill") O. Johnstone, in his personal and official capacity as the former Commissioner of Urban Renewal; Dan Batchelor, in his personal and official capacity as legal counselor of Urban Renewal, Defendants, and Bricktown Parking Investors, L.L.C., an Oklahoma Limited Liability Company; Bricktown-TMK/Hogan Parking, L.L.C., an Oklahoma Limited Liability Company; OKC Athletic Club Limited Partnership, an Oklahoma Limited Partnership, Defendants/Appellants, and BAP-Bricktown, L.L.C., an Oklahoma Limited Liability Company, Defendant, and TMK/Hogan, a Joint Venture; Bricktown TMK/Hogan Entertainment, L.L.C., an Oklahoma Limited Liability Company; Hogan Property Management, L.L.C., an Oklahoma Limited Liability Company, Defendants/Appellants, and Torchmark Corporation ("TMK"), an Alabama corporation; Torchmark Development Corporation ("TDC") and TMK Income Properties, L.P. ("TIP") both subsidiaries of TMK, Defendants, and Dan Randolph ("Randy") Hogan, Defendant/Appellant, and Edwards Theatres Circuit, Inc., a California corporation; Oklahoma Gas & Electric Company ("OG & E"), an Oklahoma corporation; The Benham Group, an Oklahoma corporation; and John Doe No. 1-50, Defendants. The State of Oklahoma, ex rel., Moshe Tal, resident taxpayer of the City of Oklahoma City, Oklahoma & Taxpayers Against Ripoffs ("T.A.R."), an association of more than ten resident taxpayers of the City of Oklahoma City, Plaintiffs/Appellants, v. The City of Oklahoma City ("City"), Oklahoma, a municipal corporation; Ronald J. Norick, in his personal and official capacity as former Mayor of the City; Kirk D. Humphreys, in his personal and official capacity as the Mayor of the City; James E. Thompson, in his personal and official capacity as Assistant City Manager & former MAPS Director; William O. West, in his personal and official capacity as City's Municipal Counselor; Daniel T. Brummitt, in his personal and official capacity as City's Assistant Municipal Counselor; The Oklahoma Urban Renewal Authority ("Urban Renewal"), a public body corporate; Tiana P. Douglas, in her personal and official capacity as the Executive Director of Urban Renewal; Stanton L. Young, Fred Jones Hall, J. Larry Nichols, Warren Gardner, and James R. Tolbert III, in their personal and official capacities as Commissioners of the Urban Renewal; William ("Bill") O. Johnstone, in his personal and official capacity as the former Commissioner of Urban Renewal; Dan Batchelor, in his personal and official capacity as legal counselor of Urban Renewal; Bricktown Parking Investors, L.L.C., an Oklahoma Limited Liability Company; Bricktown-TMK/Hogan Parking, L.L.C., an Oklahoma Limited Liability Company; OKC Athletic Club Limited Partnership, an Oklahoma Limited Partnership, Defendants/Appellees, and BAP-Bricktown, L.L.C., an Oklahoma Limited Liability Company, Defendant, and TMK/Hogan, a Joint Venture; Bricktown TMK/Hogan Entertainment, L.L.C., an Oklahoma Limited Liability Company; Hogan Property Management, L.L.C., an Oklahoma Limited Liability Company, Defendants/Appellees, and Torchmark Corporation ("TMK"), an Alabama corporation; Torchmark Development Corporation ("TDC") and TMK Income Properties, L.P. ("TIP") both subsidiaries of TMK, Defendants, and Dan Randolph ("Randy") Hogan, Defendant/Appellee, and Edwards Theatres Circuit, Inc., a California corporation; Oklahoma Gas & Electric Company ("OG & E"), an Oklahoma corporation; The Benham Group, an Oklahoma corporation; and John Doe No. 1-50, Defendants.
• Court: Oklahoma Supreme Court

61 P.3d 234

2002 OK 97

The STATE of Oklahoma, ex rel., Moshe TAL, resident taxpayer of the City of Oklahoma City, Oklahoma & Taxpayers Against Ripoffs ("T.A.R."), an association of more than ten resident taxpayers of the City of Oklahoma City, Plaintiffs/Appellees, and MaryGaye LeBoeuf, Appellee, v. The CITY OF OKLAHOMA CITY ("City"), Oklahoma, a municipal corporation; Ronald J. Norick, in his personal and official capacity as former Mayor of the City; Kirk D. Humphreys, in his personal and official capacity as the Mayor of the City; James E. Thompson, in his personal and official capacity as Assistant City Manager & former MAPS Director; William O. West, in his personal and official capacity as City's Municipal Counselor; Daniel T. Brummitt, in his personal and official capacity as City's Assistant Municipal Counselor; The Oklahoma Urban Renewal Authority ("Urban Renewal"), a public body corporate; Tiana P. Douglas, in her personal and official capacity as the Executive Director of Urban Renewal; Stanton L. Young, Fred Jones Hall, J. Larry Nichols, Warren Gardner, and James R. Tolbert III, in their personal and official capacities as Commissioners of the Urban Renewal; William ("Bill") O. Johnstone, in his personal and official capacity as the former Commissioner of Urban Renewal; Dan Batchelor, in his personal and official capacity as legal counselor of Urban Renewal, Defendants, and Bricktown Parking Investors, L.L.C., an Oklahoma Limited Liability Company; Bricktown-TMK/Hogan Parking, L.L.C., an Oklahoma Limited Liability Company; OKC Athletic Club Limited Partnership, an Oklahoma Limited Partnership, Defendants/Appellants, and BAP-Bricktown, L.L.C., an Oklahoma Limited Liability Company, Defendant, and TMK/Hogan, a Joint Venture; Bricktown TMK/Hogan Entertainment, L.L.C., an Oklahoma Limited Liability Company; Hogan Property Management, L.L.C., an Oklahoma Limited Liability Company, Defendants/Appellants, and

Torchmark Corporation ("TMK"), an Alabama corporation; Torchmark Development Corporation ("TDC") and TMK Income Properties, L.P. ("TIP") both subsidiaries of TMK, Defendants, and

Dan Randolph ("Randy") Hogan, Defendant/Appellant, and

Edwards Theatres Circuit, Inc., a California corporation; Oklahoma Gas & Electric Company ("OG & E"), an Oklahoma corporation; The Benham Group, an Oklahoma corporation; and John Doe No. 1-50, Defendants.

The State of Oklahoma, ex rel., Moshe Tal, resident taxpayer of the City of Oklahoma City, Oklahoma & Taxpayers Against Ripoffs ("T.A.R."), an association of more than ten resident taxpayers of the City of Oklahoma City, Plaintiffs/Appellants, v. The City of Oklahoma City ("City"), Oklahoma, a municipal corporation; Ronald J. Norick, in his personal and official capacity as former Mayor of the City; Kirk D. Humphreys, in his personal and official capacity as the Mayor of the City; James E. Thompson, in his personal and official capacity as Assistant City Manager & former MAPS Director; William O. West, in his personal and official capacity as City's Municipal Counselor; Daniel T. Brummitt, in his personal and official capacity as City's Assistant Municipal Counselor; The Oklahoma Urban Renewal Authority ("Urban Renewal"), a public body corporate; Tiana P. Douglas, in her personal and official capacity as the Executive Director of Urban Renewal; Stanton L. Young, Fred Jones Hall, J. Larry Nichols, Warren Gardner, and James R. Tolbert III, in their personal and official capacities as Commissioners of the Urban Renewal; William ("Bill") O. Johnstone, in his personal and official capacity as the former Commissioner of Urban Renewal; Dan Batchelor, in his personal and official capacity as legal counselor of Urban Renewal; Bricktown Parking Investors, L.L.C., an Oklahoma Limited Liability Company; Bricktown-TMK/Hogan Parking, L.L.C., an Oklahoma Limited Liability Company; OKC Athletic Club Limited Partnership, an Oklahoma Limited Partnership, Defendants/Appellees, and BAP-Bricktown, L.L.C., an Oklahoma Limited Liability Company, Defendant, and TMK/Hogan, a Joint Venture; Bricktown TMK/Hogan Entertainment, L.L.C., an Oklahoma Limited Liability Company; Hogan Property Management, L.L.C., an Oklahoma Limited Liability Company, Defendants/Appellees, and Torchmark Corporation ("TMK"), an Alabama corporation; Torchmark Development Corporation ("TDC") and TMK Income Properties, L.P. ("TIP") both subsidiaries of TMK, Defendants, and

Dan Randolph ("Randy") Hogan, Defendant/Appellee, and

Edwards Theatres Circuit, Inc., a California corporation; Oklahoma Gas & Electric Company ("OG & E"), an Oklahoma corporation; The Benham Group, an Oklahoma corporation; and John Doe No. 1-50, Defendants.

Nos. 95,271, 95,741.

Supreme Court of Oklahoma.

December 17, 2002.

As Corrected December 26, 2002.

MaryGaye LeBoeuf, Oklahoma City, OK, for Moshe Tal, Taxpayers Against Ripoffs and herself in Case No. 95,271.

James F. Davis of Andrews Davis Legg Bixler Milsten & Price, Oklahoma City, OK, for the City of Oklahoma City, Ronald J. Norick, Kirk D. Humphreys, James E. Thompson, William O. West and Daniel T. Brummitt.

James Dan Batchelor and Janis S. Powers of Batchelor & Powers, Oklahoma City, OK, and John C. McMurry, Oklahoma City, OK, for the Oklahoma City Urban Renewal Authority, Stanley L. Young, Fred Jones Hall, J., Larry Nichols, Warren Gardner, James R. Tolbert III, William O. Johnstone, Tiana P. Douglas and James Dan Batchelor.

Melvin R. McVay, Jr., Robert N. Sheets, Heather L. Hintz and Ellen K. Spiropoulos of Phillips McFall McCaffrey McVay & Murrah, P.C., Oklahoma City, Oklahoma for Bricktown Parking Investors, L.L.C., Bricktown-TMK/Hogan Parking, L.L.C., OKC Athletic Club Limited Partnership, TMK/Hogan, a Joint Venture, Bricktown TMK/Hogan Entertainment, L.L.C., Hogan Property Management, L.L.C. and Dan Randolph Hogan.

LAVENDER, J.:

¶ 1 These two appeals come from the same trial court case and require resolution of two questions.¹ (1) Did the trial judge err in denying a motion for sanctions filed pursuant to 12 O.S.Supp.1994, § 2011 (now 12 O.S. 2001, § 2011) by seven private-sector defendants (the Hogan group) against plaintiffs (Moshe Tal and Taxpayers Against Ripoffs—T.A.R.—a group of taxpayers who brought the underlying qui tam suit against said defendants and others) and plaintiffs' attorney, MaryGaye LeBoeuf?² (2) Did he err in granting three motions for attorney fees, anchored on his inherent authority to sanction bad faith litigation misconduct, filed solely against plaintiffs by twenty-two (22) defendants—City of Oklahoma City and related defendants (City); Oklahoma City Urban Renewal Authority and related defendants (OCURA); and the Hogan group? We hold the trial court did not err in denying the § 2011 motion, but did in granting attorney fees under his inherent authority.³

PART I. STANDARD OF REVIEW.

¶ 2 The appellate review standard of a sanction ruling is abuse of discretion. Hammonds v. Osteopathic Hospital Founders Association, 1996 OK 100, 934 P.2d 319, 322 (propriety of sanctions under § 2011); Broadwater v. Courtney, 1991 OK 39, 809 P.2d 1310 (propriety of sanctions under § 2011 and 23 O.S.2001, § 103); see also Meadows v. Wal-Mart Stores, Inc., 2001 OK 25, 21 P.3d 48 (review of decision to not impose sanctions in regard to discovery matter and under § 103) and Cooter & Gell v. Hartmarx Corp., 496 U.S. 384, 110 S.Ct. 2447, 110 L.Ed.2d 359 (1990)(review standard of sanction ruling under Fed.R.Civ.Pro. 11, 28 U.S.C.A. [Rule 11], is abuse of discretion). In that § 2011 is adopted from its federal counterpart Rule 11, we may look to federal case law to aid in its interpretation and application. Warner v. Hillcrest Medical Center, 1995 OK CIV APP 123, 914 P.2d 1060, 1064, cert. denied 519 U.S. 861, 117 S.Ct. 165, 136 L.Ed.2d 108 (1996).

¶ 3 To reverse for abuse of discretion we must determine the trial judge made a clearly erroneous conclusion and judgment, against reason and evidence. Abel v. Tisdale, 1980 OK 161, 619 P.2d 608, 612. Also, proceedings to impose sanctions are considered equitable in nature. Warner v. Hillcrest Medical Center, supra, 914 P.2d at 1072. Though an appellate court examines and weighs any proof in the record, it abides the presumption the lower court decision on the sanction question is legally correct and cannot be disturbed unless contrary to the weight of the evidence or to a governing principle of law. Id. If legally correct the trial judge's decision may not be reversed because of faulty reasoning, an erroneous finding of fact, or the consideration of an immaterial issue. Id.

PART II. FACTUAL BACKGROUND AND PROCEDURAL HISTORY.

¶ 4 Title 62 O.S.1991, §§ 372-373 (now 62 O.S.2001, §§ 372-373) are qui tam statutes. State ex rel. Trimble v. City of Moore, 1991 OK 97, 818 P.2d 889, 892. Section 373 provides that after written demand to a governmental entity (like City) by a sufficient number of taxpayers claiming a transaction using public funds is unauthorized, unlawful, fraudulent or void, if the public entity refuses, fails or neglects to either institute or diligently prosecute proper legal or equitable proceedings to recover any money or property belonging to the public entity, the taxpayers may bring an action in the name of the State of Oklahoma for the recovery, including a statutory (§ 372) treble damage penalty. Under § 373 the taxpayer is allowed to keep one-half (½) of the money and one-half (½) the value of property recovered, as a reward.

¶ 5 In January 1999 T.A.R. submitted a written demand to City under §§ 372-373 (City of Oklahoma City v. Oklahoma City Urban Renewal Authority [Tal I], 1999 OK 71, ¶ 2, 988 P.2d 901, 903) alleging certain transactions connected with the Oklahoma City Metropolitan Area Projects (MAPS) were unlawful. MAPS began with the passage of a one-cent sales tax increase by Oklahoma City voters. The extra revenue was earmarked to construct certain new projects (e.g. Bricktown Ballpark and Canal) and...