Underwriters at Lloyd's of London v. North American Van Lines.

Decision Date14 April 1992
Docket NumberNo. 77195,77195
Citation1992 OK 48,829 P.2d 978
PartiesUNDERWRITERS AT LLOYD'S OF LONDON, Plaintiff/Appellant, v. NORTH AMERICAN VAN LINES, Defendant/Appellee.
CourtOklahoma Supreme Court

Federal Certified Question.

Federal Certified Question from the United States Court of Appeals for the Tenth Circuit: Is a defendant ... for whom judgment is not rendered but who reduces its liability by successfully asserting the Carmack Amendment to the Interstate Commerce Act ... as its sole defense throughout the litigation a "prevailing party" entitled to costs under Okla.Stat. tit. 12, § 940? We answer in the negative.

CERTIFIED QUESTION ANSWERED.

Linda G. Alexander, Patricia A. Kirch, Niemeyer, Noland & Alexander, Oklahoma City, for plaintiff/appellant.

David A. Cheek, Victor F. Albert, McKinney, Stringer & Webster, P.C., Oklahoma City, for defendant/appellee.

HARGRAVE, Justice.

This matter comes before us on a question of law certified to this Court from the Tenth Circuit Court of Appeals pursuant to 20 O.S.1981 § 1602:

Is a defendant, such as North American Van Lines, for whom judgment is not rendered but who reduces its liability by successfully asserting the Carmack Amendment to the Interstate Commerce Act, 49 U.S.C. 11707, 10730, as its sole defense throughout the litigation a "prevailing party" entitled to costs under Okla.Stat. tit. 12 § 940?

We answer in the negative.

Title 12 O.S.1981 § 940 provides "A. In any civil action to recover damages for the negligent or willful injury to property and any other incidental costs related to such action, the prevailing party shall be allowed reasonable attorney's fees, court costs and interest to be set by the court and to be taxed and collected as other costs of the action."

North American Van Lines was transporting the household goods of Robert and Lucinda Chapman when the goods were destroyed by a fire that completely destroyed the transport vehicle. Lloyd's reimbursed the Chapmans in excess of $100,000.00 (One Hundred Thousand Dollars) pursuant to their insurance contract and sued North American for subrogation. At one point, North American apparently offered to confess judgment for $8,000.00 (Eight Thousand Dollars) under Rule 68, Federal Rules Civil Procedure. At trial, the jury returned a verdict in favor of Lloyd's for $70,000.00 (Seventy Thousand Dollars) based on a common law negligence theory. North American had answered asserting, among other things, that plaintiff had contractually limited its recovery to $.60 per pound of damaged goods, as set forth in the written agreement of the parties.

North American appealed, asserting that the Carmack Amendment to the Interstate Commerce Code preempted the common law negligence cause of action. The Carmack Amendment is a codification of the common law rule of liability for negligent damage to goods in interstate transport. The Tenth Circuit Court of Appeals, in Underwriters at Lloyd's, London v. North American Van Lines, 890 F.2d 1112 (10th Cir.1989), held that the Carmack Amendment preempted the common law cause of action for negligent destruction of property and vacated the trial court's decision, limited plaintiff's damages to the released value of $.60 per pound per article as established by the bill of lading, and instructed the trial court to enter judgment in conformity with the opinion. On January 31, 1990 the trial court entered an order for the parties to show cause why judgment should not be entered in favor of Lloyd's, London for $7,500.00 (Seven Thousand, Five Hundred Dollars) as per the Tenth Circuit's mandate. On March 28, 1990 the trial court entered judgment for Lloyd's in the amount of $7,500.00 (Seven Thousand, Five Hundred Dollars) against North American. No award of costs or attorneys fees was made in that order.

On April 1, 1990 North American filed an application for attorney's fees. The trial court ruled that North American was the prevailing party on its defense and was entitled to attorney's fees both under Clayton v. Missouri-Kansas-Texas RR. Co. 1 and pursuant to Rule 68, Federal Rules Civil Procedure offer of judgment. Lloyd's appealed and this federal certified question followed. We are not asked to address the effect of the defendant's offer of judgment.

The only question presented for our consideration is whether under the stated facts, North American is the prevailing party within the meaning of 12 O.S.1981 § 940A. We look to other cases that have considered the "prevailing party" question. In Carter v. Rubrecht, 188 Okla. 325, 108 P.2d 546 (1940), we held, in construing then-effective 15 O.S. § 268, that defendant was not a prevailing party where plaintiff had sued to recover a usury penalty, defendant had answered by general and specific denial and did not ask for affirmative relief, and plaintiff dismissed the action without prejudice. By way of distinction, we cited cases where plaintiff had sued on a promissory note and defendant by answer sought to recover the usury penalty and prevailed on the usury claim and thus defendant was the prevailing party entitled to attorney fee to be taxed as costs against the losing party on the merits. We went on to say, at 108 P.2d p. 548:

"... And it is also apparent that the court has regarded as the prevailing party, the party who prevailed on the merits, and has regarded as the losing party, and the party subject to additional penalty of an attorney's fee for his adversary, the party who lost upon the merits. That is, it appears to have been the policy to tax the attorney's fee only in those cases where the other party was determined by final judgment to be the losing party on the issue of the usury penalty."

We went on in that case to say that plaintiff's dismissal of the case without prejudice did not mean that plaintiff was the loser. "While a defendant might be said to prevail on the pleadings or in the action when plaintiff dismisses without prejudice, yet he has not finally prevailed upon the issue tendered in plaintiff's petition." See also, General Motors Acceptance Corp. v. Carpenter, 576 P.2d 1166 (Okla.1978), and Swan-Sigler, Inc. v. Black, 414 P.2d 300 (Okla.1966). In Swan-Sigler, we interpreted "prevailing party" as used in Keaton v. Branch, 104 Okla. 287, 231 P. 289 (1924), pursuant to 42 O.S. § 176, as meaning the party for whom judgment is rendered, meaning in that instance a judgment upon the validity or invalidity of the lien.

Later, in Wieland v. Danner Auto Supply, Inc., 695 P.2d 1332, 1334 (Okla.1984), we said that when judgment by confession is entered against a defendant, the plaintiff, as recipient of the award is clearly the successful party. We went on to say that a judgment is the final determination of the rights of the parties in an action, and a judgment by confession taken against a defendant under 12 O.S. § 1101 is a final determination that a plaintiff has prevailed on his claim and plaintiff may recover his reasonable attorney fees accruing up to and including the date defendant's offer to confess judgment was received.

In Evans v. Sitton, 735 P.2d 334 (Okla.1987), we interpreted 12 O.S.1981 § 940. We said that under § 940(A), if judgment is rendered for defendant, the defendant is entitled to attorney's fees as the prevailing party. We said that if plaintiff receives a verdict, plaintiff is entitled to attorney's fees, subject to subsection B of § 940. With respect to § 940(B), we said that if plaintiff prevails but receives a judgment for a lesser amount than the defendant offered, then the plaintiff is not entitled to recover attorney fees and costs, but, we said, ...

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    ..., 1978 OK 39, ¶ 4, 576 P.2d at 1167.¶14 This Court reaffirmed our definitions of "prevailing party" in Underwriters at Lloyd's of London v. North American Van , 1992 OK 48, 829 P.2d 978. Title 12, § 940 provided, in pertinent part:In any civil action to recover damages for the negligent or ......
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