Vance v. Enogex Gas Gathering, L. L.C.

• Decision Date: 26 August 2016
• Docket Number: Case No. 112,783 (Cons. w/ 113,027)
• Parties: Rufus VANCE and Glenda Robertson, Plaintiffs/Appellees, v. ENOGEX GAS GATHERING, L.L.C., an Oklahoma Corporation, Defendant/Appellant.
• Court: United States State Court of Criminal Appeals of Oklahoma. Court of Civil Appeals of Oklahoma

393 P.3d 718

Rufus VANCE and Glenda Robertson, Plaintiffs/Appellees,

v.ENOGEX GAS GATHERING, L.L.C., an Oklahoma Corporation, Defendant/Appellant.

Case No. 112,783 (Cons. w/ 113,027)

Court of Civil Appeals of Oklahoma, Division No. 3.

FILED AUGUST 26, 2016

Mandate Issued: March 21, 2017

Kenneth R. Johnston, Wes Johnston, Jonathan Allen, Johnston & Associates, Chickasha, Oklahoma, for Plaintiffs/Appellees.

Robin F. Fields, Bryan J. Wells, Heidi M. Nichols, Conner & Winters, LLP, Oklahoma City, Oklahoma, for Defendant/Appellant.

Opinion by Wm. C. Hetherington, Jr., Judge:

¶ 1 These consolidated cases¹ are appealed first in case number 112,783 from trial by jury verdict in favor of Rufus Vance and his sister Glenda Robertson (collectively Vance) and against Enogex Gas Gathering, LLC. (Enogex) resulting from alleged oil field pipeline leakage and pollution of Vance's property. Case number 113,027 is an appeal by Vance of the resulting attorney fee action order in favor of Vance and against Enogex. Finding no abuse of discretion or misapplication of law as to the trial court's instructions to the jury or on its award of attorney fees to Vance, we affirm both journal entry orders.

FACTS

Case No. 112,783 (Pollution Case)

¶ 2 In 2010, Vance discovered what they believed to be "bubbling, gurgling, foamy liquid discharging out of a hole in the ground" on their land. Investigation revealed this to be a natural gas gathering pipeline leak from a natural gas well and line owned by Enogex. The record shows there was no denial of a leak by Enogex. Enogex alleged, however, that there was a three week intentional delay between the time of the Vance discovery of the leak and when Vance reported the leak to Enogex so Vance could "prepare a lawsuit instead of working fairly and honestly with Enogex." What Enogex alleged and presented at trial was that during that three week period, Vance retained an expert and materially altered the scene of the leak and the surrounding area. Enogex then said Vance concealed that information and results of a lab test from Enogex in an effort, they contend, intended to show the jury "conditions starkly different than those seen by Enogex's pipeline operators" at trial. Enogex presented evidence the leak was a "pinhole" in size, that no fluid had escaped during the period of the leak and they saw no indication of resulting ground water or soil contamination.

¶ 3 Vance produced the pictures and videos they had taken showing the "oily, gurgling, foamy fluid coming from the hole, eyewitness testimony of the liquid in the hole, the test results from the fluid in the hole and actual samples of the fluid from the hole". They pointed out the pictures taken by Enogex showed "gurgling fluid had splashed out and melted spots in the surrounding snow" and argued Enogex intentionally buried hydrocarbons and buried and impacted soil to hide the pollution in violation of Oklahoma Corporation Commission regulatory rules thus causing pollution and damage to their entire 160 acre property.

¶ 4 Enogex countered they did not hide any hydrocarbons, repaired the pinhole leak with an approved "clamp" and did not hear any complaints from Vance until two years later when they received notice of a claim and were served with process. Enogex then had its expert investigate and introduced his testimony and report indicating again, no groundwater pollution and a "tiny amount of soil contamination."

¶ 5 Vance requested an award for diminution in value of their property of $400,000 and punitive damages. The jury returned a verdict signed by ten jurors in favor of Vance for $25,000 damage to property but awarded no damages on Vance claims for personal inconvenience, annoyance and discomfort. The jury also found by checking the appropriate box, clear and convincing evidence Enogex had acted in reckless disregard of the rights of Vance. The trial court polled each juror who signed the verdict and they each agreed it was their verdict.

¶ 6 During second stage deliberations after brief testimony and instructions in the punitive damage stage, the jury sent out an unsigned note that indicated the ten jurors who signed the first verdict form checking the box that Enogex's actions were in reckless disregard of the rights of Vance, had done so in error. Following discussion with counsel, the trial court then advised the jury it had been clearly instructed on the verdict form and it could not undo its first stage verdict. The jury then returned a verdict for Vance for $25,000 in punitive damages signed by eleven jurors who were also polled by the trial judge and each confirmed this was their verdict.

¶ 7 Enogex appeals from the judgment only as to the award of punitive damages and does not challenge the compensatory damage award.²

Case No. 113,027 (Attorney Fee Case)

¶ 8 Vance requested attorney fees under 12 O.S. § 940 as prevailing party. Vance argued for a "lodestar" attorney fee of $425,327.50. Their fee evidence showed 1,937.70 hours of attorney time in a heavily litigated case with extensive pre-trial issues and an eleven day jury trial. Enogex contested the fee request as to time expended, the amount requested being excessive and not supported by the "lodestar" standards, and excessive relative to the obtained result. Vance countered Enogex conducted a "scorched-earth" defense, not motivated by economic interests, but defended in a manner described by Enogex's expert as a "precedential" case. Vance argued this means not a precedential case in the legal sense, but a strategy "aimed at dissuading others from bringing similar claims against Enogex." The trial court conducted a full hearing and awarded Vance an attorney fee award of $50,000 from which Vance appeals.

Pollution Case Analysis

Standard of Review

¶ 9 This is a challenge by Enogex to the jury verdict on punitive damages and resulting award. It does so on two appeal propositions: 1. Its Motion For Judgment Notwithstanding The Verdict should have been granted as a result of the jury note indicating jury confusion and apparent intent not to find reckless disregard for the rights of Vance and, 2. Arguing the issue of punitive damages should not have been submitted to the jury. The trial court denied Enogex's Motion For Judgment On Punitive Damages Notwithstanding The Verdict and entered the final journal entry on jury verdict on October 2, 2013.

¶ 10 Enogex argued below in its motion three propositions, all three argued as a part of two propositions contained in its appellate briefs. The three motion propositions were:

(1). The Court should have returned the Verdict Form—First Stage ("First Stage Verdict") to the jury for correction as soon as those jurors sent a written note telling the Court that they had checked the punitive damages box in error ; (2) the Court should have entered a judgment that properly reflected the intent of the 10 jurors not to award punitive damages; and (3) the Court should never have submitted the question of punitive damages to the jury in the first place based on insufficient evidence to satisfy the required standard of clear and convincing evidence. (Emphasis in original)

¶ 11 On appeal, the standard for determining a motion for judgment notwithstanding the verdict is identical to the standard for determining a motion for directed verdict found in 12 O.S. 1997, § 698. We review a trial court's ruling on a motion for judgment notwithstanding the verdict by the same standard used by the trial court. We consider as true all evidence favorable to the non-moving party together with all inferences that may be reasonably drawn therefrom, and we disregard all conflicting evidence favorable to the moving party. First National Bank in Durant v. Honey Creek Entertainment Corp. , 2002 OK 11 ¶ 8, 54 P.3d 100. (citing, Franklin v. Toal , 2000 OK 79 ¶ 13, 19 P.3d 834, 837 ). The motion should not be granted unless there is an entire absence of proof on a material issue. Id.

Analysis

¶ 12 First, we must consider the threshold issue of whether or not the jury should have been instructed on and allowed to consider a punitive damage award in the first instance. This is a question of law to be determined by the trial judge. Sides v. Cordes, Inc. , 1999 OK 36, ¶ 11 fn.10, 981 P.2d 301 (citing, Rodebush v. Oklahoma Nursing Homes, Ltd. , 1993 OK 160, ¶ 17, 867 P.2d 1241 ) (While the initial determination is a question of law for the court, the latter—whether to allow or deny punitive damages and their amount, if any—is left to the discretion of the trier of fact, be that judge or jury.).

¶ 13 23 O.S. Supp. 2002 § 9.1 now provides in part:

A. In an action for the breach of an obligation not arising from contract, the jury, in addition to actual damages, may, subject to the provisions and limitations in subsections B, C and D of this section, award punitive damages for the sake of example and by way of punishing the defendant based upon the following factors:

...

B. Category I. Where the jury finds by clear and convincing evidence that:

1. The defendant has been guilty of reckless disregard for the rights of others: or

2. An insurer has recklessly disregarded its duty to deal fairly and act in good faith with its insured; the jury, in a separate proceeding conducted after the jury has made such finding and awarded actual damages, may award punitive damages in an amount not to exceed the greater of:

...

The trial judge must give this instruction at the conclusion of the first stage of the trial if there is "...any competent evidence the defendant has acted with reckless disregard of the rights of others." Sides, at ¶ 11. The Court in Estrada v. Port City Properties, Inc., 2011 OK 30, 258 P.3d 495 said: "We also noted that previous cases provide that the trial court has a duty to submit a punitive damages question to the jury unless there is a complete lack of evidence to support an inference of the conduct required by § 9." Id. at ¶ 18. Followed by "Nothing in the current statutory framework changes ...