Winterhalder v. Burggraf Restoration Inc.

Decision Date25 February 2011
Docket NumberDivision No. 2. ,Released for Publication by Order of the Court of Civil Appeals of Oklahoma,No. 106.868,106.868
Citation256 P.3d 84,2011 OK CIV APP 38
PartiesEd WINTERHALDER, Blue Collar Financial Group of Oklahoma, Meridian Capital, Donna Murphy, Sharon Feary, Bill Gregory, Gale Davis and Carolyn Davis, Plaintiffs/Appellants,v.BURGGRAF RESTORATION, INC., et al., Defendants/Appellees,Perry W. Newman, Third Party Defendant.
CourtUnited States State Court of Criminal Appeals of Oklahoma. Court of Civil Appeals of Oklahoma

OPINION TEXT STARTS HERE

Appeal from the District Court of Tulsa County, Oklahoma; Honorable Mary Fitzgerald, Trial Judge.REVERSED AND REMANDED FOR FURTHER PROCEEDINGS.Perry W. Newman, Owasso, Oklahoma, for Plaintiffs/Appellants Gale Davis and Carolyn Davis.John W. Anderson, Jr., Tulsa, Oklahoma, for Defendants/Appellees.JOHN F. FISCHER, Judge.

¶ 1 Gale and Carolyn Davis appeal the judgment entered by the district court in favor of Burggraf Restoration, Inc., on the ground that the Davises' claim was barred by previous litigation between these parties. Because it cannot be determined from the record on appeal whether the Davises' claim is barred, we reverse and remand to the district court for further proceedings consistent with this Opinion.

BACKGROUND

¶ 2 The Davises joined with six other plaintiffs and filed this suit alleging breach of contract, negligence, fraud and home repair fraud against Burggraf. Burggraf answered and asserted affirmative defenses contending that the Davises' claims arose from the same construction contract as Burggraf's earlier small claims action and were barred. Burggraf and the Davises entered into a Stipulation and Order, stipulating to certain facts and agreeing that the district court could enter judgment based on those facts. The relevant facts from the Stipulation are summarized as follows:

1. On March 9, 2002, the Davises suffered fire, smoke and water damage to their home located in Claremore, Oklahoma.

2. Defendant, Burggraf Restoration, Inc., was employed by Allstate, the Davises' insurance company, to perform fire, smoke and water damage repair and restoration services on the Davises' home.

3. Burggraf began work on the Davises' home on March 14, 2002, and was dismissed from the work site by the Davises in September 2002.

4. On October 4, 2002, Burggraf filed a small claims case in Tulsa County District Court, Case No. SC–2002–17400, to collect sums due for work performed on the Davises' home.

5. On November 15, 2002, the Davises sent a letter to Burggraf listing 18 items of substandard work and/or damage caused by Burggraf during the restoration and repair services. The Davises refused to pay the full amount of Burggraf's last billing statement and demanded Burggraf address the items listed in the letter. Burggraf refused to perform further work on the residence until the Davises paid the balance of the account billed.

6. Burggraf's case was scheduled for trial on October 31, 2002. At the court's direction, the parties met to see if the case could be resolved. The parties agreed to pass the trial to November 15 so that the Davises could work with their Allstate agent to get Burggraf paid. The Davises also requested a sample of the carpet Burggraf was storing that had been ordered for the Davises' home.

7. On November 15, the trial was rescheduled for December 2 by the agreement of the parties to allow the Davises' insurance agent more time to investigate their claim.

8. On December 2, the Davises asked the district court for a continuance in order to secure counsel and determine whether a counterclaim was necessary. The trial was rescheduled for December 16, 2002.

9. The Davises retained an attorney, who negotiated a settlement with Burggraf the morning of trial. The Davises agreed to pay the $1,616.00 owed Burggraf and Burggraf agreed to deliver the carpet it was storing to the Davises. Based on that agreement, Burggraf's counsel informed the Court of the settlement and the trial date was stricken.

10. However, the Davises did not pay Burggraf as agreed. On July 14, 2003, Burggraf's counsel filed a motion to set the case for trial on the small claims docket. When Burggraf failed to appear for the scheduled trial on August 15, 2003, the court dismissed the case.

11. Burggraf filed a second small claims action against the Davises on April 12, 2004 (SC–2004–4971). The Davises were served with summons on May 4, 2004. The Davises again did not file a counterclaim within the period required by Okla. Stat. tit. 12, § 1758. Burggraf's second action was based on the same underlying transaction or occurrence as its first action, SC–2002–17400.

12. Both parties appeared for trial on May 17, 2004. The Davises agreed to pay the $1,616 owed Burggraf plus $348 in court costs and attorney's fees in exchange for Burggraf delivering the carpet to their son's residence. The parties informed the court of their resolution and the case was stricken from the docket to be reset on application. No journal entry of judgment, written settlement agreement or minute order was prepared or filed in this case on the day of trial.

13. On May 28, 2004, the Davises paid the sum of $l,616 to Burggraf, plus $348 in costs, and Burggraf delivered the carpet to the Davises' son as agreed in the parties' settlement.

14. On July 12, 2004, Burggraf filed a dismissal with prejudice of the second small claims case.

15. No written settlement was executed in either small claims case. The court did not grant relief to either party. Neither party executed a release and waiver in either of the small claims cases.

¶ 3 After submission of briefs, the district court found that the Davises' claim in the current action was barred by section 1758 of the Small Claims Procedure Act and the doctrine of res judicata and entered judgment in favor of Burggraf. The Davises appeal.

STANDARD OF REVIEW

¶ 4 Although no motion was pending when the order appealed was filed, it appears that the parties intended that their Stipulation be treated as cross-motions for summary judgment. “The meaning and effect of an instrument filed in court depends on its contents and substance rather than on the form or title given it by the author.” Whitehorse v. Johnson, 2007 OK 11, n. 13, 156 P.3d 41. We review a trial court's order granting summary judgment de novo. Carmichael v. Beller, 1996 OK 48, ¶ 2, 914 P.2d 1051, 1053. The district court's judgment was based on its interpretation of statutes regulating counterclaims and the doctrine of res judicata. “A legal question involving statutory interpretation is subject to de novo review ... i.e., a non-deferential, plenary and independent review of the trial court's legal ruling.” Heffron v. Dist. Court of Oklahoma County, 2003 OK 75, ¶ 15, 77 P.3d 1069, 1076 (citing Samman v. Multiple Injury Trust Fund, 2001 OK 71, ¶ 8 and n. 5, 33 P.3d 302, 305).

ANALYSIS

¶ 5 The procedural history of the parties' dispute is unusual. The parties reached a settlement in the first case filed by Burggraf. That settlement was not reduced to writing, but the Stipulation discloses the central terms of the settlement—the Davises agreed to pay Burggraf $1,616 and Burggraf agreed to deliver carpet it had been storing for the Davises. The Davises failed to pay according to the terms of the settlement and, rather than filing a motion to enforce the settlement, Burggraf caused the case to be placed back on the trial docket. The court dismissed the case when Burggraf failed to appear on the scheduled trial date. Eight months later, Burggraf filed a second action. Like the first action, this case was based on breach of the construction contract for repair of the fire damage to the Davis home, i.e., “the same underlying transaction or occurrence as its first action.” Apparently, Burggraf did not seek to enforce the settlement agreement in the second suit either. However, the record for this appeal does not include the judgment roll for either of the cases filed by Burggraf. According to the Stipulation, on the date the second suit was set for trial the parties informed the district court that the “Davises agreed to pay the $1,616.00 owed Burggraf plus $348.00 in court costs and attorney's fees in exchange for Burggraf delivering the carpet....” 1 The case was then stricken from the trial docket. After the parties exchanged the agreed performance, Burggraf dismissed the second suit with prejudice. According to the Stipulation, there is no written agreement documenting the terms of the parties' settlement and none of the parties “executed a release and waiver in either small claims case.”

I. The Settlement Agreement

¶ 6 The district court stated two bases for its judgment. The first was that the Small Claims Procedure Act barred the claim. See 12 O.S.2001 § 1758. The second was that the claim was barred by res judicata. Before addressing these issues, we must determine the effect of the settlement agreement reached in the first case. “A settlement agreement is a contract which constitutes a compromise between two or more parties to avoid a lawsuit and amicably to settle their differences on such terms as they can agree.” Whitehorse, 2007 OK 11, ¶ 9, 156 P.3d at 46 (footnotes omitted). “A settlement agreement is an oral or written contract between the parties. As such, it is subject to the rules of offer and acceptance and of mutual assent which control any issue of contract formation.” In re De–Annexation of Certain Real Property from City of Seminole, 2009 OK 18, ¶ 8, 204 P.3d 87, 89 (citation omitted). Once a settlement has been reached, the parties' rights and liabilities as to the subject matter of the action are fixed by contract rather than by the judgment of the court. Corbett v. Combined Commc'ns Corp. of Oklahoma, Inc., 1982 OK 135, ¶ 5, 654 P.2d 616, 617–18.

¶ 7 The agreement in the first small claims case clearly settled the claims that Burggraf asserted against the Davises in that case. Because the settlement agreement was not reduced to writing, the...

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