Justia Oklahoma Supreme Court Opinion Summaries

Appellee Highpointe Energy filed a quiet title action in Oklahoma against appellants the Viersens, and others. The disputed property concerned mineral interests from two different chains of title: one chain stemmed from a bankruptcy proceeding, while the other chain arose from a mortgage foreclosure proceeding and subsequent sheriff's sale. The trial court determined that the chain resulting from the foreclosure/sheriff's sale was superior to the bankruptcy chain. The Viersens appealed. The Oklahoma Supreme Court held that because the bankruptcy purchasers could secure no greater rights in the disputed property than the bankruptcy trustee held, the purchasers from the mortgage foreclosure proceeding held the superior title. View "Highpointe Energy v. Viersen" on Justia Law

The United States Bankruptcy Court for the Western District of Oklahoma certified two questions of state law to the Oklahoma Supreme Court. White Star Petroleum, LLC, along with its wholly-owned subsidiary, White Star Petroleum II, LLC were engaged in the business of exploring, acquiring, drilling, and producing oil and natural gas, either as an operator or non-operating working interest owner of various leaseholds across Oklahoma. In 2019, several of White Star's unpaid vendors filed an involuntary bankruptcy petition against White Star. White Star and its affiliates filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code. During the bankruptcy proceedings, 78 unpaid vendors filed adversary proceedings seeking adjudication of statutory lien claims under 42 O.S. 144 against White Star's interests in various wells and establishment of trust fund claims under 42 O.S. 144.2. These proceedings were stayed when White Star initiated two adversary proceedings of its own. The first sought adjudication of the priority, validity, and value of approximately 2,000 mechanic's and materialman's liens ("M&M liens") asserted by the 78 unpaid vendors over various interests held by White Star. The second sought an order of the Bankruptcy Court directing several first purchasers of oil and gas to turn over to White Star approximately 2 million dollars, which were being held in suspense after the purchasers received statutory lien notices from the M&M lien claimants. The Bankruptcy Court certified the questions to the Oklahoma Supreme Court to aid in the resolution of these two adversary proceedings. The federal court asked: (1) were the "trust funds" created by Title 42 O.S. 144.2 limited to obligations due non-operator joint working interest owners, or did such funds include payments due holders of mechanic's and materialmen's liens arising under and perfected by Title 42 O.S. 144?; and (2) did the Oil and Gas Owners' Lien Act of 2010, grant an operator and non-operator working interest owners a lien in proceeds from purchasers of oil and gas which is prior and superior to any claim of the holder of a mechanic's and materialmen's lien asserted under Title 42 O.S. 144? The Supreme Court found that answering both questions would have been dispositive of issues pending in the underlying bankruptcy proceedings and that there was then no controlling law on the subject matter of either question. The Court answered both questions in the negative: funds which must be held in trust for payment of lienable claims pursuant to 42 O.S. 144.2 were not exclusively limited to joint-interest billing payments received by operators for services rendered by the lienholders; the Oil and Gas Owners' Lien Act did not grant operators and non-operating working interest owners a lien in proceeds from the sale of oil and gas which is prior and superior to any claim of the holder of a mechanic's and materialman's lien asserted under 42 O.S. 144. View "White Star Petroleum v. MUFG Union Bank" on Justia Law

Boardman, LLC, a custom heavy metal fabricator, employed Debtor Eddie Joe Adams as a sales representative for approximately 33 years. Adams and his employer entered into an Employment Agreement in 2013 (Original Agreement). The Original Agreement covered a period of ten years (until January 1, 2023) and compensated Adams through regular salary, bonuses, and severance. On January 1, 2014, Adams and his employer entered into the First Amendment to the Original Agreement (First Amendment) that included an additional performance incentive in the form of a "Deferred Bonus." In 2017, Adams executed an Amended and Restated Employment Agreement (Restated Agreement), which had a term until January 1, 2020. On January 1, 2019, the Deferred Bonus fully vested, and on October 31, 2019, Adams filed a voluntary chapter 7 bankruptcy petition. Boardman, LLC did not renew the Restated Agreement, and it expired on January 1, 2020. Adams received his first payment of $41,634.14, less withholding tax, under the Deferred Bonus on January 2, 2020. In his bankruptcy filings, Adams claimed the Deferred Bonus (payable over 5 years) as exempt under 31 O.S.2011, section 1(A)(20). The Bankruptcy Trustee Susan Manchester (Trustee) objected to the exemption. The United States Bankruptcy Court for the Western District of Oklahoma certified a question of law to the Oklahoma Supreme Court concerning whether the Deferred Bonus was exempt. The Supreme Court determined this was a question of first impression, and concluded the deferred bonus was not exempt as "retirement plan or arrangement qualified for tax exemption or deferment purposes" as required to be exempt under 31 O.S.2011, section 1(A)(20). View "In re: Adams" on Justia Law

Hub Partners XXVI, Ltd. filed a foreclosure action against Thomas Barnett. The district court granted Hub a money and foreclosure judgment. Barnett filed for bankruptcy. During the bankruptcy, Barnett made court-approved payments to Hub. Barnett failed to pay the debt in full, and the bankruptcy court dismissed his bankruptcy. Over a month after the dismissal, Hub issued an execution on the pre-bankruptcy judgment. Barnett objected to the execution arguing the judgment was dormant pursuant to 12 O.S. 735, since more than five years had passed and Hub had not renewed the judgment. The district court agreed and granted Barnett's motion to release the dormant judgment and vacate the execution and sale order. Hub appealed, and the Court of Civil Appeals affirmed the district court's judgment. The Oklahoma Supreme Court granted certiorari to resolve: (1) whether Hub's foreclosure judgment was dormant; and (2) whether the mortgage at issue merged with the foreclosure judgment. The Supreme Court held the 2011 foreclosure judgment was dormant, but the mortgage lien did not merge into the foreclosure judgment and continues to secure Barnett's obligation owed to Hub. View "Hub Partners XXVI, Ltd. v. Barnett" on Justia Law

Debtor Jennifer Lynn Jackson purchased a horse trailer in 2003 for personal use with the proceeds of a purchase-money loan from Defendant Arvest Bank. The Oklahoma Tax Commission issued a certificate of title for the trailer. The bank filed a UCC-1 financing statement for the collateral in 2003, and a UCC continuation statement in 2008. The central issue to this case was the issuance of title by the Oklahoma Tax Commission to the debtor and the title's implications on the perfection of the bank's security interest in the trailer. That security interest was not recorded on the face of the certificate of title, nor did the bank take steps to record the security interest. The debtor did not request that a title be issued. The manufacturer of the trailer had forwarded a statement of origin to an Oklahoma tag agent, who then issued the title. Susan Manchester, as the trustee of record, sought to avoid the perfected security interest by the bank in the trailer. She asserted that because title was issued and the lien was not noted on the title, the bank did not perfect its security interest and does not have a priority position in the bankruptcy proceeding. The United States Bankruptcy Court for the Western District of Oklahoma certified a question of law to the Oklahoma Supreme Court: "May a certificate of title for a vehicle issued by the Oklahoma Tax Commission be deemed to have been 'properly issued', within the meaning of OKLA. STAT. tit. 47 section 1110.A.1, even though the vehicle was not one for which a certificate of title is required as proof of ownership under applicable Oklahoma law?" The Supreme Court did not believe that answering the question as formulated by the Bankruptcy Court settled the underlying issue of whether the bank properly perfected its security interest the trailer. The Court reformulated the question to: "Does the filing of a UCC-1 financing statement for a personal/recreational use horse trailer perfect the creditor's security interest where the Oklahoma Tax Commission has issued a discretionary certificate of title, and the creditor is not named on the title?" The Court answered: title may be properly issued by the Oklahoma Tax Commission to non-required trailers for the convenience of showing ownership. The use of title beyond this single purpose for non-required vehicles would be contrary to the general scheme and purposes of the Uniform Commercial Code as adopted in Oklahoma. The proper method for perfecting a security interest in collateral that is not required to be titled (but may be titled at the discretion of the owner) still is, and has been by the filing of a UCC-1 financing statement.View "Manchester v. Arvest Bank" on Justia Law

In a matter of first impression, the issue before the Supreme Court was whether proceedings in aid of execution or judgment collection pursued within an action under the Uniform Fraudulent Transfers Act (UFTA) must be preceded by registration of a foreign judgment in the county of the district court from which execution issued. In 2002, the United States Bankruptcy Court for the Western District of Oklahoma entered summary judgment against Debtors and denied a discharge of the debt to Bank based on Debtors' fraudulent concealment of assets. The Bank initiated various collection procedures against Debtors including garnishment and a hearing on assets in an attempt to satisfy the two judgments. The bankruptcy judgments were registered in Payne County, the location of Debtors' homestead, in July, 2002. Meanwhile, the UFTA action continued to proceed in Oklahoma County against Debtors' relatives. In September, 2007, the trial court entered an order in the UFTA action which determined that a portion of Debtors' income had been fraudulently diverted to a sham corporation for the purpose of avoiding garnishment of that income. However, it was not until November, 2007, that Bank's second amended petition in the UFTA action added Debtors and the corporation as defendants. In December, 2009, a contempt trial against Debtors generated an order filed 2010. That order expressly withdrew and superseded the September, 2007, order. It found one of the Debtors guilty of contempt for failure to obey the 2007 order. In April, 2011, Bank sought contempt to enforce the 2010 order. On August 18, 2011, Bank registered one of the bankruptcy judgments, and one for costs and attorney fees, in Oklahoma County. On March 15, 2012, a trial judge entered an order on Bank's motion to enforce the 2010 contempt order. The trial court found open and wilful violations of the withdrawn 2007 order as well as the 2010 order. The trial court acknowledged that Bank had failed to comply with the statutory requirements of registration of foreign judgments in the county of the court which issued execution, but it determined that those requirements did not apply in a UFTA action. Debtors brought then brought this original proceeding asserting the trial court's lack of jurisdiction to impose the relief granted to Bank. Upon review, the Supreme Court concluded that the belated registration of the foreign judgment in 2011 did not authorize the trial court to retroactively enforce orders which were void for lack of jurisdiction. "When a judgment was registered in Oklahoma County in 2011, the trial court did not retroactively acquire jurisdiction to enforce the provisions of the 2007 and 2010 orders that granted remedies in the nature of execution, including contempt, and threatened incarceration for failure to pay the judgments. The 2011 judgment registration did not make the void portions of the prior orders any less so." Furthermore, the Court held that a trial court may not take judicial notice of findings of fact and conclusions of law encompassed within a void judgment. New findings of fact and conclusions of law regarding any attempt to enforce the bankruptcy judgments are required. View "Vaughn v. Graves" on Justia Law

In 2005, Defendants-Appellants Robert and Shelly Heath executed a promissory note in favor of Option One Mortgage Corporation (Option One) which was secured by a mortgage. Defendants defaulted on the note in 2008. Plaintiff-Appellee Wells Fargo Bank, N.A., as Trustee for Option One Mortgage Loan Trust 2005-4 Asset Backed Certificates, Series 2005-4 (Appellee), filed its petition to foreclose. Attached to the Petition was a copy of the note, mortgage and assignment of the mortgage. The note contained neither an indorsement nor an attached allonge. The assignment of mortgage was made by Option One Mortgage Corporation to Appellee and was dated February 28, 2008. It did not purport to transfer the note. The bank filed a motion for summary judgment and Appellants did not respond. The judgment was granted in rem and in personam against Appellants. The property was sold at a sheriff's sale, and a motion to confirm the sale was filed on the same day. A day before the hearing to confirm the sale, Appellants filed for bankruptcy. In the pendency of the sale confirmation proceedings, Appellants obtained new counsel, and filed a motion to vacate the confirmation hearing. They alleged the bank did not prove it was entitled to enforce the note or to foreclose. The bank responded that because Appellants had their personal liabilities discharged in the bankruptcy, they no longer held any interest in the foreclosed property. Upon review, the Supreme Court found that the bank with its unindorsed note did not prove that it was entitled to foreclose. The Court reversed the trial court's grant of summary judgment in favor of the bank and remanded the case for further proceedings.View "Wells Fargo Bank, N.A. v. Heath" on Justia Law

Appellants David and Barbara Moore defaulted on the Note to their mortgage in 2008. U.S. Bank, National Association, commenced foreclosure proceedings later that year, not in its individual capacity, but solely as trustee on behalf of GSAA Home Equity Trust 2006-6 (Appellee). According to the verified petition, the Appellee was "the present holder of said Note and Mortgage having received due assignment through mesne assignments of record or conveyance via mortgaging servicing transfer." The original petition did not attach a copy of the note in question sued upon. Appellants answered, pro se in 2009, disputing all allegations and requesting that the Appellee "submit additional documentation to prove [its] claims including the representation that they were the "present holder of said Note." Appellee subsequently filed an amended petition and a second amended petition to add additional defendants. Neither of these amendments included a copy of the note. Appellee submitted its Motion for Summary Judgment to the court, again representing that it was the holder of the Note. Documentation attached to the Motion attempted to support this representation: including the Mortgage, the Note, an Assignment of Mortgage, and an Affidavit in Support of Appellee's Motion for Summary Judgment. For the first time, Appellee submitted the Note and Mortgage to the trial court. The note was indorsed in blank and contained no date for the indorsement. Appellants did not respond to Appellee's Motion, and the trial court entered a default judgment against them. The trial court entered a final judgment in favor of the Appellee. Upon review, the Supreme Court found no evidence in the record establishing that Appellee had standing to commence its foreclosure action: “[t]he trial court's granting of a default judgment in favor of Appellee could not have been rationally based upon the evidence or Oklahoma law.” The Court vacated the trial court’s judgment and remanded the case for further proceedings. View "U.S. Bank v. Moore" on Justia Law

In 2007, Appellants David and Mary Eldridge executed a promissory note and mortgage in favor of Plaintiff-Appellee J.P. Morgan Chase Bank, N.A. In both the Note and the Mortgage, "JP Morgan Chase Bank, N.A." was explicitly designated as the lender and payee, or entity to whom payment under the Note and Mortgage was due. Appellants voluntarily filed bankruptcy in 2009. In their amended statement of intentions, Appellants agreed to reaffirm the outstanding balance on the Note. Shortly thereafter, the Note went into default. Appellee Chase Home Finance Milwaukee initiated foreclosure proceedings in 2010, claiming to be the present holder of the Note and Mortgage. Chase Home Finance Milwaukee claimed to have acquired the Note and Mortgage by assignment from J.P. Morgan Chase Bank, N.A. in their motion for summary judgment filed several months later. The trial court granted summary judgment for the Bank, finding the Bank was the undisputed owner and holder of the Note and Mortgage. Accordingly, judgment was entered in favor of the Bank and Appellants' counterclaims were dismissed. On appeal to the Supreme Court, Appellants argued the trial court erred ruling in favor of the Bank. Upon review, the Supreme Court found no evidence in the record to support the Bank's contention that it was the holder of the Note. Therefore, the Court reversed the granting of summary judgment by the trial court and remanded the case back for further proceedings. View "J.P. Morgan Chase, N.A. v. Eldridge" on Justia Law