Justia Oklahoma Supreme Court Opinion Summaries

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

In 2016, plaintiff-appellee Isaac Sutton went shopping for a vehicle at the defendant-appellant David Stanley Chevrolet, Inc.'s (hereafter DSC) car dealership. He agreed to purchase a 2016 Chevy Silverado on credit and he agreed to trade-in his 2013 Challenger. He was informed by DSC that his credit was approved. In addition, he was given $22,800.00 for the Challenger for which he still owed $25,400.00. The documents for the purchase of the vehicle amounted to approximately eighty-six pages, which included a purchase agreement and a retail installment sale contract (RISC). He left the dealership that evening with the Silverado and left his Challenger. Several days later he was informed by DSC that his financing was not approved and he would need a co-signor to purchase the Silverado. Sutton visited DSC but was then told he did not need a co-signor and there was no need to return the vehicle. At the end of June his lender for his 2013 Challenger contacted him about late payments. Sutton contacted DSC who said it was not their responsibility to make those payments since they did not own the Challenger he traded-in. A few days later, he was notified by DSC that his Challenger had been stolen and the matter was not the responsibility of DSC. Sutton had to make an insurance claim on his Challenger and DSC took back the Silverado. In the meantime, Sutton continued to make payments on the Challenger. Plaintiff and his wife Celeste Sutton sued DSC over the whole transaction involving the Challenger. DSC moved to compel arbitration. Plaintiffs alleged they were fraudulently induced into entering the arbitration agreement. The trial court found there was fraudulent inducement and overruled the motion to compel arbitration. The Oklahoma Court of Civil Appeals reversed the trial court and remanded for further proceedings concerning the unconscionability of the arbitration agreement. The Oklahoma Supreme Court granted certiorari, and found the trial court's order was fully supported by the evidence. The opinion of the Oklahoma Court of Civil Appeals was therefore vacated and the matter remanded to the trial court for further proceedings. View "Sutton v. David Stanley Chevrolet" on Justia Law

Petitioners and respondents owned real property in McClain County, Oklahoma, containing and abutting Colbert Lake (the Lake). Petitioners also owned real property containing Colbert Creek, which was the sole source of water that fed the Lake. Respondents sought a permit from the Oklahoma Water Resources Board (OWRB), to sell water from the Lake to oil companies for use in fracking operations. The only notice that the OWRB provided to petitioners of the respondents' permit application was by publication in newspapers. The permits were issued, and petitioners subsequently filed suit at the district court, arguing that they were not given proper and sufficient notice of the permit proceedings. The district court dismissed the lawsuit in a certified interlocutory order, and petitioners appealed. The Oklahoma Supreme Court granted certiorari to address the proper, constitutionally required notice to landowners in such proceedings. The Court held that the notice given was inadequate, therefore judgment was reversed and the matter remanded for for further proceedings. View "Purcell v. Parker" on Justia Law

Defendant the City of Tulsa (City), passed an ordinance creating a tourism improvement district that encompassed all properties within City which had hotels or motels with 110 or more rooms available for occupancy. Plaintiff-appellee Toch, LLC owned Aloft Downtown Tulsa (Aloft) with 180 rooms. Toch petitioned for a declaratory judgment that the ordinance was invalid for a variety of reasons, including that the district did not include all hotels with at least 50 rooms available. The court granted summary judgment to Toch based on its determination that City exceeded the authority granted in title 11, section 39-103.1. The question before Oklahoma Supreme Court was whether section 39-103.1 granted authority to municipalities to limit a tourism improvement district to a minimum room-count of a number larger than 50. To this, the Court answered in the affirmative, reversed the trial court, and remanded for further proceedings. View "Toch, LLC v. City of Tulsa" 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

Petitioner Sharla Whipple's twenty-three year old, unmarried son lost his life in a work related accident. Under the Workers Compensation Act, only a spouse, child, or legal guardian could file a Workers Compensation death benefit claim when a work related death occurs. Whipple's son had no spouse, child or legal guardian. Consequently, Whipple's only remedy was to file a wrongful death action. However, the trial court granted partial summary judgment against Whipple, determining that her only remedy was limited to the Workers Compensation system, rather than the district court. Whipple appealed. The Oklahoma Supreme Court held that the right of a parent as the next of kin to bring a wrongful death action when the decedent was an adult, unmarried, and childless, was established in the law pursuant to 12 O.S. 2011 section1053 and by art. 23 section 7 of the Oklahoma Constitution. Therefore, the Legislative attempt to limit recovery for wrongful death pursuant to 85A O.S. Supp. 2014 section 47 to a spouse, child or legal guardian dependent on the decedent was a nullity. "The Okla. Const ... prohibits the abrogation of the right to recover for injuries resulting in death. The Legislature may limit the recovery, but may not eliminate the right to recover." View "Whipple v. Phillips & Sons Trucking" on Justia Law

Appellants Taylor and Cody Hudson (Hudson/parents) were arrested and charged with felony criminal child abuse in relation to the alleged abuse of one of Cody Hudson's sons. Subsequently, the State sought to terminate the Hudsons' parental rights to the four children they had together. At trial, the parents sought to preclude any evidence of the criminal charges from being presented to the jury. The trial court limited evidence of the criminal charges to only inform the jury that charges had been filed, and nothing else. The jury rendered a verdict terminating parental rights as to both parents. The Hudsons appealed. After its review, the Oklahoma Supreme Court held that the limited admission of evidence of the fact that parents have been charged with criminal felonies for child abuse (but not yet convicted) was made in error but did not warrant reversal; the jury's verdict was supported by the clear and convincing evidence that the abuse was heinous and shocking. View "In the Matter of K.H." on Justia Law

Plaintiff Shelli Farley, a surviving spouse of a former City of Claremore fireman, successfully obtained a death benefits award in the Workers' Compensation Commission. She then brought a District Court action for damages alleging the death of her spouse was caused by negligence and an intentional tort committed by her spouse's employer who was a local government entity. She argued her action was also for the benefit of her surviving child, as well as the surviving parents and brother of the deceased. The Oklahoma Supreme Court concluded after review of the trial court record, that a tort action for damages suffered by a surviving spouse, surviving child, and parents of a deceased adult child did not survive for the purpose of a 12 O.S. 1053 wrongful death action when: (1) The wrongful death action arises from an injury compensable by an exclusive workers' compensation remedy and the tort action is brought against the employer of the deceased; and (2) the employer can claim sovereign immunity. In this case, the wrongful death injury was adjudicated and compensated by a successful workers' compensation claim after the death of the decedent. This successful adjudication demonstrated the decedent's injury was exclusively before the Commission and not cognizable as a District Court claim at the time of decedent's death. The parents' action for loss of companionship damages was extinguished at the time of decedent's death and did not survive. And the City was immune from suit because the tort claim against it was for liability for an injury properly compensated by a claim before the Workers' Compensation Commission. The brother of the deceased did not possess a wrongful death § 1053 action for loss of consortium. Furthermore, the Court concluded plaintiff lacked standing to seek injunctive relief. Dismissal of this case was affirmed. View "Farley v. City of Claremore" on Justia Law

Plaintiff-appellee Natural Gas Pipeline Company of America LLC (NGPL) operated two interstate natural gas pipelines that crossed property owned by Defendant-appellant Foster OK Resources LP (Foster). NGPL brought a condemnation action seeking four separate easements to have consistent access to operate and maintain the pipelines and to clear title issues involving the pipelines. Foster challenged NGPL's exercise of eminent domain and whether NGPL's taking met the legal standard of necessity. After review, the Oklahoma Supreme Court held NGPL could not contract away its right of eminent domain and was not prevented from seeking the easements at issue to operate and maintain the pipelines. NGPL's condemnation of Foster's property was for public use and met the legal standard of necessity. Furthermore, the Court held the issue of the necessity of a survey in computing just compensation owed to Foster was premature and could not be determined at this time. View "Natural Gas Pipeline Co. v. Foster OK Resources, LP" on Justia Law

The Tenth Circuit Court of Appeals certified two questions of law to the Oklahoma Supreme Court. Billy Hamilton, a small-business owner in Council Hill, Oklahoma, filed a claim in December 2015 with his insurer, Northfield Insurance Company, seeking coverage for his building's leaking roof. Northfield twice denied his claim: once in February 2016, and again in April 2016. Hamilton filed suit against Northfield in November of that year, alleging bad-faith denial of his insurance claim and breach by Northfield of the insurance contract. Hamilton rejected a proposed settlement, and the matter went to trial. A jury awarded him $10,652, the maximum amount of damages the judge instructed the jury it could award. Hamilton then sought attorney fees and statutory interest under 36 O.S. section 3629(B). Northfield responded that Hamilton was not the prevailing party under the statute, given that he had recovered less than its settlement offer to him. The federal district court agreed with Northfield, and Hamilton appealed to the Tenth Circuit Court of Appeals. Initially, a panel of that court affirmed the district court's determination that Hamilton was not the prevailing party for purposes of awarding attorney fees under section 3629(B). Following a petition for en banc rehearing by Hamilton and additional briefing by amicus curiae, the Tenth Circuit Court of Appeals granted panel rehearing sua sponte, vacated its opinion as to the issues raised in Hamilton's appeal, and certified the two questions to the Oklahoma Court. The questions were: (1) in determining which is the prevailing party under 36 O.S. 3629(B), should a court consider settlement offers made by the insurer outside the sixty- (formerly, ninety-) day window for making such offers pursuant to the statute?; and (2) should a court add to the verdict costs and attorney fees incurred up until the offer of settlement for comparison with a settlement offer that contemplated costs and fees? The Oklahoma Court answered both questions "no:" (1) a court may consider only those timely offers of settlement of the underlying insurance claim--and not offers to resolve an ensuing lawsuit that results from the insurer's denial of the same; and (2) this is strictly limited to the specific context of determining prevailing-party status under section 3629(B) alone. The Oklahoma Court expressed no opinion on a trial court's evaluation of the form of settlement offer described in the certifying court's second question when made outside the section 3629(B) setting. View "Hamilton v. Northfield Ins. Co." on Justia Law