Justia Oklahoma Supreme Court Opinion Summaries

The Oklahoma Supreme Court granted certiorari to address this first impression issue of whether the right to compel arbitration was waived when it is not raised as an affirmative defense in a responsive pleading. Plaintiffs-appellees filed suit alleging various claims stemming from the parties' investment relationships. Nearly seventeen months after they filed their answer in which they omitted arbitration as an affirmative defense, defendants-appellants moved to compel arbitration pursuant to the parties' agreements. Very little case activity involving defendants had taken place during that time. The Court of Civil Appeals affirmed the trial court's denial of the motion to compel, holding that defendants-appellants waived any right to arbitration by failing to raise it in their answer. The Supreme Court held the right to compel arbitration was not waived in this case: defendants-appellants' motion to compel arbitration met the statutory requirements of the OUAA. “This finding, however, did not end our analysis because Oklahoma law provides that a party may waive their right to arbitration even when properly requested. After conducting an examination of the pertinent facts herein, we conclude Plaintiffs/Appellees failed to satisfy their burden of proof on the issue of waiver of the right to arbitration.” Accordingly, the judgment of the trial court was reversed. View "Howell's Well Service v. Focus Group Advisors" on Justia Law

The three questions before the Oklahoma Supreme Court in this case were: (1) whether Oklahoma's class action attorney fee statute, 12 O.S.Supp.2017, section 2023(G), allowed for the percentage-of-common-fund method in calculating attorney fees; (2) whether the district court abused its discretion in awarding 40% of the common fund to class counsel, equaling over $19 million in attorney fees and a $2,500 hourly rate; and (3) whether the district court abused its discretion in awarding a $400,000 incentive award to the named class representatives. Objector Daniel McClure appealed a $19 million attorney fee award and a $400,000 incentive award in a class action suit. The district court calculated the attorney fee amount using the percentage-of-common-fund method pursuant to a contingency fee agreement between the class counsel and class representatives. The Court of Civil Appeals reversed the district court's awards, holding: (1) an attorney fee request in a common fund case was subject to the lodestar method; (2) the district court failed to properly calculate the attorney fee award under the lodestar method; and (3) the district court abused its discretion in awarding the incentive award to the class representatives. The Supreme Court held that although Oklahoma's class action attorney fee statute gave courts flexibility and discretion in calculating fee awards under the percentage-of-common-fund method, the district court abused its discretion when it awarded an unreasonable attorney fee award and an incentive award not supported by evidence. View "Strack v. Continental Resources" on Justia Law

Plaintiff-appellee Warehouse Market subleased a commercial building from defendant Pinnacle Management, Inc. The building was on federally restricted Indian land. Subsequently, defendant-appellant, Oklahoma Tax Commission (OTC) and the Muscogee (Creek) Nation Office of Tax Commission (Tribe) both sought to collect sales tax from Warehouse Market. Warehouse Market filed an interpleader action in an attempt to have the court determine which entity to pay. However, the trial court dismissed the Tribe because it had no jurisdiction over it because of the Tribe's sovereign immunity. The trial court then determined that the OTC could not be entitled to the sales tax unless and until the dispute between the OTC and the Tribe was resolved in another forum or tribunal. The Oklahoma Supreme Court held that because the substance of Warehouse Market's action/request for relief was a tax protest, exhaustion of administrative remedies was a jurisdictional prerequisite to seeking relief in the trial court. View "Warehouse Market v. Oklahoma ex rel. Ok. Tax Comm." on Justia Law

The dispute in this case centered on two oil-and-gas-producing formations known as the Chester and the Marmaton, located in Beaver County, Oklahoma. In 1973, Arnold Petroleum, Inc., the predecessor in interest to plaintiffs (collectively, "Arnold") obtained six oil-and-gas leases covering land in Beaver County. Over the course of 1973 and 1974, Arnold Petroleum assigned its leases to Dyco Petroleum Corporation, expressly reserving an overriding royalty interest in any oil and gas produced under the leases. Dyco assigned the leases to Harold Courson, the predecessor in interest of defendant Cabot Oil & Gas Corporation. This assignment, too, was expressly subject to Arnold's overriding royalty interest. Two wells drilled in the Chester formation produced "mostly gas with some oil" continuously since the mid-1970s, and at no point since then did Arnold ever stop receiving payments on its overriding royalty interest in those producing wells. In 1984, Courson obtained several new leases from the mineral owners who had granted the 1973 leases. The 1984 leases purported to cover the same rights as the original 1973 leases, but were silent as to any particular geologic formation or zone. Arnold did not become aware of the 1984 leases until 1999 when it and other royalty holders received a letter from Courson explaining he had recompleted a well in the Chester formation that had originally been drilled into the separate Lower Chester formation by Natural Gas Anadarko, Inc. (NGA). In the 1999 conversation, a Courson employee told the Arnold landman the 1984 leases covered only "deep rights" or "lower depths" that had expired under the 1973 leases. This assertion would exclude the Marmaton. For the next 13 years, the matter of the Marmaton formation would remain dormant. Courson assigned his leases to Cabot in August 2011, and Cabot drilled and completed several horizontal wells in the Marmaton. Cabot rejected Arnold's request for payment, and Arnold sued in October 2012, seeking damages for nonpayment of royalties. Cabot argued Arnold's claims were barred because the applicable statute of limitations began to run with the filing of the new leases in 1984, which event (in Cabot's view) should have put Arnold on notice of an adverse claim to the Marmaton. The issue presented for the Oklahoma Supreme Court's review was whether plaintiffs waited too long in asserting their right to payment of the overriding royalty interest. The Court of Civil Appeals reversed the trial court's judgment in favor of plaintiffs on those grounds. The Supreme Court disagreed: this litigation could not have arisen until defendant first developed the disputed formation in 2012, and then refused plaintiffs' request for payment of royalties from that production. "Nothing preceding that sequence of events could reasonably have foreclosed plaintiffs' ability to press their claim for the payments to which they were entitled under valid mineral leases." View "Claude C. Arnold Non-Operated Royalty Interest Properties v. Cabot Oil & Gas Corp." on Justia Law

Tokiko Johnson's real property was damaged in a storm and she filed a claim with her insurance company. Johnson also executed an assignment of her insurance claim for the purpose of repairing the property with the execution in favor of Triple Diamond Construction LLC (the construction company). An appraiser retained by the construction company determined storm damage to the property in the amount of $36,346.06. The insurer determined the amount of damage due to the storm was $21,725.36. When sued, the insurer argued the insured property owner was required to obtain written consent from the insurer prior to making the assignment. The Oklahoma Supreme Court determined an insured's post-loss assignment of a property insurance claim was an assignment of a chose in action and not an assignment of the insured's policy. Therefore, the insured's assignment was not prohibited by either the insurance policy or 36 O.S. section 3624. Judgment was reversed and the matter remanded for further proceedings. The insurer's motion to dismiss the appeal was thus denied. View "Johnson v. CSAA General Insurance Co." on Justia Law

In January 2020, summary judgment was entered in favor of defendant State Farm Mutual Automobile Insurance Co. (State Farm) against its insured, plaintiff Eric Thurston. In 2012, Thurston first obtained automobile liability insurance through State Farm. On June 9, 2016, Thurston was injured in an automobile accident. At that time, Thurston had three separate, six-month term, insurance policies with State Farm, with separate UM coverage on each, for which Thurston paid three separate premiums. The accident vehicle had $25,000 in UM coverage and the other two vehicles each had $50,000 in UM coverage. After determining that Thurston's medical expenses from the accident exceeded the at-fault driver's policy limits, State Farm initially paid Thurston $25,000 in UM benefits under the policy for the vehicle involved in the accident. State Farm eventually paid Thurston another $25,000 under a second policy, for a total of $50,000 in paid UM benefits. While Thurston's injuries exceeded that amount, State Farm refused further payment. Thurston brought claims against State Farm, Janis Yearout (Agent), and Yearout Insurance Agency (Agency) for fraud, breach of contract, bad faith, and failure to procure appropriate coverage. In April 2019, Thurston filed his third amended petition arguing, in part, that State Farm expressly provided for stacking when it continued to charge and accept full premiums on multiple policies without advising that the policies no longer stacked. In support, Thurston submitted his deposition testimony that he did not recall receiving notice of changes in policy language after the 2014 statutory amendment. Thurston alleged that his claims were also supported by State Farm's internal claim documents, which described the policy for the accident vehicle as "stacking" with another. The question before the Oklahoma Supreme Court was whether State Farm expressly provided for stacking of uninsured motorist policies, pursuant to 36 O.S. Supp. 2014, section 3636(B), by charging and accepting separate premiums for uninsured motorist coverage on separate policies. The Supreme Court found State Farm's charging separate UM premiums for vehicles on separate policies did not fall within section 3636's exception of expressly providing for stacking of UM coverage. Because State Farm did not take action to expressly provide for stacking of UM coverage, they were entitled to judgment as a matter of law. The district court's order granting summary judgment was affirmed. View "Thurston v. State Farm Mutual Automobile Ins. Co." on Justia Law

Plaintiffs filed a negligence action based upon the alleged acts of defendants when one of the plaintiffs was staying in a hospital after surgery and received a burn from spilled hot water. The district granted defendants' motion to strike plaintiffs' witness list and defendants' motion for summary judgment. Plaintiffs appealed and the Court of Civil Appeals. After its review, the Oklahoma Supreme Court held the trial court erred in granting summary judgment striking the list of trial witnesses when plaintiffs were not provided time to respond to the motion to strike as granted by District Court Rule 4. Judgment was reversed and the matter remanded for further proceedings. View "Shawreb v. SSM Health Care of Oklahoma" on Justia Law

After decedent Charles Fulks died, his wife, petitioner-appellee Dorothy Fulks, filed the probate of his estate in the District Court of Nowata County, Oklahoma. An heir at law-appellant, the decedent's daughter, Tammy McPherson, objected to the probate in Nowata County. She argued that: (1) the decedent died in Osage County, and all of the decedent's real and personal property was located in Osage County; (2) pursuant to 58 O.S. 2011 section 5, the proper venue for the probate was solely in Osage County, Oklahoma; and (3) the case should have been transferred pursuant to the doctrine of intrastate forum non conveniens. The trial court determined that Nowata County was also a proper venue, and it denied the daughter's request to transfer the cause to Osage County. The daughter appealed, and after review, the Oklahoma Supreme Court held venue was proper in Osage County. View "In the Matter of the Estate of Fulks" on Justia Law

Plaintiff-appellee Revolution Resources, LLC, (Revolution), an oil and gas well operator, filed an action under the Oklahoma Surface Damages Act (SDA), to Appoint Appraisers. In February 2018, Revolution acquired and became the operator of a 30,000 acre unit that was created in 1947 pursuant to Order 20212 of the Oklahoma Corporation Commission (OCC). The unit wasknown as the West Edmond Hunton Lime Unit (WEHLU). Defendant-appellant Annecy, LLC, (Annecy) purchased the subject premises in August 2019, with the intent to build expensive luxury homes. Appellant unsuccessfully sought a temporary injunction against Appellee's operations. Appellant appealed the interlocutory order denying its motion for temporary injunction. The Oklahoma Supreme Court granted an injunction pending the appeal. Appellant was required to post a bond securing the cost and attorney fees of the Appellee if the Supreme Court determined later the temporary injunction should not have been granted. The Supreme Court concluded the injunction should not have been granted: Annecy purchased its surface estate subject to the outstanding mineral estate held by Revolution. Annecy's surface estate is servient to that of Revolution's mineral estate. Annecy did not meet its burden of proving by clear and convincing evidence that it would be irreparably harmed by Revolution's oil and gas operations. Having failed to establish one of the four factors required, i.e., irreparable harm, by clear and convincing evidence, Annecy did not meet its burden to prove all necessary factors to obtain extraordinary relief, therefore its motion for temporary injunction was correctly denied. The temporary injunction granted by the Supreme Court was dissolved, and the matter remanded for further proceedings to determine the costs and attorney fees owed the Appellee which were secured by bond. View "Revolution Resources, LLC v. Annecy, LLC" on Justia Law

Plaintiff-appellant Comanche Nation of Oklahoma ex rel. Comanche Nation Tourism Center, filed a lawsuit seeking a declaratory judgment that defendant-appellant Wallace Coffey was indebted to it for the amount of the outstanding balance on an open account. The trial court granted Coffey's motion to dismiss for lack of subject matter jurisdiction and dismissed the case with prejudice. Thereafter, Coffey filed an application for prevailing party attorney fees pursuant to 12 O.S.2011 section 936. The trial court denied Coffey's request for attorney fees, finding he was not the prevailing party because he had not prevailed on the merits of the action. Coffey appealed the order denying attorney fees, and the Oklahoma Supreme Court retained the appeal, holding a defendant was not a "prevailing party" within the meaning of section 936 when the trial court dismissed the action with prejudice for lack of subject matter jurisdiction. The trial court's order denying Coffey's motion for attorney fees was therefore affirmed. View "Comanche Nation v. Coffey" on Justia Law