Justia Oklahoma Supreme Court Opinion SummariesArticles Posted in Contracts
Tres C, LLC v. Raker Resources
Plaintiff-respondent Tres C, LLC was an Oklahoma limited liability company whose members were Viola "Tincy" Cowan, her son David Cowan, her daughter Karlea Cowan Ewald, her grandson Scot Meier, and her granddaughter Marsha Bukowski. Tres C was a successor-in-interest to certain mineral interests a the 320-acre lot in Blaine County, Oklahoma, that were formerly owned by the parents of Tincy's late husband, George and Coral Cowan. In February 1955, George and Carol Cowan executed an oil and gas lease in favor of J.J. Wright (hereinafter "the Lessee") concerning those mineral interests. Under its habendum clause, the Cowan Lease would remain valid for a primary term lasting 10 years and then--so long as a producing well was drilled--for a secondary term lasting "as long thereafter as oil, gas, casinghead gas, casinghead gasoline, or any of the products covered by this lease is or can be produced." Defendants-petitioners were the Lessee's current successors-in-interest under the Cowan Lease. This appeal concerned the trial court's judgment that granted Plaintiff's petition to cancel defendant's oil and gas lease and to quiet title in its favor so that a third party could exercise the option of executing a new lease. The Court of Civil Appeals conditionally affirmed the trial court's judgment, but remanded the matter with instructions to address the noncontractual defense of obstructions, set forth in Jones v. Moore, 338 P.2d 872. The Oklahoma Supreme Court granted certiorari to address whether the trial court erred in applying a rule of law that analyzed only a 3-month window of time for assessing whether a dip in the existing well's production was a cessation of production in paying quantities such that defendants' lease expired by its own terms. On de novo review, the Court found the trial court did err insofar as it relied upon the lease's cessation-of-production clause to define the time period for assessing profitability. The Court vacated the Court of Civil Appeals' opinion, reversed the trial court's judgment, quieted title in favor of Defendants, and remanded the case for further proceedings. View "Tres C, LLC v. Raker Resources" on Justia Law
Posted in: Contracts, Energy, Oil & Gas Law, Real Estate & Property Law
Cherokee Nation v. Lexington Insurance Co., et al.
Cherokee Nation filed a declaratory judgment action seeking insurance coverage under the business interruption provision of a policy issued by a number of insurers for the economic losses it incurred when it temporarily closed its properties due to the threat of COVID-19. The district court granted Cherokee Nation's motion for partial summary judgment, holding the phrase "direct physical loss" in the business interruption provision of the policy included coverage for losses sustained by property rendered unusable for its intended purpose. The district court also found that none of the exclusions raised by the insurers applied to Cherokee Nation's loss. The insurers appealed, and the Oklahoma Supreme Court retained the appeal, holding that Cherokee Nation's losses were not covered under the business interruption section of the insurance policy at issue. The district court erred in finding business interruption coverage when Cherokee Nation did not sustain immediate, tangible deprivation or destruction of property. View "Cherokee Nation v. Lexington Insurance Co., et al." on Justia Law
Posted in: Business Law, Contracts, Insurance Law
Patel v. Tulsa Pain Consultants
Plaintiff-appellant Jayen Patel, M.D. brought a tort claim for wrongful termination against defendant-appellee Tulsa Pain Consultants, Inc. (TPC). The trial court found Patel was not an at-will employee and entered a directed verdict in favor of TPC. Patel appealed, and the Court of Civil Appeals affirmed. TPC moved for appeal-related attorney fees, which the Court of Civil Appeals denied. The Oklahoma Supreme Court granted certiorari to determine whether TPC had a contractual right to recover attorney fees as the prevailing party in Patel's wrongful termination claim. After review, the Supreme Court found that the specific language in the parties' employment agreement authorized attorney fees in this case. View "Patel v. Tulsa Pain Consultants" on Justia Law
Posted in: Civil Procedure, Contracts, Labor & Employment Law
Crown Energy Co. v. Mid-Continent Casualty Co.
Crown Energy Company ("Crown") brought suit against Mid-Continent Casualty Company ("Mid-Continent") seeking declaratory judgment that two commercial general liability policies issued to Crown provided coverage for claims of property damage brought against Crown in a separate action. The claims arose out of seismic activity allegedly caused by Crown's use of waste water disposal wells in its oil and gas operations. Mid-Continent filed a counterclaim, seeking declaratory judgment that the claims were not covered under the policies because the seismic activity did not constitute an "occurrence" and that the claims fell within a pollution exclusion to the policies. The trial court granted summary judgment in favor of Crown. Mid-Continent appealed, and the Court of Civil Appeals affirmed the trial court's judgment. After its review, the Oklahoma Supreme Court found that the seismic activity did constitute an occurrence under the policies, and that the pollution exclusion did not bar coverage. The Court of Civil Appeals’ judgment was reversed and the trial court affirmed. View "Crown Energy Co. v. Mid-Continent Casualty Co." on Justia Law
Posted in: Contracts, Energy, Oil & Gas Law, Insurance Law
Coates v. Progressive Direct Ins. Co.
Plaintiff-appellant John Coates brought an action for breach of contract and breach of the duty of good faith and fair dealing against defendant-appellee Progressive Direct Insurance Company. Plaintiff was injured after a motorcycle collision; he was insured by Progressive under a motorcycle policy, an auto policy, and a policy providing UM coverage. Coates moved for partial summary judgment regarding his entitlement to uninsured/underinsured motorist benefits. Progressive moved for summary judgment regarding Coates' bad faith claim. Coates sought more time to conduct discovery to address Progressive's counterclaim on bad faith. The trial court granted Coates' Motion for Partial Summary Judgment, allowing his UM claim against Progressive. The trial court also granted Progressive's Motion for Summary Judgment, denying Coates' claim for breach of duty of good faith and fair dealing. The trial court denied Coates' Motion for Additional Time to Respond. After review of the parties’ arguments on appeal, the Oklahoma Supreme Court affirmed the trial court’s grant of partial summary judgment on Coates' UM claim. The Court reversed, however, the decisions granting Progressive's Motion for Summary Judgment and denying Coates additional time to respond to that motion. View "Coates v. Progressive Direct Ins. Co." on Justia Law
Posted in: Civil Procedure, Contracts, Insurance Law, Personal Injury
Continental Resources v. Wolla Oilfield Services
The United States District Court for the Western District of Oklahoma certified two questions of law to the Oklahoma Supreme Court relating to the Oklahoma Consumer Protection Act, and whether it applied to conduct outside of Oklahoma. The matter concenred a dispute between Continental Resources, Inc. (Continental), an oil and gas producer headquartered in Oklahoma, and Wolla Oilfield Services, LLC (Wolla), a North Dakota limited liability company that operated as a hot oil service provider in North Dakota. Continental alleged the parties entered into an agreement for Wolla to provide hot oil services at an hourly rate to Continental's wells in North Dakota. As part of the contract, Wolla agreed to submit its invoices through an "online billing system" and to bill accurately and comprehensively for work it performed. A whistleblower in Wolla's accounting department notified Continental about systematic overbilling in connection with this arrangement. Continental conducted an audit and concluded Wolla's employees were overbilling it for time worked. Wolla denies these allegations. The Oklahoma Supreme Court concluded: (1) the Oklahoma Consumer Protection Act does not apply to a consumer transaction when the offending conduct that triggers the Act occurs solely within the physical boundaries of another state; and (2) the Act also does not apply to conduct where, even if the physical location is difficult to pinpoint, such actions or transactions have a material impact on, or material nexus to, a consumer in the state of Oklahoma. View "Continental Resources v. Wolla Oilfield Services" on Justia Law
Posted in: Business Law, Civil Procedure, Contracts, Energy, Oil & Gas Law
Meng v. Rahimi
Li Meng ("Tenant") leased a commercial property from the Plaintiffs, Mohammad Rahimi and Tahereh Dinpajooh ("Landlords") in August, 2019 for the sole purpose of operating a massage business for a two year term. The parties specifically agreed in the written lease that Tenant use of the commercial space was for the sole purpose of conducting a massage business and Tenant was prohibited from using the space for any other purpose. The Landlords prohibited any use of the leased premises which could endanger life. The Landlords noted that even though Tenant was prohibited from any use of the premises which violated public law or governmental rule, the lease specified there would be no abatement of rent even if there was a loss of business arising from some future law. Landlords argued that Tenant's obligation to pay rent was not excused because of these lease provisions. In January, 2020, approximately five months after the parties executed the lease, the first case of the COVID-19 virus was reported within the United States and soon thereafter in Oklahoma. In March, the Oklahoma governor declared a state of emergency due to COVID-19 and businesses that were not part of critical infrastructure were ordered to close for a period of time. Tenant stated that she closed the business on March 19, 2020 after she and her sole employee became ill with symptoms of the COVID-19 virus. Tenant did not pay rent after March 2020, and she never re-opened her business. By June 2020, Landlords filed this action against the Tenant for past due rent and eviction. Tenant argued that rent was not due from April through August because performance of the contract had become impossible in light of the public health risk with massage which temporarily excused the payment of rent under the doctrine of frustration of purpose or impracticability. The court stated that the defense of impracticability was not a legitimate excuse for the nonpayment of rent and did not allow Tenant to present any evidence in support of this defense. The trial court awarded Landlords $6,400 in past due rent and granted them possession. The Oklahoma Supreme Court reversed the trial court, finding that the trial court erred when it did not allow Tenant to present evidence in support of the affirmative defense. View "Meng v. Rahimi" on Justia Law
Posted in: Civil Procedure, Contracts, Landlord - Tenant
Lane v. Progressive Northern Ins. Co.
The United States Court of Appeals for the Tenth Circuit certified a question of law to the Oklahoma Supreme Court on whether Progressive Northern Insurance Company's Underinsured Motorist (UM) Exclusion--which operated to deny uninsured motorist coverage to insureds who recover at least the statutorily mandated minimum in the form of liability coverage--contravened Oklahoma's Uninsured Motorist Statute, codified at 36 O.S. section 3636. The Supreme Court responded "yes:" Because of the sweeping nature of the UM Exclusion contained in the insurance policy at issue, Progressive found a way to entirely avoid providing the promised coverage. "[A]n insurer in Oklahoma cannot deprive its policyholder of uninsured-motorist coverage for which a premium has been paid through an exclusion that effectively erases its policyholder's choice to purchase that coverage in the first place. We conclude that Progressive's UM Exclusion contravenes section 3636 and is therefore void as against public policy." View "Lane v. Progressive Northern Ins. Co." on Justia Law
Posted in: Consumer Law, Contracts, Insurance Law
Johnson v. CSAA General Insurance Co.
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
Posted in: Civil Procedure, Contracts, Insurance Law, Real Estate & Property Law
Signature Leasing, LLC v. Buyer’s Group, LLC
Plaintiff Signature Leasing, LLC requested a declaratory judgment regarding a contract containing an arbitration clause which Plaintiff alleged that Defendants Buyer's Group, LLC and Williams & Williams Marketing Services, Inc. had fraudulently induced Plaintiff to sign. Defendants filed motions to dismiss and motions to compel arbitration which the district court granted. The Court of Civil Appeals reversed and remanded to the district court. The underlying question presented for the Oklahoma Supreme Court's review was whether the district court or the arbitrator determined challenges of fraudulent inducement to the entirety of a contract which contains an arbitration clause under the Oklahoma Uniform Arbitration Act (OUAA). The Court determined the arbitrator makes that determination, and affirmed the judgment of the district court compelling the matter to arbitration. View "Signature Leasing, LLC v. Buyer's Group, LLC" on Justia Law
Posted in: Arbitration & Mediation, Business Law, Contracts