Justia Oklahoma Supreme Court Opinion Summaries

Defendant-appellant offered to purchase plaintiffs-appellees' mineral interest in Seminole County. At the time, plaintiffs did not know that they had inherited the mineral interest, that the mineral interest was included in a pooling order, or that proceeds had accrued under the pooling order. Defendant admitted it knew about the pooling order and the accrued proceeds but did not disclose these facts in making the offer. Plaintiffs signed the mineral deeds which defendant provided, and subsequently, they discovered the pooling order and the accrued proceeds. Plaintiffs filed suit against defendant for rescission and damages, alleging misrepresentation, deceit and fraud. The trial court entered summary judgment in favor of plaintiffs. The Court of Civil Appeals reversed. The issues before the Supreme Court on appeal were: (1) whether the summary judgment record on appeal established that defendant owed the plaintiffs a duty to disclose the pooling order and the accrued mineral proceeds when it made an unsolicited offer to purchase their undivided mineral interest in Seminole County and provided the mineral deeds to be executed; and if so, (2) whether rescission of the mineral deeds was a remedy for defendant's breach of the disclosure duty. The Court held that defendant owed a duty to disclose the accrued mineral proceeds to plaintiffs when it offered to purchase the mineral interest and provided the mineral deeds conveying the mineral interest and assigning the accrued mineral proceeds, if any. Furthermore, the Court held that rescission is an appropriate remedy in this case for the breach of defendant's disclosure duty. View "Croslin v. Enerex, Inc." on Justia Law

Plaintiff sued his former spouse, seeking rescission and damages arising out of an allegedly fraudulent real estate sales agreement. The district court dismissed Plaintiff's lawsuit for failing to issue summons or file a waiver within ninety days of bringing the action as required by Rule 9(a), Rules for District Courts of Oklahoma. The Court of Civil Appeals affirmed. The Supreme Court granted certiorari to review a discord between Rule 9(a) and 12 O.S.Supp. 2002 section 2004(I), and found the two provisions were in direct conflict to the extent Rule 9(a) shortened plaintiff's allotted time for service of summons. View "Cornett v. Carr" on Justia Law

Zaloudek Grain Company held a workers' compensation policy with CompSource Oklahoma for approximately ten years prior to 2011. Zaloudek was required each year to provide payroll audit information to CompSource. The audit information was used to determine the proper premium for each year. CompSource sent a notice in late 2010 to Zaloudek requesting audit information. In January, 2011, Zaloudek's policy was renewed for all of 2011 through January 1, 2012. On January 18, 2011, CompSource sent another letter requesting Zaloudek provide the necessary payroll audit information, but Zaloudek was unresponsive. Subsequently, CompSource sent Zaloudek a notification to inform the company that the process of canceling its policy would begin if CompSource did not receive the audit information. The audit information was not provided; CompSource ultimately canceled the policy when Zaloudek ignored several subsequent requests. CompSource issued a refund for payments made under the policy. Later that summer, two teenage workers were seriously injured in the grain auger at Zaloudek's facility. CompSource did not accept the company's new insurance application because it was incomplete and was not signed by an owner of Zaloudek. Zaloudek sued a few weeks following the rejection of its application, asking for a judgment against CompSource for breach of contract and bad faith and further requested declaratory relief in the form of an order requiring CompSource to provide workers' compensation coverage. Zaloudek filed a motion for summary judgment claiming CompSource lacked legal justification for terminating its policy and requested orders to establish there was no lapse in coverage and requiring CompSource to provide coverage for its two injured employees. Zaloudek further requested a finding that CompSource was in breach of contract. CompSource moved for summary judgment, arguing Zaloudek was not covered at the time of the incident and its policy was properly canceled. Zaloudek filed a counter-motion for summary judgment asserting CompSource should be estopped from denying coverage because it retained premiums and acted in a manner toward Zaloudek consistent with continued coverage. The trial court issued an order dismissing Zaloudek's bad faith claim but left pending its claims for breach of contract and declaratory relief. CompSource appealed. After its review, the Supreme Court concluded that CompSource was authorized to cancel a policy for an insured's failure to participate in the audit. The Court remanded the case for further proceedings on the other contract issues raised.View "Zaloudek Grain Co. v. CompSource Oklahoma" on Justia Law

The issue in this case was whether the parties' dispute over a provision in their lease for a shopping center store had to be resolved under the arbitration provision in the lease or whether it could have been resolved by a proceeding in district court. The disputed provision provided that landlord KWD River City Investments, L.P. would not alter the exterior of the shopping center without the consent of tenant Ross Dress for Less. KWD admitted that it allowed another tenant to alter the shopping center's exterior at that tenant's store location without Ross' consent. However, KWD maintained that Ross unreasonably withheld its consent in violation of the consent provision. KWD contended that the unreasonableness of Ross' refusal to consent was demonstrated by Ross conditioning its consent upon KWD making exterior alterations to benefit Ross. KWD then filed declaratory judgment action in district court to resolve the dispute. Ross filed a motion to compel arbitration. The trial court denied the motion to compel arbitration. On appeal, the Court of Civil Appeals reversed. KWD petitioned the Supreme Court to review the opinion of the Court of Civil Appeals. Upon review, the Court vacated the Court of Civil Appeals opinion and affirmed the trial court's denial of the motion to compel arbitration. View "KWD River City Investments, LP v. Ross Dress for Less, Inc." on Justia Law

In August of 2009, Samson Resources Company owned oil and gas leases covering 87.78 mineral acres in Roger Mills County, Oklahoma, including the Schaefer Lease. The Schaefer Lease covered 70 net acres in the Southwest Quarter of Section 28 and had a three-year primary term that ended on November 22, 2007. If drilling operations were commenced by the end of the primary term, the lease would continue so long as such operations continued. On August 2, 2007, Newfield sent a letter to Samson, proposing to drill a well in Section 28. The estimated cost of the well was over $8.5 million dollars. On August 9, 2007, Newfield filed an application with the Commission, seeking to force pool the interests of Samson and other owners in Section 28. Newfield sent an e-mail dated April 14, 2008, to Samson that informed Samson that Newfield had commenced operations prior to the expiration of the Schaefer Lease. Newfield's e-mail stated that Samson had underpaid well costs and that an election to participate with 87.78 acres would require prepayment of $1,411,982.45. Samson responded by e-mail on the same date, informing Newfield its intent was only to elect its 17.78 acres. On April 28, 2008, Samson filed an Application seeking to have its election to participate in the well limited to 17.78 acres rather than 87.78 acres. After an administrative hearing, the Administrative Law Judge determined that Samson's timely election to participate only covered 17.78 acres of its interest and that Samson accepted the cash bonus as to its remaining 70 acres. The Oil and Gas Appellate Referee reversed the ALJ's determination, finding that the ALJ improperly relied on actions which occurred prior to the issuance of the pooling order. The Commission issued Order No. 567706, which adopted the Referee's report, reversed the ALJ, and declared that Samson had elected to participate to the full extent of its 87.78 acre interest in the unit. The Commission found Samson made a "unilateral mistake" when it elected to participate to the full extent of its interest. Samson appealed the Commission's order to the Court of Civil Appeals, which affirmed. Before COCA issued its opinion affirming the Commission, Samson filed an action in the district court alleging actual fraud, deceit, intentional and negligent misrepresentation, constructive fraud, and breach of duty as operator. Samson also alleged Newfield's actions amounted to extrinsic fraud on the Commission, rendering Pooling Order No. 550310 invalid as to Samson's working interest attributable to the 70-acre Schaefer Lease. The trial court granted Newfield's motion to dismiss for lack of subject matter jurisdiction, finding the petition to be an impermissible collateral attack on a valid Commission order. The Court of Civil Appeals affirmed. After its review, the Supreme Court found that Samson's actions for damages sounding in tort were beyond the Commission's jurisdiction, and the district court in this case was the proper tribunal for Samson to bring its claims. The trial court's order granting Newfield's Motion to Dismiss was reversed, and the case was remanded for further proceedings.View "Samson Resources Co. v. Newfield Exploration Mid-Continent, Inc." on Justia Law

In 2005, Applicant Michael Benson made an application to Leader Life for a life insurance policy, naming his wife Shannon, as Beneficiary. The application asked if the applicant had ever been treated for liver disease, had any medical or surgical treatment in the last five years or any departure from good health and whether or not the applicant had ever had an alcohol or drug problem. Applicant answered yes to the departure from good health question and told the insurance company that he had a blood clot in his leg 2003. Applicant answered no to the Liver disease question and no to the alcohol question. Leaders Life accepted his answers and issued the underlying policy in this action. In 2006, Applicant was on foot, pushing a stalled car out of the street when he was struck by another vehicle which eventually resulted in his death. His wife filed for benefits under the policy. Leaders investigated the claim. They received the hospital records pertaining to his death, which also noted his blood alcohol at his time of death, although the owner of the car testified that he smelled no alcohol on the applicant. After reviewing the records, Leaders Life's underwriter concluded that Applicant falsified his answers on his application and rescinded the policy due to Applicant's alcoholism. Certiorari was granted to review the Court of Civil Appeals opinion that reversed and remanding the case following a jury verdict in Applicant's favor. Leaders Life appealed the trial court and won on appellate review. After its review, the Supreme Court found that at trial, Leaders Life made clear that they believed there were material misrepresentations made by Applicant, and that he attempted to deceive them. However, the trier of fact, the jury did not find that such a misrepresentation had been made. They decided in favor of the beneficiary, and awarded her actual and in punitive damages. The Supreme Court declined substitute its judgment for that of the jury under the case law presented by this suit. Accordingly, the Court reinstated the trial court's judgment and vacated the appellate court's opinion. View "Benson v. Leaders Life Insurance Co." on Justia Law

This case concerned a summary judgment granted by the district court in favor of the Plaintiff-Appellee RAHI Real Estate Holdings, LLC, against the Defendants-Appellants Vincent and Leslie Adams. The original plaintiff, Residential Funding Real Estate Holdings, LLC, filed a petition to foreclose in 2009, claiming Appellants defaulted on their note. Residential attached a copy of the subject note and mortgage to the petition. The note has a special indorsement from Gateway which states "Pay to The Order Of: Option One Mortgage Without Recourse." Also attached to the note was a blank indorsement by Option One Mortgage Corporation. The district court granted a motion to substitute RAHI as plaintiff in place of Residential in this foreclosure action and ordered that the caption be modified to reflect RAHI as plaintiff. One day after the order granting substitution, Residential as plaintiff filed its first amended petition. Defendants filed their answer admitting that a note and mortgage were executed but denied that the note and mortgage attached to the petition are the ones they signed. Further, they denied default and demanded strict proof. Appellants also attacked plaintiff's standing and the subject matter jurisdiction of the court. Appellee filed a motion for summary judgment alleging there is no controversy as to any material facts and attached an affidavit. Upon review, the Supreme Court found that there was no transcript of a June 29, 2010 hearing in the record, so the Court could not determine what evidence was presented, including any concerning whether or not the substitution of parties gave Option One Mortgage and Option One Mortgage Corporation the right to enforce the note. It did appear from the filed record that there was at least one issue of material fact and summary judgment was inappropriate. Accordingly, the Court reversed the grant of summary judgment and remanded the case for further proceedings. View "Residential Funding Real Estate Holdings, LLC v. Adams" 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

Fifty-four individuals and business entities sued Appellants-Defendants Tyson Foods, Inc., Tyson Poultry, Inc., and Russell Adams (collectively, Tyson), in association with contracts under which they were to raise chickens owned by Tyson on feed supplied by the company. Tyson moved to sever the claims for separate trials. The trial judge denied the motion, allowing the plaintiffs to select eleven individuals and entities to proceed to trial under theories of violation of the Oklahoma Consumer Protection Act and fraud. The poultry growers contended that Tyson targeted them for failure by delivering unhealthy birds and feed in retaliation for their refusal to modernize operations. The jury, in a nine to three split, awarded the growers compensatory and punitive damages approaching $10 million. Alleging evidentiary errors and juror misconduct, Tyson filed a motion for new trial. The trial judge recused and the new trial motion was heard by an assigned judge. Acknowledging concerns about the conduct of the trial, the substitute judge denied the motions for new trial and judgment notwithstanding the verdict, staying further proceedings pending resolution of the appeal. Upon review, the Supreme Court held that: 1) where attorneys were advised that voir dire would be limited to questions not covered in the juror questionnaire and jurors gave incomplete, untruthful, and/or misleading answers in those documents, Appellants were entitled to a new trial; and 2) a poultry grower having no title to the chickens or feed placed with the grower for fattening and future marketing of the birds by the flock's owner is not an "aggrieved consumer" for purposes of the Consumer Protection Act. The case was remanded for further proceedings. View "James v. Tyson Foods, Inc." on Justia Law

Plaintiff-Appellee HSBC Bank USA, NA, claimed to be the holder of a note and mortgage on Defendants-Appellants Wesley and Pamela Lyon's house, and initiated foreclosure proceedings against them. HSBC filed a first amended petition late 2008, adding additional defendants, but continued to assert its status as the "present holder of said note and mortgage." The Lyons, noting the facial deficiencies of the unindorsed note filed in the original action, asserted HSBC's lack of standing. The trial court denied HSBC's Motion for Summary Judgment. The trial court allowed the bank time to file an amended petition. HSBC filed its second amended petition again asserting its status as the holder of the note by reason of an indorsement and the assignment of the mortgage. A review of the note attached to the second amended petition demonstrated a blank indorsement from the original lender "without recourse to the bearer" and signed by a vice president of the assigning bank. HSBC then filed a renewed Motion for Summary Judgment in early 2011, which was granted two months later by the trial court. Defendants argued on appeal that the bank still lacked standing to bring suit, and that the summary judgment ruling was in error. Upon review, the Supreme Court found that the trial court properly granted the bank's motion for summary judgment because it had established in its amended petition that it was the current holder of the note, and that the Lyons had not made any payments on the house since 2008. View "HSBC Bank, NA v. Lyon" on Justia Law