Title: Hubbard v. Kaiser-Francis Oil Co.

State: oklahoma

Issuer: Oklahoma Supreme Court

Document:

HUBBARD v. KAISER-FRANCIS OIL COMPANY2011 OK 50Case Number: 105701Decided: 06/07/2011THE SUPREME COURT OF THE STATE OF OKLAHOMA
NOTICE: THIS OPINION HAS NOT BEEN RELEASED FOR PUBLICATION IN 
THE PERMANENT LAW REPORTS. UNTIL RELEASED, IT IS SUBJECT TO REVISION OR 
WITHDRAWAL. 

VICK ALLEN HUBBARD, Plaintiff/Appellant,v.KAISER-FRANCIS 
OIL COMPANY, a Delaware corporation, TEXAS SOUTHWEST GAS, L.L.C., a Texas 
corporation, and GBK CORPORATION, Defendants/Appellees.
ON CERTIORARI TO THE COURT OF CIVIL APPEALSDIVISION 
IV
¶0 Vick Allen Hubbard, Plaintiff, appeals from a post-judgment order of the 
district court granting litigation costs and attorney fees to Kaiser-Francis Oil 
Company, Texas Southwest Gas, L.L.C., and GBK Corporation, Defendants. The 
district court relied on offers of judgment made pursuant to 
CERTIORARI PREVIOUSLY GRANTED;OPINION OF THE COURT OF CIVIL 
APPEALS VACATED;JUDGMENT OF THE DISTRICT COURT AFFIRMED.
Laurence L. Pinkerton, Judith A. Finn, PINKERTON & FINN, P.C., Tulsa, 
Oklahoma, for Plaintiff/Appellant.
Keith F. Sellers, SELLERS LAW FIRM, and Frederic G. Dorwart, Erica A. 
Dorwart, Paul DeMuro, Michael J. Medina, FREDERIC DORWART LAWYERS, Tulsa, 
Oklahoma, for Defendants/Appellees.
COMBS, J.: 
¶1 This cause presents questions of first impression in Oklahoma law: (1) 
whether a judgment in favor of a defendant triggers the application of 

¶2 In a 2-1 decision, the Court of Civil Appeals (COCA), Division IV, 
affirmed the district court's award of costs and attorney fees to Defendants 
pursuant to offers of judgment made by Defendants under 
BACKGROUND
¶3 On May 5, 2004, Hubbard filed suit against Defendants for breach of 
an oil and gas lease, and gas purchase contract regarding a royalty interest 
owned by him. On May 25, 2004, Kaiser-Francis Oil Company filed an offer of 
judgment pursuant to 
¶4 Defendants filed a motion for summary judgment which was granted and 
entered on March 28, 2005. Hubbard appealed. Thereafter, Defendants filed a 
joint motion to recover their costs and fees based on Hubbard's failure to 
obtain a judgment for more than the amount of Defendants' § 1101.1(B) offers. On 
or around July 6, 2005, the parties reached an agreement on the amount of 
litigation costs and attorney fees to be paid by Hubbard. Hubbard paid this 
amount and Defendants withdrew their motion.
¶5 As a result of the appeal, the case was remanded and ordered to include a 
judgment roll from a related case to be filed with the district court.

DISCUSSION
¶6 The issues in this case revolve around the construction of 

1. Prevailing Defendants Are Entitled to Seek Fees and Costs 
Under12 O.S. Supp. 2002, § 
1101.1(B).

¶7 As recognized by this Court in Boston Ave. Mgmt., Inc. v. Associated 
Res., Inc., 2007 OK 
5, ¶ 13 and n. 7, 152 P.3d 880, 885 and n.7, we have never addressed 
the issue of whether a prevailing defendant, i.e., a defendant who obtains a 
judgment in his favor, may recover fees and costs pursuant to a § 1101.1(B) 
offer of judgment.5 Although not precedential, it should be noted that the 
Oklahoma Court of Civil Appeals has held several times that a prevailing 
defendant may recover its attorney fees and costs pursuant to § 1101.1(B).6 Resolution of this issue 
depends upon our interpretation of the statutory phrase "the judgment awarded 
the plaintiff." 

¶8 Generally, statutes are to be interpreted in accordance with their plain, 
ordinary meaning according to the import of the language used. In re 
Certification of Question of State Law, 1977 OK 16, 560 P.2d 195. Nevertheless, where the literal 
meaning of a statute would result in great inconvenience or lead to absurd 
consequences the Legislature could not have contemplated, we are bound to 
presume such consequences were not intended, and must adopt a construction which 
will promote the ends of justice and avoid the absurdity. Cox v. Dawson, 
1996 OK 11, ¶ 20, 
911 P.2d 272, 281; Oliver v. City of Tulsa, 1982 OK 121, ¶ 25, 654 P.2d 607, 612; Taylor v. Langley, 
1941 OK 
67, ¶ 0, 112 P.2d 411, 412. 

¶9 Hubbard correctly notes that no judgment was awarded him in this case 
because the district court granted Defendants' motions for summary judgment and 
awarded judgment in their favor. Indeed, Hubbard argues that because he was not 
awarded a judgment, the Defendants' § 1101.1(B) offers of judgment are invalid 
or ineffective. Hubbard claims the statute is triggered only when the plaintiff 
is the prevailing party in the underlying action. 
¶10 Hubbard asserts that only a judgment awarded to a plaintiff can trigger a 
§ 1101.1(B) award of fees and costs. If we accept that argument, we would be 
constrained to hold that the Legislature intended to advance fees and costs to a 
defendant where the plaintiff recovers only $1 but not where the defendant 
receives an outright judgment in its favor. Such an absurd result would not 
further the purpose of § 1101.1(B) which is to encourage settlement by creating 
the possibility of fee-shifting. 
¶11 Hubbard urges us to follow the United States Supreme Court opinion of 
Delta Air Lines, Inc. v. August, 450 U.S. 346, 101 S. Ct. 1146 
(1981), which interpreted Rule 68 of the Federal Rules of Civil Procedure.7 Delta involved the 
application of Rule 68 to an unsuccessful plaintiff pursuing claims of 
employment discrimination. The Court determined that Rule 68, by its plain 
language, does not apply to a case in which judgment is entered against the 
plaintiff-offeree and in favor the defendant-offeror.

¶12 F.R.C.P. Rule 68 is fundamentally different from § 1101.1(B), as admitted 
by Hubbard, in that Rule 68 only applies to costs, not attorney fees, and it 
does not permit counter-offers by plaintiffs. These differences are critical. 

¶13 The purpose of § 1101.1(B) is to "encourage judgments without protracted 
litigation" by "provid[ing] additional incentives to encourage a plaintiff to 
accept a defendant's offer to confess judgment" and to encourage a defendant "to 
offer an early confession of judgment [to] avoid further increases in costs 
which may be incurred [for] trial preparation." Boston Ave. Mgmt., Inc. v. 
Associated Res., Inc., 2007 OK 5, ¶ 13, 152 P.3d 880, 885. Section 1101.1(B) encourages a 
meaningful exchange between the parties by allowing a plaintiff to make a 
counter-offer and reallocate the risk of incurring fees and costs back to the 
defendant. F.R.C.P. 68 does not permit such an exchange.
¶14 We see no reason to distinguish between an outright defense judgment and 
a plaintiff's judgment for less than the amount of a defendant's offer of 
judgment. A plaintiff who lost a case entirely should not be in a better 
position than a plaintiff who obtained only a small judgment. Thus, we hold the 
Legislature intended that a judgment entered in favor of a defendant can be the 
basis for an award of attorney fees and costs under § 1101.1(B). The trial court 
correctly awarded such fees and costs to Defendants in this case.
II. Defendants Were Not Required to Renew theirOffers of 
Judgment on Remand.
¶15 The next issue raised by Hubbard is whether Defendants' offers survived 
the appeal and subsequent remand of the case concerning the March 28, 2005, 
summary judgment. Hubbard maintains that because Defendants did not renew their 
offers post-remand, they cannot seek the fees and costs they incurred after the 
remand. Hubbard's requirement that Defendants' offers should have been renewed 
is unsupported by statute or case law.
¶16 In Oklahoma, there is but one judgment for each cause of action. 
Oklahoma City Urban Renewal Authority v. Oklahoma City, 2005 OK 2, ¶ 10, n. 16, 110 P.3d 550, 557, n.16; FDIC v. Tidwell, 
1991 OK 119, ¶ 5, 
820 P.2d 1338, 1341. A judgment is the final determination of the rights of the 
parties in an action. 12 O.S. 2001, § 681. While there was a 
judgment in this case on March 28, 2005, that judgment was remanded back for 
further proceedings. On November 8, 2007, the district court again granted 
summary judgment on all claims included in the offers of judgment in favor of 
the Defendants. Hubbard appealed this second summary judgment on December 7, 
2007. On September 16, 2008, the Court of Civil Appeals affirmed the November 8, 
2007, judgment and mandate was issued on October 9, 2008. Hubbard's argument 
would require the recognition of at least two judgments in this case - the March 
28, 2005 summary judgment order that was remanded and the November 8, 2007, 
summary judgment order which has become final. 

¶17 There is nothing in the record to show that Defendants' offers were 
vacated when the original judgment in favor of Defendants was apparently vacated 
and remanded. Remand after the original appeal did not constitute refiling of 
this case and the district court resumed jurisdiction of the case upon remand. 
As we stated in Boston Ave., supra, "the plain language of § 
1101.1(B)(3) provides that there must be some type of final adjudication, i.e., 
conclusion to the claims included in the offer of judgment for an attorney fee 
and cost recovery to be triggered." Boston Ave. Mgmt., Inc. v. Associated 
Res., Inc., 2007 OK 
5, ¶ 15, 152 P.3d  at 885. The term "final adjudication" and § 
1101.1(B)(3) "date of judgment" can only mean when the "action or claim or 
claims included in the offer of judgment" becomes res judicata. The doctrine of 
res judicata "teaches that when the appeal time expires a decision under this 
rubric becomes impervious to reconsideration and hence binding and conclusive 
upon the parties."8 In Hubbard v. Kaiser-Francis et al. (Court of Civil 
Appeals, 2008, unpublished opinion, No. 105,352), the Court of Civil Appeals 
affirmed the November 8, 2007, summary judgment on September 16, 2008. A 
rehearing was not requested nor was a petition for certiorari filed pursuant to 
Rule 1.179 of the Supreme Court Rules. Therefore, final adjudication occurred 
when the mandate was issued on October 9, 2008. Accordingly, Defendants are 
permitted to recover their remaining reasonable litigation costs and attorney 
fees incurred subsequent to July 7, 2005, through the date of the mandate, 
October 16, 2008.9

¶18 We are required to analyze the enforcement of defendant's offer of 
judgment under unusual procedural circumstances. It is undisputed that the offer 
was neither accepted within ten days as required, nor was a counteroffer of 
judgment made within ten days. Nor was a subsequent timely offer of judgment 
made by either plaintiff or defendant. There is nothing in the plain text of 

III. Defendants' Offers Were Reasonable.
¶19 Hubbard also argues on appeal that the offers of judgment made by 
the Defendants, were unreasonably low and, therefore, sham offers. In the 
present case the offer made by the Defendants was to pay $275.00 per each of 
seven causes of action.
¶20 The purpose of § 1101.1 is to "encourage a plaintiff to accept a 
defendant's offer to confess judgment" and to encourage a defendant "to offer an 
early confession of judgment [to] avoid further increases in costs which may be 
incurred [for] trial preparation". See, Boston Ave. Mgmt., Inc. v. Associated 
Res., Inc., supra, ¶ 13,: Dulan v. Johnston, 

¶21 In this case, applying a "reasonable" test to these facts, we would 
consider the facts demonstrated in the record. (1) Defendant had prevailed on 
summary judgment in a similar case raising identical issues on the same group of 
wells, CJ-2000-04355 (Tulsa County); (2) Defendants had prevailed before the 
Oklahoma Tax Commission on similar legal issues on the same group of wells [OTC 
No. P-94-154]; (3) Defendant had settled a statewide class action, which 
allegedly bound Hubbard as a class member, covering the issues raised in the 
present case (Kouns v. Kaiser-Francis Oil Co., CJ-98-45, Dewey 
County); and (4) the Defendants offer of $275.00 per cause of action. 

¶22 As we have said in this opinion, the purpose of § 1101.1(B) is to 
encourage settlement by creating the possibility of fee-shifting. The purpose is 
not to create a trial tactic. It is intended as a realistic method of seeking a 
resolution of the parties' controversy. It is not the intent of § 1101.1(B) to 
allow a defendant to make an unreasonable offer of judgment and to, therefore, 
recover its reasonable litigation costs and reasonable attorney fees merely 
because it prevailed. Such a result would be absurd because it would not further 
the purpose of § 1101.1(B) which is to encourage settlement.

¶23 We find the offer in the present case to have been reasonable. 
CONCLUSION
¶24 The COCA, in a 2-1 decision, affirmed the order of the district court 
granting Appellants motions for litigation costs and attorney fees pursuant to 

CERTIORARI PREVIOUSLY GRANTED;OPINION OF THE COURT OF CIVIL 
APPEALS VACATED;|JUDGMENT OF THE DISTRICT COURT AFFIRMED.
¶25 CONCUR: TAYLOR, C.J., COLBERT, V.C.J., EDMONDSON, REIF, COMBS, GURICH, 
JJ.

¶26 CONCUR IN PART; DISSENT IN PART: KAUGER, WATT (JOINS WINCHESTER, J.), 
WINCHESTER (BY SEPARATE WRITING), JJ.

FOOTNOTES

1 That statute provides, in 
pertinent part:

B. Other actions. 
1. After a civil action is brought for the recovery of money or property in 
an action other than for personal injury, wrongful death or pursuant to Chapter 
21 of Title 25 or Section 5 of Title 85 of the Oklahoma Statutes, any defendant 
may file with the court, at any time more than ten (10) days prior to trial, an 
offer of judgment for a sum certain to any plaintiff with respect to the action 
or any claim or claims asserted in the action. An offer of judgment shall be 
deemed to include any costs and attorney fees otherwise recoverable unless it 
expressly provides otherwise. If an offer of judgment is filed, the plaintiff or 
plaintiffs to whom the offer of judgment is made shall, within ten (10) days, 
file: 
a. a written acceptance or rejection of the offer, or 
b. a counteroffer of judgment, as described in paragraph 2 of this 
subsection. 
If a plaintiff fails to file a timely response, the offer of judgment shall 
be deemed rejected. The fact an offer of judgment is made but not accepted or is 
deemed rejected does not preclude subsequent timely offers of judgment. 
2. In the event a defendant files an offer of judgment, the plaintiff may, 
within ten (10) days, file with the court a counteroffer of judgment to each 
defendant who has filed an offer of judgment and the claim or claims which are 
the subject thereof. If a counteroffer of judgment is filed, each defendant to 
whom a counteroffer of judgment is made shall, within ten (10) days, file a 
written acceptance or rejection of the counteroffer of judgment. If a defendant 
fails to file a timely response, the counteroffer of judgment shall be deemed 
rejected. The fact a counteroffer of judgment is made but not accepted or is 
deemed rejected does not preclude subsequent counteroffers of judgment if 
subsequent offers of judgment are made. 
3. If no offer of judgment or counteroffer of judgment is accepted and the 
judgment awarded the plaintiff is less than one or more offers of judgment, the 
defendant shall be entitled to reasonable litigation costs and reasonable 
attorney fees incurred by the defendant with respect to the action or the claim 
or claims included in the offer of judgment from and after the date of the first 
offer of judgment which is greater than the judgment until the date of the 
judgment. Such costs and fees may be offset from the judgment entered against 
the offering defendant. 
4. If no offer of judgment or counteroffer of judgment is accepted and the 
judgment awarded the plaintiff is greater than one or more counteroffers of 
judgment, the plaintiff shall be entitled to recover the reasonable litigation 
costs and reasonable attorney fees incurred by the plaintiff with respect to the 
action or the claim or claims included in the counteroffer of judgment from and 
after the date of the first counteroffer of judgment which is less than the 
judgment until the date of the judgment. Such costs and fees may be added to the 
judgment entered in favor of the plaintiff. 

2 It is unclear from the record what issues Hubbard 
asserted during the first appeal. 

3 In Hubbard v. Kaiser-Francis et al. (Court of Civil 
Appeals 2008 unpublished opinion, No. 105,352). 

4 In footnote 1 of Defendants' Supplemental Joint 
Combined Motion for Attorney's Fees And Brief in Support (Case No. CJ-2004-275; 
Grady County, State of Oklahoma), Defendants state "[b]ecause of the fee 
agreement, the defendants do not request any fees and expenses incurred prior to 
July 7, 2005." On page 1 in the main body of the Motion they request "recovery 
of their legal fees and reasonable litigation costs incurred subsequent to July 
7, 2005". 

5 5 In Boston Ave. Mgmt., Inc. v. Associated Res., 
Inc., 2007 OK 
5, ¶ 13 and n. 7, 152 P.3d 880, 885 and n.7, we stated:
Thus, a decision as to whether an actual defendant's judgment after a trial 
on the merits or a summary judgment in favor of a defendant that could be 
considered a final adjudication in respect to the actual action or the claim or 
claims included in the offer of judgment would trigger the cost and attorney fee 
provisions of § 1101.1(B)(3) will have to await another day in a matter where 
the case's circumstances necessitate determination of the question. 
That day has arrived. 

6 Commercial Financial Services, Inc. v. J.P. Morgan 
Securities, Inc., 2007 OK CIV APP 8, 152 P.3d 897; Hopkins v. Byrd, 2006 OK CIV APP 132, 146 P.3d 864, and Fuller v. Pacheco, 
2001 OK CIV APP 
39, 21 P.3d 74. 

7 7Pursuant to Rule 68 of the Federal Rules of Civil 
Procedure, if a plaintiff rejects a defendant's formal settlement offer, and if 
"the judgment finally obtained by the offeree is not more favorable than the 
offer," the plaintiff "must pay the costs incurred after the making of the 
offer." 

8 Depuy v. Hoeme, 1989 OK 42, ¶10, 775 P.2d 1339, 1343. 

9 See Footnote 4 of this opinion. 

10 See ¶ 8 of this opinion. 

WINCHESTER, J., with whom WATT, J., joins, CONCURRING IN PART and DISSENTING 
IN PART.
¶1 I concur in part and dissent in part to the majority opinion. I 
must dissent to that portion of the opinion which injects a new standard of 
reasonableness into the offer of judgment statute, 12 O.S. Supp. 2002, § 1101.1(B). 

¶2 The majority acknowledges that the Legislature did not statutorily impose 
a reasonableness test on the proposed offer. Nevertheless, the majority asserts 
that such a requirement must have been intended because the Legislature set 
forth in the statute that any fees and costs to be awarded pursuant to the offer 
must be reasonable. However, reference to the statute's assessment of 
"reasonable litigation costs and reasonable attorney fees" to the prevailing 
party fails to support the proposition that the Legislature intended the trial 
court to evaluate all offers of judgment for reasonableness.1 Requiring the trial court 
to determine the soundness of an offer of judgment unwittingly places the court 
in the subjective position of evaluating the evidence, credibility of the 
witnesses and trial strategy from the position of advocate for one of the 
parties. 

¶3 To inject the trial court into the determination of what is a fair offer 
of judgment defeats the clear intent of the statute which is to place the 
responsibility clearly on the lawyers shoulders. Failure to impose an express 
reasonableness standard here does not conversely mean that the Legislature 
intended to permit unreasonable offers. This Court is duty-bound to give effect 
to legislative acts, not to amend, repeal or circumvent them. Mehdipour v. 
State Dept. of Corrections, 2004 OK 19, ¶22, 90 P.3d 546, 555. The Legislature could have imposed a 
duty on the courts to assess and weigh each offer for reasonableness but it 
elected not to do so. We must honor this decision and have confidence counsel 
can fully evaluate their own position without court interference. 

FOOTNOTES

1 Reliance on the Court of 
Civil Appeals case of Fuller v. Pacheco, 2001 OK CIV APP 39, 21 P.3d 74, is misplaced. That case dealt with 
the reasonableness of an award of attorney fees and not whether the offer of 
judgment supporting the award of fees was reasonable.