Title: TIBBETTS v. SIGHT 'n SOUND APPLIANCE CENTERS, INC.

State: oklahoma

Issuer: Oklahoma Supreme Court

Document:

TIBBETTS v. SIGHT 'n SOUND APPLIANCE CENTERS, INC.  TIBBETTS v. SIGHT 'n SOUND APPLIANCE CENTERS, INC. 2003 OK 72 77 P.3d 1042 Case Number: 96079 Decided: 09/16/2003 Modified: 09/30/2003 THE SUPREME COURT OF THE STATE OF OKLAHOMA PAUL TIBBETTS, ERWIN OLDS, MARY DITTEMEYER, MARY PITTMAN, on behalf of themselves and all others similarly situated, Plaintiffs/Appellees, v. SIGHT 'n SOUND APPLIANCE CENTERS, INC., an Oklahoma Corporation, d/b/a SIGHT 'n SOUND & COST WAREHOUSE, Defendant/Appellant. CERTIORARI TO THE COURT OF CIVIL APPEALS, DIVISION I DISTRICT COURT OF GARFIELD COUNTY, STATE OF OKLAHOMA HONORABLE RONALD G. FRANKLIN, TRIAL JUDGE ¶0 Plaintiffs brought a class action suit against defendant under the Oklahoma Consumer Protection Act (OCPA), CERTIORARI PREVIOUSLY GRANTED; COURT OF CIVIL APPEALS' OPINION VACATED; TRIAL COURT JUDGMENT FOR $375,000.00 ATTORNEY FEES REVERSED. David Humphreys and Luke Wallace of Humphreys Wallace Humphreys, Tulsa, Oklahoma, and Justin LaMunyon of Faulkner & LaMunyon, P.L.L.C., Enid, Oklahoma for Plaintiffs/Appellees. Craig L. Box and Julia C. Rieman of Gungoll, Jackson, Collins, Box & Devoll, P.C., Enid, Oklahoma for Defendant/Appellant. LAVENDER, J.: ¶1 We decide here if the trial judge erred in awarding $375,000.00 in attorney fees to plaintiffs/appellees in their class action suit brought against defendant/appellant, Sight 'n Sound Appliance Centers, Inc., d/b/a Sight 'n Sound & Cost Warehouse under the Oklahoma Consumer Protection Act (OCPA), ¶2 This Court's decision in Walls v. American Tobacco Co., PART I. STANDARD OF REVIEW. ¶3 What constitutes a reasonable attorney fee is a matter addressed to the sound discretion of the trial court to be decided based on various factors and a judgment awarding attorney fees will not be reversed absent an abuse of discretion. Continental Natural Gas, Inc. v. Midcoast Natural Gas, Inc. , ¶4 Further, when an assigned error is one of law a de novo review standard applies [Christian v. Gray, supra, PART II. PROCEDURAL AND FACTUAL BACKGROUND. ¶5 The Pre-Trial Conference Order (PTO) ¶6 After the case was tried, the jury was instructed on the law and provided three verdict forms: a defendant's verdict form which generally allowed the jury to find the issues in favor of defendant; a plaintiffs' verdict form generally allowing the jury to find in favor of the plaintiffs and to fix the amount of damages to the class as a whole; and a punitive damage verdict form. Nine members of the jury signed the plaintiffs' verdict form, but it unequivocally fixed the amount of damages at zero. The same nine jurors signed the punitive damage verdict form and it fixed the amount of punitive damages at zero. Based on these verdicts we must assume the jury found defendant did engage in some violation of the OCPA, but that plaintiffs failed to carry their burden to show any damages. ¶7 Both sides, plaintiffs and defendant, moved for attorney fees and the trial judge denied both requests. Each side appealed the denials and the COCA, Division IV in Tibbetts I, in effect, decided that language employed in § 761.1(A) of the OCPA allowed plaintiffs to recover attorney fees merely by showing a violation of the OCPA without an attendant showing of damages or actual injury. Tibbetts I remanded for the trial judge to determine the amount of attorney fees. This Court denied defendant's quest for certiorari to review Tibbetts I, the matter returned to the trial court, and after various written submissions of the parties concerning the attorney fee issue and an evidentiary hearing, the trial judge entered the award of $375,00.00 in favor of plaintiffs now before us. ¶8 The $375,000.00 fee was arrived at by the trial judge upon a determination that the reasonable amount of plaintiffs' attorneys' time was 3000 hours and that a reasonable hourly rate for the lawyers involved was an average of $125.00 per hour. ¶9 Defendant appealed the award and the COCA, Division I affirmed, though it appeared to recognize that Tibbetts I's holding that plaintiffs were entitled to attorney fees merely because they had shown a violation of the OCPA was no longer good law in light of this Court's decision in Walls, supra, to the effect that an essential element of a private OCPA claim is actual damages. Division I's opinion determined it was powerless to reverse Tibbetts I, essentially in deference to the law of the case doctrine, and decided the amount awarded did not manifest an abuse of discretion. PART III. THE ONLY REASONABLE ATTORNEY FEE IN THIS CASE, WHERE PLAINTIFFS SOUGHT SOLELY MONEY DAMAGES AND RECOVERED NOTHING, IS NO FEE. ¶10 We first note that our review of the reasonableness of the fee awarded requires no exception to the law of the case doctrine because Tibbetts I did not decide the reasonableness issue. Generally, as applicable here, the law of the case doctrine provides that an appellate court's decision on an issue of law becomes the law of the case once the decision is final, in all subsequent stages of the litigation. Matter of Estate of Severns , ¶11 This Court has foreshadowed the proper decision in this case for we have recognized the importance of the relationship between the amount sued for in a case seeking only money damages and the results obtained. Southwestern Bell Telephone Co. v. Parker Pest Control, Inc., ¶12 The United States Supreme Court in Farrar v. Hobby, ¶13 In so doing, the Supreme Court recognized that the most critical factor in deciding the reasonableness of a fee award is the degree of success obtained. Farrar, supra, ¶14 Although plaintiffs, in effect, argued in the trial court and try to convince us here that they succeeded in this case by achieving the goals of uncovering violation of the OCPA (in fact, obtaining a jury verdict that defendant in some way violated the OCPA) and defendant may have stopped the violative conduct because of the lawsuit, such arguments simply cannot sustain the attorney fee award before us. Plaintiffs' arguments in such regard are a means to assert the OCPA was legislatively intended as a private attorney general statutory scheme and that their suit was a "catalyst" for defendant's voluntary change of conduct. We deal with these arguments more fully in PART IV, infra, because they do point out the stark reality we are faced with in this case that plaintiffs did not prevail and they were not the successful parties in this case. However, a few comments are in order here. ¶15 First off, the record in this appeal is not at all clear that defendant stopped any offending conduct by virtue of this lawsuit. Surely, nothing we glean from the record mandates defendant's future conduct one way or the other. PART IV. AN EXCEPTION TO THE LAW OF THE CASE DOCTRINE IS APPLICABLE HERE AND WE OVERRULE TIBBETTS I AS INCONSISTENT WITH WALLS AND PATTERSON, SUPRA. ¶16 Even when the law of the case doctrine is applicable, it will not be applied, i.e., there is an exception, if the prior decision is palpably erroneous and this Court is convinced that failure to reverse it will result in a gross or manifest injustice. Cinco Enterprises, Inc. v. Benso, ¶17 The ultimate reality is that plaintiffs did not prevail and they were not the successful parties in this case because they failed to show an essential element of their claim, i.e., damages. Walls, supra, primarily based on the meaning of the term "aggrieved consumer" contained in § 761.1(A), the plain import of the words "damages" and "actual damages" also contained therein, and a historical analysis of amendment to § 761.1(A) after our decision in Holbert v. Echeverria, ¶18 Where a plaintiff fails to show an essential element of a claim in a suit for damages it cannot reasonably be asserted that the plaintiff has been successful. We so ruled in Sloan v. Owen, ¶19 In essence, the plaintiffs contend that the OCPA is a "private attorney general" statutory scheme that allows the recovery of attorney fees merely upon a showing of a violation of the Act (even though no damages are shown) and that the Legislature sanctioned such recovery of attorney fees in favor of private litigants who implement the public policy behind the OCPA and thereby encourage private litigation to benefit a legislatively recognized public interest. ¶20 Plaintiffs' contention that the OCPA is a private attorney general statutory scheme and that they should be allowed to recover attorney fees here because they somehow vindicated a public right, is simply wrong. Again it is Walls, supra, that reveals the fallacy of plaintiffs' contention. For a private action to succeed the plaintiff must prove damages. Nowhere in § 761.1(A) is it indicated that attorneys are entitled to be compensated for merely showing some violation of the OCPA that caused no damages to their clients. This is particularly true where the clients owe the attorneys nothing because the attorney/client fee agreement is contingency-based [i.e., a percentage of any recovery], and the recovery is zero. ¶21 Further, under the OCPA it is the Oklahoma Attorney General or a district attorney that may seek coercive relief, such as an injunction [§ 756.1], to vindicate public rights to see to it that companies do not violate the provisions of the OCPA. ¶22 Were we to allow this attorney fee award to stand based on plaintiffs' private attorney general theory, such a ruling would be completely at odds with Walls, supra, where we made it clear the OCPA requires actual damages be shown as an essential element of a private OCPA claim in order to transform a consumer into an "aggrieved consumer". Our ruling in Walls, if not expressly, necessarily implies that the OCPA is not a statutory scheme that envisions or embodies a private attorney general theory. ¶23 Plaintiffs also argue entitlement to attorney fees based on the argument that defendant might have changed its conduct because of this lawsuit. In effect, plaintiffs are arguing a "catalyst" theory in support of recovery of attorney fees, without obtaining any enforceable judgment against defendant that changes the legal relationship of the parties. The United States Supreme Court recently rejected the catalyst theory of attorney fee recovery in Buckhannon Board and Care Home, Inc. v. West Virginia Department of Health and Human Resources, ¶24 Very simply, were we to accept plaintiffs' arguments in support of the affirmance of the fee award, we would be transforming the OCPA into something it is not and would be allowing an attorney fee award not authorized by any law. This is something the OCPA nowhere requires and we decline to rewrite the Act to do so. PART V. SUMMARY. ¶25 Plaintiffs sought solely money damages in their class action lawsuit brought against defendant under the OCPA. Although the jury returned a verdict which indicates some violation(s) of that Act were shown, the jury verdict found zero damages. The only reasonable attorney fee in this case, where plaintiffs' attorney fee agreement with their counsel was contingency-based, i.e., plaintiffs owe their attorneys no fees because there was no recovery, is no fee at all. ¶26 Tibbetts I, in effect, held that plaintiffs were entitled to recover attorney fees merely by showing defendant violated the OCPA in some way, even though they recovered zero damages and showed themselves entitled to no other relief. Walls, supra and Patterson, supra make clear that Tibbetts I was wrong in such regard because to be an aggrieved consumer and to have a viable claim under the OCPA, actual damages must be shown. Plaintiffs showed no actual damages to the satisfaction of the jury. To the extent Tibbetts I is claimed by plaintiffs to be the law of the case such that the propriety of at least some attorney fee award may not now be challenged as they have been determined to be the prevailing or successful parties by that decision, we hold an exception to the law of the case doctrine applies as Tibbetts I is a palpably erroneous decision and a gross or manifest injustice would be done were we to allow the award for fees to stand when such is clearly not authorized by law and plaintiffs cannot be deemed to have prevailed because they recovered nothing. Tibbetts I is overruled. ¶27 Accordingly, the opinion of the Court of Civil Appeals is VACATED and the trial court judgment awarding plaintiffs attorney fees of $375,000.00 is REVERSED. ¶28 WATT, C.J., HODGES, LAVENDER, SUMMERS, BOUDREAU and WINCHESTER, JJ., concur. ¶29 HARGRAVE and KAUGER, JJ., concur in result. ¶30 OPALA, V.C.J., dissents in part. FOOT