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Nature of Suit Code: 290
Nature of Suit: Other Real Property Actions
Cause of Action: 

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IN THE UNITED STATES COURT OF APP~~--·r.::;·~t~.--"· .. 1_.- ···- - -'-

'V _ .. _,.__ Tc.::." : ~ . :· ..... , 

FOR THE TENTH CIRCUIT 

HERITAGE MANUFACTURING & BUILDING 

SUPPLY, INC . , 

Plaintiff, 

ARBEST CONSTRUCTION COMPANY, INC., 

Plaintiff-counterdefendant, 

and 

MCALESTER PLAZA, LTD., 

Plaintiff-counterdefendantAppellee, 

v. 

ABRAHAM DEVELOPMENT COMPANY, INC.; 

ROBERT POE, as general partner and 

agent for McAlester Plaza Ltd., as 

general partner and agent for 

McAlester Plaza, Ltd., L.L.A.D., 

Defendants-Appellees, 

CALHOUN HEATING & AIR CONDITIONING 

CO., INC . , an Oklahoma corporation, 

Defendant-Appellant, 

and 

MCALESTER HOUSING AUTHORITY; MCNEIL 

MORTGAGE COMPANY; TIMOTHY ABRAHAM; 

RICHARD THOMASON; SHERWIN-WILLIAMS 

CORPORATION; ROLLIE NORRIS; SIMSMOORE LUMBER COMPANY; RAY PEWITT, 

doing business as P & P Construction 

Co., 

Defendants, 

DOYLE ARMER PAINTING CO., 

Counterclaimant. 

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AUG 2 ~-1992 

ROB~pr.,.i L ri£Uh',(~Tr-:-:-, .. .-.-w • --- -"--- -----~ 

Cler!: 

) Nos. 87-1650 and 87-2138 

) (D. c. Nos. 82-140-C, 

) 82-269-C and 82-314-C) 

) ( E • D. Okla. ) 

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Appellate Case: 87-2138 Document: 010110307900 Date Filed: 08/27/1992 Page: 1
ORDER AND JUDGMENT* 

Before SEYMOUR, SETH and HOLLOWAY, Circuit Judges. 

This litigation arises out of the financial failure of a 

HUD-insured project to construct an apartment complex in 

McAlester, Oklahoma. Several subcontractors sued the general 

contractor, Abraham Development Corporation, and the owners of the 

construction site, McAlester Plaza, Ltd., in the United States 

District Court for the Eastern District of Oklahoma, seeking to 

recover on mechanics' and materialmen's liens. As detailed below, 

another action in the same federal court and an action removed to 

that federal court from the state court are also involved in these 

appeals. 

Judgment having been entered in the district court for the 

defendant general contractor and the owners on the lien claims, 

four issues are presented on appeal: (1) whether the general 

contractor received payment in full from McAlester Plaza, Ltd., 

under the terms of the construction contract between Abraham 

Development and the McAlester Plaza partnership; (2) whether the 

McAlester Plaza partners properly used mortgage funds raised for 

construction as "trust funds" within the meaning of title 42, 

sections 152 and 153 of the Oklahoma statutes for the payment of 

"lienable claims" against the project; (3) whether McAlester 

* This order and judgment has no precedential value and shall not 

be cited, or used by any court within the Tenth Circuit, except 

for purposes of establishing the doctrines of the law of the case, 

res judicata, or collateral estoppel. 10th Cir. R. 36.3. 

2 

Appellate Case: 87-2138 Document: 010110307900 Date Filed: 08/27/1992 Page: 2
Plaza, Ltd., Abraham Development, and Robert C. Poe, a general 

partner in McAlester Plaza, Ltd., were alter egos of one another 

for purposes of disregarding Abraham Development as a corporate 

entity in order to extend personal liability on the 

subcontractors' lien claims to Poe: and (4) whether the defendants 

are entitled to recover reasonable attorney fees incurred in the 

defense of the subcontractors' lien claims. 

I 

In February 1981, McAlester Plaza, Ltd., an Oklahoma limited 

partnership, entered into a contract with the Abraham Development 

Corporation, an Oklahoma corporation, under which Abraham 

Development agreed to serve as general contractor for the 

construction of an apartment building for the elderly, insured by 

the Department of Housing and Urban Development (HUD). The 

parties agreed that the construction price was not to exceed 

$2,785,455, and then decided shortly thereafter that the total 

construction price would be no more than $2,779,455. 

While the project was under construction, Robert c. Poe was a 

1% interest holder in, as well as the managing general partner of, 

McAlester Plaza, Ltd., a 50% shareholder of Abraham Development 

Corporation, and the chairman and sole stockholder of Poe & 

Associates, a firm from which Abraham Development rented office 

space and received consulting services. H.T. "Tim" Abraham was 

president and a 50% shareholder of Abraham Development. 1 

1 

In October 1982, approximately five months after the 

McAlester Plaza project was completed, Abraham bought Poe's shares 

and became the sole shareholder of Abraham Development. See I R. 

(Footnote continued on next page) 

3 

Appellate Case: 87-2138 Document: 010110307900 Date Filed: 08/27/1992 Page: 3
As general contractor, Abraham Development contracted with 

several subcontractors who provided building 

services for the McAlester Plaza project. 

materials and 

Among the major 

subcontractors were Heritage Manufacturing & Building Supply, an 

Arkansas corporation, Arbest Construction Company, an Arkansas 

corporation, Doyle Armer, an Oklahoma citizen, Calhoun Heating & 

Air Conditioning Company, an Oklahoma corporation, and several 

others. 2 

Although construction was completed on May 12, 1982, the 

project was plagued by difficulties and could not open for 

prospective tenants. There were disputes between Abraham 

Development and some of the subcontractors regarding the quality 

and acceptability of certain construction work and the 

applicability of contractual remedies provided for in the 

contracts between the general contractor and the subcontractors. 

The costs of the project, moreover, appear to have run several 

hundred thousand dollars over the contract price. 

McAlester Plaza, then, was a business venture that ended in 

(Footnote continued): 

Doc. 54, at 9 (district court's findings of fact and conclusions 

of law). 

2 

The Rule 28.2(A) certification for case number 87-1650 also 

lists as being or having been "involved in this case," the 

following additional parties: McNeil! Mortgage Co., 

Sherwin-Williams Corp., Temple Supply, Inc., and the First 

National Bank & Trust Company of Oklahoma City. McNeil! and First 

National provided some mortgage financing for the apartment 

building, while Sherwin-Williams and Temple Supply apparently 

provided building materials and/or supplies. Although none of 

these parties submitted briefs for this appeal, the resolution of 

the questions before us may affect their interests. 

4 

Appellate Case: 87-2138 Document: 010110307900 Date Filed: 08/27/1992 Page: 4
an acrimonious insolvency for Abraham Development. 3 The 

subcontractors, asserting various mechanics' and materialmen's 

lien claims against the McAlester Plaza property under title 42, 

section 142 of the Oklahoma statutes, initiated this litigation 

against Abraham Development and the McAlester Plaza partnership in 

order to recover payments to which, it is argued, the 

subcontractors are entitled for materials and/or labor provided in 

connection with the McAlester Plaza project. 4 

II 

In March 1982 subcontractor Heritage Manufacturing filed suit 

in the United States District Court for the Eastern District of 

Oklahoma against Abraham Development and McAlester Plaza, Ltd., 

for breach of contract and enforcement of its materialman's lien. 

Arbest Construction filed a similar action in the same court in 

June 1982. In July 1982 the McAlester Plaza partnership filed a 

suit in the state District Court in Pittsburgh County, Oklahoma, 

seeking the invalidation of liens held by Heritage, Arbest, and 

several other McAlester Plaza subcontractors asserting lien claims 

against the McAlester Plaza property. The state court action was 

removed to the United States District Court and the three cases 

were consolidated. 

3 

It was 

deposition 

corporation 

R. 4-5. 

4 

the undisputed testimony of Tim Abraham in his 

that Abraham Development was "insolvent," but that the 

had not initiated formal bankruptcy proceedings. VIII 

The subcontractors filed the liens with the County Clerk of 

Pittsburgh County, Oklahoma. See Brief of Appellant Calhoun 

Heating & Air Conditioning, Inc. at 4. 

5 

Appellate Case: 87-2138 Document: 010110307900 Date Filed: 08/27/1992 Page: 5
The district court heard evidence in the cases in a bench 

trial in March 1984. In December 1986 the district court issued 

findings of fact and conclusions of law. 5 The court concluded 

that (1) McAlester Plaza, Ltd., had paid Abraham Development in 

full under the terms of their construction contract; (2) 

"[n]either McAlester Plaza, Ltd., Abraham Development Co., nor 

Robert C. Poe are the alter egos of one another"; and (3) all 

trust fund monies borrowed for the purpose of construction and 

payable under the contract were "expended for appropriate 

construction costs incurred in the [McAlester Plaza] project's 

creation." IR. Doc. 54, at 10-11. 6 

Defendants filed a motion to assess attorney fees, pursuant 

to title 12, section 936 of the Oklahoma statutes. The request 

5 

Pursuant to a bifurcation order, the trial was limited to 

three issues: 

1. Whether McAlester Plaza, Ltd., owner of the 

construction project at issue, has paid, in full, its 

contractual obligation to its general contractor, 

Abraham Development Co., Inc.; 

2. Whether McAlester Plaza, Ltd. and Abraham 

Development Co., Inc. are "alter egos" of one another 

and/or "alter egos" of Robert C. Poe; 

3. Whether McAlester Plaza, Ltd. received "trust 

funds" within the contemplation of 42 O.S. 1981 

§ 152(2), and whether McAlester Plaza, Ltd. used said 

funds for the payment of all valid lienable claims due 

and owing or to become due and owing by such mortgagor 

by reason of the project in question. 

IR. Doc. 54, at 2 (findings of fact and conclusions of law). 

6 

The Findings of Fact and Conclusions of Law were certified as 

a final judgment by order of the district court in March 1987. I 

R. Doc. 61. 

6 

Appellate Case: 87-2138 Document: 010110307900 Date Filed: 08/27/1992 Page: 6
for fees of $37,042.50 and for costs of $8,295.17 was denied by 

the court on April 1, 1987. IR. Doc. 62. A motion for rehearing 

and/or to alter or amend the order denying attorney fees was 

denied on June 29, 1987. 7 IR. Doc. 66. 

Subcontractors Heritage Manufacturing, Arbest Construction, 

and Calhoun Heating and Air Conditioning appeal from the district 

court's final judgment of March 30, 1987. Abraham Development 

Co., Robert C. Poe, and Tim Abraham appeal from the denial of 

their motion for attorney fees. 

III 

Under title 42, section 143 of the Oklahoma statutes, a 

construction subcontractor is entitled to a lien against the 

property or improvements for which the subcontractor has provided 

materials and/or construction services. 8 It is, however, a matter 

of well-settled law that the subcontractor can maintain a lien 

7 

Defendants' motion for rehearing, which was filed pursuant to 

Rule 59(e), included additional documentation and a 

request for attorney fees of $30,811.25. See Fed. R. 

59(e). 

revised 

Civ. P. 

8 

The relevant part of the statute provides: 

Any person who shall furnish any such material or 

lease or rent equipment used on said land or perform 

such labor as a subcontractor ... may obtain a lien 

upon such land, or improvements, or both, from the same 

time, in the same manner, and to the same extent as the 

original contractor, for the amount due him for such 

material, equipment and labor . . . . Provided ... that the owner of any land affected by such lien shall 

not thereby become liable to any claimant for any 

greater amount than he contracted to pay the original 

contractor. 

Okla. Stat. tit. 42, § 143 (1991) (emphasis added). 

7 

Appellate Case: 87-2138 Document: 010110307900 Date Filed: 08/27/1992 Page: 7
claim only against the property "to the same extent as the 

original contractor." Okla. Stat. tit. 42, § 143 (1991); see, 

~, Gibson v. Dunham, 346 P.2d 327, 328 (Okla. 1959) ( "It is 

... well settled that ... the property owner's obligation is 

limited to the price stipulated in the contract."). 9 If the owner 

of the property subject to the subcontractor's lien claim has paid 

the general contractor in full under the construction contract 

between the general contractor and the owner, the subcontractor 

has no lien claim against the owner's property under§ 143. 

Because the question whether Abraham Development was paid in 

ful·l by the McAlester Plaza partners is one of ultimate fact, we 

apply the clearly erroneous standard in reviewing such factual 

findings of the district court. See Fed. R. Civ. P. 52(a). We 

conclude that the court's finding that McAlester Plaza paid 

Abraham Development in full is supported by the evidentiary 

record. The total contract price agreed upon by Abraham 

Development and McAlester Plaza, Ltd., was $2,779,455. The 

defendants introduced evidence to support the conclusion that 

Abraham Development was advanced at least the amount of the 

contract price, and that several hundred thousand dollars more was 

9 

See also Annotation, Building and Construction Contracts: 

Right of Subcontractor Who Has Dealt Only with Primary Contractor 

to Recover Against Property Owner in Quasi Contract, 62 A.L.R.3d 

288, 293 (1975) ("it has been widely held or recognized that, 

apart from unjust enrichment or from any special statutory rights 

or remedies, a subcontractor who has furnished labor or materials 

for the construction or repair of some form of improvement on the 

lands of another has no right to a personal judgment against the 

landowner where there is no contractual relationship between 

them"). 

8 

Appellate Case: 87-2138 Document: 010110307900 Date Filed: 08/27/1992 Page: 8
advanced directly or on behalf of the general contractor for the 

project by the McAlester partnership. There was, for example, 

testimony by Don Spink, the secretary-treasurer of Poe & 

Associates and a consultant to Abraham Development on the 

McAlester Plaza project, that McAlester Plaza, Ltd., paid 

approximately $3 million to Abraham Development during the 

construction of the apartment building. V R. 238. There was also 

expert testimony and a report by John D. Fisher, a certified 

public accountant, concluding that the total amount "paid directly 

to or on behalf of Abraham Development, Inc.," by the partnership 

was $2,945,670. Fisher Report at 3 (in Appellees' Addendum, No. 

87-1650). 10 

We cannot say that the court's finding that McAlester Plaza 

paid Abraham Development in full according to the terms of the 

construction contract was clearly erroneous. Under the 

circumstances, then, defendants' "paid-in-full" defense was sound 

and the lien claims of the subcontractors brought pursuant to 

§ 143 must fail. 

IV 

The plaintiff subcontractors also seek recovery against the 

McAlester Plaza partnership on the theory that the partnership 

misused or misapplied construction "trust funds" that were to have 

been reserved for the payment of "lienable claims" under title 42, 

10 

See also Testimony of Jimmy Doland 

261-63 (estimating that McAlester Plaza 

Abraham Development as of July 16, 

$500,000 more thereafter). 

9 

Thomas, C.P.A., V R. 244, 

had advanced $2,846,857 to 

1982, and approximately 

Appellate Case: 87-2138 Document: 010110307900 Date Filed: 08/27/1992 Page: 9
section 152 of the Oklahoma statutes. 

language is: 

The relevant statutory 

(1) The amount payable under any building or 

remodeling contract shall, upon receipt by any 

contractor or subcontractor, be held as trust funds for 

the payment of all lienable claims due and owing or to 

become due and owing by such contractors or 

subcontractors by reason of such building or remodeling 

contract. 

(2) The monies received under any mortgage given 

for the purpose of construction or remodeling any 

structure shall upon receipt by the mortgagor be held as 

trust funds for the payment of all valid lienable claims 

due and owing or to become due and owing by such 

mortgagor by reason of such building or remodelling 

contract. 

Okla. Stat. tit. 42, § 152(1) & (2) (1991) (emphasis added).11 

It is uncontested in this litigation that the McAlester Plaza 

partnership received some mortgage funds for the purpose of 

construction. There is, however, considerable disagreement as to 

(1) the precise amount of the trust fund that was to have been set 

aside for the payment of lienable claims, and (2) whether or not 

the subcontractors have met their burden of showing "that trust 

funds were applied to purposes other than valid lienable claims." 

Sandpiper North Apartments, Ltd. v. American Nat'l Bank & Trust 

Co. of Shawnee, 680 P.2d 983, 992 (Okla. 1984) (describing 

plaintiff's burden of proof for recovery under § 152); see also 

11 

Also relevant is§ 153, which provides in part: 

(1) The trust funds created under Section 152 of 

this title shall be applied to the payment of said valid 

lienable claims and no portion thereof shall be used for 

any other purpose until all lienable claims due and 

owing or to become due and owing shall have been paid. 

Okla. Stat. tit. 42, § 153(1) (1991). 

10 

Appellate Case: 87-2138 Document: 010110307900 Date Filed: 08/27/1992 Page: 10
Bohn v. Divine, 544 P.2d 916, 920 (Okla. Ct. App. 1975) 

(describing elements of proving claim under trust fund statutes). 

Addressing the trust fund issue, the district court 

concluded: (1) all trust fund monies, as well as the full amount 

payable as construction costs under the contract, were properly 

"expended for appropriate construction costs incurred in the 

project's creation"; (2) "[p]ayments made in excess of the 

contract price were [neither] 'trust fund' monies nor amounts 

'payable under 

subcontractors 

the 

had 

contract' " ; and ( 3) the plaintiff 

not met their burden of proving by a 

preponderance of the evidence the misapplication of the trust 

funds by the McAlester Plaza partnership. IR. Doc. 54, at 11. 

We agree. 

Because of the ambiguity of§ 152(2), the precise amount of 

money that was to have been set aside as construction "trust 

funds" for the purpose of paying "lienable claims" on the 

McAlester Plaza project is not entirely clear. 12 Regardless of 

how§ 152(2) is interpreted, however, it remains the plaintiffs' 

burden under Oklahoma law to prove that "trust funds were applied 

12 

Reading§ 152(2) in pari materia with§ 143, it is reasonable 

to construe the trust fund provisions of§ 152(2) as referring to 

the entire contract price of $2,779,455. See generally 2B 

Sutherland Statutory Constr. S 51.01, at 117-21 (5th ed. 1992) 

(explaining application of in pari materia as a canon of statutory 

construction). In Sandpiper North Apartments, Ltd., the Oklahoma 

Supreme Court explained that§§ 152 and 153 "not only safeguard 

the rights of lien claimants on the job but also protect an owner, 

contractor, subcontractor, or other beneficiary from exposure in 

excess of the contract limit." 680 P.2d at 987 (emphasis added). 

But Sandpiper North Apartments, Ltd. defines only the upper limit 

of the amount that can be designated as construction "trust 

funds"; the court does not define the lower limit. 

11 

Appellate Case: 87-2138 Document: 010110307900 Date Filed: 08/27/1992 Page: 11
to a purpose other than payment of valid lienable claims." 

=S-=a ..... n___ d..._p ___ i__ p ___ e ___ r _____ .......... N o-=r ..... t~h'--~A-P .... a=r~t~m~e-n_t_s_, __ L_t_d_. , 6 8 0 P . 2 d at 9 9 2 . The 

subcontractors in this case failed to carry that burden to the 

satisfaction of the trier of fact. Indeed, in the subcontractors' 

appellate brief, they specifically cite the McAlester 

partnership's "Building Loan Agreement Cost Break-Down" to show 

that $2,580,051 of the construction mortgage loan from McNeil! 

Mortgage Co. to McAlester Plaza, Ltd., was "designated for 

construction costs and contractor's overhead." Brief of Appellant 

at 26 (No. 87-1650). The defendants, for their part, introduced 

volumes of documentary and expert evidence including the audited 

"Contractor's Certificate of Actual Cost" form that was submitted 

to HUD to show that Abraham Development had actually expended 

$2,682,085 on the McAlester Plaza project as of June 28, 1982. 13 

To summarize, there is evidence tending to show that 

$2,580,051 of the mortgage funds borrowed for the project by 

McAlester Plaza was "designated for construction costs and 

contractor's overhead," and evidence tending to show that at least 

$2,682,085 was actually expended on construction, of which only 

13 

The $2,682,085 figure is drawn from the "Contractor's 

Certificate of Actual Cost" which is reproduced as page 3 of the 

Jenkins (C.P.A.) cost certification report of July 27, 1982. 

Addendum of Appellees Doc. A (No. 87-1650). The $2,682,085 

includes $50,117 specifically designated as "General Overhead." 

It is the defendants' position on appeal that the net cost of 

construction for purposes of the trust fund statute was 

$2,580,051, i.e., the original contract price (before the $6,000 

downward adjustment of the price) minus the contractor's fee of 

$205,404.08. They refer to evidence in the Clothier audit tending 

to show that $2,386,514 was borrowed by the McAlester Plaza 

partnership to pay the net cost of construction. Reply Brief of 

Appellees at 17 (No. 87-1650). 

12 

Appellate Case: 87-2138 Document: 010110307900 Date Filed: 08/27/1992 Page: 12
$50,117 was reported as "General Overhead." Addendum of Appellees 

Doc. A (No. 87-1650). Viewed in the context of the record as a 

whole, therefore, and giving "due regard ... to the opportunity 

of the trial court to judge of the credibility of the witnesses," 

Fed. R. Civ. P. 52(a): Anderson v. Bessemer City, 470 U.S. 564, 

573 (1985), we find no clear error in the district court's 

conclusion that the McAlester partnership did not 

construction trust funds. 

misapply 

V 

The third issue presented for appellate review is the 

plaintiffs' argument that Abraham Development Corporation is the 

alter ego of Robert C. Poe and/or McAlester Plaza, Ltd., for 

purposes of disregarding Abraham Development as a corporate entity 

in order to extend liability on the subcontractors' lien claims to 

Poe and/or the partnership. The district court concluded that 

Abraham Development had conducted its affairs as a separate 

corporate entity, and that "[n]either McAlester Plaza, Ltd., 

Abraham Development Co., nor Robert C. Poe are the alter egos of 

one another." IR. Doc. 54, at 10. Although we uphold the 

conclusions of the district court on this point, 14 we note that 

14 

Although there was a close relationship between McAlester 

Plaza, Ltd., and Abraham Development, the district court found 

substantial factual evidence of Abraham Development's existence as 

a separate corporate entity. The court noted that Abraham 

Development: 

[M]aintained separate, although incomplete, corporate 

minute books .... It paid rent to Poe and Associates, 

Inc.[,] for its Tulsa office space, located in the same 

suite with Poe and Associates, Inc. It had its own 

checking account. It existed before the project at 

(Footnote continued on next page) 

13 

Appellate Case: 87-2138 Document: 010110307900 Date Filed: 08/27/1992 Page: 13
the subcontractors' alter ego argument is mooted by our analysis 

of the first two appellate issues. 

In order to invoke the court's power to disregard the 

corporate entity under the alter ego doctrine, plaintiffs must 

establish "such unity of interest and ownership that the separate 

personalities of the corporation and the owners no longer exist." 

1 William M. Fletcher, Fletcher Cyclopedia of the Law of Private 

Corporations § 41.10, at 615 (perm. ed. rev. vol. 1990) 

[hereinafter Fletcher). However, the factual showing that the 

corporation is the alter ego of its owner(s) is, in itself, 

insufficient to justify disregard of the corporate entity; "the 

'veil is pierced' only where the corporate entity is used to 

defeat public interests by protecting fraud, defending crime, or 

[for the] perpetration of other wrong." Mainord v. Sharp, 569 

P.2d 546, 548 (Okla. Ct. App. 1977); accord Robertson v. Roy L. 

Morgan, Prod. Co., 411 F.2d 1041, 1043 (10th Cir. 1969) (applying 

Oklahoma law); see also Sautbine v. Keller, 423 P.2d 447, 451 

(Okla. 1966) (explaining alter ego doctrine applicable not only in 

instances of wrongdoing, fraud, or criminal activity but also "to 

protect rights of third persons and accomplish justice"); Fish v. 

East, 114 F.2d 177, 191 (10th Cir. 1940) (seminal case stating 

rule and applying Colorado law). 

(Footnote continued): 

issue began and continues to exist after completion. It 

filed separate tax returns. Other entities, such as 

Arbest, recognized Abraham as a separate corporate 

entity and intended to and did contract with it as such. 

IR. Doc. 54, at 8. 

14 

Appellate Case: 87-2138 Document: 010110307900 Date Filed: 08/27/1992 Page: 14
Because "[a]n attempt to pierce the corporate veil is not 

itself a cause of action but rather is a means of imposing 

liability on an underlying cause of action," Fletcher § 41, at 

603, through the expedient of an equitable remedy, see Sautbine, 

423 P.2d at 451, plaintiffs are not entitled to the remedy in the 

absence of an underlying "wrong." As the Supreme Court of 

Oklahoma has explained: "[a]lthough equity may be invoked to 

protect an existing right, it is unavailable to create a right 

where none exists." Id. 

Since we affirm the district court's denial of the plaintiff 

subcontractors' lien claims under§ 143 and§ 152 -- the asserted 

underlying wrong -- there is no basis for applying the equitable 

remedy of disregard of the corporate entity under the alter ego 

doctrine. 

VI 

The final appellate issue is presented by defendants Abraham 

Development Co., Robert C. Poe and Tim Abraham. After prevailing 

in the district court on the three issues discussed above, these 

defendants moved the court to award attorney fees of $37,042.50 

(and $8,295.17 in costs, an item not involved on this appeal in 

No. 87-2138) assessed as costs pursuant to title 12, section 936 

of the Oklahoma statutes. IR. Docs. 56, 57, 59. In denying the 

motion for attorney fees, the district court criticized defendants 

for submitting time records that appeared to have included hours 

that may have been devoted to other cases. IR. Doc. 62. In a 

three-paragraph order, the court expressly "decline[d] the 

invitation to peruse page after page of unedited time records in 

15 

Appellate Case: 87-2138 Document: 010110307900 Date Filed: 08/27/1992 Page: 15
order to cull a proper itemization." Id. at 2. Defendants then 

made a downward revision of their requested attorney fees to 

$30,811.25, and documented that revised figure in a motion for 

rehearing and/or to alter or amend the order denying their 

original motion. IR. Docs. 63, 64. The court denied the second 

motion without explanation. Id. Doc. 66. 

We accord deference to a district court's underlying factual 

findings on an application for attorney fees, and its 

determination generally is subject to an abuse of discretion 

standard. Supre v. Ricketts, 792 F.2d 958, 961 (10th Cir. 1986). 

Nevertheless we are persuaded that the trial judge erred by 

rejecting in toto the claim for attorney fees, taking into 

consideration the original motion, the supporting records thereto, 

the affidavit of counsel offering to give testimony to further 

explain the items covered, the motion for rehearing on fees with 

the $6,231.25 reduction for conceded clerical error, and the 

additional time records submitted with the motion for rehearing. 

Based on our examination in detail of the submissions, 

particularly the revised exhibits supporting the reduced claim for 

fees of $30,811.25, we feel there was error in rejecting the claim 

entirely. The revised exhibits, along with the earlier ones, made 

substantial identification and explanation of the work for which 

the fees were claimed and, as noted, offered to submit testimony 

in further explanation. 

The court was not, of course, obliged to accept the original 

or the revised claims as submitted. Nevertheless in view of the 

substantial showing and the offer to justify the claim further, we 

16 

Appellate Case: 87-2138 Document: 010110307900 Date Filed: 08/27/1992 Page: 16
are convinced it was error to reject the claim for attorney fees 

outright. The Oklahoma statutes are clear that the prevailing 

party in a lien controversy is entitled to fees. Okla. Stat. tit. 

42, § 176 (1991). Moreover the prevailing party in civil actions 

for labor or services, on an open account, etc., may recover 

attorney fees. Okla. Stat. tit. 12, § 936 (1991). See Van Cleave 

v. Kolpak Builders Co., 693 P.2d 17, 18-19 (Okla. Ct. App. 1984) 

(referring to§ 176 to resolve party's request for attorney fees 

made on basis of§ 936). Thus there is no dispute on the legal 

basis being provided by Oklahoma law for recovery of attorney fees 

by prevailing parties such as the appellants in No. 87-2138, a 

lien controversy. 

VII 

Accordingly, the judgment is affirmed in all respects except 

as to the denial of attorney fees; the orders rejecting the claim 

for fees are vacated and the cases are remanded for further 

proceedings and disposition on the attorney fee claim. 

Entered for the Court 

William J. Holloway, Jr. 

Circuit Judge 

17 

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