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Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 

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FILED 

UNITED STATES COURT OF APPEALS United States Court of Appeals 

Tenth Circuit 

TENTH CIRCUIT 

NORTHWEST OIL & GAS PROPERTIES, 

INC., a Washington corporation, 

Plaintiff-Appellant, 

v. 

MARSHALL OIL CORPORATION, an 

Oklahoma corporation, 

Defendant-Appellee. 

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AUG 2 0 1991 

ROBERT L. HOECKER 

Clerk 

No. 90-6349 

(D.C. No. CIV-89-1457-P) 

(W.D. Okla.) 

ORDER AND JUDGMENT* 

Before ANDERSON, TACHA, and BRORBY, Circuit Judges. 

After examining the briefs and the appellate record, this 

three-judge panel has determined unanimously that oral argument 

would not be of material assistance in the determination of this 

appeal. See Fed. R. App. P. 34(a); 10th Cir. R. 34.1.9. The 

cause is therefore ordered submitted without oral argument. 

* 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. 

Appellate Case: 90-6349 Document: 010110132130 Date Filed: 08/20/1991 Page: 1 
In this diversity action Northwest Oil & Gas Properties, Inc. 

(Northwest) appeals an award of attorney fees. 

Northwest commenced this action against Marshall Oil 

Corporation (Marshall) and ten other defendants asserting 

Defendants were responsible for an accounting for all expenses 

from an oil well; that Defendants were liable for damages for 

failure to plug and abandon the well and for a determination that 

operator should be removed; and requesting that Marshall be 

compelled to participate in gas balancing in accordance with a gas 

balancing agreement. 

Marshall filed a motion for summary judgment which the 

district court granted holding the agreement was not ambiguous and 

that Northwest had failed to present any evidence supporting its 

claims. 

Marshall, pursuant to Oklahoma 1 law, which is the forum 

state, requested attorney fees. The district court found2 that 

the cited Oklahoma law applies even though there was no express 

1 Okla. Stat. tit. 52, § 540c (1985) (now § 540E, as amended 

1989) states: 

The district court for the county in which the oil 

or gas well is located shall have jurisdiction over all 

proceedings brought pursuant to this act. The 

prevailing party in any proceeding brought pursuant to 

this act shall be entitled to recover any court costs 

and reasonable attorney's fees. 

2 The matter had been referred to a magistrate who issued his 

Findings, Conclusions, and Recommendation which was adopted by the 

district court. 

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Appellate Case: 90-6349 Document: 010110132130 Date Filed: 08/20/1991 Page: 2 
averment in the pleadings that the action was maintained pursuant 

to § 540, as the action clearly involves the construction of the 

gas balancing agreement and the proceeds from past sales. The 

district court found Marshall met the statutory provisions as the 

prevailing party and awarded Marshall attorney fees and costs in 

the amount of $17,000. 

Northwest appeals asserting: 

(quoted in footnote 1) does not 

Marshall is not a prevailing party. 

(1) Okla. Stat. tit. 52, § 540 

support the award; and (2) 

Marshall first contends that as the rights of Northwest and 

Marshall are governed by a private agreement,§ 540 does not apply 

because, by its own terms,§ 540 applies only to "proceeding[s] 

brought pursuant to this act." 

As this issue involves a question of law we review de novo 

and give to the district court no deference. Salve Regina College 

v. Russell, U.S. __ , 111 S. Ct. 1217 (1991). 

Northwest is asking us to apply form over substance. In its 

amended complaint, Northwest sought relief including attorney fees 

from Marshall. While Northwest pled no law, it would appear the 

only conceivable basis for such an award would have been§ 540 as 

neither the contract nor any other cited law would support such an 

award. An examination of the amended complaint clearly reveals 

this action was predicated upon§ 540 even though no reference is 

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Appellate Case: 90-6349 Document: 010110132130 Date Filed: 08/20/1991 Page: 3 
made to this statute. Although Northwest insists Oklahoma 

Corporation Commission Rule 6-100 "clearly provides for exclusive 

contractual remedies," Northwest has not alleged the applicability 

of that rule by averring its gas balancing agreement provides gas 

balancing "in a manner other than as set forth" in the Rules. See 

Oklahoma Corporation Commission Rule 6-100. 

The magistrate cited to Seal v. Corporation Comm'n, 725 P.2d 

278 (Okla. 1986), and its interpretation of§ 540 and§ 545 as 

being helpful in determining whether § 540 applies. Northwest 

asserts Seal has no application. We find no merit to this 

contention. 

Northwest contends Howell Petroleum Corp. v. Samson Resources 

Co., 903 F.2d 778 (10th Cir. 1990), supports its construction of 

§ 540. Attorney fees under a similar Arkansas statute were at 

issue. Howell is distinguishable as it involved a voluntary 

settlement. Howell actually provides strong support for 

Marshall's claim to be a "prevailing party," as it emphasizes that 

"a final judgment is a prerequisite to being a prevailing party." 

Id. at 784. Marshall won a final judgment in the underlying 

action, and Northwest declined to appeal it. 

Northwest next argues that Marshall was not a "prevailing 

party" as the district court's judgment did not exonerate Marshall 

from any future liability. To support this contention Northwest 

cites several Oklahoma cases which speak of the prevailing party 

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Appellate Case: 90-6349 Document: 010110132130 Date Filed: 08/20/1991 Page: 4 
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as "one who finally prevails upon the merits." 

The Oklahoma statute at issue, § 540E, speaks of "[t]he 

prevailing party in any proceeding." The plain, clear, simple, 

and unambiguous statutory language commands the courts to look at 

the party prevailing in a proceeding. The proceeding was 

terminated and a final judgment was entered upon the merits. The 

judgment was appealable. Uncertain future events did not postpone 

the court's decision. Northwest requested no stay upon the 

merits. The obvious purpose of the Oklahoma statute would be 

undercut and absurd results would be produced if a court were to 

adopt Northwest's strained construction. When the district court 

entered its final judgment it was a final determination under the 

facts existing at the commencement of the action. Northwest could 

not successfully maintain a future action based upon these same 

facts. Northwest has had its day in court on its complaint. 

The judgment of the district court is AFFIRMED. 

Entered for the Court: 

WADE BRORBY 

United States Circuit Judge 

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Appellate Case: 90-6349 Document: 010110132130 Date Filed: 08/20/1991 Page: 5