* This order and judgment is not binding precedent, except under the

doctrines of law of the case, res judicata, and col lateral estoppel. The Court generally disfavors the citation of orders and judg ments; nevertheless, an order and judgment may be cited under the terms and condi tions of 10th Cir. R. 36.3. 

## F I L E D United States Court of Appeals Tenth Circuit 

### DEC 20 2000 

### PATRICK FISHER Clerk UNITED STATES COURT OF APPEALS

TENTH CIRCUIT

STATE BANK & TRUST, Plaintiff - Appellee and Cross-Appellant,

v. FIRST STATE BANK OF TEXAS, Defendant - Appellant and Cross-Appellee. Nos. 98-5243, 99-5131, 99-5135 (D.C. No. 97-CV-277-B) (Northern District of Oklahoma)

ORDER AND JUDGMENT *

Before BRORBY , ANDERSON and LUCERO , Circuit Judges.

Plaintiff-appellee State Bank & Trust, N.A. (“State Bank”) sued defendantappellant First State Bank of Texas (“Bank of Texas ”) to recover, under Texas law, the amount of a cashier’s check issued by Bankof Texas and two documentary drafts issued by Bank of Texas customerBuzz Speer. Bank of Texas counterclaimed to recover, under Oklahoma law , the face amount of a cashier’s check issued by State Bank and seven docu mentary drafts that appeared- 2 -

on their face to be issued by State Bank customer V entura Classics. The trial court granted summary judgment to State Bank on its claims and in a non-jury trial held that State Bank was not liable on any of Bank of Texas’s counterclaims. In the appeal on the merits, only Bank of Texas’s c ounterclaims are at issue. The other appeal and cross-appeal concern the trial cou rt’s award of costs and attorneys’ fees to State Bank. These related appeals raise state law issues under Oklahoma and Texas law. Exercising jurisdiction pursuant to 28 U.S.C. § 129 1, we affirm in part, reverse in part, and remand to the trial court for proceedings consistent with this opinion .
I The banks’ customers, Speer and Ventura Classics, s old used automobiles to one another. Typically, payment was accomplishe d by means of a documentary draft. The buyer of an automobile would prepare a documentary draft consisting of an envelope displaying payment information. The buyer would then send the draft to the seller who would place the title docum ents for the automobile being purchased inside the envelope and deposit the docum entary draft with his own bank. The seller’s bank would forward the draft an d title document to the buyer’s bank for payment or collection. Once a draft was r eceived by the buyer’s bank, the bank would call the buyer and ask him to inspec t the draft. The buyer was- 3 -

required to verify the draft, determine whether the title documentation was in order, and instruct the bank either to pay the draf t or to return the draft unpaid. At issue in this appeal are seven documentary draft s drawn on Ventura’s account and presented by Bank of Texas to State Ban k for payment (“State Bank drafts”). On receipt of the first five drafts, tot aling $87,750, Bank of Texas gave Speer immediate credit and Speer withdrew the funds before the drafts were presented to State Bank for payment or collection. When State Bank received the forwarded drafts, it called Ventura’s representativ e, Goss, to verify the drafts. Goss did not authorize payment. Accordingly, State Bank returned the drafts to Bank of Texas unpaid. However, it did not do so un til several days after the period stated on the drafts for payment or return. On receipt of the returned drafts, Bank of Texas re submitted the drafts to State Bank along with a handwritten note from Judy Massey, a vice president at Bank of Texas, stating “Dispute of Date of Return.” The note was accompanied by several photocopied sections of the Uniform Comm ercial Code (“UCC”) concerning a bank’s payment deadlines. In response to the second receipt of the drafts, an employee of State Bank, Teresa Bray, iss ued a cashier’s check in the amount of $87,750 to pay for the drafts. The checkwas mailed to Bank of Texas before the State Bank employee responsible for Vent ura’s account, Vice President- 4 -

Coy Gallatin, was made aware of the issuance of the check. He was thus prevented from retrieving the check from the mail. The following day, State Bank informed Bank of Texa s that the cashier’s check had been issued mistakenly and sent without a uthorization and, consequently, that a stop payment order was being p laced on the check. Bank of Texas claimed to have received the check and submitted it for payment prior to receipt of notice of the stop payment order. Afterreceipt of the first five documentary drafts at issue, Bank of Texas received two additional drafts, totaling $36,800, for which it gave immediate credi t to Speer’s account followed by Speer’s immediate withdrawal of the funds. After a bench trial, the district court ruled thatState Bank was not liable on Bank of Texas’s claims. See State Bank & Trust, N.A. v. First State Bank of
Texas , No. 97-CV-277-B (N.D. Okla. Oct. 21, 1998) (“Stat e Bank I ”) (findings of fact and conclusions of law). Bank of Texas appeal s the district court’s ruling on its counterclaims. The district court awarded State Bank $77,335.76 in attorneys’ fees and $14,250.24 in costs. See State Bank & Trust, N.A. v. First State Bank of Te xas , No. 97-CV-277-B, at *11-13 (N.D. Okla. Jun 21, 1999 ) (“State Bank III ”). The court also awarded interest at the rate of 4.879% p er annum. See id. Bank of1 Citations to the briefs and record in No. 98-5243 , the appeal on the

merits, are to “[Party’s] Br. A” or “[Party’s] App. A.” Citations to the briefs and record in 99-5131, the appeal on the award of attor neys’ fees, are to “[Party’s] Br. B” or “[Party’s] App. B.”

2 Bank of Texas, citing the statement of undisputed facts in its own Summary Judgment Motion, claims that “State Bank ad mitted it is a payor bank with respect to the Drafts.” (Appellant’s Br. A at16). This claim is spurious. State Bank, in its response to Bank of Texas’s moti on for summary judgment, (continued...) - 5 - Texas appealed these awards and State Bank cross-ap pealed arguing that the district court improperly denied the award of certa in costs and fees. 1
II

. State Bank’s Counter Claims On appeal from a bench trial we review factual find ings by the district court for clear error and the district court’s dete rminations of law de novo. See Sanpete Water Conservancy Dist. v. Carbon Water Con servancy Dist. , 226 F.3d 1170, 1177-78 (10th Cir. 2000). A district court’s decision to admit or to exclude evidence is reviewed for abuse of discretion. See Pierce v. Shorty Small’s of Branson, Inc. , 137 F.3d 1190 (10th Cir. 1998). A. Collecting v. Payor Bank The trial court concluded, as a matter of law, thatState Bank was not a payor bank under Oklahoma law with respect to the S tate Bank Drafts, but rather was a collecting bank. Bank of Texas contests this finding and asserts that as a payor bank State Bank should be subject to strict l iability for failure to pay the drafts within the time allotted by statute. 22 (...continued)

made clear that it considered itself a collecting b ank with regard to the drafts and disagreed with Bank of Texas’s assertion of the so- called “undisputed fact” that State Bank was a payor bank. (I Appellant’s App. Aat 208-210.)

3 Unless otherwise specified, all references to cod e sections in this opinion are to Okla. Stat. Ann. tit. 12A. - 6 - Under Oklahoma law, a payor bank is defined as “a b ank that is the drawee of a draft,” Okla. Stat. Ann. tit. 12A, § 4-105(3), 3 and a drawee is the “person ordered in a draft to make payment,” § 4-104(a)(8). A collecting bank is “a bank handling an item for collection except the payor ba nk.” § 4-105(5). Section 4-106 details when a bank is a collecting bank: (a) If an item states that it is “payable thro ugh” a bank identified in the item, (i) the item designates the bank as a collecting bank and does not by itself authorize the bank to pay the it em, and (ii) the item may be presented for payment only by or through the bank. (b) If an item states that it is “payable at” a bank identified in the item, (i) the item designates the bank as a collec ting bank and does not by itself authorize the bank to pay the item, a nd (ii) the item may be presented for payment only by or through the ban k. (c) If a draft names a nonbank drawee and it i s unclear whether a bank named in the draft is a co-drawee or a collect ing bank, the bank is a collecting bank. In determining whether State Bank was a payor bank or a collecting bank, it is necessary to keep in mind the spirit of these te rms of art. To the lay person unfamiliar with the UCC, it would seem that a colle cting bank collects money from a payor bank. In fact, these terms do not des cribe a relationship between two banks, but rather characterize the type of relationship a bank has with its- 7 -

customer. In South Carolina National Bank v. FirstUnion National Bank , 427 S.E.2d 169, 170 (S.C. 1993), the court distinguishe d a collecting bank from a payor bank in the following manner: The receiving bank . . . either forwards payment fr om the buyer’s account to the seller’s bank, or collects the payme nt from the buyer and forwards it to the seller’s bank. The bank is a “payor bank” when the draft is paid in the first way and is a “c ollecting bank” when payment is made in the second manner. At the outset, we note that because State Bank coul d not pay drafts drawn on Ventura’s account unless authorized by Ventura, the relationship between State Bank and its customer was in the nature of one betw een a collecting bank and its

customer. It is undisputed that when there is ambiguity as to whether the named bank in a draft is the co-drawee or the collecting bank, the named bank will be deemed a collecting bank. See § 4-106(c). In the instant case, the parties disa gree whether the particular drafts at issue were ambiguo us. Bank of Texas claims “the Drafts quite clearly show, as a matter of law, thatState Bank is a payor bank.” (Appellant’s Br. A at 17.) The drafts contain Speer’s name on the “Pay to the order of” line. (See,
e.g. , II Appellant’s App. A at 412.) On the bottom lef t hand corner, the drafts are designated “To” State Bank and Trust; immediately n ext to State Bank’s address is written “Ventura Classic, Brian Goss.” (Id. ) Notably, there is no account- 8 -

number written on the drafts. Accompanying each dr aft was a “collection letter” stating, among other things, the amount to be colle cted, the number of days of “sight” (i.e., the number of business days in which the bank of the buyer had to return the drafts; the default is one day), and the words “Drawn on: Ventura Classics.” (See, e.g. , id. at 413.) Relying on Great Western Bank v. Steve James Ford, Inc. , 915 F. Supp. 392 (S.D. Ga. 1996), the trial court found that State B ank was a collecting bank with regard to the drafts at issue. Great Western Bankinvolved a check-kiting scheme gone bad. The facts were similar to the facts in t his case. On receipt of the drafts at issue in Great Western , the plaintiff bank gave its customer immediate cr edit.
See id. at 394. The defendant bank’s customer did not aut horize payment of the drafts; thus, the defendant bank returned the draft s to the plaintiff bank. The defendant bank did not, however, return the drafts within the period provided for on the drafts, and so the plaintiff bank brought su it. See id. The defendant bank’s name appeared on the lower right side of the draft immediately next to the bank customer’s name and address. See id. at 395. As in the current case, the drafts contained no account number. See id. Applying Florida law, which is substantially similar to Oklahoma law in this field, the court in Great Westernfound that it was “clear from looking at the surrounding circumstances that [the defendant bank] was a collecting bank.” Id.4 Bank of Texas mistakenly relies on Reynolds-Wilso n Lumber Co. v.

People’s National Bank , 699 P.2d 146 (Okla. 1985) (per curiam), for the proposition that the drafts at issue in this case u nambiguously establish State Bank was a payor bank. Reynolds-Wilsonwas decided before the 1991 revisions to Oklahoma’s Commercial Code and relied on the pri or default rule that a draft must contain “an express statement on [its] face . . . indicating it is to be paid ‘at’ or ‘through’ a bank, before that bank is to be treated as a mere conduit [i.e., a collecting bank] and not a payor.” Id. at 151 (citations omitted). The 1991 revisions expressly reverse the presumption that a bank is a payor bank unless indicated otherwise. The revisions do this by prov iding that if a draft is ambiguous as to whether a bank is a payor bank or acollecting bank, the bank is a collecting bank. See § 4-106(c). It may be true that where a draft con tains the (continued...) - 9 - The key factors leading the court to this conclusio n were the collection item sent and addressed to the defendant bank and “most importantly” the fact that the defendant bank was not authorized to pay the drafts without its customer’s approval. Id. Because the drafts were ambiguous as to whether t he defendant bank was a drawee/payor bank or a collecting bank, Florida’s adoption of the Revised UCC required the court to find the defendan t bank was a collecting bank.
See id. at 396 (citing UCC § 4-106). The current case is almost identical to Great Weste rn . Not only were the drafts accompanied by collection letters and was St ate Bank not authorized to pay the drafts without Ventura’s approval, but the stat us of State Bank as a payor or collecting bank was ambiguous from the face of the drafts due to the location of State Bank’s name and address on the face of the dr afts. As such, the trial court properly found that State Bank was a collecting ban k. 44 (...continued)

magic words “at” or “through,” the bank to which th e words refer is a collecting bank. However, it is no longer true, as the court held in Reynolds-Wilson , that without those words a bank is not a collecting bank . In fact, the official commentary to Article 4 directly addresses this iss ue. The comment states: Often a draft will show that it is drawn on a busin ess drawee . . . with the name of a bank appearing under the name of the business drawee. Under current Oklahoma law, any ambiguity may cause the bank to be deemed a co-drawee and payor bank along with the company. Reynolds-Wilson Lumber Co. [, 699 P.2d at 149]. The revisions will reverse that conclusion. Under Rev. Sec. 4-106(c), where it is unclear whether the bank named in the d raft is a codrawee or a collecting bank, the bank will be a col lecting bank only. Okla. Stat. Ann. tit. 12A, Commentary on Revised Un iform Commercial Code Articles 3 and 4–Negotiable Instruments and Bank De posits and Collections, as enacted in Oklahoma, Article 4, Co-Drawee v. Collec ting Bank.

5 Because we affirm the district court’s holding th at State Bank was a collecting bank, we need not reach Bank of Texas’s argument that the trial court erred in finding that, even if State Bank was a pay or bank, it had a valid defense to payment of the drafts under § 4-302(b). - 10 - Because we find the drafts at issue in this case am biguous as to the status of State Bank and because Bank of Texas has not sho wn that the drafts were actually unambiguous, we affirm the district court’ s finding that State Bank was a collecting bank. Consequently, State Bank was not liable as a matter of law under § 4-302(a)(2) for returning the drafts outside the allotted time. 5
B

. Transfer Warranties Section 4-207(a) provides that a “collecting bank t hat transfers an item and receives a settlement or other consideration warran ts to the transferee and to any subsequent collecting bank that . . . [a]ll signatu res on the item are authentic and- 11 -

authorized.” Section 4-207(c) directs that “[a] pe rson to whom [such] warranties . . . are made and who took the item in good faith may recover from the warrantor as damages for breach of warranty an amount equal t o the loss suffered as a result of the breach, but not more than the amount of the item plus expenses and loss of interest incurred as a result of the breach.” Arti cle 4 of the Oklahoma Commercial Code takes its definition of “good faith” from section 3-103. See § 4-104(c). Section 3-103(a)(4) defines good faith a s “honesty in fact and the observance of reasonable commercial standards of fa ir dealing.” The trial court concluded that as a collecting bankState Bank was entitled to transfer warranties from Bank of Texas under § 4-207(a)(2) and that Bank of Texas breached its warranty to State Bank that Goss ’s signatures on the drafts were authentic and authorized. Bank of Texas argues it did not “transfer” the draf ts to State Bank in exchange for the cashier’s check as required by the code for transfer warranties to apply. In support of this contention, Bank of Texa s claims the “undisputed evidence” shows that the cashier’s check was issuedin response to Bank of Texas’s valid claim of late return rather than as a“settlement or other consideration” for the drafts. (Appellant’s Br. A at 27.) Thus, Bank of Texas’s argument continues, transfer warranties do not appl y because Bank of Texas received payment in satisfaction of its late return claim.- 12 -

Bank of Texas’s assertion that the undisputed evide nce shows the cashier’s check was issued in payment of its valid claim of l ate return, and not in payment of the drafts, is unsupported by the record and con tradicted by Bank of Texas’s own admissions. The lower court’s determination of the reason motivating State Bank’s issuance of the cashier’s check is a finding of fact. This finding of fact is of utmost importance to the conclusion of law conce rning whether transfer warranties applied and whether such warranties were breached by Bank of Texas. We conclude that Bank of Texas has waived its rightto challenge the factual finding that the cashier’s check was issued in paym ent of the drafts and not in payment of its claim of late return because in the pretrial order it stipulated and admitted to the fact that “State Bank issued the St ate Bank Cashier’s Check . . . to pay the five state Bank Drafts.” (II Appellant’s App. A at 375.) Moreover, the evidence at trial gathered from both parties’ witne sses demonstrates that the cashier’s check was issued to pay for the drafts. Even if Bank of Texas had not waived its arguments concerning the motivation for issuing the cashier’s check, we woul d still affirm the judgment of the district court. Where a case is submitted with stipulated facts, we still review the district court’s findings for clear error. See Adair State Bank v. Am. Cas.
Co. , 949 F.2d 1067, 1072 (10th Cir. 1991). Under this standard of review, we will not disturb the district court’s decision to c redit those witnesses offered by6 Bank of Texas also argues that the good faith req uirement of § 3-416(b)

applies. This Court, however, will not consider ar guments made under Article 3. The trial court expressly held the documentary draf ts were not negotiable instruments and thus not subject to Article 3. We cannot find in appellant’s brief any argument that the trial court erred in this con clusion, nor that the documentary drafts were actually negotiable instrum ents. Since any such claims were not raised on appeal, they are waived. Because Article 3 does not apply to the documentary drafts, we also reject appellant’s argument that State Bank waived the iss ue of signature authorization or authenticity under § 3-308 and thus was not enti tled to transfer warranties. Notably, this argument borders on the frivolous eve n if § 3-308 did apply. State Bank explicitly denied the authenticity of Ventura’ s signature in the pleadings. - 13 - both parties. See Pabst v. Oklahoma Gas & Elec. Co. , 228 F.3d 1128, 1135 (10th Cir. 2000) (finding no clear error in the district court’s decision to credit the plaintiff’s witness rather than the defendant’s witness); see also Anderson v. City of Bessemer City , 470 U.S. 564, 573-74 (1985) (discussing the clear ly erroneous standard). In the alternative, Bank of Texas argues that even if transfer warranties applied to the drafts, State Bank cannot recover on an alleged breach of such warranties because it did not take them in good faith as is required by § 4-207(c). 6 Bank of Texas argues that State Bank did not “take” the drafts for purposes of the code the first time it received them because State Bank returned them to Bank of Texas. Moreover, when State Bank did take the draf ts the second time they were sent, State Bank took them because of the claim of late return and issued the7We note that Article 4 refers to the Article 3 de finition of “good faith.”

See § 4-104(c).

8 Because it is not necessary to the outcome of thi s appeal, we decline to reach State Bank’s assertion that “[b]reach of warr anty under the UCC is an (continued...) - 14 - cashier’s check in satisfaction of that claim and n ot in response to the actual drafts. Bank of Texas’s argument hinges on whether or not S tate Bank took the drafts in good faith because when State Bank did fi nally “take” the drafts, it issued the cashier’s check in satisfaction of the d rafts and not in satisfaction of the claim of late return. Bank of Texas’s only arg ument that State Bank did not take the drafts in good faith relies on the implication that State Bank knew the signatures on the drafts were unauthorized but issu ed the cashier’s check anyway; therefore, State Bank did not act in good faith. After reviewing the record, we find the evidence supports the inference that State Bank took the drafts and issued the cashier’s check in good faith, i.e., with “hone sty in fact and [in] the observance of reasonable commercial standards of fair dealing.” § 3-103(a)(4). 7 In sum, we affirm the district court’s conclusion t hat State Bank was entitled to transfer warranties because it was a co llecting bank and acted in good faith. We further affirm the district court’s find ing that Bank of Texas breached its transfer warranties to State Bank that Goss’s s ignatures on the drafts were authentic and authorized. 88 (...continued)

absolute defense to and defeats a claim of late ret urn of an item .” (Appellee’s Br. A at 32 (emphasis in the original).) - 15 - C

. Admission of Evidence The district court admitted into evidence a chart c reated by Brenda Plowman, a State Bank employee, given to Bank of Te xas’s counsel only ten minutes before the commencement of the second day o f trial. Bank of Texas, citing no legal authority and making no legal argum ents, argues the trial court erred in admitting the chart. We affirm the district court’s admission of the sec ond Plowman chart because the trial court did not abuse its discretio n. “[Evidentiary] rulings generally are committed to the very broad discretio n of the trial judge, and they may constitute an abuse of discretion only if based on an erroneous conclusion of law, a clearly erroneous finding of fact or a manif est error in judgment.” Webb v. ABF Freight Sys., Inc. , 155 F.3d 1230, 1246 (10th Cir. 1998). Moreover, a party is “entitled to a new trial only when the error aff ected the party's substantial rights.” Id. (citation omitted). The ten minutes that Bank of Texas’s counsel had to consider the chart and its supporting documentat ion was undoubtedly insufficient; however, the trial court took that ci rcumstance into consideration in allowing the admission of the second Plowman chart. The court granted extra time to Bank of Texas’s counsel to review the new i nformation so that counsel9 Section 4-104(c) of the Oklahoma Commercial Code refers to § 3-103 for

the definition of “ordinary care.” - 16 - could sufficiently prepare for cross-examining Plow man. In its cross-examination of Plowman, Bank of Texas was able to point out the errors it believed were in the chart. As such, Bank of Texas’s substantial ri ghts have not been affected. D. Ordinary Care A collecting bank must exercise ordinary care in pr esenting an item or in sending an item for presentment. See § 4-202(a)(1). Section 3-103(a)(7) defines “ordinary care” as “observance of reasonable commer cial standards, prevailing in the area in which the person is located, with respe ct to the business in which the person is engaged.” 9 Section 4-202(b) states that a “collecting bank e xercises ordinary care . . . by taking proper action before its midnight deadline following receipt of an item.” However, “[t]aking proper act ion within a reasonably longer time may constitute the exercise of ordinary care, but the bank has the burden of establishing timeliness.” § 4-202(b). The trial court, in its findings of fact, concluded that “[n]either State Bank [n]or Bank of Texas consistently followed the colle ction letter instructions accompanying documentary drafts or notations on the drafts so as to strictly comply with the time limitations set forth and both banks had a pattern and practice of late returns beyond the time specified by some additional days.” State10 We note there was evidence in the record that mig ht have caused us, if

we had been the finder of fact , to rule differently. For example, the crossexamination of Plowman concerning her second chart, Bank of Texas’s arguments that the Plowman Chart did not establish a course o f dealing for returns , as opposed to payments, and Plowman’s testimony that the late return of the drafts would have violated State Bank’s policies. - 17 - Bank I , at *14. The court further found that State Bank had returned the seven drafts now at issue “within a reasonable time.” Id

. Bank of Texas argues the district court erred in ho lding State Bank did not violate its duty of ordinary care by returning the drafts outside the stated sight periods. It asserts that State Bank failed to esta blish a course of dealing showing the parties regularly returned drafts outside the d esignated sight periods. Bank of Texas properly notes that State Bank bore the burde n of proving that it exercised ordinary care and acted in a timely manner because State Bank did not meet the “midnight deadline” of § 4-202(b). We affirm the district court’s finding of fact thatthe parties had a custom of returning documentary drafts outside of the desi gnated sight period and its resulting conclusion that therefore State Bank’s late return of the drafts was, as a matter of law, performed with ordinary care. We st ress, however, that our affirmation rests largely on the deferential clearl y erroneous standard of review we are obliged to employ with regard to the distric t court’s findings of fact. 10 Unless, after reviewing the record and the argument s on appeal, we are- 18 -

completely unconvinced by the factfinder’s conclusi ons, we must generally defer to the factfinder’s experience with the mainsprings of human conduct as applied to the entirety of the case at hand. See Cooter & Gell v. Hartmarx Corp. , 496 U.S. 384, 400 (1990) (“In practice, the ‘clearly er roneous’ standard requires the appellate court to uphold any district court determ ination that falls within a broad range of permissible conclusions.”). After careful review of Plowman’s testimony at tria l, upon which both parties seem to rely entirely for establishing thei r arguments on the course of conduct issue, and after careful review of the charts Plowman offered as evidence, we do not have a “definite and firm convi ction that a mistake has been made.” Sanpete Water Conservancy Dist. , 226 F.3d at 1170. The drafts at issue were returned between one and six days late. Even a narrow reading of the Plowman chart establishes Bank of Texas had a custo m of returning payment on drafts to State Bank between one and eight days lat e. Because State Bank’s one to six day late returns of the drafts fell within t he one to eight day custom, we affirm the district court’s holding that State Bankexercised ordinary care in returning the drafts outside of the designated sigh t periods. Furthermore, because we affirm the district court’s holding that State B ank did not breach its duty of ordinary care, we reject Bank of Texas’s arguments that it is entitled to actual and consequential damages as a result of the alleged br each.11 Under Article 3, a cashier’s check is an instrume nt. See § 3-104. - 19 - E. The Cashier’s Check 1. State Bank’s Obligation to Pay the Cashier’s Ch eck Upon receipt of the drafts for the second time, State Bank, through its employee Teresa Bray, issued a cashier’s check in p ayment of the drafts. When another employee of State Bank realized the cashier ’s check had been issued mistakenly, State Bank attempted, but failed, to re trieve the check from the mail. Consequently, the following day State Bank contacte d Bank of Texas to inform Bank of Texas that the cashier’s check had been iss ued mistakenly, without authorization, and thus a stop payment order had be en placed on the check. The trial court found State Bank was justified in i ssuing the stop payment under § 3-411(c)(ii) 11 because the drafts were forged and Speer was attempting to perpetrate fraud. Section 3-411(c) provides, in re levant part, that damages are not allowed under the section “if the refusal of the ob ligated bank to pay occurs because . . . the obligated bank asserts a claim ordefense of the bank that it has reasonable grounds to believe is available against the person entitled to enforce the instrument.” Bank of Texas argues that § 3-411(c) only allows th e issuer of a cashier’s check to avoid damages, not to avoid payment of the check. This argument completely ignores § 3-305(a) which details general defenses an obliged party can- 20 -

assert to the payment of an instrument. Specifical ly, that section allows the obligated party to assert a defense . . . stated in another section of this a rticle or a defense . . . that would be available if the person entitled to e nforce the instrument were enforcing a right to payment under a simple contract. § 3-305(a)(2). In support of the trial court’s holding that State Bank was justified in stopping payment on the cashier’s check, State Bankraises four arguments on appeal. First, State Bank claims Bank of Texas mis represented material facts in its letter accompanying the drafts on their second return to State Bank. Second, State Bank argues it properly stopped payment due t o the fact the check was issued by mistake. Third, it argues Bank of Texas did not give valid consideration for the cashier’s check. Finally, St ate Bank argues Speer’s underlying fraud vitiated the contracts, i.e., the drafts, and thus provided a defense to the enforcement of the contracts. Becau se we find State Bank’s second defense to payment of the cashier’s check sufficien t to affirm the trial court’s holding, we need not reach the other three argument s raised on appeal. As discussed above, § 3-305(a)(2) allows an obligedparty to assert defenses to payment of an instrument otherwise avai lable under Article 3 of the Oklahoma Commercial Code. Section 3-418(b) provide s “if an instrument has been paid or accepted by mistake . . . the person p aying or accepting may, to the- 21 -

extent permitted by the law governing mistake and r estitution . . . revoke the acceptance.” Section 3-409 defines “acceptance” as the “drawee’s signed agreement to pay a draft as presented.” Thus, in t he case at issue, State Bank had accepted the cashier’s check. Under Oklahoma law, mistake of fact is a mistake not caused by the neglect of a legal d uty on the part of the person making the mistake, and consisting in: 1. An unconscious ignorance or forgetfulness of a f act past or present, material to the contract; or, 2. Belief in the present existence of a thing mater ial to the contract, which does not exist, or in the past exis tence of such a thing, which has not existed. Okla. Stat. Ann. tit. 15, § 63. The commentary to Article 3 of the Oklahoma Commercial Code states that: [I]f money is paid under a mistake of fact—that is, on the mistaken supposition that a specific fact exists which would entitle the payee to the money—and when the money would not have been paid if the payor had known the fact was otherwise, then the mo ney generally can be recovered. The basis for the rule is that m oney paid through misapprehension of facts belongs, in equity and goo d conscience, to the person who paid it. Okla. Stat. Ann. tit. 12A, Commentary on Revised Un iform Commercial Code Articles 3 and 4–Negotiable Instruments and Bank De posits and Collections, as Enacted in Oklahoma, Article 3, Recovery of Paymentby Mistake (citations omitted).- 22 -

In the instant case, State Bank employee Bray mista kenly believed State Bank was authorized by its customer to issue the ca shier’s check, and thus she mistakenly issued the check. At trial, she testifi ed she would not have issued the check had she known Goss had told State Bank not to pay for the drafts. Moreover, State Bank’s behavior following the issuance of the cashier’s check, i.e., the attempt to retrieve the check from the ma il and the immediate placement of a stop order on the check, supports the conclusi on that the bank mistakenly issued the check. Because of this mistake, State B ank had a viable defense to payment of the check and was able to revoke its acc eptance under § 3-418(b). On this alternative ground, we affirm the district cou rt’s holding that State Bank was justified in stopping payment on the cashier’s chec k. 2. Bank of Texas’s Immunity from State Bank’s Defe nses to Payment of the Cashier’s Check According to § 3-418(c), State Bank cannot successf ully invoke mistake as a defense to payment of the cashier’s check if Bankof Texas “took the [cashier’s check] in good faith and for value.” Under §§ 3-30 5(a) and (b), State Bank cannot successfully assert a common law contract de fense or other defense listed in Article 3 of the Oklahoma Commercial Code if Ban k of Texas was a holder in due course. Section § 3-302(a)(2) defines a holderin due course as one who took an instrument “(i) for value, (ii) in good faith, . . . and (vi) without notice that any party has a defense or claim in recoupment describe d in subsection (a) of Section12 Bank of Texas also argues it gave value for the u nderlying drafts which

should be considered as giving value for the cashie r’s check. In support of this proposition it cites “Case #2” to comment four in t he UCC Comment, 1991 Amendment to § 3-302. It is unclear how the commen t cited supports the proposition of transferred value, i.e., that becaus e Bank of Texas gave value to Speer for the documentary drafts, Bank of Texas the refore gave value to State Bank by transferring the documentary drafts to it. - 23 - 3-305 of this title.” Section 3-303(a)(3) states that an instrument is ta ken for value if it is “issued . . . as payment of, or as s ecurity for, an antecedent claim against any person, whether or not the claim is due .” Bank of Texas argues that State Bank issued the cas hier’s check in payment of Bank of Texas’s valid claim of late return. The refore, under § 3-302(a)(2), the claim of late return was “value” transferred for th e cashier’s check. 12 Earlier in this opinion, we affirmed the trial court’s finding of fact that State Bank issued the cashier’s check to pay for th e drafts and not in response to Bank of Texas’s claim of late return. Because Stat e Bank issued the cashier’s check to pay for the drafts—which were worthless be cause Ventura refused to authorize payment—rather than to pay for Bank of Te xas’s claim of late return, Bank of Texas transferred no value for the cashier’ s check. For this reason, Bank of Texas is not immune under § 3-418 to State Bank’ s defense of mistaken payment of the check. As with the issue of whether State Bank was justifi ed in stopping payment of the cashier’s check, the parties raise numerous arguments on appeal to support- 24 -

their positions concerning whether Bank of Texas wa s immune to State Bank’s defense to payment of the check. Because we conclu de Bank of Texas did not take the cashier’s check for value, we affirm, albe it on alternate grounds, the district court’s holdings that State Bank could sto p payment on the cashier’s check and that Bank of Texas was not a holder in du e course. Our reasoning makes it unnecessary to consider the parties’ otherarguments.
III

. Costs and Fees The second set of appeals concerns the district cou rt’s award of costs and fees to State Bank. We review the decision to awar d attorneys’ fees, and the amount awarded, for abuse of discretion. See Case v. Unified Sch. Dist. No. 233 , 157 F.3d 1243, 1249 (10th Cir. 1998); Bishop v. Equ inox Int’l Corp. , 154 F.3d 1220, 1224 (10th Cir. 1998). “Underlying factual f indings will only be upset when clearly erroneous. However, a district court’ s statutory interpretation or legal analysis which provides the basis for the fee award is reviewable de novo.” Bishop , 154 F.3d at 1224 (citations omitted). The parties agree that Texas law applies to State B ank’s primary claims and that Oklahoma law applies to Bank of Texas’s counte rclaims. The parties are also in accord concerning State Bank’s entitlement underOkla. Stat. Ann. tit. 12, § 936 to attorneys’ fees for its successful defense to payment of the cashier’s check.13 Because the trial court found that Oklahoma and T exas law are

substantially the same as the UCC, the trial court, in its opinion, referred to the relevant UCC sections. See State Bank III at 4-5. - 25 - The trial court found that State Bank was not entit led to attorneys’ fees on its primary claims under Texas law. The court furt her found that State Bank was not entitled to attorneys’ fees under UCC 13 §§ 3-411(b) or 4-103(e) or under Okla. Stat. Ann. tit. 12A, § 4-207(c). However, because the court found the issues in State Bank’s Texas law claims “inextricably intertw ined” with the issues in Bank of Texas’s Oklahoma law counterclaims, the court pr emised an award of fees under Okla. Stat. Ann. tit. 12, § 936 on the unsegr egated bills of State Bank’s attorneys. Notably, the court awarded State Bank on e-third less than it requested due to the fact that the “Texas law phase of the ca se . . . [did] not support an award of attorneys’ fees.” State Bank III , at *11. A. State Bank’s Cross-Appeal 1. Attorneys’ Fees Under Texas Law Because our determination of the issues raised in S tate Bank’s cross-appeal affects the outcome of Bank of Texas’s appeal, we a ddress the issues presented in State Bank’s cross-appeal first. State Bank argues the district court erred in holding that it could not recover attorneys’ fees o n its primary claims under Texas law. Specifically, State Bank claims it can recove r attorneys’ fees under Tex. Civ. Prac. & Rem. Code Ann. § 38.001, Tex. Bus. & C om. Code Ann. § 4.103(e)14 The cashier’s check was issued to pay for three o f the five drafts at issue

in State Bank’s primary suit against Bank of Texas. See State Bank & Trust, (continued...) - 26 - and Tex. Bus. & Com. Code Ann. § 3.411(b). We addr ess these arguments in

turn. a. Tex. Civ. Prac. & Rem. Code Ann. § 38.001 Under Texas Civil Practice and Remedies Code § 38.0 01, a “person may recover reasonable attorney’s fees . . . if the cla im is for . . . an oral or written contract.” The district court denied State Bank’s claim for attorneys’ fees on the grounds of § 38.001 because it held that the sectio n does not apply to conversion actions and the drafts were not “contracts” because the contracting parties were the customers of the banks, not the banks themselve s. State Bank brings to our attention Guardian Bank v. San Jacinto Savings Association , 593 S.W.2d 860 (Tex. App. 1980). In that case, t he court expressly held that a “cashier’s check is a written contract with the maker impliedly agreeing to pay to any authorized holder the face v alue stated therein.” Id. at 863. At summary judgment in this case, the district court ruled that State Bank was able to recover the value of the cashier’s check. Because a cashier’s check is a “contract” under Texas law, we hold that State Bankcould properly have been allowed attorneys’ fees for its recovery of the val ue of the cashier’s check under § 38.001(8). 14 Accordingly, insofar as the district court implic itly held, as a matter14 (...continued)

N.A. v. First State Bank of Texas , No. 97-CV-277-B, at *4-5 (N.D. Okla. June 10, 1998) (“State Bank II ”).

15 We find unconvincing State Bank’s novel state law claim that the documentary drafts somehow created contractual relationships between the banks, and we affirm the denial of attorneys’ fees as to t he claims regarding the Bank of Texas documentary drafts. Also, although we find S tate Bank’s argument that § 38.001 “does not necessarily require that the party seeking fees on the contract claim be a party to that contract” interesting, we can find no precedent for this position under Texas law, nor has State Bank cited any. We decline to create any such precedent. - 27 - of law, that attorneys’ fees were not available und er Texas law for recovery on the cashier’s check, we reverse. 15 Citing First National Bank of Missouri City v. Gitt elman , 788 S.W.2d 165 (Tex. App. 1990), State Bank also argues the distri ct court erred in not allowing recovery of attorneys’ fees on its successful conv ersion claim under § 38.001. Gittelmaninvolved a bank’s foreclosure on a car that served as collateral for a loan. See 788 S.W.2d at 166-67. The court noted that althou gh a conversion claim does not support an award of attorneys’ fees under § 38.001(8), a contract claim does. See Gittelman , 788 S.W.2d at 171. The trial court’s finding that the bank converted Gittelman’s car implied the bank did not have authority to sell the
car. See id. This, in turn, supported a finding of breach of c ontract and thus an award of attorneys’ fees under a breach of contracttheory. See id. State Bank’s reliance on Gittelmanis misplaced. Gittelmandoes not hold that facts supporting a conversion claim always sup port a breach of contract- 28 -

claim. In Gittelman , there were actual written contracts between the b ank and its
customer. See id. at 167 (noting that the trial court found the bankhad breached the relevant written contracts). Although the opinion is not explicit as to the terms of those contracts, it seems likely that the contracts at issue were loan documents signed at the time Gittelman designated h er car as collateral. Thus, when the bank converted Gittelman’s car, it breache d the terms of the contract dealing with collateral placed on the loan. In State Bank’s case, the conversion claim, as stat ed in the complaint, was that “Bank of Texas improperly exercised dominion a nd control over the titles to the automobiles that corresponded to each of the Ba nk of Texas Drafts . . . and thereafter improperly transferred and converted som e or all of those titles to Speer without paying State Bank the funds due.” (I Appel lant’s App. A at 5.) The facts supporting the conversion claim do not support a br each of contract claim between the two banks because, as discussed above, the documentary drafts do not establish a contract between the banks. Thus, we hold that the trial court properly denied State Bank’s request for attorneys’ fees under § 38.001 for its success on the conversion claim.

b. Tex. Bus. & Com. Code Ann. § 4.103(e) Tex. Bus. & Com. Code Ann. § 4.103(e) allows damage s, other than actual damages, if there is “bad faith.” We reject State Bank’s argument that it is- 29 -

entitled to recover attorneys’ fees under this sect ion because the trial court explicitly noted that “no . . . finding [of bad fai th] was entered in this case.” State Bank III , at *7. Given the trial court was presented with the same arguments we are under § 4.103(e), we think the for egoing statement implicitly demonstrates that the trial court affirmatively did not find bad faith on the part of Bank of Texas. We therefore affirm the trial court ’s holding that State Bank could not recover attorneys’ fees under § 4.103(e).

c. Tex. Bus. & Com. Code Ann. § 3.411(b) Section 3.411(b) provides that a person who enforce s a right to a check “is entitled to compensation for expenses and loss of i nterest resulting from . . . nonpayment and may recover consequential damages.” Section 3.411(c) provides that expenses or consequential damages are not reco verable if the obligated bank refused to pay because it had “reasonable grounds t o believe [it had a claim or defense] . . . available against the person entitle d to enforce the instrument.” The trial court denied recovery of attorneys’ fees to State Bank under § 3.411 because it found that it “did not and [coul d not] . . . conclude that Bank of Texas had no reasonable basis for asserting the positions taken.” State Bank
III , at *7. We affirm the trial court and reject as f rivolous State Bank’s assertion that the trial court’s finding “was inconsistent wi th the court’s earlier finding that Bank of Texas had no viable defense to payment of that check under § 3- 411(c).”- 30 -

(Appellee’s Br. B at 39.) Although the court ultim ately found Bank of Texas had no viable defense, that determination did not precl ude the court from finding that Bank of Texas had a reasonable basis for asserting defenses to payment. 2. Attorneys’ Fees Under Oklahoma Law In its cross-appeal, State Bank also asserts the tr ial court erred in denying attorneys’ fees under Oklahoma law for Bank of Texa s’s counterclaims. Specifically, State Bank asserts it was entitled to recover attorneys’ fees under Okla. Stat. Ann. tit. 12, § 936 and under Okla. Stat. Ann. tit. 12A, § 4-207(c).

a. Okla. Stat. Ann. tit. 12, § 936 Okla. Stat. Ann. tit. 12, § 936 provides as follows : In any civil action to recover on an open account, a statement of account, account stated, note, bill, negotiable ins trument, or contract relating to the purchase or sale of goods, wares, o r merchandise, or for labor or services, unless otherwise provided bylaw or the contract which is the subject [of] the action, the prevailing party shall be allowed a reasonable attorney fee to be se t by the court, to be taxed and collected as costs. Although the district court awarded State Bank atto rneys’ fees under § 936 for its successful defense to payment of the cashier’s chec k, it did not award fees under that section for State Bank’s defense to payment of the documentary drafts. On appeal, State Bank claims “documentary drafts logic ally fall within the litany of monetary obligations set forth by § 936.” (I Appel lee’s Br. B at 40.) Notably, every one of the “litany of monetary obligations” s et forth in § 936 involves some- 31 -

sort of instrument on which suit would be brought b ecause of a direct obligation established by the instrument between a plaintiff a nd a defendant. Here, Bank of Texas’s counterclaims under Oklahoma law were basedon the claim that State Bank was required to compensate Bank of Texas for t he value of the drafts because State Bank returned the documentary drafts to Bank of Texas in an untimely manner. The counterclaims were not brough t for payment of the drafts themselves. Although State Bank properly prevailed on the count erclaims, the counterclaims did not involve a suit on a contract, a note, a bill, etc., as is required under § 936. We therefore hold that the t rial court did not err in failing to grant State Bank attorneys’ fees for its success ful defense against the Bank of Texas counterclaims.

b. Okla. Stat. Ann. tit. 12A, § 4-207 The trial court held, and we affirm, that Bank of T exas breached the transfer warranties it owed to State Bank on the St ate Bank drafts. Okla. Stat. Ann. tit. 12A, § 4-207(c) provides recovery “equal to the loss suffered . . . , but not more than the amount of the item plus expenses and loss of interest” to one who took an item in good faith and who experienced a breach of transfer warranties. On appeal, State Bank argues the trial court erred by not allowing it to recover attorneys’ fees as a measure of “expense s” under § 4-207(c).16 We decline to consider State Bank’s claim—made in its Reply Brief on

cross-appeal—that it is entitled to fees incurred e nforcing subpoenas. State Bank’s opening brief on cross-appeal states “the tr ial court did err in concluding that attorneys’ fees may not be recovered under UCC §§ 4-207(c), 4-103(e) and 3- 411(b), and fee statutes set forth under Texas and Oklahoma law. State Bank urges that onlyto this extent should the trial court’s Order and Judgment be reversed.” (Appellee’s Br. B at 8.) We have revie wed State Bank’s opening brief on cross-appeal and can find no mention of the subp oena fees issue. Since State Bank did not argue the subpoena fees issue in its o pening brief, Bank of Texas was not given the chance to properly respond to the argument and we decline to consider the issue. See, e.g. , State Farm Fire & Cas. Co. v. Mhoon , 31 F.3d 979, 984 n.7 (10th Cir. 1994). - 32 - We have carefully considered the arguments raised o n appeal by both State Bank and Bank of Texas. Because we agree with the district court’s thorough discussion of the availability of attorneys’ fees a s expenses under § 4-207, we affirm the denial of attorneys’ fees pursuant to th at section. 16 B. Bank of Texas’s Appeal 1. Inextricably Intertwined Doctrine Although the district court did not find an indepen dent justification for awarding attorneys’ fees for State Bank’s primary c laims under Texas law or for the counterclaim concerning the documentary drafts under Oklahoma law, the court found the claims and counterclaims “inextrica bly intertwined” for purposes of awarding attorneys’ fees.

[T]he Court finds the issues surrounding the cashie r’s check could not be adequately addressed without a thoroug h understanding of the transactions involving the documentary draft s which led to the issuance of the cashier’s check and the stop paymen t.- 33 - The Court observes that this was a complex case in which the similarity of the claims, defenses, amount of the c ashier’s checks and the underlying transactions required considerable c oncentration in order to keep the primary claims and the countercla ims straight. The legal research necessarily overlapped so that a fin ding that the claims and defenses and underlying facts are, to an extent , “inextricably intertwined” is supportable by the record. State Bank III , at *10. The court found that State Bank’s princi pal claims were governed by Texas law which, the court held, did no t support an award of attorneys’ fees. Therefore, the court reduced the award by one third. See id. , at *10-11. As discussed, there is no question that State Bank was entitled to attorneys’ fees under Oklahoma law for its successful defense to payment of the cashier’s check. Bank of Texas’s challenge on appeal to the award of attorneys’ fees under Oklahoma law concerns the trial court’s application of the “inextricably intertwined” doctrine. Specifically, Bank of Texas argues that (1) the claims involved in these appeals are not intertwined, (2) the “inextricably intertwined” doctrine does not apply to this case, and (3) State Bank was required, under Oklahoma law, to segregate its requests for fees. In RJB Gas Pipeline Co. v. Colorado Interstate Gas Co. , 813 P.2d 1, 12-14 (Okla. App. 1990), the court reviewed a trial court ’s grant of attorneys’ fees to the prevailing party in an action that primarily co ncerned contractual obligations. The trial court awarded attorneys’ fees to the prev ailing party without requiring- 34 -

that party to segregate out the fees incurred in support of the unsuccessful claims.
See id. at 13. Citing the Supreme Court’s decision in Hen sley v. Eckerhart , 461 U.S. 424 (1983), a civil rights case, the court not ed that “in some instances it is unnecessary to apportion attorney fees between succ essful and unsuccessful claims.” RJB Gas Pipeline , 813 P.2d at 14. Ultimately, the court held that a party is “not allowed attorney fees on claims unless perm itted by statute.” Id. ; see also Tibbetts v. Sight ‘N Sound Appliance Ctrs., Inc. , 6 P.3d 1064, 1066 (Okla. App. 1999) (“Oklahoma continues to stand firmly committe d to the American Rule, under which a prevailing party may not recover a co unsel-fee award absent an authorizing statute or contract.” (citing Morgan v. Galilean Health Enters. , 977 P.2d 357, 362 (Okla. 1998)). Because the prevailin g party’s punitive damages claims were tort claims and no Oklahoma statute sup ports an award of fees on tort claims, the court reversed and remanded to the tria l court to hold a new hearing on the proper amount of fees. See RJB Gas Pipeline , 813 P.2d at 14. Although we are sympathetic to the difficulty of se gregating attorneys’ fees between claims that are so closely related, we can find no support for an “inextricably intertwined” exception to the general Oklahoma rule that attorneys’ fees can only be awarded where there is an independ ent statutory basis. We decline to affirm an unsupported legal conclusion o f state law. We reverse the- 35 -

district court’s award of attorneys’ fees to the extent it awards fees under Oklahoma law pursuant to the inapplicable “inextric ably intertwined” doctrine. We note, however, that Texas law does support an ex ception to the general requirement of segregating attorneys’ fees. The ex ception applies “when the attorney’s fees rendered are in connection with cla ims arising out of the same transaction and are so interrelated that their pros ecution or defense entails proof or denial of essentially the same facts.” Panizo v . Young Men’s Christian Ass’n , 938 S.W.2d 163, 170 (Tex. App. 1996) (citations omi tted); see also Keeper v. First Care, Inc. , 794 S.W.2d 879, 882 (Tex. App. 1990); Flint & Ass ocs. v. Intercontinental Pipe & Steel, Inc. , 739 S.W.2d 622, 624-25 (Tex. App. 1987). We leave to the trial court the task of determining what impact, if any, the cited Texas authority should have on a fee award to State Bank.
2. Costs and Fees Related to Denton Texas Suit Bank of Texas originally filed a lawsuit against St ate Bank in Denton, Texas, on the claims that ultimately became the cou nterclaims in the instant suit. That suit was dismissed. State Bank sought recovery for the costs and attorneys’ fees associated with that case (i.e., fees incurred for the removal petition and filing a motion to transfer) in the instant suit. Citing absolutely no legal authority, Bank of Texas asserts that recovery of t hose costs and fees in this suit is improper because State Bank “at least [should have] attempted to seek such- 36 -

recovery from the Denton judge.” (Appellant’s Br. B at 20.) We reject this argument as wholly unsupported by legal authority a s well as unpersuasive. The district court did not abuse its discretion in awar ding fees arising out of the Denton suit except to the extent such fees were pre mised on the application of the inextricably intertwined doctrine under Oklahoma law. Bank of Texas also claims the district court erred in awarding fees to State Bank for State Bank’s unsuccessful attempt to recov er punitive damages and for State Bank’s unsuccessful motion for summary judgme nt on Bank of Texas’s counterclaims. Bank of Texas cites RJB Gas Pipelin e Co. for the proposition that an unsuccessful claim for punitive damages related to a successful breach of contract claim does not support an award of fees un der Oklahoma law. State Bank attempts to distinguish that case on the groun d that the underlying claim for the punitive damages was a tort claim. We do not f ind this distinction persuasive because State Bank premised its claim for punitive damages on its conversion claim–i.e., a tort claim. State Bank also attempts to argue the district court’s award of fees for the unsuccessful summary judgmentmotion and for the punitive damages claims were appropriate because of the dist rict court’s proper application of the inextricably intertwined doctrine. Pursuantto our holding above, we reverse the district court’s award of attorneys’ fe es for the unsuccessful summary judgment motion and for the punitive damages claim.- 37 -

3. Paralegal Fees Under Texas law, a party may include in its requestfor attorneys’ fees amounts for work performed by legal assistants if the “assistant perform[ed] work traditionally done by an attorney.” Multi-Moto Corp. v. ITT Commercial Fin. Corp. , 806 S.W.2d 560, 570 (Tex. App. 1990). The eviden ce presented must establish: (1) the qualifications of the legal assistant to pe rform substantive legal work; (2) that the legal assistant performed substantive legal work under the direction and supervision of an atto rney; (3) the nature of the legal work performed; (4) the legal a ssistant’s hourly rate; and (5) the number of hours expended by the l egal assistant. Id. (citation omitted). Oklahoma law also permits a party to recover charge s for work performed by paralegals as an award of attorneys’ fees. See, e.g. , Taylor v. Chubb Group of
Ins. Cos. , 874 P.2d 806, 808-09 (Okla. 1994). Such charges are only appropriate if they are “clearly shown to have been made (1) fo r the delegated performance of substantive legal work, that (2) would otherwise have to be performed by a lawyer, (3) at a rate higher than that charged for the nonlawyers’ time.” Id. at 809. A party seeking an award of attorneys’ fees “ must plead and prove that the charges made for non-lawyer’s time covered work that a lawyer would have had to perform but for the performance of such services by a legal assistant.” Id. Also, the “total charges made for the legal assista nt’s services must be less than- 38 -

the total charges would have been, had a lawyer per formed the services.” Id. In Taylorthe court specified tasks which a legal assistant may perform, including interviewing clients, drafting pleadings and other documents, conducting legal research, scheduling depositions, coordinating and managing document production, locating and interviewing witnesses, or ganizing pleadings, trial exhibits, and other documents, preparing witness an d exhibit lists, and assisting lawyers at trial. See id

. In its appeal, Bank of Texas claims that the award of attorneys’ fees to State Bank included charges for work performed by p aralegals that was not “perfected” for purposes of either Texas or Oklahom a law. Specifically, Bank of Texas claims the charges were inappropriate under T exas law because there was no indication as to the qualifications of the paral egals and the billing summaries include billing for “clerical services” that are no t “substantive legal services.” (Appellant’s Br. B at 21.) The stated failure under Oklahoma law is that the t rial testimony did not demonstrate the work performed bythe paralegals would otherwise have been performed by an attorney and th e billing inappropriately included charges for clerical duties performed by t he paralegals. After careful review of the record, we hold that in sofar as the trial court properly awarded attorneys’ fees, it did not abuse its discretion in awarding fees for work performed by paralegals under either Oklah oma or Texas law. The- 39 -

qualifications of the paralegals and their performa nce of “substantive legal work” were substantiated in the fee application or testif ied to at trial. Although we agree with appellant that Oklahoma law places the b urden of proof and pleading on the party requesting fees, after careful review of the fee application we conclude the work performed by paralegals for whichfees were sought was all work that the Supreme Court of Oklahoma listed as p roper for a legal assistant in Taylor , 874 P.2d at 809.
4. Section 1920 Costs We review for abuse of discretion the district court’s order upholding the clerk’s taxation of costs. See Munoz v. St. Mary-Corwin Hosp. , 221 F.3d 1160, 1170 (10th Cir. 2000). “We will reverse subsidiaryfactual findings only if they are clearly erroneous.” Jane L. v. Bangerter , 61 F.3d 1505, 1509 (10th Cir. 1995). The district court affirmed the clerk’s award to St ate Bank of $3,401.71 in costs made pursuant to 28 U.S.C. § 1920, concluding that the amount taxed as costs for copies was justified. We have reviewed t he record and the parties’ arguments and can find nothing to suggest the distr ict court abused its discretion. Accordingly, we affirm the court’s award of costs f or copies. See, e.g. , Tilton v. Capital Cities/ABC, Inc. , 115 F.3d 1471, 1476 (10th Cir. 1997).
5. Oklahoma Commercial Code Costs- 40 -

The clerk declined to award State Bank costs under the Oklahoma Commercial Code. Upon review of the clerk’s sugges ted taxation of costs, the trial court awarded State Bank an additional $10,84 8.53 in costs as damages under Okla. Stat. Ann. tit. 12A, § 4-207. This additiona l award included costs incurred for telephone use, postage, computer research, faxe s, Federal Express, binding, a private investigator, courier services, staff overt ime, mileage incurred for attorneys to take depositions of Bank of Texas empl oyees, and expert witnesses. However, the court denied State Bank costs for meal s under any theory of
recovery. As an initial matter, we affirm the district court’ s denial of costs pursuant to Okla. Stat. Ann. tit 12A, § 3-411 and § 4-103 fo r the reasons stated in the discussion above concerning the award of attorneys’ fees. However, because we find that the district court properly awarded State Bank costs as an element of damages for breach of transfer warranties under § 4-207, w e affirm the district court’s award of other costs. Although the officia l comments to § 4-207 indicate a reluctance to grant attorneys’ fees as expenses, they do not demonstrate similar reluctance with regard to other expenses incurred i n litigation as a result of breach of transfer warranties. We decline to reach whether any of the individually contested costs were properly awarded under § 1920 because we find that they were properly awarded under § 4-207.- 41 - IV The judgment of the district court is REVERSED insofar as it found that attorneys’ fees are not available under Texas law f or State Bank’s successful recovery on the cashier’s check and insofar as it applied the inextricably intertwined doctrine to allow recovery of attorneys ’ fees under Oklahoma law. The judgment is AFFIRMED as to all other issues and this matter is
REMANDED to the district court for proceedings consistent w ith this Opinion.

ENTERED FOR THE COURT

Carlos F. Lucero Circuit Judge