Title: Hubbard v. Kaiser-Francis Oil Co.
Citation: 2011 OK 50
Docket Number: 
State: Oklahoma
Issuer: Oklahoma Supreme Court
Date: June 7, 2011

Hubbard v. Kaiser-Francis Oil Co. Annotate this Case Justia Opinion Summary In 2004, Plaintiff-Appellant Vick Hubbard filed suit against Defendants Kaiser-Francis Oil Company, Texas Southwest Gas and GBK Corporation for breach of an oil and gas lease and a gas purchase contract. Pursuant to 12 OS Supp. Sec. 1101.1(B), Defendants offered Plaintiff $275 for each of the seven alleged breaches. Plaintiff did not accept the offers and did not submit a counteroffer. By the statute, the offers were deemed rejected. Defendants moved for summary judgment that was granted and entered by the trial court. Plaintiffs appealed. Thereafter, Defendants filed a joint motion to recover their costs and fees based on Plaintiff's failure to obtain a judgment for more that the combined amount of Defendants' offers. In 2005, the parties reached an agreement on litigation costs and attorney fees that were to be paid by Plaintiff. Plaintiff paid that amount and Defendants withdrew their motion. Because of Plaintiff's appeal, the case was remanded to district court. The parties moved for summary judgment. The court granted Defendants' motion. Judgment for Defendants was entered in 2007. Defendants subsequently filed a supplemental joint combined motion for attorney fees for costs they incurred since 2005. In 2008, the district court granted Defendants' motion. On appeal to the Supreme Court, the issues presented for review were matters of first impression. Of import in this case was: (1) whether Defendants were entitled to attorney fees under Sec. 1101.1 because they received a summary judgment, and (2) whether a judgment that was appealed and remanded negated Defendants' 1101.1 offer of judgment made prior to the appeal. Upon careful consideration of the arguments, the Supreme Court affirmed the lower courts' decisions in this case. The Court held that Defendants were entitled to litigation costs, and that the offer of judgment was applicable throughout the case, including through any appeals and remand. Read more Want to stay in the know about new opinions from the Oklahoma Supreme Court? Sign up for free summaries delivered directly to your inbox. Learn More › You already receive new opinion summaries from Oklahoma Supreme Court. Did you know we offer summary newsletters for even more practice areas and jurisdictions? Explore them here . HUBBARD v. KAISER-FRANCIS OIL COMPANY 2011 OK 50 Case Number: 105701 Decided: 06/07/2011 THE SUPREME COURT OF THE STATE OF OKLAHOMA NOTICE: THIS OPINION HAS NOT BEEN RELEASED FOR PUBLICATION IN THE PERMANENT LAW REPORTS. UNTIL RELEASED, IT IS SUBJECT TO REVISION OR WITHDRAWAL. VICK ALLEN HUBBARD, Plaintiff/Appellant, v. KAISER-FRANCIS OIL COMPANY, a Delaware corporation, TEXAS SOUTHWEST GAS, L.L.C., a Texas corporation, and GBK CORPORATION, Defendants/Appellees. ON CERTIORARI TO THE COURT OF CIVIL APPEALS DIVISION IV ¶0 Vick Allen Hubbard, Plaintiff, appeals from a post-judgment order of the district court granting litigation costs and attorney fees to Kaiser-Francis Oil Company, Texas Southwest Gas, L.L.C., and GBK Corporation, Defendants. The district court relied on offers of judgment made pursuant to CERTIORARI PREVIOUSLY GRANTED; OPINION OF THE COURT OF CIVIL APPEALS VACATED; JUDGMENT OF THE DISTRICT COURT AFFIRMED. Laurence L. Pinkerton, Judith A. Finn, PINKERTON & FINN, P.C., Tulsa, Oklahoma, for Plaintiff/Appellant. Keith F. Sellers, SELLERS LAW FIRM, and Frederic G. Dorwart, Erica A. Dorwart, Paul DeMuro, Michael J. Medina, FREDERIC DORWART LAWYERS, Tulsa, Oklahoma, for Defendants/Appellees. COMBS, J.: ¶1 This cause presents questions of first impression in Oklahoma law: (1) whether a judgment in favor of a defendant triggers the application of ¶2 In a 2-1 decision, the Court of Civil Appeals (COCA), Division IV, affirmed the district court's award of costs and attorney fees to Defendants pursuant to offers of judgment made by Defendants under BACKGROUND ¶3 On May 5, 2004, Hubbard filed suit against Defendants for breach of an oil and gas lease, and gas purchase contract regarding a royalty interest owned by him. On May 25, 2004, Kaiser-Francis Oil Company filed an offer of judgment pursuant to ¶4 Defendants filed a motion for summary judgment which was granted and entered on March 28, 2005. Hubbard appealed. Thereafter, Defendants filed a joint motion to recover their costs and fees based on Hubbard's failure to obtain a judgment for more than the amount of Defendants' § 1101.1(B) offers. On or around July 6, 2005, the parties reached an agreement on the amount of litigation costs and attorney fees to be paid by Hubbard. Hubbard paid this amount and Defendants withdrew their motion. ¶5 As a result of the appeal, the case was remanded and ordered to include a judgment roll from a related case to be filed with the district court. DISCUSSION ¶6 The issues in this case revolve around the construction of 1. Prevailing Defendants Are Entitled to Seek Fees and Costs Under 12 O.S. Supp. 2002, § 1101.1(B). ¶7 As recognized by this Court in Boston Ave. Mgmt., Inc. v. Associated Res., Inc., 2007 OK 5, ¶ 13 and n. 7, 152 P.3d 880 , 885 and n.7, we have never addressed the issue of whether a prevailing defendant, i.e., a defendant who obtains a judgment in his favor, may recover fees and costs pursuant to a § 1101.1(B) offer of judgment.5 Although not precedential, it should be noted that the Oklahoma Court of Civil Appeals has held several times that a prevailing defendant may recover its attorney fees and costs pursuant to § 1101.1(B).6 Resolution of this issue depends upon our interpretation of the statutory phrase "the judgment awarded the plaintiff." ¶8 Generally, statutes are to be interpreted in accordance with their plain, ordinary meaning according to the import of the language used. In re Certification of Question of State Law, 1977 OK 16, 560 P.2d 195 . Nevertheless, where the literal meaning of a statute would result in great inconvenience or lead to absurd consequences the Legislature could not have contemplated, we are bound to presume such consequences were not intended, and must adopt a construction which will promote the ends of justice and avoid the absurdity. Cox v. Dawson, 1996 OK 11, ¶ 20, 911 P.2d 272 , 281; Oliver v. City of Tulsa, 1982 OK 121, ¶ 25, 654 P.2d 607 , 612; Taylor v. Langley, 1941 OK 67, ¶ 0, 112 P.2d 411 , 412. ¶9 Hubbard correctly notes that no judgment was awarded him in this case because the district court granted Defendants' motions for summary judgment and awarded judgment in their favor. Indeed, Hubbard argues that because he was not awarded a judgment, the Defendants' § 1101.1(B) offers of judgment are invalid or ineffective. Hubbard claims the statute is triggered only when the plaintiff is the prevailing party in the underlying action. ¶10 Hubbard asserts that only a judgment awarded to a plaintiff can trigger a § 1101.1(B) award of fees and costs. If we accept that argument, we would be constrained to hold that the Legislature intended to advance fees and costs to a defendant where the plaintiff recovers only $1 but not where the defendant receives an outright judgment in its favor. Such an absurd result would not further the purpose of § 1101.1(B) which is to encourage settlement by creating the possibility of fee-shifting. ¶11 Hubbard urges us to follow the United States Supreme Court opinion of Delta Air Lines, Inc. v. August, 450 U.S. 346 , 101 S. Ct. 1146 (1981), which interpreted Rule 68 of the Federal Rules of Civil Procedure.7 Delta involved the application of Rule 68 to an unsuccessful plaintiff pursuing claims of employment discrimination. The Court determined that Rule 68, by its plain language, does not apply to a case in which judgment is entered against the plaintiff-offeree and in favor the defendant-offeror. ¶12 F.R.C.P. Rule 68 is fundamentally different from § 1101.1(B), as admitted by Hubbard, in that Rule 68 only applies to costs, not attorney fees, and it does not permit counter-offers by plaintiffs. These differences are critical. ¶13 The purpose of § 1101.1(B) is to "encourage judgments without protracted litigation" by "provid[ing] additional incentives to encourage a plaintiff to accept a defendant's offer to confess judgment" and to encourage a defendant "to offer an early confession of judgment [to] avoid further increases in costs which may be incurred [for] trial preparation." Boston Ave. Mgmt., Inc. v. Associated Res., Inc., 2007 OK 5, ¶ 13, 152 P.3d 880 , 885. Section 1101.1(B) encourages a meaningful exchange between the parties by allowing a plaintiff to make a counter-offer and reallocate the risk of incurring fees and costs back to the defendant. F.R.C.P. 68 does not permit such an exchange. ¶14 We see no reason to distinguish between an outright defense judgment and a plaintiff's judgment for less than the amount of a defendant's offer of judgment. A plaintiff who lost a case entirely should not be in a better position than a plaintiff who obtained only a small judgment. Thus, we hold the Legislature intended that a judgment entered in favor of a defendant can be the basis for an award of attorney fees and costs under § 1101.1(B). The trial court correctly awarded such fees and costs to Defendants in this case. II. Defendants Were Not Required to Renew their Offers of Judgment on Remand. ¶15 The next issue raised by Hubbard is whether Defendants' offers survived the appeal and subsequent remand of the case concerning the March 28, 2005, summary judgment. Hubbard maintains that because Defendants did not renew their offers post-remand, they cannot seek the fees and costs they incurred after the remand. Hubbard's requirement that Defendants' offers should have been renewed is unsupported by statute or case law. ¶16 In Oklahoma, there is but one judgment for each cause of action. Oklahoma City Urban Renewal Authority v. Oklahoma City, 2005 OK 2, ¶ 10, n. 16, 110 P.3d 550 , 557, n.16; FDIC v. Tidwell, 1991 OK 119, ¶ 5, 820 P.2d 1338 , 1341. A judgment is the final determination of the rights of the parties in an action. 12 O.S. 2001, § 681. While there was a judgment in this case on March 28, 2005, that judgment was remanded back for further proceedings. On November 8, 2007, the district court again granted summary judgment on all claims included in the offers of judgment in favor of the Defendants. Hubbard appealed this second summary judgment on December 7, 2007. On September 16, 2008, the Court of Civil Appeals affirmed the November 8, 2007, judgment and mandate was issued on October 9, 2008. Hubbard's argument would require the recognition of at least two judgments in this case - the March 28, 2005 summary judgment order that was remanded and the November 8, 2007, summary judgment order which has become final. ¶17 There is nothing in the record to show that Defendants' offers were vacated when the original judgment in favor of Defendants was apparently vacated and remanded. Remand after the original appeal did not constitute refiling of this case and the district court resumed jurisdiction of the case upon remand. As we stated in Boston Ave., supra, "the plain language of § 1101.1(B)(3) provides that there must be some type of final adjudication, i.e., conclusion to the claims included in the offer of judgment for an attorney fee and cost recovery to be triggered." Boston Ave. Mgmt., Inc. v. Associated Res., Inc., 2007 OK 5, ¶ 15, 152 P.3d at 885. The term "final adjudication" and § 1101.1(B)(3) "date of judgment" can only mean when the "action or claim or claims included in the offer of judgment" becomes res judicata. The doctrine of res judicata "teaches that when the appeal time expires a decision under this rubric becomes impervious to reconsideration and hence binding and conclusive upon the parties."8 In Hubbard v. Kaiser-Francis et al. (Court of Civil Appeals, 2008, unpublished opinion, No. 105,352), the Court of Civil Appeals affirmed the November 8, 2007, summary judgment on September 16, 2008. A rehearing was not requested nor was a petition for certiorari filed pursuant to Rule 1.179 of the Supreme Court Rules. Therefore, final adjudication occurred when the mandate was issued on October 9, 2008. Accordingly, Defendants are permitted to recover their remaining reasonable litigation costs and attorney fees incurred subsequent to July 7, 2005, through the date of the mandate, October 16, 2008.9 ¶18 We are required to analyze the enforcement of defendant's offer of judgment under unusual procedural circumstances. It is undisputed that the offer was neither accepted within ten days as required, nor was a counteroffer of judgment made within ten days. Nor was a subsequent timely offer of judgment made by either plaintiff or defendant. There is nothing in the plain text of III. Defendants' Offers Were Reasonable. ¶19 Hubbard also argues on appeal that the offers of judgment made by the Defendants, were unreasonably low and, therefore, sham offers. In the present case the offer made by the Defendants was to pay $275.00 per each of seven causes of action. ¶20 The purpose of § 1101.1 is to "encourage a plaintiff to accept a defendant's offer to confess judgment" and to encourage a defendant "to offer an early confession of judgment [to] avoid further increases in costs which may be incurred [for] trial preparation". See, Boston Ave. Mgmt., Inc. v. Associated Res., Inc., supra, ¶ 13,: Dulan v. Johnston, ¶21 In this case, applying a "reasonable" test to these facts, we would consider the facts demonstrated in the record. (1) Defendant had prevailed on summary judgment in a similar case raising identical issues on the same group of wells, CJ-2000-04355 (Tulsa County); (2) Defendants had prevailed before the Oklahoma Tax Commission on similar legal issues on the same group of wells [OTC No. P-94-154]; (3) Defendant had settled a statewide class action, which allegedly bound Hubbard as a class member, covering the issues raised in the present case (Kouns v. Kaiser-Francis Oil Co., CJ-98-45, Dewey County); and (4) the Defendants offer of $275.00 per cause of action. ¶22 As we have said in this opinion, the purpose of § 1101.1(B) is to encourage settlement by creating the possibility of fee-shifting. The purpose is not to create a trial tactic. It is intended as a realistic method of seeking a resolution of the parties' controversy. It is not the intent of § 1101.1(B) to allow a defendant to make an unreasonable offer of judgment and to, therefore, recover its reasonable litigation costs and reasonable attorney fees merely because it prevailed. Such a result would be absurd because it would not further the purpose of § 1101.1(B) which is to encourage settlement. ¶23 We find the offer in the present case to have been reasonable. CONCLUSION ¶24 The COCA, in a 2-1 decision, affirmed the order of the district court granting Appellants motions for litigation costs and attorney fees pursuant to CERTIORARI PREVIOUSLY GRANTED; OPINION OF THE COURT OF CIVIL APPEALS VACATED;| JUDGMENT OF THE DISTRICT COURT AFFIRMED. ¶25 CONCUR: TAYLOR, C.J., COLBERT, V.C.J., EDMONDSON, REIF, COMBS, GURICH, JJ. ¶26 CONCUR IN PART; DISSENT IN PART: KAUGER, WATT (JOINS WINCHESTER, J.), WINCHESTER (BY SEPARATE WRITING), JJ. FOOT