Title: BOSTON AVENUE MANAGEMENT, INC. v. ASSOCIATED RESOURCES, INC.
Citation: 152 P.3d 880, 2007 OK 5
Docket Number: 
State: Oklahoma
Issuer: Oklahoma Supreme Court
Date: January 30, 2007

BOSTON AVENUE MANAGEMENT, INC. v. ASSOCIATED RESOURCES, INC. Annotate this Case BOSTON AVENUE MANAGEMENT, INC. v. ASSOCIATED RESOURCES, INC. 2007 OK 5 152 P.3d 880 Case Number: 100009 Decided: 01/30/2007 THE SUPREME COURT OF THE STATE OF OKLAHOMA BOSTON AVENUE MANAGEMENT, INC., Plaintiff/Appellee, and OFFICE DESIGN, INC., Plaintiff, v. ASSOCIATED RESOURCES, INC., Defendant/Appellant. CERTIORARI TO THE COURT OF CIVIL APPEALS, DIVISION III APPEAL FROM THE DISTRICT COURT OF TULSA COUNTY, STATE OF OKLAHOMA HONORABLE DORIS L. FRANSEIN, TRIAL JUDGE ¶0 The Court of Civil Appeals (COCA), Division III reversed a trial court order denying Defendant/Appellant, Associated Resources, Inc.'s (Associated) motion for attorney fees and costs against Plaintiff/Appellee, Boston Avenue Management, Inc. (Boston) and remanded for determination of an award of attorney fees to Associated. The COCA relied on CERTIORARI PREVIOUSLY GRANTED; COURT OF CIVIL APPEALS' OPINION VACATED; TRIAL COURT ORDER AFFIRMED. James L. Kincaid of CROWE & DUNLEVY, Tulsa, Oklahoma for Plaintiff/Appellee. Stephen R. McNamara and Brian Gaskill, SNEED LANG, P.C., Tulsa, Oklahoma for Defendant/Appellant. LAVENDER, J. ¶1 We decide in this case whether the Court of Civil Appeals (COCA), Division III erred in reversing a trial court order denying Defendant/Appellant, Associated Resources, Inc.'s (Associated) motion for attorney fees and costs against Plaintiff/Appellee, Boston Avenue Management, Inc. (Boston) and remanding for determination of an award of attorney fees to Associated. The COCA's decision relied on FACTUAL BACKGROUND AND PROCEDURAL HISTORY ¶2 Boston sued Associated for monetary relief for allegedly failing to pay the proper holdover rent required by two lease agreements. Associated filed an Offer of Judgment (hereafter Offer) pursuant to § 1101.1(B). The Offer sets forth in pertinent part that Associated "offers to allow judgment to be taken against it for the amount of $3,934.24." Boston did not accept the Offer. ¶3 Thereafter, Boston filed a First Amended Petition against Associated containing two counts.2 Basically, each count concerned a separate lease and alleged Plaintiff, Office Design, Inc. (Office Design), as landlord, entered the lease agreements with Associated, as tenant. The First Amended Petition alleged that subsequent to execution of the leases Boston purchased the leased premises and assumed the role of landlord. Each count essentially alleged the respective lease involved had a "holding over" clause, that Associated remained in possession of the premises after expiration of the terms of the leases for certain periods of time, but failed to pay the holdover rent for such periods required to be paid by the terms of each lease. Count I sought $14,897.25, plus attorney fees, costs and other proper relief; count II sought $3,834.24, plus attorney fees, costs and other proper relief. ¶4 Associated moved for "summary judgment," asserting Boston was not the real party in interest to bring the suit. Associated's "summary judgment" motion was sustained solely on the basis Boston was not the real party in interest to sue under the leases (apparently because Boston had not received a valid assignment of the leases from Office Design) and the "summary judgment" order ostensibly dismissed with prejudice Boston's causes of action against Associated on that basis. However, obviously in an attempt to comply with 12 O.S.2001, § 2017(A), the dismissal was entered without prejudice to the right of Office Design to intervene to assert any causes of action previously asserted by Boston. Section 2017(A) provides in part that "[n]o action shall be dismissed on the ground that it is not prosecuted in the name of the real party in interest until a reasonable time has been allowed after objection for ratification of commencement of the action by, or joinder or substitution of, the real party in interest ...." The real party in interest "summary judgment" ruling was made by a different trial judge than the judge that denied Associated's motion for attorney fees and costs. The appellate record does not contain the parties' trial court "summary judgment" submissions, but does contain the "summary judgment" order, entitled Journal Entry of Judgment. ¶5 Office Design intervened and filed a Second Amended Petition that Associated concedes on appeal asserted the same causes of action against Associated as previously asserted by Boston.3 Although Boston is listed in the caption of the Second Amended Petition as a plaintiff, Boston is not mentioned in the body thereof. ¶6 Next, as pertinent here, Associated filed a motion for attorney fees and costs against Boston, citing § 1101.1(B) as support. Essentially, Associated argued § 1101.1(B) allowed it to recover attorney fees and costs against Boston because Boston did not recover a favorable judgment against Associated in any amount. Basically, Associated relied on the provisions of § 1101.1(B)(3) that provide: If no offer of judgment or counteroffer of judgment is accepted and the judgment awarded the plaintiff is less than one or more offers of judgment, the defendant shall be entitled to reasonable litigation costs and reasonable attorney fees incurred by the defendant with respect to the action or the claim or claims included in the offer of judgment from and after the date of the first offer of judgment which is greater than the judgment until the date of the judgment. Such fees and costs may be offset from the judgment entered against the offering defendant. ¶7 Prior to the trial court's ruling on Associated's motion for attorney fees and costs, Office Design (purportedly joined by Boston) filed a dismissal without prejudice of the suit. After supplemental and responsive submissions and oral argument regarding Associated's quest for attorney fees and costs, the trial court denied Associated's motion for attorney fees and costs. One basis for the trial court's denial was, in effect, a realization § 1101.1 was not applicable because the "summary judgment" ruling in favor of Associated and against Boston on the real party in interest issue was not an actual adjudication of the causes of action brought against Associated and was not a judgment within the contemplation of § 1101.1. In other words, the same claims or causes of action initiated by Boston against Associated were allowed to continue through Office Design's intervention or substitution as the real party in interest plaintiff. Associated appealed the denial.4 ANALYSIS ¶10 The focus of this appeal involves legal questions concerning the meaning of two legislative enactments, § 1101.1(B) and § 2017(A), and the interplay of the two statutes in the circumstances of this case. Involving questions of law relating to statutory interpretation, the appropriate appellate standard of review is de novo, "i.e., a non-deferential, plenary and independent review of the trial court's legal ruling[s]." Fulsom v. Fulsom, 2003 OK 96, ¶ 2, 81 P.3d 652 , 654, citing Samman v. Multiple Injury Trust Fund, 2001 OK 71, ¶ 8 and n. 5, 33 P.3d 302 , 305 and n. 5. ¶11 We also recognize the following general rules concerning statutory interpretation. When called on to determine the meaning of a statute, a court's primary goal is to ascertain and then follow the intention of the Legislature. See TRW/Reda Pump v. Brewington, 1992 OK 31, 829 P.2d 15 , 20. Legislative intent is ascertained by reviewing the whole act in light of its general purpose and object. Id. Fulsom further delineated certain well recognized principles concerning statutory interpretation. Fulsom states: The plain meaning of a statute's language is conclusive except in the rare case when literal construction would produce a result demonstrably at odds with legislative intent. Also, a court is duty-bound to give effect to legislative acts, not to amend, repeal or circumvent them. A universally recognized principle in cases when a court is called on to interpret legislative enactments is that the court is without authority to rewrite a statute merely because the legislation does not comport with the court's conception of prudent public policy. Fulsom ¶12 Fulsom also set out salient general rules regarding the recovery of attorney fees and statutory interpretation of enactments asserted to support an attorney fee allowance. In Fulsom the following is found: This Court stated the following in State ex rel. Tal v. City of Oklahoma City, Oklahoma follows the American Rule ... . The Rule is generally that each litigant pays for their own legal representation and our courts are without authority to assess attorney fees in the absence of a specific statute or contract allowing for their recovery. Exceptions to the Rule are narrowly defined and carved out with great caution because it is understood liberality of attorney fee awards against the non-prevailing party has a chilling effect on our open access to courts guarantee. [Citations omitted.] Oklahoma jurisprudence, thus, recognizes that attorney fee statutes are strictly applied because to do otherwise holds out the real possibility of chilling access to the courts. For an award of attorney fees to be authorized under a particular statute the authorization must be found within the strict confines of the involved statute. Further, if the involved attorney fee statute requires interpretation it may be read in context with other parts of the statute and in light of the law in effect at the time of its enactment. Fulsom ¶13 Contrasted with the recognized purpose or rationale behind our jurisprudence following the American Rule are the general policy reasons supporting the recovery of attorney fees and costs, to wit: the encouragement of settlement and discouragement of the bringing of frivolous claims. Hicks v. Lloyd's General Ins. Agency, Inc., ¶14 Title 12 O.S.Supp.2006, § 1101.1(B)(1) and (3) provide: B. Other actions. 1. After a civil action is brought for the recovery of money or property in an action other than for personal injury, wrongful death or pursuant to Chapter 21 of Title 25 or Section 5 of Title 85 of the Oklahoma Statutes, any defendant may file with the court, at any time more than ten (10) days prior to trial, an offer of judgment for a sum certain to any plaintiff with respect to the action or any claim or claims asserted in the action. An offer of judgment shall be deemed to include any costs and attorney fees otherwise recoverable unless it expressly provides otherwise. If an offer of judgment is filed, the plaintiff or plaintiffs to whom the offer of judgment is made shall, within ten (10) days, file: a. a written acceptance or rejection of the offer, or b. a counteroffer of judgment, as described in paragraph 2 of this subsection. If a plaintiff fails to file a timely response, the offer of judgment shall be deemed rejected. The fact an offer of judgment is made but not accepted or is deemed rejected does not preclude subsequent timely offers of judgment. .... 3. If no offer of judgment or counteroffer of judgment is accepted and the judgment awarded the plaintiff is less than one or more offers of judgment, the defendant shall be entitled to reasonable litigation costs and reasonable attorney fees incurred by the defendant with respect to the action or the claim or claims included in the offer of judgment from and after the date of the first offer of judgment which is greater than the judgment until the date of the judgment. Such costs and fees may be offset from the judgment entered against the offering defendant.9 A. REAL PARTY IN INTEREST. Every action shall be prosecuted in the name of the real party in interest. An executor, administrator, guardian, bailee, trustee of an express trust, a party with whom or in whose name a contract has been made for the benefit of another, or a party authorized by statute may sue in his own name without joining with him the party for whose benefit the action is brought. No action shall be dismissed on the ground that it is not prosecuted in the name of the real party in interest until a reasonable time has been allowed after objection for ratification of commencement of the action by, or joinder or substitution of, the real party in interest; and such ratification, joinder, or substitution shall have the same effect as if the action had been commenced in the name of the real party in interest. (emphasis added). The purpose of § 2017(A) was explained in Weeks v. Cessna Aircraft Co., Substitution of plaintiffs has been liberally granted in Oklahoma where mistake or inadvertent error has caused the improper party to file an action. Saint Paul Fire and Marine Insurance Co. v. Spann, Oklahoma's interpretation of section 2017 is fully consistent with the construction commonly placed on Federal Rule of Civil Procedure 17, from which section 2017 derives. The advisory committee notes to the 1966 amendment to Rule 17 describe the rationale for permitting liberal substitution of the plaintiff for the real party in interest in actions brought under the Federal Rules. The provision that no action shall be dismissed on the ground that it is not prosecuted in the name of the real party in interest until a reasonable time has been allowed, after the objection has been raised, for ratification, substitution, etc., is added simply in the interests of justice. (Emphasis added). F.R.C.P. 17, Advisory Committee Notes, 1966 Amendment. The committee notes stress that the provision "is intended to prevent forfeiture when determination of the proper party to sue is difficult or when an understandable mistake has been made." Id. The committee explains that "the modern function of the rule in its negative aspect is simply to protect the defendant against a subsequent action by the party actually entitled to recover." Id. Where the defendant's interests are protected, substitution should be allowed. Thus, the purpose of the real party in interest requirement from the defendant's perspective is to insure that the defendant will not be later subjected to a second suit based on the same cause or claim. See Joplin v. Ely, ¶17 Here, in essence, Associated persuaded the trial court that Office Design was the party having the actual right to recover (if entitlement to recovery was ultimately shown at all), not Boston, and the real party in interest purpose from Associated's perspective was served. When Office Design was allowed to intervene in the lawsuit, Office Design was, in effect, substituted in the place of Boston to litigate the same action and claims against Associated as had been initially brought by Boston. Although the "summary judgment" order of the trial judge handling the case prior to the judge that ruled on Associated's motion for attorney fees and costs used the unfortunate language that Boston's causes of action against Associated were dismissed with prejudice on the basis that Boston was not the real party in interest, the substantive effect of the "summary judgment" ruling was that Boston was dismissed as a party to the lawsuit and Office Design, once it decided to file a Second Amended Petition asserting the same claims, was substituted for Boston as the real party in interest plaintiff to carry forward the same action and the same claims as initially brought against Associated by Boston. ¶18 By virtue of the last phrase of § 2017(A) the substitution of Office Design had "the same effect as if the action had been commenced in the name of the real party in interest." Normally, § 2017(A)'s general purpose from the plaintiff's perspective, "is to prevent forfeiture when determination of the proper party to sue is difficult or when an understandable mistake has been made. Thus its main thrust is to allow correction in parties after the statute of limitation has run, despite the valid objection that the original action was not brought by the real party in interest." Watford, ¶19 In the case of Triad Bank, N.A. v. A & A Materials Co., Inc., CONCLUSION ¶21 For the purposes of the recovery of attorney fees and costs under § 1101.1(B)(3), the "summary judgment" ruling of the trial court on the real party in interest issue cannot be considered an actual adjudication of the action or the claim or claims brought by Boston against Associated. Instead, the action and the claims were allowed to go forward and to continue through Office Design's intervention and, in effect, its substitution for Boston as the real party in interest to litigate the action and claims against Associated. Office Design dismissed the action without prejudice and, thus, neither the action or claims have to this point been the subject of a final and actual adjudication sufficient to invoke the provisions of § 1101.1(B)(3). In that no judgment has yet adjudicated the action or claim or claims that were the subject of Associated's Offer of Judgment, the trial court was correct to deny Associated's motion for attorney fees and costs and the COCA erred in reversing that order and remanding for a determination of attorney fees to Associated. ¶22 For the reasons set forth in this opinion, the COCA's opinion is VACATED and the trial court Order denying Associated's motion for attorney fees and costs against Boston is AFFIRMED. ¶23 EDMONDSON, V.C.J., LAVENDER, HARGRAVE, OPALA, KAUGER, WATT, TAYLOR and COLBERT, JJ., concur. ¶24 WINCHESTER, C.J., concurs in result. FOOT