Opinion ID: 2631026
Heading Depth: 1
Heading Rank: 4

Heading: Prevailing Party Attorney Fees and Expenses

Text: ¶ 11 The six subcontracts are not in the appellate record. However, the record does include portions from one of the subcontracts which provide for arbitration, choice of law, and attorney fees and expenses, and the parties do not dispute that identical provisions are included in each of the six subcontracts. ¶ 12 The parties' arbitration agreement is set out in section 13.1, and it's application is not in dispute in this case. [2] The parties' choice of law agreement is set out in section 14.2, which reads, This Agreement shall be governed by the law of the state of Oklahoma. This section applies to the entire agreement, and nothing in the arbitration agreement provides otherwise. Although Hatcher argues that the subcontracts involved interstate commerce and that the federal arbitration statutes, 9 U.S.C. §§ 1, et seq., preempt any conflicting state law, the legal effect of section 14.2 is that arbitration in this case is governed by Oklahoma law even if there is a conflict with the federal arbitration statutes. See Volt Info. Sci., Inc. v. Bd. of Trustees of the Leland Stanford Junior Univ., 489 U.S. 468, 109 S.Ct. 1248, 103 L.Ed.2d 488 (1989)(explaining that enforcing arbitration under state law in accordance with the parties agreement gives effect to the contractual rights and expectations of the parties without doing violence to conflicting federal arbitration law). ¶ 13 Enforcement of voluntary arbitration agreements is firmly entrenched in Oklahoma law. Voss v. City of Oklahoma City, 1980 OK 148, ¶ 4, 618 P.2d 925, 927; City of Muskogee v. Martin, 1990 OK 70, ¶ 8, 796 P.2d 337, 340. Arbitration is enforced according to the terms of the parties' agreement. Voss ¶ 5, 618 P.2d at 927-928. Where there is a valid arbitration agreement, the courts will submit the dispute to arbitration; and where the arbitrator's award is within the submission and the authority established by the arbitration agreement, the courts will enforce the award. Id. ¶ 6, 618 P.2d at 928. ¶ 14 The parties' agreement in this case provided for prevailing party attorney fees and other expenses of litigation or arbitration. The arbitrator determined that attorney fees is governed by the subcontracts, quoting section 14.4 of the subcontracts. [3] ¶ 15 Hatcher takes the position that the attorney fee-shifting provision in the subcontracts is subject to more than one interpretation. Hatcher argues that the meaning of prevailing party attorney fees is rendered ambiguous because the arbitrator considered claims under all six subcontracts. This argument is not convincing. The arbitrator did not expressly find the attorney fee provision to be ambiguous and in need of interpretation. We find the attorney fee provision in the subcontracts to be clear and unambiguous. ¶ 16 The first and last parenthetical phrases in section 14.4 are the pertinent provisions: Should either party employ an attorney to institute suit or demand arbitration to enforce any of the provisions hereof . . . the prevailing party shall be entitled to recover reasonable attorney's fees, costs, charges and expenses expended or incurred therein. The plain and ordinary meaning [4] of the language in these phrases is not susceptible to more than one meaning, rather it is clear on its face. The first phrase, Should either party employ an attorney to institute suit or demand arbitration to enforce any of the provisions hereof, plainly extends the attorney fee provision to a party's claim to enforce the contract whether filed in a court of law or before an arbitration tribunal. The last phrase, the prevailing party shall be entitled to recover reasonable attorney's fees, costs, charges and expenses expended or incurred therein, clearly gives the prevailing party a contract right to recover reasonable attorney fees and expenses. ¶ 17 The meaning of this last phrase is more evident when one considers the meaning of its parts. Prevailing party, as a non-legal term, ordinarily means the stronger party or the victorious party. [5] Coinciding with its ordinary meaning, prevailing party, as a legal term of art, means the successful party who has been awarded some relief on the merits of his or her claim. [6] The language shall be entitled to recover is a clear statement of a right of the prevailing party, with the mandatory shall [7] creating an unequivocal right that leaves no discretion with the court or the arbitrator to deny it. The language reasonable attorney's fees, costs, charges and expenses places the amount of money which the prevailing party has a right to recover within the discretion of the court or the arbitrator, leaving the court or the arbitrator to decide what are reasonable amounts for attorney fees and expenses expended or incurred by the prevailing party. ¶ 18 In mandatory language similar to that used in the involved subcontracts, Oklahoma statutory law, 12 O.S.Supp.2002, § 936, gives the prevailing party in a civil action a right to recover attorney fees. The statute provides that the prevailing party shall be allowed a reasonable attorney fee to be set by the court. [8] Section 936 applies to a party who is successful on a contract claim as specified therein even when another party is successful on another claim and entitled to attorney fees under a different statute. Welling v. American Roofing & Sheet Metal Co., Inc., 1980 OK 131, 617 P.2d 206; Midwest Livestock Systems v. Lashley, 1998 OK 68, 967 P.2d 1197. [9] It also applies to a party who is successful on a contract claim as specified therein where the damages to be recovered are used to offset the damages on another claim. Tomahawk Resources, Inc. v. Craven, 2005 OK 82, 130 P.3d 222. The statute's purpose is to make whole the contracting party who must resort to litigation to vindicate a contract right. B & P Construction Co. v. Wells, 1988 OK 17, ¶ 6, 759 P.2d 208, 209. But, the statute allows the parties to contract away the right to prevailing party attorney fees with the clause unless otherwise provided by law or the contract which is the subject of the action. ¶ 19 The parties in this case did not contract away the right to prevailing party attorney fees, instead they extended it to arbitration proceedings. We conclude that section 14.4 in the subcontracts controls the contracting parties' right to recover prevailing party attorney fees, and as provided by the contract, its meaning and application are governed by Oklahoma law. Section 14.4 gives the same right to prevailing party attorney fees to the contracting parties in a civil action as they would have under § 936 of title 12. Additionally, section 14.4's plain and ordinary language shifted the prevailing party's attorney fees and expenses in arbitration onto the losing party. Under section 14.4, the arbitrator has no discretion to deny the prevailing party's right to recover attorney fees and expenses. Rather, section 14.4 unequivocally requires the arbitrator to award reasonable attorney fees and expenses when requested by the prevailing party. ¶ 20 The arbitrator awarded Sooner $71,304.87 on the merits of its claim against Hatcher but denied Sooner's request for prevailing party attorney fees. On Sooner's motion to modify, the arbitrator had before him both the prevailing party attorney fees contract provision and the prevailing party attorney fee statute. The arbitrator found that the award of attorney fees is governed by a provision in the numerous subcontracts and that Sooner prevails on some of its claims, and Nolan Hatcher prevails on some of its claims and denied Sooner's request for prevailing party attorney fees. This ruling manifests an intent to ignore the clear and unambiguous prevailing party attorney fee provision in the parties' agreement. ¶ 21 In its reply brief, Hatcher surmises that the arbitrator decided that both parties had prevailed on various subcontract actions, and that each would be entitled to recover the same amount of attorney fees; and instead of awarding fees to both the arbitrator mentally offset the amounts by declining to award fees to either. That position is nothing more than a guess. At the end of the arbitrator's detailed accounting of the merits of the controversy, Sooner was the winner, and with the arbitrator's award of prejudgment interest against Hatcher, Sooner was the winner. As the proctor of the parties' agreement, the arbitrator's function was to effectuate the parties' arbitration agreement. Here, the arbitrator manifestly disregarded the parties' agreement.