Court Opinion

ID: 9787410
Source: CourtListenerOpinion
Date Created: 2023-08-31 00:16:00.232938+00
Date Added: 2024-06-11T07:36:55.631588
License: Public Domain

LAVENDER, J.,
dissenting.
T 1 I respectfully dissent. In my view, the record does not support the trial judge's award of attorney fees to defendant/appellee under the authority of City National Bank & Trust Co. v. Owens, 1977 OK 86, 565 P.2d 4. In my opinion, the majority, without expressly stating so, has expanded the reach of the inherent equitable authority to award limited attorney fees for bad faith, vexatious, wanton or oppressive litigation misconduct enunciated in Owens. I am concerned the expansion will have an inordinate chilling effect on access to the courts, a constitutionally anchored right in Oklahoma [OKLA. CONST. art. 2, § 6], because the majority opinion can be read to allow a prevailing defendant a non-statutorily or non-contractually-based attorney fee premised on nothing more than the fact a plaintiff fails to present sufficient evidence in his/her case-in-chief to withstand a demurrer/directed verdict.
112 I am also troubled because the majority, again without expressly saying so, appears to make the inherent equitable authority exception to the American Rule as to the recovery of attorney fees delineated in Owens, at least partially coextensive with 12 O.S. Supp.1994, $ 2011, without providing the procedural protections granted by that statute. Further, I have a concern the majority has not adequately described the test to be used for invocation of the inherent authority exception. Particularly, the majority seems to have substituted an objective reasonableness standard for the proper standard called for by Owens. In my view, Owens calls for some inquiry into the subjective motivation(s) or reason(s) behind a plaintiff's litigation conduct, or one must be able to say, based on the egregious nature of the misconduct involved, improper motivation may properly be presumed. I am also troubled that the majority may be punishing a client (plaintiff/appellant Dean Bailey Olds, Inc.) for what might be the negligence of its counsel in continuing to advocate a negligent misrepresentation theory even after it may have become apparent there was an insufficient factual basis to show any breach of duty by defendant/appellee.
13 Under the American Rule-the general/normal rule in Oklahoma-each litigant bears the cost of his/her legal representation and our courts are without authority to assess and award attorney fees in the absence of a specific statute or a specific contract allowing attorney fee recovery. Kay v. Venezuelan Sun Oil Co., 1991 OK 16, 806 P.2d 648, 650. Any exceptions to the American Rule are narrowly defined [Id.] and carved out with great caution. Beard v. Richards, 1991 OK 117, 820 P.2d 812, 816. Exceptions are narrowly defined and carved out with great caution because it is understood that liberality of attorney fee awards against the non-prevailing party has a chilling effect on our open access to courts guarantee. See Beard v. Richards, 820 P.2d at 816.
[ 4 One exception to the general American Rule is that carved out in Owens. As I understand the import of Owens it recognized the inherent equitable authority of a trial court to award attorney fees against a party for bad faith litigation misconduct, misconduct that is vexatious, wanton or engaged in for oppressive reasons. See Winters By and Through Winters v. City of Oklahoma City, 1987 OK 63, 740 P.2d 724, 726-727. On more than one occasion this Court has recognized that the bad faith exception authorized by Owens is a narrow one and that it should be applied with a degree of caution and restraint. Wallace v. Halliburton Co., 1993 OK 24, 850 P.2d 1056, 1060-1061; Smith v. State ex rel. Dept. of Human Services, 1990 OK 19, 788 P.2d 959, 961-962. For attorney fees to be authorized "overriding consider*823ations" must indicate the need for such a recovery. Owens, 565 P.2d at 8-9. Thus, our ruling in Owens was never intended to be viewed as giving trial courts some broad, all-encompassing equitable authority to award attorney fees. Smith v. State ex rel. Dept. of Human Services, 788 P.2d at 962.
1 5 To come within the bad faith exception, in my view, it must be shown the litigation is conducted for oppressive reasons, such as delay or the litigation is necessarily an abuse of the judicial process and a waste of public revenue. Beard v. Richards, 820 P.2d at 816. To determine if the bad faith exception applies, in my opinion, the focus of the inquiry is on the intent of the person filing the claim, rather than the quality or quantity of the evidence, or ultimate success or failure of the claim. See Whitlock v. Bob Moore Cadillac, Inc., 1997 OK 56, 938 P.2d 737 (bad faith litigation conduct under Oklahoma Consumer Protection Act, 15 0.98.1991, § 751 et seq., as amended); (Green Bay Packaging, Inc. v. Preferred Packaging, Inc., 1996 OK 121, 932 P.2d 1091, 1098-1099 (bad faith conduct in relation to litigation concerning Uniform Trade Secrets Act, 78 0.8.1991, § 85 et seq.); see also First Nat. Bank and Trust Co. of Vinita v. Kissee, 1993 OK 96, 859 P.2d 502, 511-514 and TRW/Reda Pump v. Brewington, 1992 OK 31, 829 P.2d 15, 23 and f. n. 5 (20 O.S.1991, § 15.1, concerning statutory authority to award attorney fees for frivolous appeal, is not coextensive with the bad faith or oppressive conduct exception to the American Rule enunciated in Owens, although there may be overlap between statutory basis for attorney fee award under § 15.1 and common law exeeption found in Owens; determination of frivolity under § 15.1 is made on objective basis from review of entire record). >
¶ 6 My review of the record convinces me that the trial judge did not make any inquiry into the subjective intent, motivation(s) or reason(s) behind plaintiff/appellant's litigation conduct or that of its counsel; nor, in my view, can it be said on the instant record that any misconduct involved was of such an egregious nature that some bad motive or intent may be properly presumed. Simply, this record does not appear to show any overriding considerations calling for the need of an attorney fee recovery.
T7 Furthermore, the majority seems to err because, instead of applying the bad faith test upon which the exception in Owens is based-i.e. with its focus on the intent of the supposed offending party(s)-the majority appears to have sub silentio adopted the objective reasonableness standard applied by this Court in certain cireamstances under 12 O.S. Supp.1994, § 2011. Hammonds v. Osteopathic Hospital Founders Association, 1996 OK 100, 934 P.2d 319, 322-323; Warner v. Hillcrest Medical Center, 1995 OK CIV APP 123, 914 P.2d 1060, cert. denied 519 U.S. 861, 117 S.Ct. 165, 136 L.Ed.2d 108 (1996). Seetion 2011 provides in toto:
A. SIGNATURE. Every pleading, written motion, and other paper shall be signed by at least one attorney of record in his individual name, whose Oklahoma Bar Association identification number shall be stated, or, if the party is not represented by an attorney, shall be signed by the party. Each paper shall state the address of the signer and telephone number, if any. Except when otherwise specifically provided by rule or statute, pleadings need not be verified or accompanied by affidavit. An unsigned paper shall be stricken unless the omission of the signature is corrected promptly after being called to the attention of the attorney or party.
B. REPRESENTATIONS TO COURT. By presenting to the court, whether by signing, filing, submitting, or later advocating, a pleading, written motion, or other paper, an attorney or unrepresented party is certifying that to the best of the person's knowledge, information, and belief, formed after an inquiry reasonable under the cireumstances: .
1. It is not being presented for any improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation;
2. The claims, defenses and other legal contentions therein are warranted by existing law or by a nonfrivolous argument for the extension, modification, or reversal of existing law or the establishment of new law;
*8243. The allegations and other factual contentions have evidentiary support or, if specifically so identified, are likely to have evidentiary support after a reasonable opportunity for further investigation or discovery; and
4. The denials of factual contentions are warranted on the evidence or, if specifically so identified, are reasonably based on a lack of information or belief.
C. SANCTIONS. If, after notice and a reasonable opportunity to respond, the court determines that subsection B of this section has been violated, the court shall, subject to the conditions stated below, impose an appropriate sanction upon the attorneys, law firms, or parties that have violated subsection B of this section or are responsible for the violation.
1. HOW INITIATED.
a. By Motion. A motion for sance-tions under this rule shall be made separately from other motions or requests and shall describe the specific conduct alleged to violate subsection B of this section. It shall be served as provided in Section 2005 of this title, but shall not be filed with or presented to the court unless, within twenty-one (21) days after service of the motion or such other period as the court may prescribe, the challenged paper, claim, defense, contention, allegation, or denial is not withdrawn or appropriately corrected. If warranted, the court may award to the party prevailing on the motion the reasonable expenses and attorneys fees incurred in presenting or opposing the motion. Absent exceptional cireumstances, a law firm shall be held jointly responsible for violations committed by its partners, associates, and employees.
b. On Court's Initiative. On its own initiative, the court may enter an order describing the specific conduct that appears to violate subsection B of this section and directing an attorney, law firm, or party to show cause why it has not violated subsection B of this section with respect thereto.
2. NATURE OF SANCTIONS; LIMITATIONS. A sanction imposed for violation of this rule shall be limited to what is sufficient to deter repetition of such conduct or comparable conduct by others similarly situated. Subject to the limitations in subparagraphs a and b of this paragraph, the sanction may consist of, or include, directives of a nonmonetary nature, an order to pay a penalty into court, or, if imposed on motion and warranted for effective deterrence, an order directing payment to the movant of some or all of the reasonable attorneys fees and other expenses incurred as a direct result of the violation.
a. Monetary sanctions shall not be awarded against a represented party for a violation of paragraph 2 of subsection B of this section.
b. Monetary sanctions shall not be awarded on the court's initiative unless the court issues its order to show cause before a voluntary dismissal or settlement of the claims made by or against the party which is, or whose attorneys are, to be sanctioned.
3. ORDER. When imposing sanctions, the court shall describe the conduct determined to constitute a violation of this seetion and explain the basis for the sanction imposed.
D. INAPPLICABILITY TO DISCOVERY. This section does not apply to disclosures and discovery requests, responses, objections, and motions that are subject to the provisions of Sections 3226 through 3287 of this title.
T8 Under the current version of § 2011 the question of whether sanctions are appropriate for certain types of litigation misconduct has its focus on an objective standard. Warner v. Hillcrest Medical Center, supra, 914 P.2d at 1064.1 Under § 2011, no longer may subjective good faith provide a safe harbor against an attorney fee sanction when it *825becomes objectively apparent there is no viable claim against a named defendant and no longer is there room under § 2011 for a pure heart, empty head defense to an attorney fee award. Warner v. Hillcrest Medical Center, 914 P.2d at 1064; First Nat. Bank and Trust Co. of Vinita v. Kissee, supra, 859 P.2d at 512. In the present case, however, the applicability of § 2011 is not raised by anyone. I assume it is not raised because the procedural protections mandated by the provision were not followed in this case. See generally TAL Technologies, Inc. v. L.D. Rhodes Oil Co., 2000 OK 38, 4 P.3d 1256 (description of procedural protections). As far I can tell from my review of the record submitted to us in this appeal, no specific notice of the purported offending conduct was provided to plaintiff or its counsel; no opportunity was afforded to correct such conduct by withdrawal of any offending pleading; no opportunity to respond that any claimed offending pleading or advocacy thereof should not be sanctionable was given; nor was any show cause order issued by the trial judge which would have described the offending conduct and afforded an opportunity to be heard.
T9 In the present situation, the negligent misrepresentation theory of liability began through plaintiff/appellant's pleadings. If that theory of liability was, indeed, not factually or legally viable, § 2011 surely would have been applicable to provide a statutory mechanism to sanction any violative conduct. But, § 2011 was not invoked. Instead, that provision was apparently ignored throughout the litigation and the trial court merely sidestepped the procedural mandates of $ 2011-a course now seemingly approved of by the majority, under the guise of some broad, all-encompassing inherent equitable authority, something this Court has previously said was not intended by our pronouncement in Owens.
110 In summary, it is my view that a proper analysis of the record does not support application of an Owens attorney fee award notwithstanding the trial judge's characterization of plaintiff/appellant's suit as "onerous". There was no showing the suit was brought or litigated in bad faith or for any improper or oppressive reason(s); nor can it be said, on this record, any overriding considerations require an attorney fee award. Therefore, I respectfully dissent.

. For purposes of this dissent I need not decide whether a subjective intent inquiry would be required for violations falling under 12 O.S. Supp.1994, § 2011(B)(1)-i.e. matters presented for an improper purpose, such as to harass or cause unnecessary delay or needless increase in the cost of litigation.