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Parker v. Genson

Court of Appeals of Oklahoma, Division III

June 9, 2017

ANTHONY PARKER and KENNETH PARKER, Plaintiffs/Appellants,
v.
MICHAEL GENSON, Defendant/Appellee.

          Mandate Issued: 11/14/2017

         APPEAL FROM THE DISTRICT COURT OF CLEVELAND COUNTY, OKLAHOMA HONORABLE TRACY SCHUMACHER, JUDGE

          Bradley D. Brickell, Brickell & Associates, P.C., Norman, Oklahoma, and Stanley M. Ward, Ward and Glass, Norman, Oklahoma, for Plaintiffs/Appellants.

          Sidney A. Dunagan, Ellen A. Adams, Sidney K. Swinson, Brandon C. Bickle, GABLE & GOTWALS, P.C., Oklahoma City, Oklahoma, for Defendant/Appellee.

          Bay Mitchell, Presiding Judge.

         ¶1 Plaintiffs/Appellants Anthony Parker and Kenneth Parker (collectively, "Plaintiffs") appeal the trial court's denial of their Motion for New Trial following an award of prevailing-party attorney fees in the amount of $394, 556.75, plus a 25 percent bonus fee, and costs in the amount of $23, 289.83 to Defendant/Appellee Michael Genson ("Defendant" or "Michael Genson"). Following our review of the applicable law and facts, we REVERSE the decision of the trial court and REMAND for further proceedings consistent with this opinion.

         FACTUAL AND PROCEDURAL BACKGROUND

         ¶2 Plaintiffs brought suit against three parties, Michael Genson, Robert Genson, and GOG Production, LLC ("GOG") (collectively, "Co-Defendants"), for surface damage to real property caused by oil production operations. [1] Following a jury trial in the District Court of Cleveland County, the jury returned a verdict in favor of Plaintiffs as to their claims against GOG but returned a verdict in favor of the individual defendants, Michael Genson and Robert Genson (together, the "Individual Defendants"). However, the trial judge at the time (The Honorable Tom Lucas) entered judgment notwithstanding the verdict ("JNOV") against the Individual Defendants and also awarded prevailing-party attorney fees and costs to Plaintiffs. All three Co-Defendants in the suit appealed the initial judgment, and all three Co-Defendants filed for bankruptcy protection. A settlement was reached with GOG and Robert Genson during their bankruptcy proceedings, and their appeals of the judgment were dismissed. Michael Genson's bankruptcy was dismissed, so he proceeded with his appeal of the initial judgment.

         ¶3 On October 25, 2013, Division IV of the Court of Civil Appeals ("COCA") in Case No. 108, 619 vacated the post-trial orders which entered judgment JNOV and an award of prevailing-party attorney fees and costs in favor of Plaintiffs as against Michael Genson. [2] COCA directed the district court to reinstate the jury's verdict given in favor of Michael Genson, thus making him a prevailing party. Defendant then moved the District Court to award his attorney fees and costs against Plaintiffs incurred in all phases of the litigation. Following an adversary hearing, the district court (The Honorable Tracy Schumacher) awarded prevailing-party attorney fees and costs, pursuant to 12 O.S. §940 (A), to Defendant. The amount awarded included the fees incurred on behalf of all three Co-Defendants in the initial suit (Michael Genson, Robert Genson, and GOG), the post-trial litigation at the district court level, and appeal-related work for Michael Genson only. The trial court also enhanced Defendant's requested fees by 25 percent, relying on Burk v. City of Okla. City, 1979 OK 115, 598 P.2d 659, and stating, in part, that the enhancement was the "same [percentage] awarded to Plaintiffs by Judge Lucas... the time and labor involved in the case was significant... the attorneys involved for the Defendant are quite skilled at this very specialized area of the law... the fees charged are consistent with the fees charged by attorneys of this caliber... and the case was undesirable given its age and progress through the trial court post verdict and then on appeal." The trial court also awarded "reasonable and proper" costs in the amount of $23, 289.83.

         ¶4 On appeal, Plaintiffs argue that Michael Genson cannot recover attorney fees and costs incurred in the litigation on behalf of all three Co-Defendants because only he was a prevailing party. They insist that, as a matter of law, the trial court must apportion the fees and costs among the prevailing and non-prevailing Co-Defendants. Additionally, Plaintiffs argue the enhancement of 25 percent was not supported by the facts of this case. In contrast, Defendant argues that the sole issue before this Court is whether the trial court's award of attorney fees and costs against Plaintiffs was supported by the evidence. Further, Defendant argues the trial court properly rejected Plaintiffs' apportionment argument.

         ANALYSIS

         ¶5 Oklahoma strongly adheres to the American Rule that prevailing-party attorney fees are not recoverable in the absence of a statute or enforceable contract. Morgan v. Galilean Health Enter., Inc., 1998 OK 130, ¶11, 977 P.2d 357, 362. Section 940(A) of Title 12, relied on by Defendant here, is one such statute. [3] The Oklahoma Supreme Court has emphasized that statutes authorizing the award of attorney fees must be strictly applied. Fulsom v. Fulsom, 2003 OK 96, ¶8, 81 P.3d 652, 655. "[T]o do otherwise holds out the real possibility of chilling access to the courts." Id. "An attorney fee award is recoverable to a prevailing party only for the work attributable to a claim for which such fees are statutorily recoverable." Lee v. Griffith, 1999 OK 32, ¶5, 990 P.2d 232, 233. Consistent with this view, the Supreme Court has "approved an apportionment of attorney fees where the legal services were performed partly in an action in which attorney fees were recoverable and partly in a matter in which such fees are not allowable." Sisney v. Smalley, 1984 OK 70, ¶22, 690 P.2d 1048, 1052. Similarly, the Court has reversed an award of attorney fees in a case where the prevailing party was entitled to an award but had asserted counterclaims for which there was no statutory authority for fees, stating that "the trial court should have reduced the award by the amount attributable to [the party's] unsuccessful counterclaim theories." Green Bay Packaging, Inc. v. Preferred Packaging, Inc., 1996 OK 121, ¶38, 932 P.2d 1091, 1098.

         ¶6 A review of the relevant case law demonstrates that apportionment usually becomes necessary when a party successfully prosecutes or defends both fee-bearing and non-fee bearing claims. See RJB Gas Pipeline Co. v. Colo. Interstate Gas Co., 1989 OK CIV APP 100, ¶68, 813 P.2d 1, 14 (reversing the award of attorney fees and remanding to the trial court to "apportion[] attorney fees to eliminate those fees for the unsuccessful punitive damages claims" based on a tort claim for which there is no provision for the recovery of attorney fees). However, the situation presented by this appeal is different. Here, Plaintiffs argue that apportionment is also necessary between co-defendants, who are represented by the same attorneys, when only one of them was the prevailing party who could recover his attorney fees pursuant to 12 O.S. §940 (A). [4] Neither the parties to this appeal nor our own independent research revealed an Oklahoma appellate decision addressing this precise issue. However, "[f]or 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." Fulsom, 2003 OK 96, ¶8. Section 940(A) specifically states that "the prevailing party shall be allowed reasonable attorney's fees, court costs and interest to be set by the court..." 12 O.S. §940 (A) (emphasis added.) Considering the plain language of §940(A), the Supreme Court's firm statement in support of apportionment set forth in Lee, 1999 OK 32, ¶5, the affirmation of a trial court's apportionment of fees between fee-bearing and non-fee-bearing claims, Sisney, 1984 OK 70, ¶22, Green Bay, 1996 OK 121, ¶38, and our state's commitment to the American Rule, Morgan, 1998 OK 130, ¶11, we find the trial court has a legal duty to apportion an award of attorney fees and costs among or between prevailing and non-prevailing parties represented by the same attorneys when the award is made pursuant to 12 O.S. §940 (A) and not all represented parties prevailed. To permit otherwise would result in a prevailing party (like Plaintiffs here were against Robert Genson and GOG) paying attorney fees of the parties against whom he prevailed. This is certainly not the result contemplated by the exception to the American Rule set forth in §940(A). See also Tsotaddle v. Absentee Shawnee Housing Authority, 2001 OK CIV APP 23, ¶31, 20 P.3d 153, 162 ("In a case involving multiple claims where prevailing-party attorney fees are authorized for only one claim, the law dictates that the court 'apportion' the fees so that attorney fees are awarded only for the claim for which there is authority to make the award.").

         ¶7 The burden of proof lies with the party seeking attorney fees to prove entitlement and to "document[] the appropriate hours expended and hourly rates." Hensley v. Eckerhart, 461 U.S. 424, 437 (1983). The Tenth Circuit has, when interpreting Oklahoma case law on attorney fee awards, found an "exception" to the "rule" of apportionment. Arnold Oil Properties, L.L.C. v. Schlumberger Technology Corp., 508 Fed.Appx. 715, 716-17 (10th Cir. 2013) (unpublished). "If a court finds all of the time devoted to the alleged non-fee-bearing claim... 'would have been necessarily incurred' in connection with a claim that is fee-bearing... then apportionment is not required. Id. (quoting Transpower Construct ors v. Grand River Dam Authority, 905 F.2d 1413, 1423 (10th Cir. 1990). [5] Defendant urges us to follow this example and find that the fees incurred in the defense of all three Co-Defendants would have been "necessarily incurred" in his defense alone because Plaintiffs' claims against all three Co-Defendants were identical. In Arnold Oil, 508 Fed.Appx. at 717, the record supported the trial court's non-apportionment because the "[trial] court expressly held this exception applies, finding [the fee-bearing and non-fee-bearing claim] to be direct corollaries of one another, as reflected in the jury instructions and verdict form utilized ...


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