SHEPARD v. OKLAHOMA DEPARTMENT OF CORRECTIONS

2015 OK 8

Summary: In November 2005 Shepard was working for the Oklahoma Department of Corrections when she was injured. In the subsequent worker's compensation case it was found that she sustained injuries to her neck, lumbar back, left shoulder, right shoulder and left arm. The Worker's Compensation Court ordered that Shepard be provided "reasonable and necessary continuing medical maintenance limited to prescription medications and four (4) visits per year to monitor the same with Dr. M." and that this provision was subject to review upon application of either party for good cause shown (the "Order"). Thereafter Shepard continued to receive prescription medication for pain management pursuant to the Order. Shepard continued to receive pain medications and was at all times compliant with her prescriptions. Shepard submitted to random screenings to ensure that she used the pain medications as prescribed, all of which she passed. Shepard moved to reopen her claim in 2010 due to worsening conditions and in 2011 she was granted further compensation as a result. In 2012 the Oklahoma Department of Corrections and its insurance provider (the "Respondents") sought a hearing to "discuss prescriptions". Respondents sought an order that would have the effect of terminating Shepard's medical prescriptions. The gist of Respondent's argument was that under the new Worker's Compensation statute continuing prescription medication for pain management is not authorized, and therefore Shepard's continuing medication for pain management should no longer be authorized. The Worker's Compensation Court of Existing Claims, which is the court specifically formed for the purpose of handling existing claims under the previous Worker's Compensation Court, agreed. Shepard appealed. The Oklahoma Supreme Court ruled that the change in the worker's compensation law was an unconstitutional attempt to retroactively change a Shepard's substantive rights and remanded the case.

Legal Issues: An issue involving the existence of a legislative intent to make a statute retroactive is a question of law that the Oklahoma Supreme Court reviews on a de novo basis and independent of the trial court or tribunal's ruling.

The specific question before the Court involved the change in the Worker's Compensation statute located at 85 O.S. 2005 §14(A)(1), the operative law on the date of Shepard's initial injury, which read:

A. 1. The employer shall promptly provide for an injured employee such medical, surgical or other attendance or treatment, nurse and hospital service, medicine, crutches, and apparatus as may be necessary after the injury. The treating physician shall supply the injured employee and the employer with a full examining report of injuries found at the time of examination and proposed treatment, this report to be supplied within seven (7) days after the examination; also, at the conclusion of the treatment the treating physician shall supply a full report of the treatment to the employer of the injured employee.

and the operative law on the date of the most recent review located at 85 O.S. 2011 §326(G) which reads:

G. Effective March 1, 2012, the scope and duration of medical treatment shall be provided in accordance with the current edition of the "Official Disability Guidelines", as published by the Work Loss Data Institute. For medical treatment not addressed by the Official Disability Guidelines or addressed but not recommended in the ODG section in regard to injuries to the cervical, thoracic, or lumbar spine, the Physician Advisory Committee shall adopt the Oklahoma Treatment Guidelines as provided in Section 73 of this act. Medical treatment provided by or at the direction of the treating physician in accordance with the current edition of the Official Disability Guidelines or Oklahoma Treatment Guidelines is presumed to be reasonable and necessary medical care. The employer or insurance carrier shall not be responsible for charges for medical treatment not provided in accordance with the current edition of the Official Disability Guidelines or Oklahoma Treatment Guidelines unless the medical treatment was provided in a medical emergency, the medical treatment was preauthorized by the employer or insurance carrier, or the medical treatment is approved by the Court upon a finding based on clear and convincing evidence provided by a qualified independent medical examiner that medical treatment provided according to either the ODG or OTG is not in the best interest of the employee.

First the Court examined whether the legislature intended for a retroactive application of §326(G) to someone who had been awarded continuing medical care prior to its effective date. The Court generally presumes that all legislation is intended to operate from its effective date forward unless there is a plain legislative intent to the contrary or the nature of the statute itself invokes retroactive application. The Court further noted that in past changes to worker's compensation the legislature had used terms such as 'regardless of the date of the injury' in the legislation to indicate retroactive application, and that no such language is found here. The Court also applied the in pari materia doctrine to read the worker's compensation legislation as a whole to examine the legislative intent in passing this provision. In so doing, the Court concluded that the legislature did intend for §326(G) to apply to continuing medical care awarded prior to its effective date.

Second, the Court examined whether the legislature was constitutionally empowered to make this legislation take effect in a retroactive manner. The Oklahoma State Constitution prohibits the legislature from affecting the accrued rights of a party by repeal or amendment of a statute. Okla. Const. Art. 5 §54. In order to be protected, the accrued right must be substantive, and not merely procedural. The Court examined the proposed difference in medical care to be provided to Shepard should §326(G) be applied retroactively and found that while Shepard presently received ongoing pain management and prescription medications under the prior law, under the new law Shepard would not receive any medical treatment in the form of anti-inflammatiries, muscle relaxers, painkillers, or sleep assistance medications and would receive at most "intermittent use of mediation, but not on a routine prescription basis." The Court ruled that this amounted to a substantive right, and that the legislature was constitutionally prohibited from retroactively affecting it.

Because the Respondents did not have the opportunity to put on evidence before the Worker's Compensation court based on the prior law, the Court remanded the matter to the Worker's Compensation court for further action.

Discussion: Prior to February 1, 2014 Oklahoma's worker's compensation was handled through a special court set up for that purpose. A political debate arose regarding whether this system was needlessly complicated and excessively expensive resulting in economic harm. The decision was made to scrap the old worker's compensation court and instituted the Worker's Compensation Commission. Under the new legislation worker's compensation claims are much less adversarial and streamlined with the goals of increasing speed of claim processing and reducing insurance and other costs. The policy debate continues regarding whether this will have the effect of removing delays and excesses or whether this will have the effect of steamrolling injured workers and undervaluing their claims. Meanwhile, claims initiated prior to February 1, 2014 are handled by the Worker's Compensation Court of Existing Claims.

ROUSE v. OKLAHOMA MERIT PROTECTION COMMISSION

2015 OK 7

Summary: Rouse was employed by the Grand River Dam Authority, an Oklahoma state agency, at its coal-fired plant. After several years of poor performance reviews for specific issues which remained uncorrected and three specific events resulting in workplace issues, Rouse was terminated. Upon Rouse's request, the termination was suspended and he was allowed to retire. Thereafter, Rouse sued for wrongful termination. The matter was heard by the Oklahoma Merit Protection Commission ("OMPC") which is a state agency in charge of the state's employment dispute regulation system for state employees. The OMPC held a two-day hearing and concluded that Rouse's termination was justified. Rouse appealed to the district court, which upheld the OMPC ruling. Rouse then appealed to the Oklahoma Supreme Court. The Oklahoma Supreme Court affirmed the lower courts in this opinion.

Legal Issues: When reviewing the decisions of an administrative agency, the Oklahoma Supreme Court will affirm decisions that are supported by substantial evidence and which are not arbitrary and capricious.

The Oklahoma Supreme Court consolidated Rouse's numerous complained issues into four main issues: 1) the interpretation of 74 O.S. §840-6.5; 2) determining whether the reasons for termination were not pretextual or post hoc rationalizations; 3) determining that the employee was estopped from challenging the level of discipline imposed (termination); and, 4) the evidence introduced before and considered by OMPC. 

Interpretation of 74 O.S. §840-6.5: Rouse argued that under this statute in order to be terminated there must be proof of an element of willfulness or culpable negligence and that because no specific evidence was admitted on either point that the termination must be reversed. The Court cited the pertinent language of the statute as follows: 

Any employee in the classified service may be discharged . . . for misconduct, insubordination, inefficiency, habitual drunkenness, inability to perform the duties of the position in which employed, willful violation of the Oklahoma Personnel Act, the Merit Rules for Employment or of the rules prescribed by the Oklahoma Merit Protection Commission, conduct unbecoming a public employee, conviction of a crime involving moral turpitude, or any other just cause.

The Court ruled that the statutory language was clear and unambiguous, and that termination is possible for any of a litany of grounds. Nothing in the terms of the statute or other applicable law requires that an employee terminated for "just cause" must be proved to have acted with an element of willfulness or culpable negligence.

Whether the reasons stated were pretextual or post hoc rationalizations: An employee may allege they were terminated in retaliation for such things as filing a worker's compensation claim or whistleblowing and that the stated reasons for the termination are either not genuinely present (pretextual) or the stated reasons would not have otherwise resulted in termination but were used as grounds for termination in this instance (post hoc rationalization). If such allegations are made, the employer can rebut these allegations by showing that the termination was legitimate for non-retaliatory reasons. The Court cited numerous pieces of evidence in the record including poor performance reports from the years 2006 through 2011 with the specific complaints including the taking of excessively long smoking breaks, being inefficient, reading fictional books while on duty, and misconduct. Rouse was suspended without pay for seven days in 2010. Additionally, Rouse admitted to an incomplete work task assignment in August, 2011, incompetence in handling an alarm event on December 13, 2011, and inattentiveness to a costly tube leak/overflow event on December 14, 2011. Based on the available evidence, the Court ruled that the allegations of pretext and/or post hoc rationalizations had been rebutted.

Estoppel of the employee to challenge the level of discipline: Estoppel is a legal doctrine that prevents one party from taking a position that is inconsistent with an earlier action and that places the other party at a disadvantage. In this case, Rouse bargained for a change of his status from termination to retirement, then sued for wrongful termination. The administrative decision indicated that Rouse should be estopped from challenging the level of discipline because Rouse had, in essence, agreed to the termination in bargaining to obtain his full retirement. The Court ruled that had there not been grounds for Rouse's termination that the estoppel argument might have been applied, but that in this instance where the record contained significant evidence of grounds for Rouse's termination, the argument was immaterial to the determination of the Court.

Admission of evidence of prior discipline: Rouse argued that he was denied due process because he was not provided with a specific written statement that his prior negative evaluations would be used against him as a reason for termination after the events of December, 2011. Rouse also argued that he should have been given some level of progressive discipline without termination. The Court noted that Rouse had received negative written evaluations in 2006 through 2009 with the cumulative effect that he was he was suspended without pay for seven days in 2010. After all of this Rouse was terminated after the events of December 2011. The Court ruled that the written evaluations and pre-termination letters issued to Rouse were sufficient notice. The Court noted that there had previously been a progression of discipline in this matter. Further, the Court ruled that progressive discipline is not mandated in all causes and that public employers are not required to prove some less severe disciplinary act would be ineffective before application of a more stringent penalty.

Discussion: Oklahoma is an "at will" employment state, meaning that as a general rule employment may be terminated by the employee or the employer for any or no reason. Nonetheless, certain types of termination can be reversed and lost wages awarded. These usually involve some claim of retaliation against the employee for filing a claim against the employer, whistleblowing, or other federally prohibited behaviors such as racial or age discrimination. The variables are many, and any questions in this regard should be submitted to a qualified attorney. When the state of Oklahoma is the employer, employment disputes are handled by the OMPC.

Policy debates rage regarding the ease or difficulty of termination for state employees. This opinion clarifies the current state of the law. If and when there should be changes to the law are up to the legislature and governor. 

HORTON v. HAMILTON

2015 OK 6

Summary:  Horton purchased a Life Fund 5.1, LLC capital appreciation bond (also known as a zero-coupon bond) from a company that subsequently filed for bankruptcy. More than two years after the purchase date of the bond, Horton filed a lawsuit against the company and the individuals involved in the sale in Oklahoma County District Court Case No. CJ-2009-12041, alleging misrepresentations and omissions in the sale of securities, fraud, breach of fiduciary duty, and negligence. The defendants filed a motion for summary judgment on the grounds that plaintiff's cause of action fell outside of the applicable statute of limitations. The Oklahoma County District Court granted summary judgment. Plaintiff appealed. Plaintiff's appeal was first heard by the Oklahoma Court of Civil Appeals, which ruled that no factual disputes existed in the evidentiary materials as to when the limitations periods ran and that Horton was aware of the defendants' tortious conduct more than two years before she filed her petition. The Oklahoma Supreme Court granted certiorari to review the case and overturned the Court of Civil Appeals.

Legal Issues: Statutes of limitation require that a legal action be brought within certain time limits from the accrual of the cause of action. In Oklahoma, the accrual of the cause of action can be defined by statute, but in no event can the accrual of the cause of action take place before each element of the cause of action has materialized. In short, your time to file does not begin until you are legally capable of filing. Also, in some instances Oklahoma recognizes the "discovery rule" which states that the statute of limitations is tolled until the plaintiff knew or should have known about the accrual of the cause of action.

Summary judgment should be granted only if the court determines that there is no dispute as to any material fact and that the moving party is entitled to judgment as a matter of law. When there are questions of material fact, the case proceeds to trial for the jury or judge to hear evidence and make a decision of fact.

This case revolves around the four theories of law presented by the plaintiff as the basis for her suit: misrepresentations and omissions in the sale of securities under the Oklahoma Securities Act, fraud, breach of fiduciary duty, and negligence.

Misrepresentation and omissions in the sale of securities: The Oklahoma Securities Act is found at 71 O.S. §§ 1-101 et seq. In relevant part, the Act prohibits the sale of securities by means of an untrue statement of a material fact or an omission to state a material fact and creates a civil liability for doing so. A two year statute of limitations applies to this civil liability. 71 O.S. §1-509(J)(2). The Oklahoma Supreme Court looked to the legislative commentary and ruled that the statute of limitations is to be interpreted in the same way as the similar federal statute. Thus, the cause of action accrues either: 1) when the plaintiff has an actual knowledge of the misrepresentation, or; 2) when the plaintiff should have known of the misrepresentation through the exercise of reasonable diligence. Because the question of when the plaintiff should have known through the exercise of reasonable diligence is a question of fact that remained in controversy, the summary judgment as to the misrepresentation claim was overruled.

Fraud:  Pursuant to 12 O.S. § 95(A)(3) the statute of limitations for fraud is two years, but "the cause of action in such case shall not be deemed to have accrued until the discovery of the fraud." A party discovers fraud when he or she ascertains each element of the claim. In determining when a party makes discovery, the court must bear in mind that a claim of fraud requires specific pleading. 12 O.S. §2009(B). Because the question of when the plaintiff knew regarding each element of her fraud claim remained a question in controversy, the summary judgment as to the fraud claim was overruled.

Breach of Fiduciary Duty and Negligence: The Oklahoma Supreme Court noted that while some fiduciary relationships are explicitly defined by the law, the existence of a fiduciary duty not defined by law is a question of fact. A claim of breach of fiduciary duty and a claim of negligence are essentially the same, except that the standard of care which a fiduciary owes to the plaintiff is higher. Regardless, the statute of limitations calculation is the same in questions of breach of fiduciary duty and negligence each accrue when a party ascertains each element of his or her claim. Because the question of when the plaintiff knew, or should have known, regarding the elements of her claim remained in controversy the summary judgment as to both claims was overruled.

Discussion: When filing a motion for summary judgment, the moving party must present the court with sufficient evidence that is available in the court's record to show that any potential questions of fact are not disputed. This procedure is available when one party is attempting to use the judicial process to delay or bring a frivolous action. If there are no questions of material fact in dispute, then there is no need for a trial. The purpose of a trial is to present evidence regarding the facts of the case. If the facts of the case are established, all that remains is for the court to apply the appropriate laws and enter a ruling. However, if there are questions of material fact that cannot be established then a hearing should be held regarding those questions. After the hearing, when the facts have been determined, the law is applied and the court enters judgment.

With the overruling of the defendant's motion for summary judgment, this case will be returned to the Oklahoma County District Court for further proceedings.

STATE ex rel. OKLAHOMA BAR ASSOCIATION v. DEMOPOLOS

2015 OK 5

Summary: Attorney James M. Demopolos has been immediately suspended on an interim basis due to his entry of a guilty plea to charges of one count of Obstructing an Officer, one count of Threatening an Act of Violence, and one count of Domestic Abuse (Assault and Battery) in a deferred sentencing agreement.

Legal Issues: The Oklahoma Supreme Court is directly responsible for the accreditation of attorneys in the state of Oklahoma. This is accomplished through the Oklahoma Bar Association and its enforcement of the Oklahoma Rules for Professional Conduct for Attorneys ("ORPC").  If an attorney is alleged to have violated the ORPC, the Oklahoma Bar Association investigates as outlined in the Rules Governing Disciplinary Proceedings ("RGDP"). 

Because the change of status of an attorney from 'good standing' to 'suspended' is of public significance, all attorney licensure matters are published, regardless of whether a novel legal question is involved.

As one would expect, an attorney is required to obey the criminal laws of the state. ORPC 8.4 (b) prohibits an attorney from committing a "criminal act that reflects adversely on the lawyer's honesty, trustworthiness or fitness as a lawyer in other respects." Thus matters such as routine traffic tickets or even a single DUI are not necessarily actionable. The commentary to the rule notes: "Although a lawyer is personally answerable to the entire criminal law, a lawyer should be professionally answerable only for offenses that indicate lack of those characteristics relevant to law practice. Offenses involving violence, dishonesty, breach of trust, or serious interference with the administration of justice are in that category. A pattern of repeated offenses, even ones of minor significance when considered separately, can indicate indifference to legal obligation."

In order to police the attorneys of this state in a timely fashion, the Oklahoma Supreme Court requires that if an attorney enters a plea of 'guilty' or 'nolo contendre' to a "crime that demonstrates such attorney's unfitness to practice law" that the court clerk forward a copy of the plea or judgment to the Oklahoma Supreme Court for action. (See, RGDP 7.1 and 7.3). Typically, the Court will enter an immediate interim suspension of the attorney and refer the matter to the Oklahoma Bar Association for investigation and further action under the RGDP.

Discussion: Under a deferred sentence, Demopolos entered a guilty plea to charges of one count of Obstructing an Officer, one count of Threatening an Act of Violence, and one count of Domestic Abuse (Assault and Battery) in Oklahoma County Case No. CF-2014-3767. Pursuant to this arrangement, the Oklahoma County court will hold Demopolos' guilty plea for two years. If that time passes and Demopolos has not had other criminal charges brought against him the case will be dismissed. If other criminal charges are brought against Demopolos before the two years expire, the District Attorney may seek to have the Oklahoma County court to impose penalty for these charges as well. 

The Court per RGDP 7.3 entered an immediate interim suspension of Demopolos' license to practice law until further notice. This matter will now be handled via the disciplinary procedures and will appear before the Court again when a final determination regarding Demopolos' status as an attorney is made.

Update: This matter was finally resolved in State ex rel. Oklahoma Bar Association v. Demopolos, 2015 OK 50. The Court issued discipline in the form of one year of suspension from the practice of law with a further year of deferred suspension.