FRANKENBERG v. STRICKLAND

2015 OK 23

SUMMARY: Taxpayers the Frankenbergs own real property in Garvin County, Oklahoma. They made improvements to the property in 2001. The Garvin County Tax Assessor did not notice the improvements until 2012. The Assessor then significantly increased the assessed value of the property, and thus the property taxes due on the property. The Taxpayers contested the new valuation of the property citing Oklahoma Constitution Art. X §8B which states that the fair valuation of the property could not be increased by more than 5% in any one year. The Assessor argued that an exception existed for changes in valuation for the year in which an improvement is placed on the property, and that this exemption should include the year that an improvement is discovered to be made on the property.

Legal Issue: The question before the Oklahoma Supreme Court regarded the interpretation of Art. X §8B, which reads in relevant portion:

"...the fair cash value of any parcel of locally assessed real property shall not increase by more than five percent (5%) in any taxable year;... . The provisions of this section shall not apply in any year when title to the property is transferred, changed, or conveyed to another person or when improvements have been made to the property. If any improvements are made to the property, the increased value to the property as a result of the improvement shall be assessed for that year based on the fair cash value as set forth in Section 8 of Article X of this Constitution. ..."

The facts were unquestioned that the improvements were made on the property in 2001 and that the assessor changed the valuation in 2012. The Assessor argued that the exception should be read to include the year in which the Assessor actually becomes aware of the improvement. The Court declined this broad reading of the exception, ruling that the terms of this section are clear and unambiguous: an exception to the 5% rule exists in the year that improvements are made, and not in the year in which they are discovered to have been made.

Discussion: The Court appears to concur with Taxpayer's statement of Assessor's relief, a 5% increase per year in the value of the property until the assessed value reaches the fair value of the property.

The Assessor did not argue any affirmative responsibility on the part of Taxpayer to inform it of the improvement, and in fact admitted that no such responsibility existed. As such, the Court did not rule directly on whether a taxpayer may be obligated to inform the Assessor or whether the burden for discovery of improvements rests solely on the Assessor.

STATE ex rel. OKLAHOMA BAR ASSOCIATION v. MANSFIELD

2015 OK 22

Summary: The law license of attorney Christopher I. Mansfield, has been suspended for a period of eighteen months resulting from irregularities in a probate proceeding.

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.

Attorney Mansfield encountered significant and severe personal issues related to the estrangement of his wife and eventual divorce. During this time, Mansfield was appointed to serve as Successor Trustee of the Elizabeth S. Cox Revocable Trust and as Personal Representative of the Estate of Elizabeth S. Cox by the Tulsa County Court. During the course of this representation, Mansfield oversaw the sale of property and marshaling of assets for an estate of slightly over $500,000. During the course of these events, Mansfield encountered significant monetary challenges due to his personal and marital problems, and transferred approximately $45,000 from the estate to himself. Mansfield justified these transfers to himself at the time as being for services rendered to the estate, although he did not get the required judicial permission to make these withdrawals.

Later, the estate came to mediation in an attempt to reach reconciliation between the various adversarial beneficiaries of the estate. At the mediation, Mansfield agreed to reduce his fee to $27,500 and did not disclose his prior withdrawals. Mansfield then presented the reduced fee to the district court for approval, noting the total amount of the estate for distribution was approximately $491,000, with the difference between the full amount and the listed amount being those fees previously withdrawn by Mansfield. One of the attorneys for one of the beneficiaries noted the discrepancy in the amounts and questioned Mansfield about it. Mansfield first attempted to attribute the costs to property maintenance charges, but soon admitted what he had done. Thereafter, Mansfield discussed the matter with the Oklahoma Bar Association's Ehthics Counsel, retained a lawyer to represent him, and admitted his actions to the Bar for investigation.

As one would expect, an attorney is required to be honest in his dealings with all persons, the Court most definitely included. ORPC 8.4. Mansfield's downfall was not the amount of the fee, which may well have fallen within the normal range of fees recovered by attorneys for work similar to that which he performed. Rather, his fault lay in taking the fee without the proper judicial permission and then attempting to cover up that fact through false statements to the Court and to others.

The Court did look at several mitigating factors before issuing punishment. First, Mansfield is by all accounts a good attorney who has received Bar association awards for his work as a guardian ad litem. The judge who appointed him to serve in the Cox estate has since appointed him to serve in other matters with full knowledge of what happened, and expressed the opinion that this was a one-time indiscretion. Also, Mansfield reported this matter to the bar himself and offered to make restitution for the offense.

With all of these factors before it, the Court imposed an eighteen month suspension on Mansfield's law license. Because the suspension is for under two years, assuming that Mansfield has no further issues appear, he can resume his practice of law at the conclusion of the suspension without making further application for reinstatement.

Discussion: The legal profession requires its practitioners to be honest in their dealings with their clients. Failure to do so necessarily results in discipline. Mansfield's case appears to be that of a good attorney who finds himself in difficult personal situation and, as a result, who temporarily makes bad decisions. It speaks well of Mr. Mansfield that he recognized his error and corrected it even though the path to do so was not easy.

REINSTATEMENT OF CERTIFICATE OF CERTIFIED SHORTHAND REPORTERS

2015 OK 21

Summary: This is an administrative matter that reinstates the certificates of those Court Certified Shorthand Reporters (also known as Court Reporters) previously suspended for failure to meet continuing education requirements, to pay fees, or both.

Discussion: Because the status of a reporter's certificate is a public matter all such rulings are published. This is an administrative action regarding the Court’s governance of the operations of the Oklahoma court system.

SCHWEIGERT v. SCHWEIGERT

2015 OK 20

Summary: Denise Schweigert (hereafter referred to as "Mother") filed for divorce from Tony Schweigert (hereafter referred to as "Father") in July, 2010. Father was served with the Summons as well as Mother's Petition and Application for Temporary Orders. A hearing on Mother's application for Temporary Orders was held on August 9, 2010. Father appeared in person and without an attorney at the hearing, but filed no papers in the case. One year passed. On August 2, 2011, Mother's attorney got a 'minute order' from the court setting the matter for a hearing on the default judgment docket. No notice was attempted or given to Father of the case being placed on the default judgment docket. On August 24, 2011 the matter came up on the default judgment docket and Mother was granted custody of the parties' minor children. Two years later, in 2013, Father filed a motion to vacate the default judgment alleging fraud and lack of due process.

Legal Issue: A district court's judgment is vacated and a new trial granted only when an aggrieved party's can show, among other things, an irregularity in the proceedings or court's order affecting the party's substantial rights. Father alleged that Mother's placing the matter on the default judgment docket without providing him notice of the same was an irregularity in the proceedings that affected his substantial rights.

The Oklahoma Supreme Court noted that it has previously held that a parent has a fundamental right to the companionship, care, custody, and management of his or her child. Although the court grants deference to the district court in its decision denying to vacate and grant a new trial, the Court will reverse the district court when it has made an error of law.

The central question was whether Father's appearance at the temporary order hearing amounted to a general appearance, and if so, what was the result of this pro se appearance.

The Court ruled that by making a physical appearance, even though he filed no documents nor had an attorney, Father had made a general entry of appearance in the case. As such, Father had all of the rights and obligations of a party in litigation. One such right is the requirement to keep the court and other party aware of contact information such that future documents can be readily served. Father did not do this. If a party fails to remain active in the case, then the other party may seek default judgment. The means of obtaining the default judgment are outlined in relevant part in Rule 10 of the District Courts which reads in relevant part:

If the addresses of both the party and his attorney are unknown, the motion for default judgment may be heard and a default judgment rendered after the motion has been regularly set on the motion and demurrer docket. It shall be noted on the motion whether notice was given to the attorney of the party in default, to the party in default or because their addresses are unknown to neither. (Emphasis added.)

Mother caused the matter to be placed on the default judgment docket without first filing a motion to do so. Because of this irregularity, Father's motion to vacate should be upheld. The matter was remanded to the district court for further action consistent with the opinion.

Discussion: Mother raised the issue of hardship in her appellate brief. Both parties have subsequently remarried. If the divorce is vacated, then in the eyes of the law Mother and Father remain married and the subsequent marriages would be rendered void. The Court noted that because this issue was first raised at the appellate level (i.e. the district court never had a chance to rule on this) that the Court would not rule on this. Justice Edmondson, joined by Justices Combs and Watt, wrote a concurring opinion that noted the issue of hardship should be raised again before the district court when the matter is remanded for further action.

BROOM v. WILSON PAVING & EXCAVATING, INC.

2015 OK 19

Summary: Plaintiff Steven Broom was a temporary employee working for Labor Ready employment service and assigned to work for the day with Wilson Paving & Excavating laying pipe inside a trench. The trench Broom was working in collapsed, resulting in severe injuries on Broom including rib fractures, collapsed lungs, pulmonary contusions, blood within the chest, fluid around the spleen and kidney, and a left kidney laceration. Broom applied for and received worker's compensation benefits from Labor Ready as his employer. Broom also sued Wilson Paving for its negligent violation of OSHA rules that would have prevented the collapse. Broom received a judgment for $1,150,000 against Wilson Paving. In a post-judgment action, Broom sought payment via garnishment against an insurance policy held by Wilson Paving from Mid-Continent Casualty Company. Mid-Continent objected to payment, alleging that its policy excluded expected or intentional injuries and that its policy excluded injuries resulting from earth movement. The trial court held in favor of Mid-Continent finding that the injuries were excluded under the earth-movement exclusion. Broom appealed and the case was assigned to the Oklahoma Court of Civil Appeals. The OCCA ruled that coverage was properly excluded under the expected or intentional injuries exception, but not under the earth-movement exception. Broom applied for and received certorari to the Oklahoma Supreme Court. The Oklahoma Supreme Court held that neither exception applied and remanded the case to the trial court for further action consistent with its holding.

Legal Issue: The Mid-Continent policy covered potential injuries to non-employees accrued as a result of Mid-Continent's business activities. This policy specifically did not cover injuries that were expected or intended by the insured. It also specifically excluded damages resulting from earth movement such as by earthquake, landslide, mud flow, subsidence, settling, slipping, falling away, shrinking, expansion, caving in, shifting, eroding, rising, tilting or any other movement of land, earth or mud. 

The Court noted that in Oklahoma to limit liability in an insurance policy an insurer must employ language that clearly and distinctly reveals its stated purpose. Any ambiguity in the contract is to be interpreted against the insurer, as the policy is drafted by the insurer. 

Using this standard the Court first set aside the exception for injuries that were expected or intended by the insured, noting that Broom sued for and won under a negligence theory. The Court noted that negligence has in it no element of willfulness; but involves a state of mind which is negative; a state of mind in which the person fails to give attention to the character of his acts or omissions or to weigh their probable or possible consequences. Thus, injuries flowing from negligence are neither expected nor intended.

Next the Court looked to the earth-movement exception. Mid-Continent argued that by its very nature a collapse is a movement of earth and therefore not covered. Wilson Paving argued that this interpretation would have excluded almost every possible loss it could encounter as its business related to the movement of earth. The Court found this question to be one of first impression in the state of Oklahoma, and looked to other jurisdictions for guidance. There it found that earth movement exceptions have been traditionally applied to natural events such as earthquakes and landslides that are not man-made events. The Court ruled that because Mid-Continent did not clearly delineate that the exception was to include all movements of earth regardless of cause, and that the historic use of such exclusions has been related to natural phenomena, that an ambiguity existed in the language of the policy and interpreted the same against the insurance company.

Because neither exception is applicable, the Court remanded the matter to the trial court for further action in accordance with the terms of this opinion. Likely, this will result in payment of the injury from the insurance policy.

Discussion: Mid-Continent attempted to use parallel litigation by the American Interstate Insurance Company (AIIC) regarding this same event. AIIC sought and obtained a declaratory judgment that its policy covering Mid-Continent at the time of the injury did not cover the injury. The AIIC policy was limited to employees of Wilson Paving. At all times in the litigation Broom alleged he was an employee of Labor Ready on loan to Wilson Paving, and as such was not an 'employee' of Wilson Paving under the AIIC insurance policy. The Court noted that Mid-Continent was not a party to that litigation and that the terms of the contracts, while similar, were not identical. Further, the express purpose of the AIIC contract was to insure against losses to employees and the purpose of the Mid-Continent contract was to insure against losses of all other persons.

Dissent: Justice Taylor wrote a spirited dissent to this opinion, accusing the Court of placing a constrained reading of the language of the earth-movement exception and of using out-of-jurisdiction cases that were regarding home-owners insurance and not commercial insurance as was present in this case. Justice Taylor makes it clear that he feels that the Court has 're-written' the insurance policy and dissents therefrom.

IN RE: DETACHMENT OF MUNICIPAL TERRITORY FROM THE CITY OF ADA

2015 OK 18

Summary: The City of Ada sought to annex certain land in Pontotoc County to become part of the city. Land owners of agricultural property adjacent to the annexed property objected, citing Ada's failure to give them the required statutory notice of a certified mailing. Ada did mail notices via regular first class mail to the property owners and argued substantial compliance with the statute. The district court upheld Ada's annexation of the land.

Legal Issues: Can a city's annexation of property stand when it substantially complies, but does not actually comply, with the notice requirements of 11 O.S. §21-103(A) and (B)(2)? The Oklahoma Supreme Court ruled it cannot.

In Oklahoma sovereign power is exercised by the state legislature alone. Authority of cities to annex land is granted by the legislature to the city. The Court ruled that the primary judicial function in a review of municipal annexations is to ascertain whether the city has exercised its annexation power in a reasonable manner in compliance with state law, and within the scope of legislative authority. A city annexation ordinance must recite jurisdictional facts. If it does, only the State can collaterally attack the ordinance. If it does not, an interested party may attack its validity and show that jurisdictional facts did not exist. If the interested party shows that jurisdictional facts were not recited, or that the cited jurisdictional facts did not actually exist, then the interested party can have the annexation invalidated. Failure to provide the required notice by the exact means specified in the statute meant that the city lacked the jurisdiction to enact the ordinance and annex the land.

Discussion: The Court noted that at least one land owner who was provided notice merely by first class mail claimed not to have received notice. Had notice been served by return receipt mail as specified the question of whether that land owner had been served would be firmly established. The Court noted that one person required to receive notice who did not receive it was too many. 

STATE ex rel. OKLAHOMA BAR ASSOCIATION v. RAYNOLDS

2015 OK 17

Summary: Attorney William F. Raynolds, II, has been disbarred on charges of embezzlement of client funds and failure to respond to bar disciplinary proceedings.

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 'disbarred' 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 be honest in his dealings and not to embezzle client funds. ORPC 1.8 and 1.15. Attorneys are also required to make a timely response to the bar association if charged with misconduct. RGDP 6.4. By failing to make a response to the allegations, the accusations are deemed to be admitted by Raynolds.

With the legal equivalent of an admission to embezzlement of client funds before it, the Oklahoma Supreme Court immediately disbarred Raynolds. Raynolds may seek readmission to the bar after five years.

Discussion: The legal profession requires its practitioners to be honest in their dealings with their clients. Failure to do so necessarily results in removal from the bar.

STATE ex rel. OKLAHOMA BAR ASSOCIATION v. ELIAS

2015 OK 16

Summary: Attorney Jason Randal Elias, a.k.a. Jason Randal Corn offered to resign his license to practice law on March 13, 2015, while under investigation for professional disciplinary action due to two counts of alleged misconduct. Elias is alleged to have engaged in significant breaches of the attorney-client relationship with one Elizabeth Stambaugh by eliciting funds and gifts from his client in excess of one million dollars over a period of several years, and by interfering with guardianship proceedings later instituted to protect Ms. Stambaugh from Elias' actions. The facts are voluminous and set forth in full in the opinion. No abridgment would do them justice. The Oklahoma Supreme Court accepted Elias' resignation. Mr. Elias can apply for readmission in five years.

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 'no longer a member of the bar' is of public significance, all attorney licensure matters are published, regardless of whether a novel legal question is involved.

Attorneys should avoid situations where they have a conflict of interest with the business or financial interests of their clients. ORPC 1.8. Attorneys are required to exercise a high level of protection for their clients, and this is especially true when the client has, or may have, a diminished capacity. ORPC 1.14. When an attorney knows that a party is represented by an attorney, the attorney is under an obligation to deal with the other party's attorney, and not to contact that other party directly. ORPC 4.2 Elias' alleged actions violated these standards, among others.

Discussion: Elias offered his resignation during the investigation of his actions. In these circumstances a resignation is 'tantamount to disbarment' in that both the time for readmission and the actual readmission process are the same for one who resigns and one who is disbarred. Obviously, the nature of the alleged misconduct is extremely severe and strikes to the heart of the attorney-client relationship. If Mr. Elias were to apply for readmission at the end of five years he will have an extremely difficult time satisfying the requirements for readmission.

STATE ex rel. OKLAHOMA BAR ASSOCIATION v. SULLIVAN

2015 OK 15

Summary: Attorney John Bernard Sullivan has been immediately suspended on an interim basis due to his entry of a plea of guilty to one count of Use or Possession of Drug Paraphernalia, in violation of K.S.A. 21-5710, a Class A Nonperson Misdemeanor.

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: Sullivan plead guilty to one count of Use or Possession of Drug Paraphernalia, in violation of K.S.A. 21-5710, a Class A Nonperson Misdemeanor. The judgment on these matter was forwarded to the Oklahoma Supreme Court per RGDP 7.3 and the Oklahoma Supreme Court entered an immediate interim suspension of Sullivan's 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 Sullivan's status as an attorney is determined.

REINSTATEMENT OF CERTIFICATES OF CERTIFIED SHORTHAND REPORTERS

2015 OK 14

Summary: This is an administrative matter that reinstates the certificates of those Court Certified Shorthand Reporters (also known as Court Reporters) previously suspended for failure to meet continuing education requirements, to pay fees, or both.

Discussion: Because the status of a reporter's certificate is a public matter all such rulings are published. This is an administrative action regarding the Court’s governance of the operations of the Oklahoma court system.

MARIANI v. STATE ex rel. OKLAHOMA STATE UNIVERSITY

2015 OK 13

Summary: Mariani was struck by an employee of Oklahoma State University who was driving negligently and suffered over $130,000 worth of injuries. Oklahoma State University carries no liability insurance policy on its vehicles and is a self-insured portion of the state government. Prior to trial, Mariani sought and obtained $125,000 from her own insurance and uninsured motorist insurance. At trial Mariani was awarded a total recover of $175,000. The state of Oklahoma sought to be given credit for the $125,000 previously received by Mariani from her private insurance, meaning the total amount to be paid by the state would have been approximately $50,000. The trial court refused the request and the state appealed.

Legal Issue: If an injured party receives benefits or compensation for the injury from a party other than the tortfeasor, do those other benefits serve to lessen the tortfeasor's liability? In Oklahoma the answer to that question is "no". Oklahoma follows what is known as the 'collateral source' rule, which provides that  compensation given to the injured party from a collateral source wholly independent of the wrongdoer does not operate to lessen the damages recoverable from the person who causes the injury.

However, as might be expected, the government itself is not just any other 'wrongdoer'. Under the common law, the government was immune to liability in tort. In the modern setting, the government has relinquished its immunity in the form of the Oklahoma Government Tort Claims Act, 51 O.S. §151 et seq. (the "OGTCA"). Generally speaking, the OGTCA provides a specific mechanism to sue the state for torts like any other entity so long as certain filing requirements are met. In this case, the state alleged that the collateral source rule had been eliminated by the OGTCA in 58 O.S. §158(D) and §167(E).

The Oklahoma Supreme Court examined the statutes in question and found that this provision allows for the state to receive the benefit of insurance policies held by the state for the state's benefit, but that the language does not authorize the state to assume the benefit of insurance policies held by the injured party. The Court went on to note that in states with similar governmental tort claim statutes that did expressly exempt the state from the collateral source rule, that the language used by those states differed dramatically from the language used by the Oklahoma legislature.

Discussion: Individuals may seek to sue the state of Oklahoma for tort, but in so doing they will face a more stringent set of filing requirements. At the end of the day, however, the state is liable for damages it causes in tort like any other party. This may give the state cause to revisit its self-insurance policy, especially as pertains to motor vehicles.