FILED
United States Court of Appeals
Tenth Circuit
December 22, 2008
PUBLISH Elisabeth A. Shumaker
Clerk of Court
UNITED STATES COURT OF APPEALS
TENTH CIRCUIT
RANDY COMBS,
Plaintiff-Appellant/
Cross-Appellee,
v. Nos. 07-7042 & 07-7043
SHELTER MUTUAL INSURANCE
COMPANY; SHELTER GENERAL
INSURANCE COMPANY,
Defendants-Appellees/
Cross-Appellants.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF OKLAHOMA
(D.C. No. 6:05-CV-00474-JHP)
Jim T. Priest, Whitten, Nelson, McGuire, Terry & Roselius, Oklahoma City,
Oklahoma, for Plaintiff-Appellant/Cross Appellee.
Clyde A. Muchmore (Timila S. Rother, with him on the briefs), Crowe & Dunlevy,
Oklahoma City, Oklahoma, for Defendants-Appellees/Cross Appellants.
Before KELLY, BALDOCK, and O’BRIEN, Circuit Judges.
BALDOCK, Circuit Judge.
Defendant Insurance Companies employ Plaintiff Randy Combs as an
insurance sales agent. Plaintiff sued Defendants pursuant to Oklahoma law, alleging
various contract and tort claims related to his agency contract. The district court
granted summary judgment for Plaintiff on his claims for breach of contract and
breach of the implied covenant of good faith and fair dealing.
See Fed. R. Civ. P. 56. Subsequently, the district court granted judgment as a matter
of law for Defendants as to the remaining claims of fraud/constructive fraud and
breach of fiduciary duty. See Fed. R. Civ. P. 50.
Plaintiff appeals alleging the district court committed numerous errors.
Defendants cross-appeal alleging the district court erred in granting summary
judgment for Plaintiff on the breach of contract and breach of the implied covenant
of good faith and fair dealing claims. The parties agree Oklahoma law applies to this
diversity case. We have jurisdiction under 28 U.S.C. § 1291. Although our rationale
differs from that of the district court, we affirm.
I.
In April 1993, Plaintiff entered an agency agreement (Agreement) with
Defendants. Pursuant to this business arrangement, Plaintiff receives a commission
for selling policies on behalf of Defendants. Plaintiff is entitled to a bonus
commission each year, calculated by the overall “Loss Ratio” on policies he sells.
Specifically, the Agreement’s bonus provision states “[Plaintiff] may earn bonus
commission each calendar year [he] qualif[ies]. [Defendants] will pay [Plaintiff] a
percentage of the Total Premium [Defendants] receive on [Plaintiff’s] Agent Policies
and limited by [Plaintiff’s] Loss Ratio for a three year period.” The agreement
2
further defines “Loss Ratio” as “the premium [Defendants] earned on [Plaintiff’s]
Agent Policies divided into the Losses Charged to [Plaintiff’s] Agent Policies.”
“Losses Charged” is defined as “the amount [Defendants] have paid on claims and
the amount [Defendants] increase or decrease . . . reserves.” (emphasis added).
In 2005, Defendants settled a lawsuit with an insured for $450,000. The suit
derived from Defendants’ alleged bad-faith handling of a claim made on an insurance
policy Plaintiff sold. Defendants subsequently included the settlement payment as
a portion of the “Losses Charged” to Plaintiff’s “Agent Policies.” Because
Defendants attributed this payment as a “claim” paid on one of Plaintiff’s policies,
Plaintiff did not qualify for a bonus commission in 2005. Plaintiff filed suit alleging
the settlement payment was not a “claim” under the Agreement and should not have
been included in his Loss Ratio.
Prior to trial, Plaintiff and Defendants filed cross-motions for summary
judgment. In granting Plaintiff’s motion in part and denying Defendants’ motion,
the district court held Defendants were in breach of contract because the application
of the settlement payment to Plaintiff’s Loss Ratio violated Oklahoma law. The
district court relied on Oklahoma case law precluding insured parties from including
third-party agents in suits against insurance companies for bad-faith handling of
policy claims. Thus, the district court concluded that attributing such bad-faith
settlement payments to third-party agents through contract violated Oklahoma public
policy. The district court further charged Defendants with constructive knowledge
3
of this Oklahoma law and, therefore, ruled Defendants violated the implied covenant
of good faith and fair dealing. Despite Plaintiff’s request for punitive damages, the
district court limited Plaintiff’s recovery on the implied covenant of good faith and
fair dealing claim to contract damages.
During trial on Plaintiff’s fraud/constructive fraud and breach of fiduciary
duty claims, the district court excluded evidence of Defendants’ business practices
outside Oklahoma. The district court also granted Defendants’ motion to exclude
Plaintiff’s expert witness. At the close of each party’s case-in-chief, Defendants
moved for judgment as a matter of law. The district court orally granted Defendants’
motion, holding (1) Plaintiff did not establish the necessary elements for
fraud/constructive fraud by clear and convincing evidence, and (2) Defendants did
not owe Plaintiff a fiduciary duty. Thus, the district court refused to submit the
fraud/constructive fraud and breach of fiduciary claims to the jury.
Under the breach of contract and breach of the implied covenant of good faith
and fair dealing claims, the district court awarded Plaintiff $27,988.00 in contract
damages. This amount was based upon Plaintiff’s projected bonus commission
without the application of Defendants’ settlement payment as a “claim” paid on one
of Plaintiff’s policies. The district court also awarded Plaintiff $14,126.25 in
attorney fees. Because attorney fees are not permitted for tort actions under
Oklahoma law, the district court apportioned Plaintiff’s attorney fees between his
tort and contract claims, and limited the award to work performed before the district
4
court granted summary judgment on Plaintiff’s breach of contract claim. Both
parties appeal. For clarity’s sake, we first address Defendants’ cross-appeal.
II.
On cross-appeal, Defendants argue the district court erred in granting summary
judgment for Plaintiff on his claims for breach of contract and breach of the implied
covenant of good faith and fair dealing. Defendants assert the Agreement does not
violate Oklahoma law and contend the Agreement unambiguously includes bad-faith
settlement payments as “claims” charged to an agent’s policy. Thus, Defendants
request that we reverse the district court and enter summary judgment for Defendants
on the claims for breach of contract and breach of the implied covenant of good faith
and fair dealing.
A.
Relying on Timmons v. Royal Globe Ins. Co., 653 P.2d 907 (Okla. 1982) and
its progeny, the district court ruled Defendants’ practice of attributing bad-faith
settlement payments to agents’ loss ratios violated Oklahoma law. In Timmons, the
Oklahoma Supreme Court held that a third-party agent was not a party to the contract
between an insured and an insurance company. Id. at 912. As such, the insured
could not hold a third-party agent liable for an insurance company’s breach of its
duty of good faith and fair dealing. Id. Because Timmons held this duty owed to
the insured was non-delagable, id. at 914, the district court reasoned Defendants
could not achieve a similar delegation of this duty by applying a bad-faith settlement
5
payment to a third-party agent’s bonus commission. The district court held
Defendants’ interpretation of the Agreement was contrary to Oklahoma public policy
and a breach of contract. Our review of the district court’s determination is de novo.
See Scrivner v. Sonat Exploration Co., 242 F.3d 1288, 1291 (10th Cir. 2001).
Defendants argue Timmons only precluded a cause of action by an insured
against a third-party agent for breach of the implied good faith duty owed by the
insurance company to the insured under an insurance contract. Defendants believe
Timmons does not speak to how insurance companies and their agents contract
amongst themselves. Defendants’ argument relies on general principles of freedom
of contract. Under Oklahoma law, “[a]bsent illegality, the parties are free to bargain
as they see fit, and the court may neither make a new contract, or rewrite the existing
contract.” Oxley v. Gen. Atlantic Res., Inc., 936 P.2d 943, 945 (Okla. 1997).
Accordingly, courts’ “power to void a contract as being in contravention of public
policy is delicate and undefined” and may only be exercised “in cases free from
doubt.” In re Kaufman, 37 P.3d 845, 854 (Okla. 2001); see also Shepard v. Farmers
Ins. Co. Inc., 678 P.2d 250, 251 (Okla. 1983) (“Courts will exercise their power to
nullify contracts made in contravention of public policy only rarely, with great
caution and in cases that are free from doubt.”).
Because we hold the Agreement unambiguously excludes tort payments from
the calculation of Plaintiff’s Loss Ratio, we need not speculate whether the
Oklahoma Supreme Court would find the Agreement at issue violative of Oklahoma
6
public policy. See Medina v. City and County of Denver, 960 F.2d 1493, 1495 n.1
(10th Cir. 1992) (“We are free to affirm a district court decision on any grounds for
which there is a record sufficient to permit conclusions of law, even grounds not
relied upon by the district court.”) (citation omitted). In addition, because
Defendants are in breach of contract, we do not decide whether they also breached
the implied covenant of good faith and fair dealing owed to Plaintiff.
B.
When interpreting a contract, Oklahoma law requires courts to “consider the
entire agreement ‘so as to give effect to every part, if reasonably practicable.’”
Scrivner, 242 F.3d at 1291 (quoting 15 Okla. Stat. § 157). Determination of
“whether a contract is ambiguous and interpretation of an unambiguous contract are
questions of law” for the court. Otis Elevator Co. v. Midland Red Oak Realty, Inc.,
483 F.3d 1095, 1101 (10th Cir. 2007). An ambiguous contract, however, “is a mixed
question of law and fact and should be decided by the jury.” Id. In determining
whether a contract is ambiguous, courts must “construe the words as they are
‘understood in their ordinary and popular sense, rather than according to their strict
legal meaning, unless used by the parties in a technical sense, or unless special
meaning is given to them by usage.’” Gamble, Simmons & Co. v. Kerr-McGee
Corp., 175 F.3d 762, 767-68 (10th Cir. 1999) (quoting 15 Okla. Stat. § 160). Courts
“will not create an ambiguity by using a forced or strained construction, by taking
a provision out of context, or by narrowly focusing on the provision.” S. Corr. Sys.
7
v. Union City Public Schools, 64 P.3d 1083, 1089 (Okla. 2002). The ultimate goal
of “contract interpretation is to determine and give effect to the intent of the parties.”
Otis Elevator, 483 F.3d at 1101.
The issue in the instant case is very simple: what does the word “claim”
mean? The Agreement states that “Losses Charged” to Plaintiff in calculating his
bonus are based on “the amount [Defendants] have paid on claims.” The issue here
is whether the word “claim” includes extra-contractual payments, i.e. tort payments,
to an insured arising outside of the compensation guaranteed under an insurance
policy. The Oxford English Dictionary defines “claim” as:
1. a. A demand for something as due; an assertion of a
right to something . . . to lay claim to: to assert one’s right
to, claim.
***
b. spec. in Insurance, an application for the compensation
guaranteed by an insurance company, esp. for loss of or
damage to property, etc., insured.
Oxford English Dictionary Online (2d ed. 2008) (emphasis in original).
Defendants argue that Definition 1.a. above is the ordinary and popular
meaning of “claim” and that a tort action against an insurance company is merely
based on an insured’s “demand for something as due.” Thus, the argument goes, the
ordinary and popular definition of “claim” includes bad-faith settlements, and
Defendants are not in breach of contract for classifying the settlement payment as a
“claim.” In support of their argument, Defendants correctly point out that the
Agreement involves an agency contract, not an insurance policy. This fact, however,
8
does not require the Court to completely ignore the obvious insurance context
“gathered from a four-corners’ examination of the [Agreement].” Pitco Prod. Co. v.
Chaparral Energy, Inc., 63 P.3d 541, 546 (Okla. 2003).
The Agreement is steeped in language pertinent to the insurance industry. For
example, the Agreement’s bonus provision, where the disputed term “claim” is also
located, refers to “[p]remium[s]” received on “[p]olicies” sold by Plaintiff.
Certainly, “premium” and “policy” have different meanings when used outside the
insurance context. The “contractual intent” behind each term is obvious, however,
when “determined from the entire agreement.” S. Corr. Sys., 64 P.3d at 1088-89.
Similarly, a four-corners examination of the Agreement indicates the parties had the
insurance meaning of “claim” in mind, rather than the broader version espoused by
Defendants. See Dillon Family & Youth Servs., Inc. v. Dep’t of Human Servs., 965
F.2d 932, 935 (10th Cir. 1992) (“Under Oklahoma law, ‘[h]owever broad may be the
terms of a contract, it extends only to those things concerning which it appears that
the parties intended to contract.’”) (quoting 15 Okla. Stat. § 164). We will “not
permit ambiguities to be created by taking contract provisions out of context.”
FDIC. v. American Casualty Co., 975 F.2d 677, 680 (10th Cir. 1992). If Defendants
intended a meaning other than the quite common and unambiguous definition applied
in the insurance context, they should have made it clear at the time of contract. “[A]
party to a contract cannot fail to disclose a meaning he attaches to a term which is
not in accordance with the accepted meaning in the industry when he is aware or
9
should be aware that the other party is using the term in its accepted sense.” CMI
Corp. v. Gurries, 674 F.2d 821, 824 (10th Cir. 1982).
Having determined the parties intended “claim” to mean the compensation
guaranteed by an insurance company, we hold the Agreement is unambiguous and
Defendants are in breach of contract for treating their bad-faith settlement payment
as a loss on the policy sold by Plaintiff. An action alleging bad-faith lies in tort, not
in the compensation guaranteed under contract, and involves “the unjustified
withholding of payment due under a policy.” Haberman v. The Hartford Ins. Group,
443 F.3d 1257, 1270 (10th Cir. 2006) (citation omitted). Thus, the “claim” relevant
to the Agreement here was the “payment due under [the] policy” sold by Plaintiff,
not the tort action resulting from Defendants’ “unjustified withholding of [that]
payment.” Id. Because the settlement payment was, therefore, unrelated to a
“claim” under the policy, we affirm the district court’s grant of summary judgment
on Plaintiff’s action for breach of contract.
III.
We now turn to the five main issues Plaintiff has raised on appeal. First, he
argues the district court erred by limiting recovery from the breach of the implied
covenant of good faith and fair dealing to contract damages. Plaintiff asserts the
issue of punitive damages should have been submitted to the jury. Second, Plaintiff
argues the district court erred in granting judgment as a matter of law for Defendants
on the fraud/constructive fraud claim. Plaintiff contends this claim should have been
10
submitted to the jury. Third, Plaintiff argues the district court erred in granting
summary judgment on the breach of fiduciary duty claim. Plaintiff asserts that
whether a fiduciary duty exists between contracting parties is a jury question.
Fourth, Plaintiff argues the district court should not have apportioned attorney fees
between the contract and tort claims because the claims were so interrelated. Fifth,
Plaintiff argues the district court erred in denying injunctive and declaratory relief
to preclude Defendants from continuing their practice of applying tort payments to
agents’ Loss Ratios.
A.
We first address whether the district court erred in ruling that Oklahoma law
precluded Plaintiff from recovering punitive damages for Defendants’ breach of the
implied covenant of good faith and fair dealing. 1 We review the district court’s
determination of state law and the propriety of punitive damages de novo. See FDIC
v. Hamilton, 122 F.3d 854, 857 (10th Cir. 1997).
Under Oklahoma law, “[e]very contract . . . contains an implied duty of good
faith and fair dealing.” Wathor v. Mutual Assurance Adm’rs, Inc., 87 P.3d 559, 561
(Okla. 2004). In cases involving “ordinary commercial contracts, a breach of that
duty merely results in damages for breach of contract, not independent tort liability.”
1
Because Plaintiff already received contract damages and because we hold
he is unable to recover punitive damages for any possible breach of the implied duty
of good faith and fair dealing, we need not decide whether Defendants, in fact,
breached the implied duty of good faith and fair dealing owed to Plaintiff.
11
Id. In the “proper case,” however, “punitive . . . damages may be sought.” Conover
v. Aetna US Health Care, Inc., 320 F.3d 1076, 1079 (10th Cir. 2003) (emphasis
added). The “proper case” requires that a “special relationship” exist between the
parties. See Wathor, 87 P.3d at 561-62. Oklahoma courts have found such a
“special relationship” in only very limited circumstances, most notably between an
insurer and insured. Id. at 561; see also, Allison v. UNUM Life Ins. Co., 381 F.3d
1015, 1027 (10th Cir. 2004) (“there is no dispute that the Oklahoma [bad- faith] law
is directed toward the insurance industry”). The “special relationship” in insurance
contracts stems from the “quasi-public nature of insurance, the unequal bargaining
power between the insurer and insured, and the potential for an insurer to
unscrupulously exert that power at a time when the insured is particularly
vulnerable.” Wathor, 97 P.3d at 561-62; see also Christian v. American Home
Assurance Co., 577 P.2d 899, 902 (Okla. 1977) (noting the special relationship in
insurance contracts exists because the insured is not entering the contract to obtain
commercial advantage but to protect from risk of accidental losses).
In contrast, the Agreement between Plaintiff and Defendants is a private,
commercial agency contract. The Agreement lacks the quasi-public nature and
unequal bargaining positions present in insurance contracts. Moreover, the
Agreement is based upon each party’s attempt to obtain a commercial advantage and
is dissimilar to situations where “the insured will be disabled and in strait financial
circumstances and, therefore, particularly vulnerable to oppressive tactics on the part
12
of an economically powerful entity.” Id. Because no such special relationship exists
between Plaintiff and Defendants, any breach by Defendants, “merely results in
damages for breach of contract, not independent tort liability.” Wathor, 97 P.3d at
561; see also Roberts v. Wells Fargo AG Credit Corp., 990 F.2d 1169, 1174 (10th
Cir. 1993) (finding no special relationship, and therefore, no tort liability, in
commercial lending setting); Hinson v. Cameron, 742 P.2d 549, 554 (Okla. 1987)
(declining to impose tort liability for bad-faith termination of at-will employee).
Accordingly, the district court properly limited recovery on the breach of the implied
duty of good faith and fair dealing claim to contract damages.
B.
We next address whether the district court erred in granting judgment as a
matter of law for Defendants on Plaintiff’s fraud/constructive fraud claim. On
appeal, Plaintiff argues his constructive fraud claim should have been submitted to
the jury. We review a district court’s grant of judgment as a matter of law de novo.
Speciality Beverages, L.L.C. v. Pabst Brewing Co., 537 F.3d 1165, 1175 (10th Cir.
2008).
Oklahoma law permits “a plaintiff to bring simultaneous claims for fraud and
breach of contract.” Id. at 1180. A party, however, “may not obtain double
recovery.” Id. In addition, “[f]raud is never presumed and it must be proved by
clear and convincing evidence.” Rogers v. Meiser, 68 P.3d 967, 977 (Okla. 2003).
Accordingly, “the mere allegation of fraud alone ‘will not justify the submission of
13
that issue [to the jury] unless facts are produced from which an irresistible deduction
of fraud reasonably arises.’” Roberts, 990 F.2d at 1173 (quoting Silk v. Phillips
Petrol. Co., 760 P.2d 174, 177 (Okla. 1998)). Although “a defendant’s acts may
constitute fraud at law and allow a recovery of actual damages, not every fraud case
will support a punitive damage recovery.” Rogers, 68 P.3d at 977. To obtain
punitive damages, a plaintiff is “required to show not only all the elements of
actionable fraud, but evil intent or such aggravating circumstances as to be deemed
equivalent to such intent.” Id.
While we believe Plaintiff’s fraud allegations do not likely warrant submission
to the jury, we need not decide the matter because Plaintiff already received damages
for Defendants’ breach of contract and is not entitled to double recovery under a
fraud theory. See Speciality Beverages, 537 F.3d at 1180. Thus, all that remains is
the possibility of punitive damages. We conclude that “submission of the issue of
punitive damages to a jury [would] be improper.” Willis v. Midland Risk Ins. Co.,
42 F.3d 607, 614 (10th Cir. 1994). Plaintiff has failed to demonstrate the requisite
“evil intent or such aggravating circumstances as to be deemed equivalent to such
intent” for punitive damages. Rogers, 68 P.3d at 977.
The record reflects that individuals whom Defendants insured rarely sued for
the bad-faith handling of a policy claim. Here, when such an instance did occur on
a policy sold by Plaintiff, Defendants clearly informed Plaintiff of the accounting
procedure under which his bonus commission would be negatively impacted. After
14
receiving word of his bonus reduction, Plaintiff was allowed the opportunity to
contest Defendants’ procedure directly to corporate executives. Defendants
considered Plaintiff’s arguments but ultimately decided they would continue to apply
such bad-faith settlement payments to agents’ Loss Ratios.
Plaintiff has not provided evidence that Defendants acted “with some evil
intent, or . . . such gross negligence [or] such disregard of [Plaintiff’s] rights, as
deemed equivalent to such intent.” Id. In fact, Plaintiff’s briefing focuses on a
theory of “constructive fraud.” Notably, the difference between constructive fraud
and traditional common law fraud is that constructive fraud does not require intent
to deceive. Speciality Beverages, 537 F.3d at 1181. Defendants mere failure, at time
of contract, to disclose their policy of attributing bad-faith payments to agents’ Loss
Ratios, without actual or presumed malicious intent, does not “rise to the level that
justifie[s] submission of the punitive damages issue to a trier of fact.” Willis, 42
F.3d at 615 (affirming district court’s refusal to submit punitive damages issue to
jury where evidence of defendant’s malice or reckless disregard was insufficient).
Accordingly, the district court appropriately withheld Plaintiff’s fraud/constructive
fraud claim from the jury.
C.
We next address whether the district court erred in granting judgment as a
matter of law on the breach of fiduciary claim. The district court ruled no fiduciary
duty existed between Plaintiff and Defendants. As with the fraud claim, Plaintiff
15
asserts this question should have been submitted to the jury. Our review of the
district court’s grant of judgment as a matter of law is again de novo. Speciality
Beverages, 537 F.3d at 1175.
Under Oklahoma law, fiduciary relationships “can arise anytime the facts and
circumstances surrounding a relationship would allow a reasonably prudent person
to repose confidence in another person.” Quinlan v. Koch Oil Co., 25 F.3d 936, 942
(10th Cir. 1994) (citation omitted). Entering a contract “can be the mere incident
creating the [fiduciary relationship],” id. at 943, so long as the facts and
circumstances are not “indicative of an arms length commercial contract.” Id. at
942. As such, an action for breach of fiduciary duty which “arises from contract can
be based either in tort or contract.” Id. at 943 (citations omitted). If a plaintiff
chooses to pursue a tort claim rather than breach of contract, “the issue of punitive
damages may be presented to the jury.” Id. (emphasis added) (when a breach of
fiduciary duty does arise from contract, the injured party must “choose whether to
sue for breach of contract or for tort”). Oklahoma law, however, “precludes the
recovery of punitive damages where the gravamen of plaintiff’s action is for breach
of an obligation arising from contract.” Id.; see also Burton v. Juzwik, 524 P.2d 16,
19-20 (Okla. 1974); 23 Okla. Stat. § 9.
Again, all that remains for Plaintiff is the possibility of punitive damages.
Plaintiff is precluded from recovering punitive damages for any breach of fiduciary
duty because the “gravamen of [P]laintiff’s action is for breach of an obligation
16
arising from contract.” 2 Quinlan, 25 F.3d at 943. Moreover, as we held with
Plaintiff’s fraud claim, the evidence at trial does not “rise to the level that justifie[s]
submission of the punitive damages issue to a trier of fact.” Willis, 42 F.3d at 615.
Accordingly, even if a fiduciary duty existed between Plaintiff and Defendants,
which we do not decide, no issues were left for jury determination. Plaintiff’s breach
of fiduciary duty claim was, therefore, appropriately withheld from the jury.
D.
We next address whether the district court erred in apportioning attorney fees
between the contract and tort claims. In diversity cases, attorney fees are a
substantive matter controlled by state law. North Texas Prod. Credit Ass’n v.
McCurtain County Nat’l Bank, 222 F.3d 800, 817 (10th Cir. 2000). We review the
legal principles underlying an award de novo. Id. However, the ultimate
“determination of reasonableness and amount of the fee award is generally left to the
sound discretion of the district court.” Gamble, 175 F.3d at 773.
Oklahoma strictly adheres to the “American rule concerning attorney’s fees.”
North Texas, 222 F.3d at 818. Attorney fees are not available unless (1) the
opponent acts in bad faith, (2) attorney fees are authorized under a specific
statute, or (3) a contract exists between the parties which governs attorney fees. Id.
Accordingly, “[i]n a case involving multiple claims where prevailing party attorney
2
Plaintiff’s brief acknowledges “[i]t [is] Defendants’ breach of contract
. . . that [is] the gravamen of this case.” Brief for the Plaintiff-Appellant at 30.
17
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.” Tsotaddle v. Absentee Shawnee Housing Auth., 20 P.3d 153,
162 (Okla. Civ. App. 2000). Oklahoma law provides a statutory exception
authorizing attorney fees for breach of contract claims. See 12 Okla. Stat.§ 936. No
similar statutory exception exists for tort actions. R.J.B. Gas Pipeline Co. v.
Colorado Interstate Gas Co., 813 P.2d 1, 14 (Okla. Civ. App. 1989), overruled on
other grounds by Taylor v. Chubb Group of Ins. Cos., 874 P.2d 806 (Okla. 1994).
In the instant case, the district court correctly recognized its duty to apportion
fees between the contract claim and the tort claims. 3 Despite Plaintiff’s contention
to the contrary, Oklahoma does not have an “inextricably intertwined” theory upon
which attorney fees do not have to be apportioned if the claims are closely related.
See State Bank & Trust v. First State Bank, 2000 WL 1862690, at *14 (10th Cir.
Dec. 20, 2000) (unpublished) (“Although we are sympathetic to the difficulty of
segregating attorneys’ fees between claims that are so closely related, we can find
no support for an ‘inextricably intertwined’ exception to the general Oklahoma rule
that attorneys’ fees can only be awarded where there is an independent statutory
basis.”). Moreover, after the district court granted summary judgment for Plaintiff
3
No contract exists between the parties governing attorney fees and
Defendants’ litigation conduct is not at issue, thereby leaving only the possibility of
attorney fees authorized by statute.
18
on the breach of contract claim, all that remained was the possibility of punitive
damages arising from the tort claims. The district court was eminently reasonable
in using this point as the appropriate cut-off for separating work performed on the
contract and tort issues. See R.J.B. Gas Pipeline, 813 P.2d at 14 (reversing and
remanding case so that trial court could apportion and eliminate attorney fees for
unsuccessful punitive damages claims). We, therefore, affirm the district court’s
award of $14,126.50 in attorney fees.
E.
Finally, we address whether the district court erred in denying Plaintiff’s
request for injunctive and declaratory relief. Injunctive relief is an equitable remedy
and a district court’s decision to grant or deny injunctive relief is reviewed for abuse
of discretion. Signature Prop. Int’l Ltd. P’ship v. City of Edmond, 310 F.3d 1258,
1268 (10th Cir. 2002). In diversity cases, the law of the forum state governs claims
for injunctive relief. See Mid-America Pipeline Co. v. Lario Enters., Inc., 942 F.2d
1519, 1523 (10th Cir. 1991). Injunctive relief “is an extraordinary remedy that
should not be lightly granted.” Sharp v. 251st St. Landfill, Inc., 925 P.2d 546, 549
(Okla. 1996). “Under Oklahoma law, injunctive relief is not warranted where a
plaintiff has a plain, speedy, and adequate remedy at law.” Australian Gold, Inc. v.
Hatfield, 436 F.3d 1228, 1242 (10th Cir. 2006) (citation omitted). If a plaintiff’s
injury “may be compensated by an award of monetary damages then an adequate
remedy at law exists.” Coxcom, Inc. v. Oklahoma Secondary Schools Athletic
19
Ass’n, 143 P.3d 525, 529 (Okla. Civ. App. 2006). In the instant case, the monetary
damages awarded to Plaintiff were clearly a “plain, speedy, and adequate remedy at
law.” Australian Gold, 436 F.3d at 1242. The district court, therefore, did not abuse
its discretion in denying injunctive relief. 4
IV.
We do not decide whether Defendants violated Oklahoma public policy.
Based on our independent analysis, we affirm the district court’s ultimate conclusion
that Defendants were in breach of contract. We further affirm the judgment of the
district court in all other respects.
AFFIRMED.
4
Plaintiff also argues the district court erred in excluding Plaintiff’s expert
witness and evidence of Defendants’ conduct outside Oklahoma. We resolve these
issues summarily. Plaintiff’s expert was prepared to testify that Defendants’ practice
conflicted with accepted industry practice. Plaintiff’s evidence of Defendants’
conduct outside Oklahoma showed that in some instances Defendants attributed bad-
faith payments as “claims” on agent policies and in other instances, they did not. As
we observed throughout this opinion, because Plaintiff has already been awarded
contract damages, all that remains is the possibility of punitive damages. Plaintiff’s
expert testimony and his minimal and conflicting evidence of Defendants’ conduct
outside Oklahoma do not materially advance the punitive damages issue, i.e.,
whether Defendants acted with “evil intent” in contracting with Plaintiff. Thus, we
need not decide whether the district court abused its discretion in excluding
Plaintiff’s expert witness and evidence of Defendants’ conduct outside Oklahoma
because any potential error was certainly harmless.
20