Specialty Beverages, L.L.C v. Pabst Brewing Co.

FILED
United States Court of Appeals
Tenth Circuit

August 19, 2008
Elisabeth A. Shumaker
Clerk of Court
PUBLISH

UNITED STATES COURT OF APPEALS

TENTH CIRCUIT

SPECIALTY BEVERAGES, L.L.C.,

Plaintiff-Appellant-Cross-
Appellee,

v. Nos. 06-6243 & 06-6250

PABST BREWING COMPANY,

Defendant-Appellee-Cross-
Appellant.

Appeal from the United States District Court
for the Western District of Oklahoma
(D.C. No. CIV-04-1605-L)

Robert E. Norman (Jack S. Dawson with him on the briefs), Miller Dollarhide,
Oklahoma City, OK, for Plaintiff-Appellant-Cross-Appellee.

Craig W. Hoster (Michael R. Pacewicz with him on the briefs), Crowe &
Dunlevy, P.C., Tulsa, OK, for Defendant-Appellee-Cross-Appellant.

Before KELLY, EBEL, and MCCONNELL, Circuit Judges.

EBEL, Circuit Judge.
 Plaintiff Specialty Beverages, L.L.C. sued Defendant Pabst Brewing

Company for breach of contract and fraud. Specialty Beverages and Pabst both

filed motions for judgment as a matter of law pursuant to Rule 50(a) of the

Federal Rules of Civil Procedure. The district court granted Pabst’s motion

regarding Specialty’s fraud claim and granted Specialty’s motion regarding

Pabst’s impossibility and impracticability defenses. The court denied Pabst’s

motion regarding Specialty’s lost profits damages for its breach-of-contract claim.

After the jury returned a verdict for Specialty on its breach-of-contract claim, the

district court also denied Specialty’s motion for attorneys fees pursuant to

Oklahoma statute.

We hold that the district court correctly granted Specialty’s motion

regarding Pabst’s impossibility and impracticability defenses, correctly denied

Pabst’s motion regarding lost profit damages, and correctly denied Specialty’s

motion for attorneys fees. The district court erred, however, when it granted

Pabst’s motion regarding Specialty’s fraud claim. We exercise our jurisdiction

pursuant to 28 U.S.C. § 1291, and REVERSE and REMAND for a trial on

Specialty’s fraud claim. We AFFIRM the district court’s decision regarding all

other issues raised in these appeals.

I. Facts

The contract dispute underlying these appeals arose out of the intricacies of

Oklahoma law regulating the sale of beer. Oklahoma law permits the sale of both

2
“low point” and “strong” beer. “[L]ow-point beer” includes “[a]ll beverages

containing more than one-half of one percent (½ of 1%) alcohol by volume and

not more than three and two-tenths percent (3.2%) alcohol by weight.” Okla.

Stat. tit. 37, §§ 163.1, 163.2(1). “Strong” beer contains “more than three and

two-tenths percent (3.2%) alcohol by weight.” See id. § 163.1. This case

involves a contract for the distribution of “strong” beer. 1

Oklahoma significantly regulates the distribution of beer (as well as wines

and other intoxicating beverages). See id. §§ 501-99 (Alcoholic Beverage

Control Act). That Act provides, among other things, that a brewer cannot sell

beer directly to a wholesaler or retailer. Instead, Oklahoma has created a

four-tiered system for selling beer: First, the brewer must sell its beer to a

“non-resident seller.” A “non-resident seller” must be licensed by the State of

Oklahoma and is authorized “to solicit and take orders for alcoholic beverages

from the holders of licenses authorized to import the same into [Oklahoma], and

to ship or deliver, or cause to be shipped or delivered, alcoholic beverages into

Oklahoma pursuant to such sales.” Okla. Stat. tit. 37, § 524(A). In more concrete

terms, the “non-resident seller” sells the beer to a licensed “wholesaler,” who in

turn sells the beer to a licensed retail establishment. See Okla. Stat. tit. 37,

1
For the remainder of this opinion, all references to “beer” refer to
“strong” beer unless otherwise indicated.

3
§§ 518.1, 521(E), (F), 524. A brewer may have more than one non-resident seller

distributing beer to Oklahoma wholesalers.

Even though they are not permitted to deliver beer to retail establishments,

licensed non-resident sellers are permitted to go into licensed retail

establishments to market and obtain space for their products from the retailer. A

non-resident seller can also help the retail establishment order beer from that

non-resident seller. The sale and delivery just has to be made through a licensed

wholesaler. Thus, non-resident sellers can, in effect, work as the sales force for

both the brewer and wholesaler. A non-resident seller can sell beer through, and

a retail establishment can take delivery from, any number of licensed wholesalers.

This case involves a contract between Specialty Beverages, a non-resident

seller licensed in Oklahoma, and Pabst, the largest brewer of strong beer doing

business in Oklahoma. 2 Dennis James and Toby Tindell, along with two other

“silent partners,” formed Specialty Beverages in the fall of 2002, and obtained the

required licensing by February 2003. Specialty Beverages was a limited liability

company formed under Delaware law and, as such, was qualified to be a

non-resident seller in Oklahoma. Specialty Beverages began distributing lesser

known brands of beer, wine, and soda.

2
At the time of this contract, Pabst was the fourth largest “brewer” in the
United States, but sold the most strong beer in Oklahoma. At that time, the three
larger brewers, Anheuser-Busch, Miller, and Coors, apparently decided not to sell
strong beer in Oklahoma because of the convoluted nature of the state’s tiered
distribution system.

4
 Pabst, meanwhile, had a longstanding relationship with Marrs Distributing

Company, which acted as the non-resident seller of certain Pabst brands in

Oklahoma. 3 Over the course of their relationship, Pabst had become increasingly

dissatisfied with Marrs. One of Pabst’s concerns about Marrs’s performance was

that Marrs did not maintain any inventory of Pabst products from which licensed

wholesalers and retailers could order. Thus, wholesalers and retailers had to

place orders for Pabst products several months in advance. Marrs also did not

make any effort to market Pabst’s brands to retail establishments, and instead

relied solely on orders from wholesalers. In addition, although Pabst had

authorized Marrs to distribute twenty-five Pabst brands, Marrs serviced only eight

of them.

In light of Pabst’s growing dissatisfaction with Marrs, Pabst’s Oklahoma

marketing manager, Chuck Lefholz, approached Specialty Beverages in the spring

of 2003. Originally, Lefholz wanted Specialty Beverages to distribute Pabst’s

low point beer, but Specialty Beverages was not interested. Later that same year,

Lefholz again approached Specialty Beverages, but this time, he inquired whether

Specialty would distribute Pabst’s strong beer.

During negotiations, Specialty Beverages and Pabst discussed Pabst’s

business relationship with Marrs and the concerns Pabst had about Marrs’s

3
Pabst sold its remaining brands through another non-resident seller, Best
Brands.

5
performance. Regarding Pabst’s contractual relationship with Marrs, Lefholz

explained to Specialty Beverages that Pabst had a one-year, terminable-at-will

“appointment letter” with Marrs. Although that “appointment letter” was

renewable each year, it had already expired for that year and Pabst did not intend

to renew it.

Despite Lefholz’s belief that Pabst could terminate its relationship with

Marrs, others at Pabst, specifically Rosemary Sarabia-Mata, a “distributor

contract coordinator,” and Yeoryios Appallas, Pabst’s vice president and general

counsel, warned Lefholz that, in addition to the one-page annual appointment

letter it had with Marrs, Pabst also had an eighteen-page “exclusive”

distributorship agreement 4 with Marrs that did not include any termination date.

General Counsel Appallas opined that Pabst could terminate its written

distributorship agreement with Marrs only after giving Marrs sixty days’ notice

and then only if Pabst could “prove that Marrs did not service and cannot service

the territory assigned.” Lefholz, however, rejected that interpretation of Pabst’s

relationship with Marrs, asserting that Oklahoma law would not recognize an

exclusive distributorship agreement. Although there were a number of internal

4
Pabst also had an “exclusive” agreement with its other non-resident seller
in Oklahoma, Best Brands. Those agreements with both Best Brands and Marrs
were correctly categorized as “exclusive” because Pabst had authorized Marrs to
distribute certain Pabst brands exclusively, and Best Brands to distribute other,
different Pabst brands exclusively. Pabst, therefore, had two “exclusive”
distributorship agreements with two different non-resident sellers.

6
communications among Pabst officials concerning its contractual relationship

with Marrs, no one from Pabst told Specialty Beverages about Pabst’s exclusive

distributorship agreement with Marrs. Toby Tindell, one of Specialty Beverages’

owners, specifically testified that Specialty Beverages would never have entered

into any agreement to be Pabst’s non-resident seller if Specialty had known about

the exclusive arrangement between Pabst and Marrs.

Lefholz eventually obtained permission from Pabst’s management to notify

Marrs that Pabst was not going to renew Marrs’s appointment letter. Pabst sent

Marrs this termination notice on April 8, 2004.

A week later, on April 15, Pabst issued Specialty Beverages an

“appointment letter,” “appointing” Special Beverages to be “our Nonresident

Seller License for the State of Oklahoma for one year effective April 14, 2004

thru April 14, 2005 subject to Renewal at the sole discretion of Pabst Brewing

Company.” The appointment letter then specifically listed a number of brands of

Pabst beers. Although the letter does not specifically state this, Specialty

Beverages understood that “those sorts of appointment letters could be terminated

on 30-days notice with or without cause.”

Pabst’s general counsel, Appallas, testified that, in addition to the

appointment letter, he also prepared a much lengthier distributor agreement for

Specialty Beverages. That agreement was similar, although not identical, to the

agreement Pabst also had with Marrs. In drafting the distributor agreement for

7
Specialty Beverages, Appallas started with Pabst’s standard distributor agreement

and then modified it to make a one-year, non-exclusive agreement. According to

Appallas, he made these modifications because Specialty Beverages was a new

company without a track record. Appallas further testified that he told Lefholz to

send this agreement to Specialty Beverages, along with the one-page appointment

letter. Lefholz responded he would not send that distributor agreement to

Specialty Beverages because all that was needed was the appointment letter. The

record indicates that Pabst never sent the distribution agreement to Specialty. On

April 15, 2004, Pabst sent Specialty Beverages a three-page fax consisting of a

cover page, the appointment letter, and a signature page. The third page of that

fax was actually the signature page from the lengthier distributor agreement, but

as it was included in the fax, it appeared to be only a second signature page for

the appointment letter.

The Pabst appointment letter was Specialty Beverages’ big break.

Although it had been distributing lesser known, smaller beverage brands, those

brands did not have the volume of business that would make and keep Specialty

Beverages profitable.

Specialty Beverages’ plan to improve sales of Pabst beer and avoid the

problems Marrs encountered was to buy a significant inventory of beer from

Pabst, aggressively market Pabst products to retail establishments, and service

more than just the eight Pabst brands Marrs had been distributing. In furtherance

8
of that plan, after obtaining the appointment letter, Specialty Beverages tripled its

warehouse space and added temperature controls in the warehouse in order to

store the beer in better conditions; added office space and administrative staff;

bought a refrigerated trailer to store Pabst keg products, which had to be

refrigerated rather than just air conditioned; hired a new sales force, going from

one to four salespersons; hired Mike Fancher, who Pabst recommended, as

Specialty Beverages’ sales manager; committed money and resources to

marketing; borrowed significantly more money from the bank than it otherwise

would have and increased its line of credit in order to buy Pabst beer to have on

hand; and bought thousands of cases of Pabst beer. Specialty Beverages had

specifically refrained from taking any of these steps until it received the official

appointment letter because it did not have the financial ability to makes these

changes to its business unless Pabst appointed Specialty as its non-resident seller.

On April 29, 2004, two weeks after Pabst issued Specialty Beverages the

appointment letter, Marrs sued Pabst in Oklahoma state court, alleging Pabst had

breached the exclusive distribution agreement it had with Marrs. On May 3,

2004, Marrs obtained a temporary restraining order (“TRO”) that restrained Pabst

from breaching its distribution agreement with Marrs and ordered Pabst and Marrs

to retain the status quo. As a result, Pabst reinstated Marrs as its exclusive

distributor. The state court scheduled a hearing on Marrs’s motion for a

preliminary injunction for May 25, 2004. Before that hearing occurred, however,

9
Marrs and Pabst settled their dispute. Pabst agreed to reinstate Marrs as its

exclusive distributor and non-resident seller, and Marrs agreed to dismiss its

complaint without prejudice.

At Pabst’s urging, Specialty Beverages had already obtained a number of

beer orders from retailers immediately upon receiving the appointment letter.

Specialty Beverages placed its order with Pabst to fill these first retail orders and

began receiving the beer from Pabst at about the time Marrs initiated litigation

against Pabst. Once the court entered the TRO in the Marrs litigation, Pabst

directed Specialty Beverages not to sell any of that beer to the retailers. “Right

when [Specialty Beverages] got the beer in, of course, we were excited to . . . get

it out of the building, to move it in to . . . take care of our customers, we got

a . . . message from Pabst that they had an issue and not to move any beer.”

Using electronic transfers, Pabst still collected the money Specialty Beverages

owed it for these beer shipments.

Although Specialty Beverages knew that Marrs had sued Pabst, prompting

Pabst to direct Specialty not to sell any of its beer, Specialty Beverages asserts no

one ever told it about the TRO. Nor did Pabst keep Specialty otherwise informed

about this litigation. Instead, Pabst continued to assure Specialty that it would

quickly resolve the dispute with Marrs. Pabst otherwise refused to return any of

Specialty’s phone calls and email inquiries. Weeks after Marrs and Pabst settled

Marrs’s lawsuit, Specialty Beverages was still sending Pabst emails asking about

10
developments in the lawsuit and whether there would be a hearing on Marrs’s

request for a preliminary injunction.

During this time, Pabst still encouraged Specialty Beverages to continue

placing monthly beer orders, which Specialty did for several months. 5 Pabst,

however, never delivered any more beer to Specialty. Pabst did eventually pick

up some of the beer that it had already delivered to Specialty. The rest of the

beer that Pabst delivered to Specialty grew stale in Specialty Beverages’

warehouse. In addition, those wholesalers and retailers that had ordered Pabst

products through Specialty Beverages “were all over us about why we wasn’t

[sic] getting them beer.” Specialty Beverages’ reputation among its customers

was “destroyed” because Specialty could not fill any orders for Pabst products.

Finally, to get Pabst’s attention, Specialty Beverages stopped the electronic fund

transfers to Pabst to pay for the beer Specialty had continued to order. Pabst then

encouraged Specialty to negotiate with Marrs and perhaps pay to obtain the

distributorship. Specialty Beverages did try to negotiate with Marrs, to no avail.

By February 2005, Specialty Beverages went out of business. “We were broke,

and we had no beer to sell, and our reputation was totally destroyed.”

Specialty Beverages sued Pabst, in October 2004, in Oklahoma state court,

and alleged both breach of contract and fraud. Pabst then removed the action to

5
Specialty Beverages feared that if it did not continue making monthly beer
orders, Pabst would accuse Specialty of breaching the appointment letter.

11
federal court on the basis of the federal court’s diversity jurisdiction, see 28

U.S.C. § 1332.

The district court conducted a jury trial on these two claims. During trial,

the district court granted Pabst judgment as a matter of law on Specialty

Beverages’ fraud claim and granted Specialty judgment as a matter of law on

Pabst’s impossibility and impracticability defenses. The jury then entered a

verdict in Specialty Beverages’ favor on the breach-of-contract claim, awarding

Specialty $274,022 in damages for economic loss and $400,000 in damages for

the diminished value of Specialty Beverages’ business. The district court denied

Specialty Beverages’ motion for attorneys’ fees. Both Specialty and Pabst appeal.

II. UCC or Oklahoma common law

Before turning to the merits, we must address an issue that both the district

court and the parties overlooked: whether the Uniform Commercial Code

(“UCC”), as enacted by Oklahoma, or Oklahoma common law contract principles

govern these appeals. 6 Our diversity jurisdiction requires that we “ascertain and

apply the state law” rather than “reach[ing] [our] own judgment regarding the

substance” of the state law in question. Wade v. Emcasco Ins. Co., 483 F.3d 657,

665 (10th Cir. 2007) (internal quotation marks omitted) (quoting Wankier v.

Crown Equip. Corp., 353 F.3d 862, 866 (10th Cir. 2003)). Generally, we would

6
The parties do not dispute that Oklahoma law governs the claims at issue
in the instant case.

12
follow the most recent decisions of the Oklahoma Supreme Court, id. at 665–66;

however, in the case at bar, the Oklahoma Supreme Court has not considered

whether the UCC or the common law governs a beer distributorship agreement.

Accordingly, we must analyze decisions from the lower state courts in Oklahoma,

decisions from appellate courts in other states, and decisions from the federal

district courts in Oklahoma in order “to predict what [Oklahoma’s] highest court

would do.” Id. at 666.

In Oklahoma, Article 2 of the UCC governs “transactions in goods.” Okla

Stat. tit. 12A, § 2-102. The statute defines “goods” as “all things (including

specially manufactured goods) which are movable at the time of identification to

the contract for sale.” Id. § 2-105(1). There is no doubt that beer satisfies the

statutory definition of a “good”; however, we must determine whether a

distribution contract for beer constitutes a “transaction in goods.”

Although the Oklahoma Supreme Court has not yet addressed how to

determine if a contract that provides both services and goods fits within Article

2’s scope, it appears that Oklahoma courts would apply the “predominant factor”

test utilized by most other state courts. See Gilbert Cent. Corp. v. State, 716 P.2d

654, 663 (Okla. 1986) (applying the predominant factor test in another context to

determine if a highway construction contract constituted the sale of personal

property); see also Pepsi-Cola Bottling Co. of Pittsburg, Inc. v. PepsiCo, Inc., 431

F.3d 1241, 1255 n.7 (10th Cir. 2005) (noting that New York law applies the

13
predominant factor test to determine if a contract falls within the scope of Article

2); Belleville Toyota, Inc. v. Toyota Motor Sales, U.S.A., Inc., 770 N.E.2d 177,

194 (Ill. 2002) (applying the “predominant purpose” test to determine if Article 2

applied to an automobile dealership agreement); East Hill Marine, Inc. v. Rinker

Boat Co., Inc., 229 S.W.3d 813, 818 (Tex. App. 2007) (applying the “dominant

factor” test to determine if a dealership contract fit within Article 2’s scope). The

majority of other courts conclude that Article 2 governs distribution agreements

because the sale of goods is the predominant factor. 7 See, e.g., Pepsi-Cola

Bottling Co., 431 F.3d at 1255 n.7 (concluding that the predominant factor test

dictates that a distributorship agreement for soft drinks fits within Article 2’s

scope); Intercorp, Inc. v. Pennzoil Co., 877 F.2d 1524, 1527–28 (11th Cir. 1989)

(holding that Alabama law dictated that an oil products distributorship agreement

fit within the scope of Article 2); Jo-Ann, Inc. v. Alfin Fragrances, Inc., 731 F.

Supp. 149, 153–55 (D.N.J. 1989) (applying New Jersey law and concluding that

Article 2 applied to a distributorship agreement for cosmetic products); Belleville

Toyota, 770 N.E.2d at 196 (concluding that Article 2 governed an automobile

dealership agreement); E. Hill Marine, Inc., 229 S.W.3d at 819–20 (applying the

7
In the UCC context, decisions from other jurisdictions are particularly
persuasive due to the uniform nature of the UCC, and where necessary, Oklahoma
courts look to decisions from other state and federal courts when analyzing
common provisions of the UCC. See, e.g., Sesow v. Swearingen, 552 P.2d 705,
706 (Okla. 1976) (referring to Texas case law to resolve a UCC statutory
interpretation question).

14
“dominant factor” test and determining that Article 2 applies to a boat

distributorship agreement). In addition to the strong majority of jurisdictions that

conclude that Article 2 governs distributorship agreements, one Oklahoma federal

district court applied the UCC, without further discussion, to a distributor

agreement. Phillips Machinery Co. v. LeBlond, Inc., 494 F. Supp. 318, 320 (N.D.

Okla. 1980). The combination of these decisions leads us to predict that, if faced

with the current situation, the Oklahoma Supreme Court would apply the UCC to

the contract dispute at the heart of these appeals.

III. Merits

Turning to the merits, we first address the three issues related to the district

court’s rulings on the parties’ motions for judgment as a matter of law pursuant to

Rule 50(a) of the Federal Rules of Civil Procedure. Pabst contends that the

district court wrongly granted Specialty’s Rule 50(a) motion regarding Pabst’s

impossibility and impracticability defenses and wrongly denied its motion

regarding Specialty’s lost profits claim. Specialty, for its part, asserts that the

district court improperly granted Pabst’s motion regarding Specialty’s fraud

claim. We address each argument in turn below.

A. Standard of review

We review de novo a district court’s decision to grant a motion for

judgment as a matter of law. Haberman v. Hartford Ins. Group, 443 F.3d 1257,

1264 (10th Cir. 2006). “In diversity cases, the substantive law of the forum state

15
governs the analysis of the underlying claims, including specification of the

applicable standards of proof, but federal law controls the ultimate, procedural

question whether judgment as a matter of law is appropriate.” Id. Judgment as a

matter law is appropriate where “a party has been fully heard on an issue during a

jury trial and the court finds that a reasonable jury would not have a legally

sufficient evidentiary basis to find for the party on that issue.” Fed. R. Civ. P.

50(a)(1). To make our determination, we may not weigh the evidence or make

our own credibility determinations. Shaw v. AAA Eng’g & Drafting, 213 F.3d

519, 529 (10th Cir. 2000). Thus, after drawing all reasonable inferences in favor

of the nonmoving party, see Thompson v. State Farm Fire. & Cas. Co., 34 F.3d

932, 941 (10th Cir. 1994), we may affirm a judgment as a matter of law only if

“the evidence so overwhelmingly favors the moving party as to permit no other

rational conclusion.” Shaw, 213 F.3d at 529. In other words, “‘[t]he question is

not whether there is literally no evidence supporting the [nonmoving]

party . . . but whether there is evidence upon which the jury could properly find

[for that party].’” Century 21 Real Estate Corp. v. Meraj Int’l Inv. Corp., 315

F.3d 1271, 1278 (10th Cir. 2003) (alterations in original).

B. Judgment as a matter of law on Pabst’s asserted defenses of
impossibility or impracticability

Pabst contends that the district court erred when it granted Specialty

judgment as a matter of law on Pabst’s asserted defenses of impossibility or

16
impracticability. In response, Specialty asserts that the district court correctly

granted the judgment as a matter of law because Pabst failed to demonstrate both

that its performance was completely impossible and that Marrs’s defense of its

legal rights was objectively unforeseeable. As discussed more completely below,

we conclude that the district court properly granted Specialty judgment as a

matter of law on this issue because Pabst failed to present the jury with evidence

sufficient to allow the jury to conclude that the defense of impossibility or

impracticability excused its nonperformance.

Under Oklahoma law, the defense of impossibility of performance is a

common law doctrine, see, e.g., Okla. Gas & Elec. Co. v. Pinkerton’s Inc., 742

P.2d 546, 547 n.2 (Okla. 1986); however, the Oklahoma courts regularly consider

this defense when analyzing contracts governed by the UCC. Golsen v. ONG W.,

Inc., 756 P.2d 1209, 1212 (Okla. 1988); see also Resources Inv. Corp v. Enron,

669 F. Supp. 1038, 1043 (D. Colo. 1987) (applying Oklahoma law). The

Oklahoma Supreme Court has defined this doctrine as follows:

Where, from the nature of the contract, it is evident that the parties
contracted on the basis of the continued existence of the person, thing,
condition, or state of things, or of facts, to which it relates, the
subsequent perishing of the person or thing, or cessation of existence
of the condition or state will excuse the performance, or terminate the
contract, a condition to that effect being implied, in spite of the fact that
the promise may have been unqualified.

Kan., Okla. & Gulf Ry. Co. v. Grand Lake Grain Co., 434 P.2d 153, 157 (Okla.

1967).

17
 The Oklahoma Supreme Court has also adopted several limitations on the

scope of this defense. The defense applies only if it “appear[s that] the thing to

be done cannot be accomplished by any means.” Id.; see also Pinkerton’s, 742

P.2d at 548 (“The duty of a promisor is not discharged by the mere fact that

supervening events deprived him of the ability to perform, if they are not such as

to deprive other persons similarly situated of the ability to so perform.”). In

addition, the defense does not apply if the promisor had any reason to anticipate

the facts that rendered performance impossible. Grand Lake Grain, 434 P.2d at

158. In other words, the defense is not available if a promisor was aware of a

potential risk that could interfere with its performance and assumed that risk by

not explicitly addressing it in the contract. Id.

Unlike impossibility of performance, impracticability is a UCC-based

defense. See Okla. Stat. tit. 12A, § 2-615. That statute provides, in pertinent

part: “a seller . . . is not [in] breach of his duty under a contract for sale if

performance as agreed has been made impracticable by the occurrence of a

contingency the nonoccurrence of which was a basic assumption on which the

contract was made . . . .” Id. § 2-615(a). Similar to the defense of impossibility,

impracticability does not excuse nonperformance if the contingency was

foreseeable. See id. cmt. 8 (“[T]he exemptions of this section do not apply when

the contingency in question is sufficiently foreshadowed at the time of contracting

to be included among the business risks which are fairly to be regarded as part of

18
the dickered terms, either consciously or as a matter of reasonable, commercial

interpretation from the circumstances.”); see also Sabine Corp. v. ONG W., Inc.,

725 F. Supp. 1157, 1174 (W.D. Okla. 1989) (noting that under Oklahoma law, the

defense of impracticability is available only if “the occurrence making

performance impracticable [was] unforeseeable”).

Turning to the case at bar, we conclude that the district court correctly

granted Specialty a judgment as a matter of law on both defenses because the

contingency in question—the interference caused by the exclusive distribution

agreement with Marrs—was foreseeable. The record indicates that Pabst

anticipated that its contractual obligations to Marrs might interfere with its

nascent relationship with Specialty. Pabst’s general counsel testified that at the

time Pabst was negotiating with Specialty, he was aware that terminating the

agreement with Marrs might lead to litigation. In addition, the record indicates

that the general counsel believed that the distribution agreement with Marrs was

binding and that Pabst would not likely be able to cancel that contract. In light of

this evidence, we conclude that the interference caused by the Marrs contract was

objectively foreseeable, and thus, the defenses of impossibility and

impracticability were not available to Pabst. See Sabine Corp., 725 F. Supp. at

1174; Grand Lake Grain, 434 P.2d at 158. Accordingly, the district court

correctly decided that a rational jury could not find in favor of Pabst based on

19
these defenses, and therefore properly granted judgment as a matter of law on this

issue.

Pabst argues that its impossibility and impracticability defenses should

have survived because, although litigation between Marrs and Pabst was

foreseeable, the state court grant of the TRO was not. With this tenuous nuance,

however, Pabst jumps from the frying pan into the fire. In the first place, it is far

from unforeseeable that Marrs might obtain a TRO to enforce the distribution

agreement. Moreover, Pabst’s argument fails because the TRO did not render its

performance impossible or impracticable as the TRO was in place for only the

short period of time. Oklahoma law dictates that a TRO may be in place only

until the state court can hold a hearing on the requested preliminary injunction.

Okla. Stat. tit. 12, § 1384.1. The record indicates that Marrs obtained the TRO on

May 3, 2004, and that the state court set a preliminary injunction hearing for May

25, 2004. Therefore, the TRO could remain in place only for that 22-day period.

In any event, Marrs and Pabst settled their dispute on May 20. Thus, after the

settlement, it was Pabst’s election to settle the dispute with Marrs that prohibited

it from fulfilling its obligations to Specialty.

Under Oklahoma law, this type of “subjective impossibility” falls outside

of the scope of the defense of impossibility. See Pinkerton’s, 742 P.2d at 548

(“The duty of a promisor is not discharged by the mere fact that supervening

events deprived him of the ability to so perform, if they are not such as to deprive

20
other persons similarly situated of the ability to perform.”). Given the similar

concerns underlying both defenses, we conclude that the Oklahoma courts would

reach the same conclusion regarding the defense of impracticability. See Enron,

669 F. Supp. at 1043 (applying Oklahoma law and concluding that “[s]imilar

considerations govern the claim based upon impossibility and commercial

impracticability”); see also E. Capitol View Cmty. Dev. Corp, Inc., v. Robinson,

941 A.2d 1036, 1040 n.6 (D.C. 2008) (applying District of Columbia law and

reaching the same conclusion); Hartman v. El Paso Natural Gas Co., 763 P.2d

1144, 1151 (N.M. 1988) (applying New Mexico law and reaching the same

conclusion). Accordingly, we conclude that the district court properly granted

Specialty’s Rule 50(a) motion on this point. 8

C. Denial of judgment as a matter of law on Specialty’s lost profits
claim

Pabst next contends that the district court erred when it denied Pabst’s Rule

50(a) motion for a judgment as a matter of law on Speciality’s lost profits

damages claim. Pabst specifically argues that the court erred because Oklahoma’s

“new business” rule prohibits companies without an established track record from

recovering lost profits damages. Specialty counters that Oklahoma would not

apply a strict new business rule in this case because it is distinguishable from

8
Because we conclude that the district court correctly granted Specialty’s
Rule 50(a) motion, we need not address Pabst’s contention that the district court
erred by failing to instruct the jury on its impossibility and impracticability
defenses.

21
existing precedent. After reviewing Oklahoma case law, we agree that Oklahoma

only requires a “reasonably accurate” estimate of future profits. 9 Thus, we

conclude that the district court properly denied Pabst’s Rule 50(a) motion.

The general rule under Oklahoma law allows for the recovery of anticipated

lost profits if the loss is “capable of reasonably accurate measurement or

estimate.” Digital Design Group, Inc. v. Info. Builders, Inc., 24 P.3d 834, 844

(Okla. 2001) (emphasis added); Florafax Int’l, Inc. v. GTE Mkt. Res., Inc., 933

P.2d 282, 292 (Okla. 1997); see also Okla. Stat. tit. 23, § 21 (“No damages can be

recovered for a breach of contract, which are not clearly ascertainable in both

their nature and origin.”). The court in Florafax additionally explained that a

plaintiff satisfies this burden by demonstrating with “sufficient certainty that

reasonable minds might believe from a preponderance of the evidence that such

damages were actually suffered.” 933 P.2d at 296. If the plaintiff satisfies this

burden, then it is “proper to let the jury decide what the loss is from the best

evidence the nature of the case admits.” Id.

Pabst correctly asserts that in older cases, the Oklahoma Supreme Court

limited the recovery of lost profit damages to established companies. See, e.g.,

Carpenters’ Local 1686 v. Wallis, 237 P.2d 905, 908 (Okla. 1951). We conclude,

9
Although we have faced this issue before, we expressly declined to
answer whether Oklahoma law would allow for lost profit damages for
unestablished businesses. See TK-7 Corp. v. Estate of Barbouti, 993 F.2d 722,
726 (10th Cir. 1993). Therefore, we must address this issue for the first time in
this appeal.

22
however, that those cases are distinguishable from the case at bar for two reasons.

First, when those cases were decided, the general rule in Oklahoma prohibited the

recovery of damages for any future profits regardless of whether the business at

hand was well established. See Wallis, 237 P.2d at 908 (“As a general rule,

anticipated profits of a business are too remote and speculative to warrant a

judgment for their loss.”). At that time, this rule was consistent with the

widespread requirement that plaintiffs prove expectation damages with certainty.

See Bernadette J. Bollas, The New Business Rule and the Denial of Lost Profits,

48 Ohio St. L.J. 855, 856–57 (1987). The new business rule thus operated as an

exception to this general rule, allowing established businesses to recover lost

future profits if they could demonstrate those losses with certainty. See Wallis,

237 P.2d at 908 (“[T]he exception to the rule is that the loss of profits from a

tortious interruption of an established business may be recovered where it is made

reasonably certain, by competent proof, what the amount of the loss actually

is . . . .”). In other words, due to the uncertain nature of their future profits, new

business ventures were essentially barred from recovering damages for future lost

profits.

The current legal landscape suggests that the Oklahoma Supreme Court

would not apply this strict new business rule to the case at bar because the now-

applicable general rule points in the opposite direction. As discussed above,

Oklahoma law now allows businesses to recover lost future profits so long as they

23
can demonstrate that those loses are “capable of reasonably accurate measurement

or estimate.” Digital Design Group, 24 P.3d at 844. Thus, because the general

rule has changed, we conclude that the Oklahoma Supreme Court would allow for

the recovery of reasonably estimated lost future profits, regardless of whether the

business was well established.

Second, the unique factual circumstances of the instant case suggest that

the new business rule would not apply because the business venture at issue was

generally established. The record indicates that Specialty had been in existence

for two years prior to reaching the agreement with Pabst. Thus, it was not a new

enterprise. In addition, the agreement dictated that Specialty would essentially

step into the shoes of Marrs, an established business. Therefore, Specialty could

(and did) rely on Marrs’s experiences as a baseline in order to demonstrate with

“sufficient certainty that reasonable minds might believe from a preponderance of

the evidence that such damages were actually suffered.” Florafax, 933 P.2d at

296.

In light of these distinctions, we conclude that Oklahoma law would allow

for Specialty to recover damages for anticipated lost profits. We must analyze the

evidence presented at trial, however, to determine if the district court properly

denied Pabst’s Rule 50(a) motion. To recover for anticipated lost profits,

Specialty must demonstrate: “1) [that] the loss is within the contemplation of the

parties at the time the contract was made, 2) [that] the loss flows directly or

24
proximately from the breach. . . and 3) [that] the loss is capable of reasonably

accurate measurement or estimate.” Florafax, 933 P.2d at 292.

The record unambiguously demonstrates that Specialty presented a “legally

sufficient evidentiary basis” for the jury to award anticipated lost profits to

Specialty. 10 First, there is no question that lost profit damages were within the

contemplation of the parties when Pabst issued the appointment letter. This is not

a circumstance where the lost profit damages depended upon a potentially

unknown collateral contract. See, e.g., Ft. Smith & W.R. Co. v. Williams, 121 P.

275, 277 (Okla. 1912) (holding that lost profit damages were permissible because

the defendant railroad shipper was aware of the need to deliver equipment on time

so that plaintiff could fulfill his contract to provide a merry-go-round at a two-

day picnic). Instead, at the time Pabst and Specialty reached their agreement,

Pabst was directly aware that Specialty would earn a profit by reselling beer

purchased from Pabst to local wholesalers.

10
At trial, the parties divided economic damages into two classes:
anticipated lost profits and diminution in value. We have recognized, however,
that the diminution in value calculation depends on a firm’s projected profit
stream, and thus, that an award for both diminution in value and lost profits can
be duplicative. See Eateries, Inc. v. J.R. Simplot Co., 346 F.3d 1225, 1236 (10th
Cir. 2003) (“Because fair market value, by definition, includes expected earnings
and expenses, courts have generally held a plaintiff may not recover diminution in
value damages and lost profits.”). In the instant case, however, Pabst waived any
argument regarding the duplicative nature of the damage award by failing to raise
the argument to this court. See State Farm Fire & Cas. Co. v. Mhoon, 31 F.3d
979, 984 n.7 (10th Cir. 1994).

25
 Second, there is no doubt that the breach directly caused the loss and that

the lost profits and diminution of value were capable of reasonably accurate

estimate. Specialty’s expert testified extensively regarding his calculations of

both lost profits and diminution in value. The expert explained that he

extensively tested the pro forma calculations of Specialty’s projected profit and

expenses during the twelve-month period the appointment letter from Pabst would

have covered. The expert also testified that he analyzed Specialty’s accounting

records as part of his examination. Finally, the expert testified about the methods

he used to calculate the diminution of value. In light of this evidence, Specialty

provided the jury with a legally sufficient basis on which to award Specialty

economic damages for both lost profits and diminution in value, and accordingly,

the district court did not err when it denied Pabst’s Rule 50(a) on this issue. 11

D. Judgment as a matter of law on Specialty’s fraud claim

Specialty claims that the district court wrongly granted Pabst’s motion for

judgment as a matter of law on Specialty’s fraud claim. Before turning to the

merits on this issue, however, we briefly consider a threshold issue—whether

Oklahoma law allows a plaintiff to bring simultaneous claims for fraud and

breach of contract. Oklahoma law on this point is well settled. While a party

may not obtain double recovery, election of remedies is not required. See Rogers

11
Because we conclude that the district court correctly denied Pabst’s Rule
50(a) motion, we need not address Pabst’s contention that the district court erred
by instructing the jury on lost profits damages.

26
v. Meiser, 68 P.3d 967, 970 n.5 (Okla. 2003); Howell v. James, 818 P.2d 444,

447–48 (Okla. 1991). Accordingly, Specialty was free to pursue both fraud and

breach-of-contract claims. 12

We turn, then, to the merits of Specialty’s fraud claim. That claim, as set

forth in the pretrial order, is based on the theory that “Pabst knowingly and

willfully misrepresented to Specialty the nature of Pabst’s agreement with Marrs.

Specifically, Specialty alleges that Pabst represented that Marrs merely had an

expired one year letter agreement . . . that Pabst was not going to renew.” “Pabst

knowingly failed to inform Specialty that Pabst and Marrs actually had an

exclusive distributor agreement with no expiration date.” As a result, “Specialty

alleges that it entered into the letter agreement with Pabst, hired a sales manager,

rented additional warehouse space, incurred new debt, purchased beer from Pabst,

and took orders from customers in reliance upon Pabst’s representations.”

Finally, “Specialty alleges that had it known Pabst’s representations were untrue,

it would not have done any of these things.”

Oklahoma recognizes several different theories that would support a fraud

claim. Specialty Beverages presented sufficient evidence to withstand Pabst’s

Rule 50 motion under at least one of those theories.

12
We specifically caution, however, against a duplicative damages award
for both fraud and breach of contract. On remand, the district court must be
mindful of the damages award for breach of contract and must take care that any
damages due to the fraud do not doubly compensate Specialty.

27
 Oklahoma Stat. tit. 15, § 59 establishes a cause of action for constructive

fraud. Constructive fraud occurs:

1. In any breach of duty which, without an actually fraudulent intent,
gains an advantage to the person in fault, or any one claiming under
him, by misleading another to his prejudice, or to the prejudice of any
one claiming under him; or,

2. In any such act or omission as the law specially declares to be
fraudulent, without respect to actual fraud.

Okla. Stat. tit. 15, § 59. As specifically relevant here, “[c]onstructive fraud is

‘the concealment of material facts which one is bound under the circumstances to

disclose.’” Bankers Trust Co. v. Brown, 107 P.3d 609, 613 (Okla. Civ. App.

2004) (quoting Varn v. Maloney, 516 P.2d 1328, 1332 (Okla. 1973)).

To recover under a theory of constructive fraud, Specialty Beverages must

prove:

(1) That the defendant owed plaintiff a duty of full disclosure. This
duty could be part of a general fiduciary duty owed by the defendant to
the plaintiff. This duty could also arise, even though it might not exist
in the first instance, once a defendant voluntarily chooses to speak to
plaintiff about a particular subject matter;

(2) That the defendant misstated a fact or failed to disclose a fact to
plaintiff;

(3) That the defendant’s misstatement or omission was material;

(4) That plaintiff relied on defendant’s material misstatement or
omission; and

(5) That plaintiff suffered damages as a result of defendant’s material
misstatement or omission.

28
Lillard v. Stockton, 267 F. Supp. 2d 1081, 1113 (N.D. Okla. 2003) (applying

Oklahoma law; emphasis added). There is no requirement, however, that the

plaintiff prove that the defendant acted with the intent to deceive. See State ex

rel. Okla. Bar Ass’n v. Lloyd, 787 P.2d 855, 860 n.16 (Okla. 1990); Doerr v.

Henry, 806 P.2d 669, 673 (Okla Civ. App. 1991).

Although to recover a plaintiff must ultimately prove fraud by clear and

convincing evidence, “it is not necessary that evidence of fraud be ‘clear and

convincing’ to escape a demurrer to the evidence. However, there must be

evidence of each element of fraud presented before the issue may be submitted to

the jury.” 13 P.E.A.C.E. Corp. v. Okla. Natural Gas Co., 568 P.2d 1273, 1277

(Okla. 1977); see also Roberts, 990 F.2d at 1173; Silk v. Phillips Petroleum Co.,

760 P.2d 174, 177 (Okla. 1988); see also Barnett v. Life Ins. Co. of the S.W., 562

F.2d 15, 19 (10th Cir. 1977). “The existence of fraud, given evidence for each

element, is a question of fact for the jury.” Murray v. D&J Motor Co., 958 P.2d

823, 831 (Okla. Civ. App. 1998) (citing Silk, 760 P.2d 174).

1. Duty to speak

13
“[B]ecause fraud is never presumed, the mere allegation of fraud alone
will not justify the submission of that issue to the jury unless facts are produced
from which an irresistible deduction of fraud reasonably arises.’” Roberts v.
Wells Fargo AG Credit Corp., 990 F.2d 1169, 1173 (10th Cir. 1993) (quotations,
citation omitted). In Roberts, for example, this court, applying Oklahoma law,
held that an irresistible deduction of fraud did not reasonably arise from the lone
fact that the defendant breached the contract. See id. at 1173.

29
 Oklahoma law does not restrict the duty necessary for a constructive fraud

claim to a general fiduciary duty. Instead, the requisite duty may arise if a party

selectively discloses facts that create a false impression. See Uptegraft v. Dome

Petroleum Corp., 764 P.2d 1350, 1353 (Okla. 1988) (“The duty to speak arose

when the defendant began negotiations; on disclosing in part the pertinent facts,

such duty would be breached by withholding other pertinent facts. A duty to

speak may arise from partial disclosure, the speaker being under a duty to say

nothing or to tell the whole truth.”). In other words, “[o]ne conveying a false

impression by the disclosure of some facts and the concealment of others is guilty

of fraud even though his statement is true as far as it goes, since concealment is in

effect a false representation that what is disclosed is the whole truth.” Roberts

Ranch Co. v. Exxon Corp., 43 F. Supp. 2d 1252, 1259 n.12 (W.D. Okla.

1997)(applying Oklahoma law); see also Gentry v. Am. Motorist Ins. Co., 867

P.2d 468, 472 n.3 (Okla. 1994) (“‘If on account of peculiar circumstances there is

a positive duty on the part of one of the parties to a contract to speak, and he

remains silent to his benefit and to the detriment of the other party, the failure to

speak constitutes fraud.’”) (quoting Hubbard v. Bryson, 474 P.2d 407, 410 (Okla.

1970)); Uptegraft, 764 P.2d at 1353 (noting that, “although one may not be under

a duty to speak, if he undertakes to do so he must speak the truth and not suppress

the facts within his knowledge or materially qualify those stated”); id. at 1353-54

(“Although a party may keep absolute silence and violate no rule of equity, yet, if

30
he volunteers to speak and to convey information which may influence the

conduct of the other party, he is bound to disclose the whole truth”).

In the instant case, Specialty Beverages’ evidence demonstrates that a

reasonable jury could conclude that Pabst owed Specialty such a duty. During

their negotiation of the appointment letter, Pabst chose to speak to Specialty

Beverages about Pabst’s contractual relationship with Marrs, telling Specialty that

Pabst had a one-year appointment letter with Marrs that had already expired and

that Pabst did not intend to renew. By not fully disclosing its contractual

relationship with Marrs—that Pabst also had an exclusive distributor agreement

that could only be cancelled in limited circumstances—Pabst created a false

impression and thereby had a duty to correct that misrepresentation. See

Uptegraft, 764 P.2d at 1353 (noting duty to speak arose when party made only

partial disclosure during negotiations; Doerr, 806 P.2d at 669-71, 673; cf. Gentry,

867 P.2d at 472 & n.3 (holding insurance company’s agent had “special duty” to

disclose exclusions when he sold policy to insured).

2. Failure to disclose

In light of our determination regarding Pabst’s duty of full disclosure, we

have little trouble concluding that Pabst failed to disclose the complete facts of its

contractual relationship with Marrs. Toby Tindell and Mike Francher, two

Specialty employees, testified that, while Pabst informed them about the

appointment letter with Marrs, it did not tell them about the exclusive distributor

31
agreement with Marrs. The failure to disclose this fact was sufficient to satisfy

this element. See Doerr, 806 P.2d at 674 (holding that the sellers’ failure to

disclose their uncertainty regarding the boundaries of the property satisfied the

failure to disclose element because the sellers had described the property

boundaries to the buyers).

3. Materiality, Reliance, & Damages

We similarly have no doubt that Specialty relied on Pabst’s failure to

disclose the material nature of its relationship with Marrs and that Speciality

suffered damages as a result. Toby Tindell testified that Specialty would not have

entered into any agreement with Pabst if it had been aware of the full extent of

the relationship between Pabst and Marrs. Tindell also testified that Specialty

expanded its warehouse capacity, hired additional staff, increased its credit line,

and arranged for refrigeration capacity after Pabst sent it the appointment letter.

4. Conclusion

Specialty, thus, presented sufficient evidence on each element of a

constructive fraud claim under Okla. Stat. tit. 15, § 59. “The existence of fraud,

given evidence for each element, is a question of fact for the jury.” Murray, 958

P.2d at 831 (citing Silk, 760 P.2d 174). We therefore hold that the district court

improperly granted Pabst’s Rule 50(a) motion on Specialty’s fraud claim.

Although the parties address constructive fraud here, the pretrial order

itself did not limit Specialty Beverages fraud claim to a theory of constructive

32
fraud. It may be that Specialty’s evidence would also support a fraud claim under

another theory recognized under Oklahoma law. 14 We need not decide that here,

but leave it instead for the parties to determine on remand what fraud theories,

pled in district court, that Specialty’s evidence would support.

III. Attorneys’ fees

With the judgment as a matter of law issues resolved, we turn to the final

issue on appeal. We review the district court’s decision to deny Specialty’s

request for attorneys’ fees for an abuse of discretion. In re Meridian Reserve,

Inc., 87 F.3d 406, 409 (10th Cir. 1996). In the course of our analysis, we review

de novo “any statutory interpretation or other legal analysis underlying the district

court’s decision” and review for clear error “any supporting findings of fact.” Id.

The Oklahoma statute at issue provides:

In any civil action to recover for labor or services rendered, or on an
open account, a statement of account, account stated, note, bill,
negotiable instrument, or contract relating to the purchase or sale of
goods, wares, or merchandise, unless otherwise provided by law or the
contract which is the subject of the action, the prevailing party shall be
allowed a reasonable attorney fee to be set by the court, to be taxed and
collected as costs.

14
In addition to Okla. Stat. tit. 15, § 59’s constructive fraud theory,
Oklahoma law also recognizes statutory causes of action for actual fraud, see id.
§ 58, and deceit, see Okla. Stat. tit. 76, § 2, which some Oklahoma courts refer to
as fraud, see Cooper v. Parker-Hughey, 894 P.2d 1096, 1099-1100 (Okla. 1995).
In addition to these statutory causes of action, Oklahoma courts have also
recognized theories of actual and constructive fraud not specifically linked to a
statute. See Manokoune v. State Farm Mut. Auto. Ins. Co., 145 P.3d 1081,
1086-87 (Okla. 2006); Patel v. OMH Med. Ctr., Inc., 987 P.2d 1185, 1199 (Okla.
1999).

33
Okla. Stat. tit. 12, § 936. Pursuant to this statute, Specialty contends that it is

entitled to reasonable attorney fees because its agreement with Pabst constitutes a

“contract relating to the purchase or sale of goods.” Pabst asserts, on the other

hand, that § 936 is inapplicable to the instant case because the Oklahoma

Supreme Court has consistently applied a narrow interpretation to the statute.

After reviewing the most recent opinions from the Oklahoma Supreme Court, we

find Pabst’s argument more persuasive and thus conclude that the district court

correctly denied Specialty’s motion.

In a case addressing § 936, the Oklahoma Supreme Court explained that

“[t]he American Rule is firmly established in this jurisdiction,” and that

“[e]xceptions to the American Rule are narrowly defined.” Kay v. Venezuelan

Sun Oil Co., 806 P.2d 648, 650 (Okla. 1991). Against this backdrop, the court

then interpreted the scheme for attorney fees provided by § 936. The court

explained that the statute originally provided only for attorney fees in suits for

collecting amounts due on open accounts. Id. at 651. The court further explained

that the Oklahoma legislature later amended the statute to include the seven

additional categories. Id. In light of this statutory history, the court concluded

that the statute allowed for attorney fee awards only when the prevailing party

sought to collect “money judgments for debts created by the contracts enumerated

in the statute.” Id. at 651-52. In other words, § 936 applies only to “actions for

34
the collection of monetary consideration promised as payment for the receipt of

property, labor or services.” Id. at 651 n.12 (emphasis added).

Consistent with this narrow interpretation, the Oklahoma Supreme Court

has held that actions for breach of contract for the performance of labor and

services do not fit within § 936’s narrow confines. See Holbert v. Echeverria,

744 P.2d 960, 966 (Okla. 1987), superseded by statute on other grounds Walls v.

Am. Tobacco Co., 11 P.3d 626 (Okla. 2000). In Holbert, the plaintiffs sued a

contractor after he refused to sell them a completed house at a previously agreed

upon price. Id. at 961-62. The contractor contended that the plaintiffs altered the

architectural plans for the house several times, which resulted in the price

increase. Id. at 961. The Oklahoma Supreme Court held that § 936 did not apply

to this suit because the plaintiffs sought to recover for breach of the sales contract

rather than for compensation for labor and services. See id. at 966 & n.25

(holding that the court must look to the “underlying nature of the suit” to

determine if § 936 applies).

Specialty contends that, while the Oklahoma Supreme Court has narrowly

interpreted § 936 as it applies to labor or services contracts, the plain language of

the statute mandates a broader interpretation for a “contract relating to the

purchase or sale of goods.” Okla. Stat. tit 12, § 936 (emphasis added). In support

of this argument, Specialty cites an Oklahoma Supreme Court case that predates

Kay. See Hardesty v. Andro Corp., 555 P.2d 1030 (Okla. 1976). In that case, the

35
court applied an expansive interpretation of the term “relating to” and thus

concluded that § 936 allowed for attorney fees in a case involving a breach of

warranty. Id. at 1035-36. Although Hardesty has not been expressly overruled

and may support Specialty’s argument, our precedent mandates that we look to

the most recent decisions from the Oklahoma Supreme Court. See Wade, 483

F.3d at 665–66. In Kay and Holbert, that court more recently explained that

§ 936 allows for attorney fees only where a party is seeking to collect “monetary

consideration promised as payment for the receipt of property, labor or services.”

Kay, 806 P.2d at 651 n.12; see also Holbert, 744 P.2d at 966. In addition, we

have previously decided that the Oklahoma Supreme Court narrowly interprets all

provisions of § 936. See Meridian Reserve, 87 F.3d at 411 (“In particular, more

recent Oklahoma cases have adopted a strict interpretation of the statute in all

cases, not just those dealing with the ‘labor or services’ clause.”). Accordingly,

we decline Specialty’s invitation to interpret broadly the statute’s provision

regarding contracts for the purchase or sale of goods.

In the instant case, the gravamen of Specialty’s complaint was to recover

lost profits for Pabst’s breach of their agreement. Specialty did not seek to

recover amounts owed to it by Pabst for the purchase or sale of beer.

Accordingly, the district court correctly denied Specialty’s motion for attorney

fees after concluding that § 936 does not provide for such fees in the instant case.

IV.

36
 In light of our discussion above, we conclude that the district court erred

only with respect to its decision on Pabst’s Rule 50(a) motion regarding

Specialty’s fraud claim. Due to this error, we REVERSE the district court’s

decision granting Pabst a judgment as a matter of law on the fraud claim, and

REMAND for proceedings consistent with this decision. We AFFIRM the district

court’s decision regarding all other issues raised in these appeals.

37