Insight Investments v. North American Specialty Insurance Company

• Court: Court of Appeals for the Tenth Circuit
• Decided: September 25, 2025
• Docket: 24-6068
• Status: Unpublished

Opinion

Appellate Case: 24-6068 Document: 52-1 Date Filed: 09/25/2025 Page: 1 FILED United States Court of Appeals UNITED STATES COURT OF APPEALS Tenth Circuit

FOR THE TENTH CIRCUIT September 25, 2025 _________________________________ Christopher M. Wolpert Clerk of Court INSIGHT INVESTMENTS, LLC,

Plaintiff - Appellant/Cross- Appellee,

v. Nos. 24-6068 & 24-6076 (D.C. No. 5:20-CV-00788-G) NORTH AMERICAN SPECIALTY (W.D. Okla.) INSURANCE COMPANY,

Defendant Third-Party Plaintiff - Appellee/Cross-Appellant,

and

SASHA M. BELL,

Third-Party Defendant. 1 _________________________________

ORDER AND JUDGMENT * _________________________________

Before HARTZ, TYMKOVICH, and EID, Circuit Judges. _________________________________

A subcontractor’s labor-and-material payment bond guarantees that all the

subcontractor’s bills for labor and materials will be paid by a surety if it defaults. In

this case, a subcontractor, Icon Construction, Inc. (Sub), prepared a modular building

1 Third-Party Defendant Sasha M. Bell is not a party to this appeal. * This order and judgment is not binding precedent, except under the doctrines of law of the case, res judicata, and collateral estoppel. It may be cited, however, for its persuasive value consistent with Fed. R. App. P. 32.1 and 10th Cir. R. 32.1. Appellate Case: 24-6068 Document: 52-1 Date Filed: 09/25/2025 Page: 2

to be used on an Air Force base during renovation of the permanent clinic. It

procured a labor-and-material payment bond from North American Specialty

Insurance Company (Surety).

While the construction project was underway, Sub entered into a contract with

Insight Investments, LLC (Insight) stating that Sub sold the modular building to

Insight and Insight then leased it back to Sub. Undisputed facts, however, establish

that the true nature of the transaction was that Insight simply financed Sub’s

performance under its subcontract with the prime contractor. When Sub failed to pay

what it owed Insight, Insight made a claim on the bond from Surety. Surety refused

to pay, and Insight filed this lawsuit.

There are three issues on appeal: (1) Does the payment bond protect Insight if

it was merely financing Sub? (2) For purposes of determining bond coverage, does

the parol-evidence rule require the court to adopt the description of the relationship

between Sub and Insight in their separate contract, or may the court consider

extrinsic evidence? And (3) if the court denies a claim under the bond, is Surety

entitled to recover prevailing-party attorney fees under the applicable Oklahoma

statute?

On the first question, we hold that Insight is not covered under the bond

because it did not provide labor or material, but only money. Next, we hold that the

parol-evidence rule governs only the parties to a contract, so Surety was allowed to

introduce evidence regarding Sub’s actual relationship with Insight. Finally, we hold

that Surety is entitled to prevailing-party attorney fees under Okla. Stat. Ann. tit. 12,

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§ 936 (2025), because the statute requires only that there be an action to recover for

unpaid labor or services, not that the action be valid.

I. BACKGROUND

A. The Construction Project

In September 2016 United Excel Corporation (Prime) entered into a contract

with the U.S. Army Corps of Engineers, agreeing to serve as the prime contractor on

a project to renovate a medical clinic on Vance Air Force Base in Oklahoma. In April

2017 Prime subcontracted with Sub, whose task was to design, manufacture, and

install a modular building (the Module) to serve as a temporary medical clinic while

renovation of the existing clinic was underway. Prime was to pay Sub $807,766,

including 20 monthly lease payments of $19,000 after installation. If the Module was

used beyond the 20-month term, the monthly rate would decrease to $17,250.

Sub began manufacturing the Module at its own facility in late August 2017.

The following month, Sub purchased from Surety a “Subcontract Labor and Material

Payment Bond” (the Bond). Joint App. at 69. The Bond provided “[t]hat if [Sub]

shall promptly make payment to all claimants as hereinafter defined, for all labor and

material used or reasonably required for use in the performance of the subcontract,

then this obligation shall be void; otherwise it shall remain in full force and effect[.]”

Id. In other words, if Sub promptly paid all claimants, there would be nothing for the

surety to cover.

The Bond defines a claimant as:

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[O]ne having a direct contract with [Sub] for labor, material, or both, used or reasonably required for use in the performance of the contract, labor and material being construed to include that part of water, gas, power, light, heat, oil, gasoline, telephone service, or rental of equipment directly applicable to the subcontract.

Id. The Bond permits any claimant to sue if it “has not been paid in full before the

expiration of a period of ninety (90) days after the date on which the last of [its] work

or labor was done or performed, or materials were furnished . . . .” Id.

From late August through December 2017, Sub manufactured the Module,

delivered it to the site, and substantially completed its installation. Prime was then to

begin paying Sub monthly rent.

B. The Sub-Insight Transaction

In May 2016, more than a year before Sub began working on the project,

Insight salesman Reid Lukes sent an email advertising Insight’s “financing

programs” for modular buildings. Id. at 460. In a follow-up email, he said Insight was

“just a finance company” that “funds all of [its] modular partners [presumably, those

making modular buildings who are financed by Insight] 100% of the project without

recourse.” Id. at 458

In October 2016 Sub contacted Insight to discuss financing for the Module.

Ten months later, Lukes requested more details, sending an email asking, “How

much were you looking for us to fund?” Id. at 466. Eric Salomone, Sub’s Vice

President, responded, “We were looking for you to fund $511,433 for the building.”

Id. Lukes replied that Insight typically invested a lower percentage of equity, and

proposed funding $466,501 instead.

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These negotiations culminated in late December 2017, when Salomone sent

Lukes an email with the final terms:

[Sub] accepts the revised up-front funding of the building at $410,000.00 (from the original $466,501.00). As discussed on the phone, we would like to receive the funding as early as possible. Also, should the lease not get extended beyond the initial 20 month term long enough for [Sub] to recover the remaining $56,501.00 from the original building price via a 50% split of the extension lease payments, [Sub] would share in the future sale or lease of the building until we recover at least said remaining $56,501.00.

Id. at 478 (emphasis added). After several emails concerning documentation, Lukes

replied, “Once we receive our return on equity, Insight will share all future rents

and/or sale of the building 50/50.” Id. at 477.

This transaction was memorialized in three documents: a Master Lease

Agreement, an amendment to that agreement providing that Sub would direct Prime

to send its rent payments directly to Insight’s bank, and a Remarketing Agreement

(collectively the Sub-Insight Agreement). The Sub-Insight Agreement terms the

parties’ arrangement as a “lease,” characterizing the transaction as a purchase by

Insight of the completed Module, followed by a lease back to Sub. Id. at 671. In sum,

Insight provided cash funding in exchange for monthly rent payments and an

ownership interest in the Module. Insight stipulated that it “did not manufacture,

deliver, or install” the building. Id. at 368 (joint stipulation). Surety was not made

aware of this agreement.

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In late December 2017, Sub sent Insight an invoice for $410,000. Although

Insight advanced the money, Sub did not repay Insight, apparently because Prime did

not pay Sub.

In July 2018 Insight submitted a claim against Surety under the Bond. Surety

denied Insight’s claim, stating that Insight was not a proper claimant because it had

not provided labor or material to Sub—rather, it had “provide[d] funding.” Id. at 95.

C. Court Proceedings

In August 2020 Insight sued Surety in the United States District Court for the

Western District of Oklahoma, asserting claims for breach of contract, bad faith, and

breach of the duty of good faith and fair dealing.

In May 2022 the district court granted Surety’s motion for summary judgment.

In doing so, the court treated Insight’s separate claims for bad faith and breach of the

duty of good faith and fair dealing together, ruling that they actually “represent the

same cause of action under Oklahoma law.” Insight Invs., LLC v. N. Am. Specialty

Ins. Co., No. CIV-20-788-G, 2022 WL 1630982, at *7 n.6 (W.D. Okla. May 23,

2022). The court then considered “the totality” of the Sub-Insight transaction, id.

at *8, including prior email communications in which Insight repeatedly

characterized its contribution in terms of funding or financing, see id. at *5–6, 8. The

court held that Insight was not a proper claimant under the Bond because it provided

“only money, not material.” Id. at *8. And “[s]tructuring [Sub]’s repayment

obligation as a lease [did] not convert Insight into a material supplier—Insight was

simply an investor.” Id. Because Insight’s claims were “premised on its status as a

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claimant, and thus a third-party beneficiary, under the Bond, establishing that Insight

[was] not a claimant under the Bond [was] a complete defense to those claims.” Id.

at *7 n.7 (citation omitted).

In March 2024, however, the district court denied Surety’s motion for

prevailing-party attorney fees under Okla. Stat. Ann. tit. 12, § 936. That statute

provides: “In any civil action to recover for labor or services rendered, . . . the

prevailing party shall be allowed a reasonable attorney fee[.]” Id. § 936(A). Because

the court had awarded summary judgment to Surety “on the basis that Insight did not

render labor or services,” it held that Surety was not entitled to attorney fees under

the statute. Insight Invs., LLC. V. N. Am. Specialty Ins. Co., No. CIV-20-788-G, 2024

WL 1336338, at *2 (W.D. Okla. Mar. 27, 2024) (emphasis added).

Exercising jurisdiction under 28 U.S.C. § 1291, we affirm the summary

judgment in favor of Surety on the merits and reverse the denial of prevailing-party

attorney fees.

II. DISCUSSION

A. Summary Judgment

“We review de novo the district court’s grant of summary judgment, applying

the same legal standards that govern the district court.” Alfaro-Huitron v. Cervantes

Agribusiness, 982 F.3d 1242, 1249 (10th Cir. 2020). Summary judgment is

appropriate if “there is no genuine dispute as to any material fact and the movant is

entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a).

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We apply “the substantive law of the forum state when sitting in diversity.”

Flight Concepts Ltd. P’ship v. Boeing Co., 38 F.3d 1152, 1156 (10th Cir. 1994).

Although Insight asserts on appeal that the Sub-Insight Agreement was “negotiated,

issued and executed in California” and “specifies it is governed by California law,”

Aplt. Br. at 11, Insight did not raise this issue before the district court. On the

contrary, it repeatedly cited Oklahoma law. In addition, Insight states on appeal that

there is “no conflict between California and Oklahoma law on the fundamental rule

of contract interpretation” at play here: the parol-evidence rule. Id. Therefore, we

apply Oklahoma law on this issue. 2

We first conclude that Insight is not a proper claimant under the Bond. We

then conclude that extrinsic evidence was admissible to show that.

1. Does Insight Qualify as a Claimant?

On public projects, “[s]tatutes frequently require” a labor-and-material

payment bond to protect labor and material suppliers, “since mechanics’ liens cannot

be asserted against government property.” Restatement of the Law of Security § 165

at 459 (A.L.I. 1941); see Boren v. Thompson & Assocs., 999 P.2d 438, 445 (Okla.

2000) (“[W]here public works projects are concerned, subcontractors [that is,

laborers and materialmen] are protected by bonds because public property cannot be

2 Although the name “parol evidence rule” may suggest that it is a rule of evidence, it is actually “part of the substantive law of Oklahoma.” Fulton v. L & N Consultants, Inc., 715 F.2d 1413, 1418 n.3 (10th Cir. 1982); see Restatement (Second) of Contracts § 213 cmt. a. at 129 (A.L.I. 1981) (“[T]he parol evidence rule . . . is not a rule of evidence but a rule of substantive law.”). 8 Appellate Case: 24-6068 Document: 52-1 Date Filed: 09/25/2025 Page: 9

encumbered by liens. Payment bond statutes which require bonds for public work

projects are specifically provided for the benefit of subcontractors.”). On this federal

project, Prime was required by statute to obtain a payment bond to protect its

subcontractors and their labor and material providers. 3 And Prime, in turn, required

Sub to obtain the Bond to cover its labor and material providers.

Recall that the Bond was conditioned upon Sub not “promptly mak[ing]

payment to all claimants as hereinafter defined, for all labor and material used or

reasonably required for use in the performance of the subcontract.” Joint App. at 69

(emphasis added). And it defines a claimant as “one having a direct contract with the

[Sub] for labor, material, or both, . . . labor and material being construed to include

3 See Aplee. Br. at 15 (confirming that Prime’s federal “construction project [was] not lienable”); 40 U.S.C. § 3131(b) (Miller Act) (“Before any contract of more than $100,000 is awarded for the construction, alteration, or repair of any public building or public work of the Federal Government, a person must furnish to the Government the following bonds, which become binding when the contract is awarded: . . . A payment bond with a surety satisfactory to the officer for the protection of all persons supplying labor and material in carrying out the work provided for in the contract for the use of each person.”); Okla. Stat. Ann. tit. 61, § 1 (“A. Prior to an award of a contract exceeding One Hundred Thousand Dollars ($100,000.00) for construction or repair of a public or private building, structure, or improvement on public real property, the person that receives the award shall furnish a bond with good and sufficient sureties payable to the state in a sum not less than the total sum of the contract. B. The bond shall ensure the proper and prompt completion of the work in accordance with the contract and shall ensure that the contractor shall pay all indebtedness the contractor incurs for the contractor’s subcontractors and all suppliers of labor, material, rental of machinery or equipment, and repair of and parts for equipment the contract requires the contractor to furnish.”); see also Randi A. Donaldson, 9 Okla. Prac., Construction Law § 5:17 (2014 ed.) (“The Oklahoma ‘Little Miller Act’ [Okla. Stat. Ann. tit. 61, §§ 1, 2] is patterned after the federal Miller Act requiring bonds of certain types on public projects and providing remedies for unpaid subcontractors and suppliers.”). 9 Appellate Case: 24-6068 Document: 52-1 Date Filed: 09/25/2025 Page: 10

that part of water, gas, power, light, heat, oil, gasoline, telephone service, or rental of

equipment directly applicable to the subcontract.” Id. (emphasis added).

Insight does not fall under this definition. It admits that it “did not

manufacture, deliver, or install” the Module. Id. at 368 (joint stipulation). Indeed,

Sub had already completed all those steps by the time Insight executed its contract

with Sub. Rather, the evidence establishes that what Insight provided to Sub was

“financing.” Id. at 460; see, e.g., id. at 466 (Insight salesman asking, “How much

were you looking for us to fund?”); id. at 478 (Sub’s Vice President “accept[ing] the

revised up-front funding of the building at $410,000.00”). 4 And financing does not

constitute labor or material.

4 In the final pages of its opening brief, Insight contends that the district court disregarded its extrinsic evidence, which served to create a genuine dispute of material fact regarding its relationship with Sub. Insight references the affidavit of Lukes, who negotiated the Sub-Insight Agreement on behalf of Insight, and notes that he testified that Sub “asked solely for a sale/leaseback” and did not mention a “loan” arrangement. Aplt. Br. at 19; see Joint App. at 668 (testifying that Sub’s Vice President “Salomone approached me/Insight on behalf of [Sub], requesting a lease, not a loan,” and that “a loan was never discussed”). One problem for Insight, however, is that Lukes’s subsequent deposition testimony contradicted his affidavit. Testifying as Insight’s corporate representative, he repeatedly characterized Insight’s business in terms of “invest[ing],” “financing,” and “funding,” id. at 761, 764–69, 775, just as he did in his email communications with Sub. In any event, considering the evidence in the light most favorable to Insight, there is no genuine dispute as to the nature of the Sub-Insight transaction—Insight provided cash funding in exchange for assignment of the monthly rent payments from Prime to Sub and an ownership interest in the modular building. Therefore, the purported factual dispute is immaterial. Further, even if the transaction is characterized as a lease rather than a loan, Insight provided no labor or materials; as we proceed to discuss, its purchasing the Module and then leasing it back to Sub would not qualify it as a claimant under the Bond, 10 Appellate Case: 24-6068 Document: 52-1 Date Filed: 09/25/2025 Page: 11

Oklahoma caselaw has long confirmed this conclusion. In Rockwell Bros. &

Co. v. Keatley, 152 P. 449 (Okla. 1915), after a contractor entered into an agreement with

a school district to provide labor and material for the construction of a high-school

building, it executed a labor-and-material payment bond with a surety. A third party then

advanced money to the contractor to pay for the labor and material, it failed to pay the

money back, and the third party sued the contractor and the surety under the bond. See id.

The Supreme Court of Oklahoma held that the labor-and-material payment bond was not

“broad enough to include money loaned to the contractor for the purpose of paying for

such labor and material.” Id. at 450. In other words, the bond protected “those who might

supply the contractor with labor and material,” not “a party advancing money.” Id.

(emphasis added); accord First Nat’l Bank v. S. Sur. Co., 161 P. 539, 540 (Okla. 1916)

(following the “great weight of authority”); see also First Nat’l Bank v. O’Neil, 223 N.W.

298, 300 (Minn. 1929) (“The authorities are practically uniform that a bond to secure the

payment of claims for labor and material does not inure to the benefit of one who loans

or advances funds for the payment of such claims. The reason[s] for it [are] that claims

for borrowed money are not within the condition of the bond, and . . . [t]he principal may

not bind his surety to a new and different obligation or liability from that covered by the

bond.” (emphasis added; citation and internal quotation marks omitted)).

Unlike the situation in Barbero v. Equitable General Insurance Co., 607 P.2d 670,

671–73 (Okla. 1980), where materialmen could collect on such a bond when they had

agreed to provide a subcontractor with “all labor and materials” for a construction project

and were not paid the agreed price, Insight provided no material to the Sub. As in Keatley

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and Southern Surety, Insight merely “advanc[ed] money.” Keatley, 152 P. at 450; S. Sur.

Co., 161 P. at 540.

Although Insight perfunctorily suggests that leasing the Module back to Sub

constituted the rental of equipment, thus making it a material supplier, the entire

Module can hardly be considered equipment. In the context of the Bond—which

covers the labor and material suppliers that assisted Sub in building the Module—that

term plainly refers to the tools and machinery used to help build the Module. See

Flintco, LLC v. Total Installation Mgmt. Specialists, Inc., -- P.3d --, 2025 WL

1513757, at * 9, 11–12 (Okla. 2025) (terms in a private surety bond are given their

“plain meaning”); Webster’s Third New International Dictionary 1443 (2002)

(defining equipment as “the implements (as machinery or tools) used in an operation

or activity”); Linde Air Prods. Co. v. Am. Sur. Co., 152 So. 292, 293 (Miss. 1934)

(“The word ‘equipment,’ [in a labor-and-material payment bond,] . . . must be given

its usual and ordinary meaning, which is, the outfit, i.e., tools, machinery,

implements, appliances, etc., necessary to enable one to do the work in which he is

engaged.”). And even if the Module were considered equipment, it was decidedly not

“used or reasonably required for use in the performance of the subcontract,” as

required by the Bond. Joint App. at 69. Under that agreement, Sub designed, built,

and installed the Module; the Module was not “used or reasonably required” to

design, build, or install itself. Id. It would be nonsensical to say that the contract’s

end-product was equipment used in the performance of the contract.

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In support of its argument, Insight cites U.S. ex rel. Morgan Buildings & Spas,

Inc. v. BKJ Solutions, Inc., No. CIV-09-730-M, 2012 WL 2994717 (W.D. Okla.

July 20, 2012), asserting that in that case the “[p]ayment bond covered [a] claimant

that supplied [a] modular building for [a] military base.” Aplt. Br. at 14. But the

claimant did not simply transport a modular building to the base; the claimant

“constructed the modular buildings at the actual worksite, . . . and after the

construction of the buildings, [it] installed interior floors, roofs, drop ceilings,” etc.

Morgan Bldgs., 2012 WL 2994717, at *3. Unlike Insight, which provided only

funding, the claimant in that case was paid for the labor and materials used in

building and furnishing modular units.

Were we to hold that purchasing the completed Module and leasing it back to

Sub qualified Insight as a material supplier, Sub could unilaterally increase Surety’s

potential liability, effectively making it the guarantor of Insight’s funding (which

Surety knew nothing about), on top of its obligation to Sub’s labor and material

suppliers. See Whale v. Rice, 49 P.2d 737, 741 (Okla. 1935) (“Nothing can be clearer,

both upon principle and authority, than the doctrine, that the liability of a surety is not to

be extended, by implication beyond the terms of his contract.” (internal quotation marks

omitted)); O’Neil, 223 N.W. at 300 (“The principal may not bind his surety to a new and

different obligation or liability from that covered by the bond.” (internal quotation marks

omitted)). To be sure, if Insight had never advanced the money to Sub, then Sub might

have failed to pay its labor and material suppliers, leaving Surety with a bill anyway.

But under Insight’s rationale, Surety could have been stuck with that same bill plus

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Insight’s bill. For instance, if Insight had advanced money to Sub, but Sub went way

over budget and failed to pay Insight or its labor and material providers, Surety

would have had to cover both bills. The Bond did not contemplate such an increase in

potential liability. See Wasatch Bank of Pleasant Grove v. Sur. Ins. Co. of Cal., 703

P.2d 298, 300 (Utah 1985) (“To hold the surety liable for advancements made or money

loaned to the contractors to enable them to carry out the contract without the assent of the

surety, unless the facts are such that it would be inequitable to not hold the surety liable,

is to read into the contract a liability not assumed by the surety and a liability clearly not

contemplated by the parties at the date of the execution of the bond. . . . To hold Surety

liable would only shift the loss from one who assumed it to one who did not.” (internal

quotation marks omitted)); see id. (“In extending credit to [a subcontractor], Wasatch

[Bank] assumed the risk that [the subcontractor] would default on the loan and that the

security would fail. Had Wasatch deemed this risk unacceptable, it could have refused to

make the loan without further security, including an express agreement from [the]

[s]urety that the bond would cover the loan. Thus, the loss suffered by Wasatch was no

greater than the risk it assumed in extending credit to [the subcontractor].”); see also

O’Neil, 223 N.W. at 300 (“If upon an agreement so made by the lender and contractor,

the surety of the bond is to be held liable for the money so advanced, the contractor

could, if he saw fit, obtain the money by such means to pay for each and every item for

material and labor used in the road, and, at its completion, the money for all the labor and

material would still be owing and the surety on the bond liable therefor, although he had

no knowledge of any money being borrowed by the contractor to pay for such material

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and labor. This can hardly be the meaning of the language of the bond[.]” (ellipsis and

internal quotation marks omitted)).

Insight also contends that the district court impermissibly added a new

condition to the Bond—that Insight had to manufacture, deliver, or install the

Module. But the court did not add a new condition. It merely said that Insight did not

qualify as a claimant under the express conditions of the Bond because “[i]t is

undisputed that Insight did not provide any labor or material to assist [Sub] with the

design, manufacture, delivery, or installation of the [Module] at the [p]roject site.”

Insight Invs., 2022 WL 1630982, at *8.

Insight points to U.S. ex rel. Pileco, Inc. v. Slurry Systems., Inc., 804 F.3d 889,

893 (7th Cir. 2015), for the proposition that a lessor of construction equipment,

which acts as a “middleman” between an equipment manufacturer/supplier and a

contractor, is covered by a labor-and-material payment bond. But the situation in that

case was entirely different from what we have here. Unlike in Pileco, where the

equipment lessor was a subcontractor—that is, it had agreed to lease equipment to the

prime contractor, and that equipment was delivered by a third party, see id. at 890–

91—Insight was not a subcontractor. Rather, it was a financer merely purporting to

buy the Module from Sub and lease it back. Whereas the subcontractor in Pileco

leased actual equipment to the project—a “huge steel machine” called a “trench

cutter”—Insight provided money. Id. at 890. In any event, as we have explained, the

Module itself was not equipment.

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Having concluded that Insight is not a proper Bond claimant, we next discuss why

the parol-evidence rule is inapplicable.

2. Parol Evidence/The Stranger Exception

“Under the parol evidence rule, pre-contract negotiations and oral discussions

are merged into and superseded by the terms of an executed writing. The rule

provides that parol evidence cannot vary, modify or contradict the terms of an

executed written agreement.” First Nat’l Bank in Durant v. Honey Creek Ent. Corp.,

54 P.3d 100, 103 (Okla. 2002) (citations omitted); see Okla. Stat. Ann. tit. 15, § 137

(“The execution of a contract in writing, whether the law requires it to be written or

not, supersedes all the oral negotiations or stipulations concerning its matter, which

preceded or accompanied the execution of the instrument.”); see also Restatement

(Second) of Contracts § 213 at 129 (A.L.I. 1981) (Under the parol evidence rule,

“[a] binding integrated agreement discharges prior agreements to the extent that it is

inconsistent with them.”). This rule promotes “the certainty and stability of

contracts” by elevating them over the parties’ pre-contract negotiations and making

them the final word of the parties’ arrangements. Honey Creek, 54 P.3d at 103; see

Carter G. Bishop, Daniel D. Barnhizer & George A. Mocsary, Contracts: Cases and

Theory of Contractual Obligation at 390 (3d ed. 2010) (“[T]he parol evidence rule

purposes to define and limit the universe of terms and meanings that are the subject

of a court’s determination of the parties’ intentions where the parties have reduced at

least some part of their agreement to writing.”); id. at 392 (“We presume that if the

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parties took the time to memorialize their agreement then the writing is the best

evidence of what the parties intended the written words and terms to mean.”).

But as the Supreme Court of Oklahoma said nearly a century ago, the parol-

evidence rule “applies only in controversies between the parties to the instrument and

those claiming under them.” In re Assessment of Alleged Omitted Prop. of Kennedy

for Tax’n in Osage Cnty. for 1917, 58 P.2d 134, 137 (Okla. 1936) (internal quotation

marks omitted); see Fulton v. L & N Consultants, Inc., 715 F.2d 1413, 1418 (10th

Cir. 1982) (in Oklahoma “the parol evidence rule only applies to parties to the

agreement and their privies”); 5 In re McClain, 447 F.2d 241, 244 (10th Cir. 1971)

(under Oklahoma law “[t]he parol evidence rule applies only to the parties to the

agreement in question”).

This limitation on the application of the parol-evidence rule is commonly

referred to as the “stranger exception.” See Peter Linzer, 6 Corbin on Contracts

§ 25.24 at 319 (revised ed. 2010) (“[M]any courts . . . adopt what is often called ‘the

stranger exception’ or the ‘stranger rule,’ that a third party may not invoke the parol

evidence rule in connection with a contract to which it was not a signatory. There are

also times when it is the ‘stranger’ who proffers parol evidence and seeks to take

5 Those “claiming under” the parties, Osage County, 58 P.2d at 137 (internal quotation marks omitted), are sometimes referred to as “privies,” Fulton, 715 F.2d at 1418. But that term should not be construed too broadly. The parol-evidence rule does not apply to those whose “interest is not aligned with or related to protection of the integrity of actual terms agreed on” in the contract at issue. Id. at 1418 n.4. Here, Surety’s interest was not “aligned with or related to protection of the integrity of” the terms of the Sub-Insight Agreement, which it was not made aware of, and which attempted to enlarge Surety’s liability under the Bond. Id. 17 Appellate Case: 24-6068 Document: 52-1 Date Filed: 09/25/2025 Page: 18

advantage of the exception.”); see also Osage County, 58 P.2d at 137 (stating that the

parol evidence rule “has no application in controversies between a party to the

instrument on the one hand and a stranger to it on the other, for the stranger not

having assented to the contract is not bound by it, and is therefore at liberty when his

rights are concerned to show that the written instrument does not express the full or

true character of the transaction.” (emphasis added and internal quotation marks

omitted)); Richard A. Lord, 11 Williston on Contracts § 33:9 at 934 (4th ed. 2012)

(“The parol evidence rule is frequently held to apply only to the contracting parties

and their privies and not to third persons, often referred to as strangers to the

contract[.]” (citing Fulton, 715 F.2d 1413 (10th Cir. 1982) (“applying Oklahoma

law”))).

Insight’s primary argument is that the district court impermissibly relied on

parol evidence to find that, contrary to the Sub-Insight Agreement’s “unambiguous

terms” describing the transaction as a lease, the transaction was, in fact, a financing

arrangement. Aplt. Br. at 12. But this argument fails under Oklahoma’s stranger

exception. Because Surety was not a party to that agreement, Surety was not bound

by it, and the parol-evidence rule did not bar Surety from challenging with

contradictory extrinsic evidence the agreement’s description of the relationship

between Insight and Sub.

Nearly a century of caselaw supports this conclusion. In 1936 the Oklahoma

Supreme Court considered a dispute between taxpayers and the State regarding whether

the taxpayers still owned some real estate on January 1, 1917. See Osage Cnty., 58 P.2d

18 Appellate Case: 24-6068 Document: 52-1 Date Filed: 09/25/2025 Page: 19

at 135. The taxpayers asserted that a contract for sale of the property “control[led] the

question” of who owned the property on that date, that the contract was “clear and

unequivocal,” and that the trial court “erred in receiving parol evidence to change the

plain provisions of said contract.” Id. But the court rejected the argument, holding that

the parol-evidence rule “has no application in controversies between a party to the

instrument on the one hand and a stranger to it on the other.” Id. at 137 (emphasis

added). Because “[t]he state was not a party to the contract in question,” the state’s

extrinsic evidence was “admissible to show the real intention of the parties.” Id.

A half-century ago this court recognized Oklahoma’s stranger exception in a

dispute regarding whether the creditor bank had filed a security interest in a truck in

the correct county. See McClain, 447 F.2d at 243–44. Which county was the proper

county depended on whether the truck was for personal use or primarily for business.

See id. at 243. The security agreement signed by the truck owner when financing his

purchase of the truck said that it was primarily for business use and the county in

which to file the lien was chosen accordingly. But the trustee in bankruptcy of the

owner’s estate challenged the bank’s lien priority by offering evidence that the truck

was never used for business. See id. We said that under Oklahoma law, “[t]he parol

evidence rule applies only to the parties to the agreement in question.” Id. at 244

(citing, among other authorities, Osage Cnty., 58 P.2d at 137). Because the trustee

was a “third party attacking the security interest,” the rule did not apply. Id.

(emphasis added). So too here, Surety is a third party attacking the Sub-Insight

19 Appellate Case: 24-6068 Document: 52-1 Date Filed: 09/25/2025 Page: 20

Agreement’s characterization of that transaction, and the parol evidence rule is thus

inapplicable.

As a result, we are not “limited to the contractual terminology between the

parties or the way they choose to describe the working relationship,” but instead look

to “the economic realities,” as we do when evaluating whether an individual is an

employee or an independent contractor. Acosta v. Jani-King of Okla., Inc., 905 F.3d

1156, 1159–60 (10th Cir. 2018). And as we have discussed, the “economic realities”

reflect that Insight was not a proper claimant under the Bond. Id. at 1159.

Because Insight’s claims for breach of contract and bad faith were predicated

on its status as a Bond claimant, Surety’s establishing otherwise provided a complete

defense to those claims. Insight, not being a Bond claimant, is not a third-party

beneficiary under the Bond, and thus it has no contractual or statutory foundation

upon which to assert its claims against Surety. We therefore affirm the district court’s

summary judgment on the merits. See Colony Ins. Co. v. Burke, 698 F.3d 1222, 1229

(10th Cir. 2012) (affirming a judgment in favor of an insurer under Oklahoma law

where there was no “contractual or statutory relationship between the insurer and the

third party,” so the third party could not pursue its contractual and bad-faith claims

(internal quotation marks omitted)).

B. Prevailing-Party Attorney Fees

“In diversity cases, attorney fees are [ordinarily] a substantive matter

controlled by state law.” Combs v. Shelter Mut. Ins. Co., 551 F.3d 991, 1001 (10th

Cir. 2008); see Chieftain Royalty Co. v. Enervest Energy Institutional Fund XIII-A,

20 Appellate Case: 24-6068 Document: 52-1 Date Filed: 09/25/2025 Page: 21

L.P., 888 F.3d 455, 460 (10th Cir. 2017) (noting that in federal diversity litigation,

state law governs fees that are dependent on the outcome of the litigation, but

procedural fees, such as sanctions for misconduct during the litigation, are generally

governed by federal law). Under Oklahoma law, “whether a party is entitled to an

award of attorney fees . . . presents a question of law subject to the de novo standard

of review.” Waits v. Viersen Oil & Gas Co., 456 P.3d 1149, 1151–52 (Okla. Civ.

App. 2020).

The relevant attorney-fee statute, Okla. Stat. Ann. tit. 12, § 936(A), provides:

In any civil action to recover for labor or services rendered, . . . 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.

On cross-appeal Surety argues that it is entitled to attorney fees under the statute

because Insight brought an action to recover for labor or services rendered. Insight

contends the opposite, because the district court determined that it had not, in fact,

rendered any labor or services. We agree with Surety.

The Supreme Court of Oklahoma has said: “[I]t is the underlying nature of the

suit itself which determines the applicability of the labor or services provisions of

§ 936.” ABC Coating Co. v. J. Harris & Sons Ltd., 747 P.2d 271, 273 (Okla. 1987)

(emphasis added); see Maxxum Constr., Inc. v. First Com. Bank, 256 P.3d 1058, 1060

(Okla. Civ. App. 2011) (“[I]f the underlying nature of the suit is one to recover for

unpaid labor or services rendered, § 936 authorizes an award of prevailing party

attorney’s fees[.]”); see also Kay v. Venezuelan Sun Oil Co., 806 P.2d 648, 652

21 Appellate Case: 24-6068 Document: 52-1 Date Filed: 09/25/2025 Page: 22

(Okla. 1991) (focusing on “the gravamen of the action” to determine whether § 936

applied). Accordingly, a prevailing party is entitled to attorney fees “where suit is

brought for labor [or] services rendered.” ABC Coating, 747 P.2d at 273 (Okla. 1987)

(emphasis added and internal quotation marks omitted); see Burrows Constr. Co. v.

Indep. Sch. Dist. No. 2 of Stephens Cnty., 704 P.2d 1136, 1138 (Okla. 1985) (“If the

action is brought for labor and services rendered, the provisions of section 936

apply.”).

Here, the “underlying nature of [Insight’s] suit” is one to recover for services

rendered. ABC Coating, 747 P.2d at 273. Insight pleaded that it had provided material

to the project, had not been paid, and was entitled to payment from Surety. See Joint

App. at 33–34, 38–39 (First Amended Complaint alleging that Insight “provide[d] the

[Module] at the Base,” that it had not been paid, that it was a proper “claimant under

the [Bond],” and that it was entitled to more than $450,000 in damages). If Insight

had prevailed it would have been compensated—that is, recovered—for services

rendered. Indeed, Insight contended that if it prevailed, it was entitled to attorney fees

under § 936. See Aplee. Supp. App. at 64 (final pretrial report). Given that Surety

prevailed, it is the party entitled to attorney fees under the statute. Whether “suit is

brought for labor [or] services rendered,” ABC Coating, 747 P.2d at 273 (emphasis

added and internal quotation marks omitted), depends on what the suit claims, not

who prevails.

The caselaw relied on by the dissent does not override this commonsense

construction of the statute. The dissent relies primarily on language in a decision by

22 Appellate Case: 24-6068 Document: 52-1 Date Filed: 09/25/2025 Page: 23

Oklahoma’s intermediate appellate court, Nayles v. Dodson, 476 P.3d 1245, 1248

(Okla. Civ. App. 2020). It is necessary to put this language in context. In that case

the plaintiffs had placed a $1,000 deposit against the purchase of a vehicle, but then

decided it was overpriced and declined to buy it. The defendant refused to refund the

deposit. The plaintiffs obtained a judgment and then sought attorney fees, relying on

the same statute involved in this case, § 936 (now codified as § 936(A)), which

provided attorney fees “[i]n any civil action to recover . . . on . . . [a] contract relating

to the purchase or sale of goods, wares, or merchandise . . . .” The defendant argued

that the statute did not cover the plaintiffs’ claim because the claim did not allege any

actual purchase or sale of goods. The court rejected that argument, noting that all that

was required was a contract relating to such a sale. The court distinguished the

statute’s “relating to” language applicable to transactions in goods from the language

regarding labor or services, which permits attorney fees “[i]n any civil action to

recover for labor or services rendered.” 6 Regarding the latter context, the court said

“a claim under that provision must be for labor and services actually provided.” Id.

at 1249.

6 Section 936 stated at that time: 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. Nayles, 476 P.3d at 1249 23 Appellate Case: 24-6068 Document: 52-1 Date Filed: 09/25/2025 Page: 24

Ignoring the language “a claim . . . for,” the partial dissent focuses on the

words “actually provided” and infers that attorney fees are allowable only if labor

and services were actually provided. But the obvious thrust of Nayles was that the

plaintiffs could collect attorney fees even though they did not allege that there had

been any purchase or sale of goods; it was enough that their transaction “related to”

the sale of goods. The court’s discussion of attorney fees in the labor-or-materials

context was not a holding; and, more importantly, the court was just considering what

needs to be claimed, not what needs to be proved. The distinction between contracts

for the sale of goods and contracts for labor or materials was that in the sale-of-goods

context the claim need only relate to a sale (as was the case in Nayles), whereas in

the labor-or-materials context, it is not enough that the claim relate to the provision

of labor or materials—there must be a claim to recover for labor or materials that

were provided. The case before us on appeal involves such a claim.

The dissent does not, and cannot, cite any reported case (other than the

decision below), where attorney fees have been denied a defendant simply because

the plaintiff could not prove its claim that it is owed money for labor or services it

provided. Not only do the cases relied on by the dissent involve other types of

claims—claims labeled by the courts as collateral to the provision of labor or

services—but several of the opinions in those cases (as already noted in our

discussion) restate the proposition that it is the claim, not the actual fact, that

determines the applicability of the attorney-fee statute. We address the other cases

relied on by the dissent in the order discussed in the dissent.

24 Appellate Case: 24-6068 Document: 52-1 Date Filed: 09/25/2025 Page: 25

In Russell v. Flanagan, 544 P.2d 510, 512 (Okla. 1975), the claim was not to

be paid for labor or services provided, but a claim of breach of warranty against the

person providing the labor—“an action collaterally concerning labor or services, . . .

not a civil action for labor or services within the meaning of the statute.”

In Burrows, 704 P.2d at 1137, the plaintiff construction company “was paid

according to the terms of the contract.” But it claimed that it would have made more

money (by reducing the sales taxes due) if, as allegedly agreed, it had been appointed

the purchasing agent for the project. The court said, “It is the underlying nature of the

suit itself which determines the applicability of the labor and services provisions of

section 936.” Id. (footnote omitted). This claim, held the court, “did not directly

relate to the rendition of labor or services, and was thus not subject to the provisions

of section 936.” Id. at 1138. In contrast, “If the action is brought for labor and

services rendered, the provisions of section 936 apply.” Id. (emphasis added).

In ABC Coating, 747 P.2d at 272, the plaintiff had developed a special process

used in reinforcing concrete and entered into arrangements for the defendant to use

the process, but the defendant terminated the arrangement. The plaintiff then sued

“for appropriation of trade secrets, fraud, breach of a secrecy agreement and unjust

enrichment.” Id. The defendant prevailed and was awarded attorney fees under § 936

based on the “for labor or services” language. The state supreme court reversed.

Under the dissent’s interpretation of the statute, reversal was obvious because

plaintiff’s claim proved unmeritorious. But the court took a different path. It wrote,

as we said previously, “[I]n each case it is the underlying nature of the suit itself

25 Appellate Case: 24-6068 Document: 52-1 Date Filed: 09/25/2025 Page: 26

which determines the applicability of the labor or services provisions of § 936. The

question is whether the damages arose directly from the providing of labor or

services [in which case fees may be awarded], or from an aspect collaterally relating

to labor services [in which case fees are not available].” Id. at 273. The distinction

being made by the court was not between law and equity (as suggested by the partial

dissent) but between claims for failure to pay for labor or services and claims merely

related to labor or services. In that case, “none of [the plaintiff’s claims] arose

directly from the rendition of labor or services.” Id.

Finally, in Kay, 806 P.2d at 649, plaintiff performed services for an oil

company and was paid as agreed: a thousand dollars per month plus expenses and the

assignment of an overriding royalty interest in certain of the company’s leases. The

plaintiff was paid the royalty interests in oil produced from the lease but received

nothing with respect to gas production. See id. at 649–50. The plaintiff sued for gas

royalties, but the assignments were interpreted by the court as not including gas. See

id. at 650. The company unsuccessfully sought attorney fees under § 936. The action

was for interpretation of the royalty assignment, and was “only collaterally related to

the agreement for labor and services.” Id. at 652. Relevant to our case, the court’s

opening paragraph stated that “the labor and services provisions of § 936 authorize

attorney fees to prevailing parties in actions for the recovery of money due for labor

and services performed.” Id. at 649 (emphasis added and internal quotation marks

omitted). Surely a party who successfully defends a claim for labor and services by

26 Appellate Case: 24-6068 Document: 52-1 Date Filed: 09/25/2025 Page: 27

showing that no such labor or services were performed is a prevailing party and

entitled to attorney fees.

Indeed, we note that Insight’s interpretation is not only contrary to the clear

import of the language of the Oklahoma statute, but a contrary interpretation would

lead to an absurd result. As Insight would have it, whenever the defendant

prevailed—that is, whenever the court ruled that the plaintiff was not entitled to

compensation for labor or services rendered—the defendant would perforce be barred

from collecting an attorney fee. In other words, the statute would benefit only

plaintiffs. Surely, if that were the legislature’s intent, it would have explicitly said so.

Unsurprisingly, Kay rejected that interpretation.

We therefore reverse the district court’s denial of prevailing-party attorney

fees.

III. CONCLUSION

We AFFIRM the district court’s summary judgment and REVERSE its denial of

prevailing-party attorney fees. We REMAND for further proceedings to determine the

amount of the fee award.

Entered for the Court

Harris L Hartz Circuit Judge

27 Appellate Case: 24-6068 Document: 52-1 Date Filed: 09/25/2025 Page: 28

24-6068 & 24-6076, Insight Investments, LLC v. North American Specialty Ins. Co., et al. EID, J., concurring in part and dissenting in part.

I agree with the majority that Insight is not a proper claimant under the bond

issued by the North American Specialty Insurance Company (“NASIC”) and that the

parol evidence rule did not bar NASIC from offering extrinsic evidence to show that

the agreement between Insight and Icon was for financing, rather than for labor or

materials. But I do not agree with the majority’s conclusion that NASIC is entitled to

an award of attorney fees under the relevant attorney-fee statute, Okla. Stat. Ann.

tit. 12, § 936(A). In my view, Oklahoma courts have already answered the question

before us: the provision of § 936 at issue here—which authorizes attorney fees “[i]n

any civil action to recover for labor or services rendered”—only applies when the

underlying claim involves a direct contract “for labor and services actually

provided.” Nayles v. Dodson, 476 P.3d 1245, 1249 (Okla. Civ. App. 2020) (emphasis

added). Applying that principle here, NASIC is not entitled to attorney fees because

Insight did not actually provide any labor or services to Icon, and because Insight’s

contract with Icon—the putative “labor and services” contract—is only collateral to

Insight’s claim against NASIC. Because the majority concludes otherwise, I

respectfully dissent as to Part II.B of its decision.

Oklahoma has long “follow[ed] the American Rule, which states that each

litigant pays for their own legal representation” unless a specific statute or

contractual provision permits an award of attorney fees. Lunn v. Continental Motors,

Inc., 568 P.3d 589, 591 (Okla. 2025); see Kay v. Venezuelan Sun Oil Co., 806 P.2d Appellate Case: 24-6068 Document: 52-1 Date Filed: 09/25/2025 Page: 29

648, 650 (Okla. 1991). And even where a particular statute authorizes or mandates

an award of attorney fees—as is the case with § 936—Oklahoma courts require that

the statute be “strictly applied.” Kay, 806 P.2d at 650.

Oklahoma courts have therefore taken a narrow view of § 936. Specifically,

Oklahoma courts have held that the provision of § 936 at issue here, which mandates

an award of attorney fees to the prevailing party “[i]n any civil action to recover for

labor or services rendered,” only applies when the underlying claim arises out of

(1) a direct contract (2) for labor or services actually rendered. Nayles, 476 P.3d

at 1249; see id. at 1250 (“[A] ‘labor and services’ claim must centrally involve labor

and services actually rendered.” (emphases added)). Thus, when a claim only

“collaterally concern[s]” a contract for labor or services, § 936 does not apply.

Russell v. Flanagan, 544 P.2d 510, 512 (Okla. 1975); Kay, 806 P.2d at 652 (declining

to apply § 936 where the claim was only “collaterally related to the agreement for

labor and services”); Nayles, 476 P.3d at 1248 (stating that § 936 does not apply if

the labor-and-services contract is only a “peripheral matter” in the action).

Given those limitations, the Oklahoma Supreme Court has declined to apply

§ 936 to claims for breach of warranty based on a labor contract, see Russell, 544

P.2d at 512; to claims for lost profits based on breach of a construction contract, see

Burrows Constr. Co. v. Indep. Sch. Dist. No. 2 of Stephens Cnty., 704 P.2d 1136,

1138 (Okla. 1985); to claims for misappropriation of trade secrets and fraud, see ABC

Coating Co., Inc. v. J. Harris & Sons Ltd., 747 P.2d 271, 273 (Okla. 1987); and to

claims involving a contractual assignment of the right to receive royalties from

2 Appellate Case: 24-6068 Document: 52-1 Date Filed: 09/25/2025 Page: 30

mineral leases used to produce oil and gas, see Kay, 806 P.2d at 651–52. The

majority dismisses these cases largely because they concern collateral claims. See

Maj. Op. at 24–25. But these cases serve the important purpose of showing that the

Oklahoma Supreme Court has continually denied claims for attorney fees under

§ 936 that only collaterally concern labor or services. We should not depart from this

rule.

Like the underlying claims in those cases, Insight’s claim against NASIC is

not within the scope of § 936. For one thing, the putative labor-and-services contract

at issue here—the agreement between Insight and Icon—is only “collaterally related”

to Insight’s claim under the NASIC bond. Kay, 806 P.2d at 652. Insight’s claim was

not one to recover directly for the non-payment of labor or services from the party

that received the labor or services, as § 936 requires; instead, Insight’s claim sought

indemnity from a third party. And because Insight’s collateral agreement with Icon

was one for financing—rather than for labor or services—Insight’s claim against

NASIC under the bond did not “centrally involve labor and services actually

rendered.” Nayles, 476 P.3d at 1250 (emphases added). That being so, Insight’s

claim against NASIC falls outside of § 936’s scope.

In concluding to the contrary, the majority relies on language from the

Oklahoma Supreme Court stating that “it is the underlying nature of the suit itself

which determines the applicability of the labor or services provisions of § 936.”

Maj. Op. at 21 (quoting ABC Coating Co., 747 P.2d at 273). But that statement in

ABC Coating was referring to the principle that a party may recover attorney fees

3 Appellate Case: 24-6068 Document: 52-1 Date Filed: 09/25/2025 Page: 31

under § 936 even when the claim is equitable in nature––such as a claim for unjust

enrichment or quasi-contract—so long as “the damages arose directly from the

providing of labor or services, such as the failure to pay for those services,” rather

than “from an aspect collaterally relating to labor or services.” 747 P.2d at 272–73.

This is the correct interpretation because the Oklahoma Supreme Court clearly

expressed that while, in ABC Coating Co., “the trial court was correct in its finding

that attorney’s fees may be awarded under § 936 to the prevailing party in an action

on quasi-contract,” it noted that “such an award may be made only if the type of

contract in question is one of those enumerated in the statute.” Id. (emphasis added).

The thrust of the court’s holding, therefore, was to include equitable claims within

the scope of § 936.

In any event, the underlying nature of the suit here further underscores that

§ 936 does not apply. “[T]he gravamen of the action” between Insight and NASIC

“is the interpretation and effect of the language” of the collateral agreement between

Insight and Icon—not whether Icon breached that agreement, whether Insight has a

right to collect payment from Icon, or the amount that Icon owed for that breach.

Kay, 806 P.2d at 652. Put differently, the parties here do not dispute the existence of

Icon’s breach of its agreement with Insight, nor do they dispute whether or how much

Insight could have recovered in a direct action against Icon. Instead, the parties

dispute whether and to what extent Insight and Icon’s agreement obligated NASIC as

a surety. Such a claim is not fee-bearing under § 936.

4 Appellate Case: 24-6068 Document: 52-1 Date Filed: 09/25/2025 Page: 32

Finally, the majority insists that interpreting § 936 in this way “would lead to

an absurd result” by effectively barring prevailing defendants from ever collecting

attorney fees and thereby benefitting only plaintiffs. Maj. Op. at 27. But such a

result is “not so absurd as to undermine the most natural reading” of § 936’s text or

to warrant a departure from the way Oklahoma courts have applied that text. County

of Maui v. Hawaii Wildlife Fund, 590 U.S. 165, 193 (2020) (Thomas, J., dissenting).

Indeed, Oklahoma courts have suggested that the state legislature may have

specifically designed § 936 to limit attorney fees awards in this way. See Nayles,

476 P.3d at 1250 (“The Legislature chose to adopt the Russell rule that a ‘labor and

services’ claim must centrally involve labor and services actually rendered, but

clearly did not adopt the ‘goods actually delivered’ standard stated in n. 11 of Kay.”).

And we have especially good reason to apply § 936 narrowly, given Oklahoma’s

general adherence to the “American Rule” of attorney fees and given Oklahoma

courts’ admonition that the statute be “strictly applied.” Kay, 806 P.2d at 650.

Applying that statutory text, I would hold that § 936 does not apply to

Insight’s claim against NASIC and would therefore affirm the district court’s denial

of NASIC’s motion for attorney fees. Because the majority concludes otherwise,

I dissent from Part II.B of the majority’s decision.