F I L E D United States Court of Appeals Tenth Circuit UNITED STATES CO URT O F APPEALS May 17, 2007 FO R TH E TENTH CIRCUIT Elisabeth A. Shumaker Clerk of Court
SELRAHC, a Limited Partnership,
Plaintiff-Appellant,
v. No. 04-7116 (D.C. No. 02-CV-221-W ) TER RY BU RR USS, (E.D. Okla.)
Defendant-Appellee,
and
GERALD WA YNE BAILEY; EARP ELECTRIC, IN C.,
Defendants-Third-Party- Plaintiffs-Appellees,
v.
CHARLES ROYE, Individually,
Third-Party-Defendant.
Plaintiff-Appellee,
v. No. 05-7116 TER RY BU RR USS, (D.C. No. 02-CV-221-W ) (E.D. Okla.) Defendant, and
Defendants-Third-Party- Plaintiffs-Appellants,
Third-Party- Defendant-Appellee.
OR D ER AND JUDGM ENT *
Before TA CH A, Chief Judge, O’BRIEN, and M cCO NNELL, Circuit Judges.
These cases arise out of an oral contract for the construction of a motel in
Stigler, Oklahoma. In M arch of 2001, Gerald W ayne Bailey agreed to construct
the motel for Selrahc, a limited partnership with Charles Roye as its managing
partner, at the cost of construction plus M r. Bailey’s ten percent fee. M r. Bailey
* After examining the briefs and appellate record, this panel has determined unanimously that oral argument would not materially assist the determination of this appeal. See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G). The case is therefore ordered submitted without oral argument. This order and judgment is not binding precedent except under the doctrines of law of the case, res judicata and collateral estoppel.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 w ith Fed. R. App. P. 32.1 and 10th Cir. R. 32.1.
-2- subcontracted w ith Terry Burruss to provide architectural services and with Earp
Electric, Inc., to provide electrical services.
In August of 2001, the parties’ relationship deteriorated after M r. Roye
refused to pay in full a bill presented by M r. Bailey. M r. Bailey eventually left
the work site on the advice of his attorney and the motel was completed without
the continued participation of M r. Bailey, M r. Burruss, and Earp Electric.
Selrahc sued M r. Bailey, M r. Burruss, and Earp Electric (the “defendants”)
in Oklahoma state court claiming negligence and breach of contract. After the
case was removed to federal district court because of diversity of citizenship,
M r. Bailey and Earp Electric brought claims against Selrahc and M r. Roye
individually for breach of contract and open account. A jury found for the
defendants on Selrahc’s claims. The jury also found for M r. Bailey and Earp
Electric on their breach-of-contract claims and for M r. Bailey on his open account
claims. 1
The district court denied Selrahc and M r. Roye’s motions for judgment as a
matter of law and for a new trial with one exception: the court held that
M r. Bailey and Earp Electric had not proven a contractual relationship with
M r. Roye in his individual capacity and vacated the judgments against him. The
1 Earp Electric’s open account claims were abandoned at trial and not submitted to the jury.
-3- court awarded attorneys’ fees to M r. Bailey, M r. Burruss, and Earp Electric, and
also to M r. Roye.
In appeal number 04-7116, Selrahc appeals from the district court’s denial
of its motions for judgment as a matter of law and for a new trial, and the district
court’s aw ard of attorneys’ fees to M r. Bailey, M r. Burruss, and Earp Electric. In
appeal number 05-7116, M r. Bailey and Earp Electric appeal from the award of
attorneys’ fees to M r. Roye.
04-7116
Selrahc argues on appeal that (1) the district court erred in not granting it
judgment as a matter of law as to all claims; (2) the district court committed
numerous reversible errors during trial; (3) the verdicts were excessive and
indicated “confusion” and “abuse of power” on the part of the jury, Aplt. Opening
Br. at 22; and (4) the attorneys’ fees granted to M r. Bailey, M r. Burruss, and Earp
Electric w ere improper.
1. Denial of Judgment As A M atter of Law
Selrahc argues that because there was not a legally sufficient evidentiary
basis for the jury verdicts on either its claims or the claims of M r. Bailey and
Earp Electric, the district court erred in not granting its motions for judgment as a
matter of law and for a new trial.
W e review orders denying judgment as a matter of law de novo, applying the same standard as the district court and viewing all evidence in the light most favorable to the non-moving party.
-4- The standard for granting judgment as a matter of law is high: Unless the evidence so overwhelmingly favors the movant as to permit no other rational conclusion, judgment as a matter of law is improper.
Kaiser v. Bowlen, 455 F.3d 1197, 1206 (10th Cir. 2006) (citation and internal
quotation marks omitted). Similarly,
W e review the district court’s denial of [a] motion for a new trial for abuse of discretion, viewing all the evidence in the light most favorable to the prevailing party. A motion for a new trial on the grounds that the jury verdict is against the weight of the evidence normally involves a review of the facts presented at trial, and thus involves the discretion of the trial court. Thus, even if we do not necessarily agree with the jury’s verdict, it must be upheld unless it is clearly, decidedly or overwhelmingly against the weight of the evidence.
Escue v. N. Okla. Coll., 450 F.3d 1146, 1156-57 (10th Cir. 2006) (citations and
internal quotation marks omitted). Selrahc argues that the evidence supporting its
claims was so overwhelming that the court erred in not granting its motions.
a. Selrahc’s Negligence and Breach-of-Contract Claims
“As a federal court sitting in diversity, our role is to ascertain and apply
state law to reach the result the Oklahoma Supreme Court would reach if faced
w ith the same question. We review de novo a district court’s determination of
state law.” Shugart v. Cent. Rural Elec. Coop., 110 F.3d 1501, 1504 (10th Cir.
1997). In Oklahoma, “[a] party seeking to establish negligence must prove by a
preponderance of evidence the existence of a duty owed by the defendant to the
plaintiff to use ordinary care, a breach of that duty, and an injury proximately
-5- caused by the defendant’s breach of duty.” Com er v. Preferred Risk M ut. Ins.
Co., 991 P.2d 1006, 1010 (Okla. 1999). To prove breach, Selrahc had to prove
that a contract existed between it and M r. Bailey, M r. Burruss, and Earp Electric,
that the defendants breached the contract, and that Selrahc was damaged “as a
direct result of [the] breach.” See Young v. Thom as, 930 P.2d 836, 839
(Okla. Civ. App. 1996).
The parties do not dispute that the motel w as to be built in compliance with
the requirements of the Best W estern hotel company and the applicable
construction codes. Nor do the parties dispute that M r. Burruss never submitted
architectural plans that fully met Best W estern’s requirements, that certain wiring
installed by Earp Electric violated the city code of Stigler, or that M r. Roye
eventually attempted to hire M r. Bailey’s subcontractors directly. The parties do
dispute the reason behind M r. Roye’s refusal to pay an invoice submitted by M r.
Bailey in August of 2001. Selrahc argued at trial that M r. Roye refused to pay the
invoice until Earp Electric reinstalled the non-compliant wiring; that upon his
refusal M r. Bailey, M r. Burruss, and Earp Electric abandoned the project; and that
the only reason M r. Roye contacted the subcontractors was because M r. Bailey
had abandoned the project and M r. Roye was trying to finish it. Selrahc argues
that it presented overwhelming evidence supporting these claims and that it was
therefore entitled to judgment as a matter of law that defendants were negligent
and breached the contract. W e disagree.
-6- The defendants presented evidence that M r. Roye thought that M r. Bailey
was not doing enough work to justify his ten-percent fee and that he was
concerned that Selrahc was being overcharged. They introduced evidence that
M r. Roye refused to pay all of the August 2001 invoice because he had decided
that he was not going to pay for anything that had not been actually installed in
the motel. M r. Bailey testified that “w hen items are stored on the job site, they’re
either stored on the job site in a trailer or in a bonded warehouse for a commercial
construction project.” Aplt. App., Vol. II at 147. 2 He further testified that under
standard industry practice a pay request is submitted once the subcontractor
provides proof that the items are on the site or in the bonded warehouse.
M r. Bailey testified that he opposed M r. Roye’s decision to deviate from the
standard practice because once the items w ere installed in the project they could
not legally be removed if payment was not made and the only option remaining
would be to lien the property. The defendants presented evidence that in his
initial refusals to pay M r. Roye made no mention of the faulty wiring and pointed
to the fact that not only did M r. Roye refuse to pay the portions of the invoice
that were to go to Earp Electric and M r. Bailey, he also refused to pay a portion
that was to go to Steve Thomas Plumbing, a subcontractor not involved with the
wiring. The defendants also presented evidence that when M r. Bailey resisted the
2 Citations to briefs and appendices are to the briefs and appendices of the appeal that is being discussed.
-7- change in payment practice, M r. Roye contacted the subcontractors, told them that
M r. Bailey was no longer the contractor on the job, and tried to pressure the
subcontractors into contracting directly with Selrahc.
Consequently, there was ample evidence presented from which the jury
could have determined that Selrahc w as the breaching party. It cannot therefore
be said that the “evidence so overwhelmingly favor[ed] [Selrahc] as to permit no
other rational conclusion” than that the jury verdicts were erroneous. Kaiser,
455 F.3d at 1206 (internal quotation marks omitted). The district court did not
comm it error by refusing to grant Selrahc’s motions for judgment as a matter of
law and for a new trial as to its negligence and breach-of-contract claims.
b. M r. Bailey and Earp Electric’s Claims
Selrahc also argues it was entitled to judgment as a matter of law on the
claims brought against it. Its first argument is somewhat confusing because it
claims that “CCB failed to establish that it had an agreement with Selrahc, a
prerequisite to a claim for breach of contract.” A plt. Opening Br. at 12. W hile
we infer that “CCB” refers to CCB, Construction, Inc., M r. Bailey’s construction
company, see Supp. App. at 2, the claims in question were brought by M r. Bailey
in his individual capacity. Assuming that Selrahc intends to complain about the
jury verdicts in favor of M r. Bailey, we are at loss to understand how Selrahc can
argue that there was no contractual relationship between itself and M r. Bailey
-8- when it brought its own breach-of-contract claim against M r. Bailey. This point
is denied.
Selrahc next argues that “CCB presented no evidence supporting his [sic]
claim for open account with Selrahc[;]” rather, “C CB’s evidence went only to its
claim for breach of contract.” Aplt. Opening Br. at 13. Again assuming that
Selrahc is referring to the open account verdict in favor of M r. Bailey, we agree
that there was not sufficient evidence to support the jury’s verdict. In Oklahoma,
“three factors are required to establish an open account: (1) [a]n [a]ccount based
upon running or concurrent dealings; (2) these dealings have not been closed,
settled or stated; (3) some term of the contract remains to be settled between
parties, or the agreement contemplates further transactions betw een the parties.”
Office of Governor-Dep’t of Indus. Dev. v. Dalton, 560 P.2d 971, 972
(O kla. 1977).
The parties contracted for the construction of the motel for the cost of
construction plus ten percent. The factual situation here is therefore analogous to
that found in Whitson v. Wetherbee Electric Co., 416 P.2d 888 (Okla. 1966). In
Whitson, an electric company sued to collect on a contract that called (1) for it to
provide the electrical materials and services necessary to “‘hook[] up’”
a “mechanical cutter, or shear,” and (2) for it to be paid for the cost of the
materials and services plus “a [certain] percentage of profit.” Id. at 889-90.
One of the questions addressed by the Oklahoma Supreme Court was whether
-9- such a suit was one on open account. The court quoted with approval various
definitions of “open account,” including:
[A]n open account [is] an account “where the parties intend that the individual items of the account shall not be considered independently, but as a continuation of a related series, and that the account shall be kept open and subject to a shifting balance as additional related entries of debits or credits are made thereto, until it shall suit the convenience of either party to settle and close the account . . . .”
Id. at 891 (quoting 1 Am. Jur. 2d Accounts and Accounting § 3). The court held
that the suit on the amounts unpaid under the contract at issue was not a suit on
open account.
The same reasoning applies here. W hile the parties to this cost-plus
contract were unsure exactly how much finally would be spent, all of the terms
were set because the contract would end when the building was completed.
Consequently, the district court erred in not granting judgment as a matter of law
on M r. Bailey’s open account claim, and we reverse the district court’s judgment
as to that claim.
Selrahc also argues that it was entitled to judgment as a matter of law on
Earp Electric’s claims for breach of contract and open account because Earp
Electric offered no evidence to support these claims. Its point regarding Earp
Electric’s open account claim is denied because no such claim was presented to
the jury. As to the breach-of-contract claim, Selrahc argues that the only
evidence of breach of contract presented by Earp Electric was “Selrahc’s refusal
-10- to pay for electrical wiring not in conformance with local code.” Aplt. Opening
Br. at 11. This point is denied because, as discussed above, evidence was
presented from which the jury could have found that Selrahc’s refusal to pay was
not based on the non-compliant wiring.
2. Alleged Reversible Errors During Trial
Selrahc claims that the district court erred in not granting its motion for
new trial on the basis of substantial prejudicial error that occurred at trial.
In particular, Selrahc claims the district court committed reversible error by
(a) improperly admitting hearsay testimony regarding comm ents by the Stigler
City Clerk, (b) improperly admitting discovery deposition testimony from Best
W estern employees, (c) improperly excluding evidence regarding M r. Burruss’s
state disciplinary proceedings, (d) improperly allowing prejudicial attorney
misconduct, (e) improperly commenting on the evidence in front of the jury, and
(f) giving improper instructions and verdict forms to the jury. As noted
previously, we review a district court’s denial of a motion for new trial for abuse
of discretion. Escue, 450 F.3d at 1156.
a. Hearsay Testimony Regarding Comments by the Stigler City Clerk
At trial, M r. Bailey was questioned about a visit he and M r. Earp of Earp
Electric made to LeAnn Lassiter, the City Clerk for Stigler, Oklahoma. W hen
M r. Bailey initially began to testify about comments M s. Lassiter made regarding
the city’s electrical code, Selrahc’s attorney objected to the testimony as being
-11- hearsay and the objection was sustained. M r. Bailey later was allowed to testify
(over Selrahc’s objection) that he was told that the city used the National Electric
Code (NEC), which did not require the wiring at issue to be installed in conduit.
Finally, M r. Bailey testified again, this time under cross-examination by Selrahc’s
attorney, that the city told him that the NEC was the only applicable code. At
that point, counsel for Selrahc questioned M r. Bailey extensively regarding who
from the city had given him this information, when it was given, whether
M s. Lassiter w as going to appear as a witness, and whether he had talked to
M s. Lassiter since she had given him that information or since the lawsuit began.
Selrahc argues on appeal that the district court improperly admitted
hearsay, which “is a statement, other than one made by the declarant while
testifying at the trial or hearing, offered in evidence to prove the truth of the
matter asserted.” Fed. R. Evid. 801(c). Defendants argue that M s. Lassiter’s
statements are admissible under the state of mind exception of the hearsay rule.
See Fed. R. Evid. 803(3).
Selrahc’s point is denied. There is no need to consider any of the various
hearsay exceptions because M s. Lassiter’s statement was not hearsay. It was
undisputed that the Stigler City Code required the wiring in question to be in
conduit. Therefore, M s. Lassiter’s statement was not offered as proof of the truth
of what she said–i.e., that the city code simply incorporated the NEC (which does
not require such wiring to be in conduit)–but instead solely as proof that she made
-12- the incorrect statement, and that M r. Bailey and M r. Earp relied on that statement.
See Fed. R. Evid. 801 advisory committee’s note to subdivision (c) (“If the
significance of an offered statement lies solely in the fact that it was made, no
issue is raised as to the truth of anything asserted, and the statement is not
hearsay.”).
b. Deposition Testimony from Best W estern Employees
At trial, transcripts of deposition testimony from Best W estern employees
Lori Gonzales and M ark Holst and reports attached to the transcripts were
admitted into the record, the testimony was read to the jury and the exhibits
displayed. The testimony concerned M s. Gonzales’s and M r. Holst’s actions
regarding a visit M r. Holst made to the motel. The exhibits were “reports”
prepared by M s. Gonzales and M r. H olst regarding the situation with the motel.
Prior to the testimony being read into the record, Selrahc’s counsel stated his
objections, which w ere directed to the content of M s. Gonzales’s and M r. Holst’s
reports, specifically that (1) M s. Gonzales’s testimony barely referenced her
report and emails contained in the report included hearsay statements from third
parties, and (2) M r. Holst’s report and testimony also contained a substantial
number of hearsay statements from third parties. Selrahc’s counsel requested that
the court redact all third-party hearsay statements from the reports.
On appeal, Selrahc complains that M s. Gonzales’s and M r. Holst’s
deposition testimonies were irrelevant and were themselves hearsay statements
-13- because “[n]either witness appeared at trial, nor was there any show ing that these
witnesses were unavailable.” Aplt. Opening Br. at 15. This point is denied
because neither of these objections w ere raised at trial. “If [a] complaining party
fail[s] to make a contemporaneous objection at trial” as to evidence that it claims
was improperly admitted “we review the ruling under a plain error standard.”
Nat’l Envtl. Serv. Co. v. Ronan Eng’g Co., 256 F.3d 995, 1001 (10th Cir. 2001);
see Fed. R. Evid. 103(a) and (d). On plain error review “we will only reverse in
an exceptional circumstance–one where the error was patently plainly erroneous
and prejudicial, and fundamental injustice would otherwise occur.” Barber v.
T.D. Williamson, Inc., 254 F.3d 1223, 1227 (10th Cir. 2001) (citations and
internal quotation marks omitted). The admission of the deposition testimony
does not meet this standard.
c. Evidence Regarding M r. Burruss’s State Disciplinary Proceedings
At trial, Selrahc’s counsel sought to offer into evidence a finding of the
Oklahoma architectural board that M r. Burruss had violated Oklahoma law by
practicing architecture in the state without an Oklahoma license. Out of hearing
of the jury, Selrahc’s counsel argued that the findings needed to be admitted to
show a state law violation. Defendants’ counsel reiterated an objection
previously raised in a motion for limine, arguing that the finding from the
disciplinary proceeding was overly prejudicial in light of the fact that M r. Burruss
admitted that he violated Oklahoma law. The court sustained the objection and
-14- excluded the evidence but agreed that the document could be used if M r. Burruss
denied violating the law. Following the bench conference M r. Burruss admitted
that he had violated Oklahoma law by preparing and submitting architectural
plans without a license.
On appeal, Selrahc argues that the evidence from the architecture board was
“highly probative” and that M r. Burruss’s “testimony, that he was working on an
application with the state architectural board, . . . coupled with the lack of
evidence of state sanctions[,] allowed Bailey and Burrus[s] to trivialize the matter
as if it were not a breach of the parties’ contract and did not evidence
negligence.” Aplt. Reply Br. at 8.
“Although relevant, evidence may be excluded if its probative value is
substantially outweighed by the danger of unfair prejudice . . . .” Fed. R. Evid.
403. Here, Selrahc’s argument was that the architectural board finding was
probative because it showed a violation of state law. Actually, it was merely
duplicative of M r. Burruss’s own testimony that he violated state law . Further,
the probative value of the violation of state law was compromised by the
undisputed fact that Selrahc was aware that M r. Burruss was not licensed in
Oklahoma at the time he started work. The district court committed no abuse of
discretion and Selrahc’s point is denied.
-15- d. Prejudicial Attorney M isconduct
At trial, M r. Roye testified to additional funds expended by Selrahc on
lighting for the motel following the departure of Earp Electric. Counsel for
defendants cross-examined M r. Roye regarding a “disclaimer” from Cecil Don
Robertson, the electrician who replaced Earp Electric, in which it was made clear
that M r. Robertson had installed only the upper portion of the parking lot lights.
After M r. Roye testified that he did not remember signing the disclaimer, defense
counsel was allowed, over objection, to give the document to M r. Roye to
“refresh his memory.” Aplt. App., Vol. IV at 566. After examining the
document, M r. Roye was asked a number of questions about M r. Robertson and
the disclaimer. M r. Roye testified that he did not recall ever seeing the disclaimer
and that the signature on it was his wife’s, not his.
Selrahc subsequently moved for a mistrial, arguing that the exchange had
led the jury to believe that Roye’s wife had signed the document in his name
when she had actually signed her own name. Defense counsel argued that he had
in good faith thought that M r. Roye had signed the document but that M r. Roye
had been clear that his wife had signed it and that she had signed her own name.
The district court denied the motion for a mistrial but gave the jury a limiting
instruction drafted by Selrahc’s counsel instructing the jury that the disclaimer
was not signed by Charles Roye.
-16- On appeal, Selrahc alleges that a mistrial should have been granted because
defense counsel “deliberately misrepresented, to the Court and the Jury, in
repeated questioning, that M r. Roye had signed a document he did not sign, for
the purpose of making M r. Roye appear as if he w ere lying.” A plt. Opening Br.
at 18. “W e review the district court’s denial of a motion for mistrial for abuse of
discretion. In deciding whether the court abused its discretion, we assume that
the trial judge is in the best position to determine w hether an incident was so
serious as to warrant a mistrial.” Rios v. Bigler, 67 F.3d 1543, 1550 (10th Cir.
1995) (citation and internal quotation marks omitted).
M r. Roye was in no way prejudiced by this exchange. He clearly testified
that the signature on the disclaimer was his w ife’s, no evidence was presented to
contradict that testimony, and the jury was then instructed that M r. Roye’s
testimony was correct. Selrahc’s point is denied.
e. Improper District Court Comments on Evidence
Selrahc argues that the district court improperly commented on an attempt
by Selrahc’s counsel to impeach testimony of Terry Burruss. Selrahc forwarded
the first set of architectural plans submitted by M r. Burruss to Best W estern.
After Selrahc had received M r. Burruss’s second set of plans, it received a letter
from Best W estern (the “July 20th letter”) detailing the deficiencies found in the
first set. At trial, Selrahc’s counsel asked M r. Burruss if the second set of plans
he had submitted had already addressed the deficiencies Best W estern listed in the
-17- July 20th letter. M r. Burruss testified that the second set did correct those
deficiencies and Selrahc’s counsel introduced earlier deposition testimony in an
effort to impeach his testimony. In that deposition testimony, Selrahc’s counsel
stated:
Now, my understanding from what you’ve told me is that Exhibit Number 2 did not correct all the deficiencies identified by [Best W estern], and this w as a preliminary revised plan and that you did not intend that these ever–this particular document right here, just this document, that it be sent to Best W estern.
Aplt. App., Vol. II at 220. M r. Burruss then answered: “[A]t the time I had sent
[the second set] up there, I was not aware of the July 20th letter. I was aware
there had been a Best W estern representative on the site that had relation to these
that had comments about the rooms not being large enough.” Id., Vol. II at
220-21. After this deposition testimony was read by Selrahc’s counsel, the judge
stated that he was not sure that it actually impeached M r. Burruss’s trial
testimony and sustained an objection to the use of the testimony.
There was no prejudice here. Following the reading of the deposition
testimony, M r. Burruss admitted that the second set of plans did not completely
correct the deficiencies listed in the July 20th letter. So even though the judge
sustained the objection to the deposition testimony Selrahc succeeded in
impeaching M r. Burruss’s previous testimony. Selrahc’s point of error is denied.
f. Improper Instructions
-18- Selrahc claims the district court erred in instructing the jury on the theory
of quantum meruit.
In a diversity case, the substance of a jury instruction is a matter of state law, but the grant or denial of a tendered instruction is governed by federal law. W e review de novo the ultimate question of whether the jury was properly instructed on the question of law. In so doing, we examine the instructions as a whole to determine if they sufficiently cover the issues in the case and focus on the facts presented by the evidence.
Haberman v. Hartford Ins. Group, 443 F.3d 1257, 1273 (10th Cir. 2006)
(citations and internal quotation marks omitted). “W e review the district court’s
decision to give a particular jury instruction for an abuse of discretion. The
instructions are considered as a whole de novo to determine whether they
accurately informed the jury of the governing law.” M urphy Oil USA, Inc. v.
Wood, 438 F.3d 1008, 1019 (10th Cir. 2006) (citation omitted). “R eversal is
warranted w hen a deficient jury instruction is prejudicial. Thus, where a jury
instruction is legally erroneous, we must reverse if the jury might have based its
verdict on the erroneously given instruction.” Coleman v. B-G M aint. M gmt. of
Colo., Inc., 108 F.3d 1199, 1202 (10th Cir. 1997) (citation and internal quotation
marks omitted).
At trial, the district court instructed the jury on the theory of quantum
meruit in regard to Earp Electric’s claims. “[T]he common-law doctrine of
quantum meruit . . . is founded on a Latin phrase meaning, ‘as much as he
deserves,’ and in law has been defined as a legal action grounded on a promise
-19- that the defendant would pay to the plaintiff for his services as much as he should
deserve.” M artin v. Buckman, 883 P.2d 185, 193-94 (Okla. Civ. App. 1994)
(internal quotation marks omitted). Selrahc argues that Earp Electric could not
recover under quantum meruit because of the existence of an express contract.
See Shumaker v. Hazen, 372 P.2d 873, 875 (Okla. 1962) (agreeing with counsel’s
argument that, as a general proposition of law, “[t]here cannot be an express and
an implied contract for the same thing existing at the same time”) (internal
quotation marks omitted). But as Earp Electric correctly points out, no express
contract existed between it and Selrahc. And, even if an express contractual
relationship w as found to exist: “W here a petition declares upon an express
contract but negatives full performance of it because of defendant’s w rongful act,
a recovery for debt may be had upon a quantum meruit.” Id. (quotations omitted).
The district court did not abuse its discretion in instructing the jury on quantum
meruit.
Selrahc also argues that the district court committed reversible error by
instructing the jury on substantial performance regarding M r. Bailey’s and Earp
Electric’s breach-of-contract claims. The jury was instructed that “[a] party who
has substantially performed a contract is entitled to recover” and that defendants
substantially performed if “Selrahc received substantially what the contract
required; any omissions, deviations or defects can be corrected without difficulty;
and Defendants acted in good faith in intending to perform their part of the
-20- contract.” Aplt. App., Vol. I at 136. Selrahc argues that the evidence was clear
that neither M r. Bailey nor Earp Electric had substantially performed their duties
under the contract. See Thompson v. United States, 223 F.3d 1206, 1210
(10th Cir. 2000) (“Jury instructions should be given only if they are supported by
competent evidence.”) (internal quotation marks omitted).
Since the motel w as not close to completion and the wiring in question did
not comply with the Stigler code when M r. Bailey and Earp Electric left the job
site, we agree that there was not sufficient evidence to warrant the substantial
performance jury instruction. However, the error could not have been prejudicial.
M r. Bailey and Earp Electric’s argument to the jury was not that they had
substantially performed but that Selrahc had driven them off the work site after
trying to change how payments were made. Selrahc’s argument was that the
defendants abandoned the project after it refused to pay for faulty wiring. The
jury was not only instructed on substantial performance but also that “[a] contract
is breached or broken, even if the time for performance has not arrived, when one
party notifies the other or acts in such a way that it is clear that he does not intend
to do what was promised in the contract[,]” Aplt. App., Vol. I at 134; that “[a]
party is relieved of the duty to perform a contract if the other party to the contract
prevented him from performing,” id., Vol. I at 135, and that “[e]ven though a
contract may call for a condition to be satisfied before a party’s performance is
required, in some cases the condition may be excused so that the party’s
-21- performance is required even though the condition has not been satisfied,” id.,
Vol. I at 137. Since it is clear that the jury believed the defendants’ version of
events, there was no reason that it would have relied on the more difficult finding
of substantial performance in reaching its verdict. 3 This point is denied.
3. The Verdicts Reflected Inconsistencies On Their Face and Indicated Confusion
and Abuse of Power
The jury found for M r. Bailey and against Selrahc on both his
breach-of-contract claim and his open account claim, aw arding $11,127.00 to
M r. Bailey on each claim. The jury also found for Earp Electric and against
Selrahc on Earp Electric’s breach-of-contract claim, awarding it $4,997.00.
Selrahc argues that the district court erred in not granting its motion for a new
trial because the verdicts were inconsistent. Selrahc did not object to the verdicts
prior to the discharge of the jury.
A failure to object to general jury verdicts on the ground of inconsistency before the jury is discharged constitutes waiver, unless the verdict is inconsistent on its face such that the entry of judgment upon the verdict is plain error. Plain error exists only when verdicts are inconsistent on their face.
3 Selrahc also argues that the jury instruction “error was further compounded by the submission of a verdict form on an open account[] in favor of Earp Electric . . . after the judge’s clerk advised that the verdict form would be deleted.” Aplt. Opening Br. at 22. No such verdict form was presented to the jury.
-22- Bartee v. M ichelin N. Am., Inc., 374 F.3d 906, 911 (10th Cir. 2004) (citation,
internal quotation marks, and footnote call number omitted). Selrahc argues that
the verdicts were inconsistent on their face. W e disagree.
Selrahc’s argument is that the $11,127.00 verdict is identical to the amount
that M r. Bailey testified was the cost of certain items that were used on the
project for which he was never paid, and that $4,997.00 is identical to the amount
of usable material that the electrician who replaced Earp Electric found when he
entered the job site. Selrahc argues that “[t]he jury is believed to have intended
one judgment, in the amount of $11,127.00, in favor of [M r.] Bailey, and one
judgment, in the amount of $4,997.00, in favor of Earp Electric” and that the
double award of $11,127.00 (to M r. Bailey) “shows the jury was confused and the
award is completely inconsistent with the evidence and instructions.” Aplt.
Opening Br. at 23.
This is not facial inconsistency requiring a grant of new trial despite the
failure to object. The verdicts here were all against Selrahc. To the extent that
Selrahc is arguing that the evidence did not support two verdicts of $11,127.00,
that argument is moot in light of our previous determination overturning the open
account award. 4 To the extent that Selrahc is attempting to argue that even the
4 W e note that the jury was instructed that even if it found in favor of Selrahc on both its breach-of-contract claim and its negligence claim only a single recovery of damages could be awarded. No similar instruction, however, was requested in regard to the breach-of-contract and open account claims brought by (continued...)
-23- verdicts that it believed the jury intended were excessive, or to reprise or raise
further claims regarding the sufficiency of the evidence as to its liability on
M r. Bailey and Earp Electric’s breach-of-contract claims or the amount of the
verdicts on those claims, those arguments are not properly presented in this point
and are waived. See Garrett v. Selby Connor M addux & Janer, 425 F.3d 836, 841
(10th Cir. 2005) (holding that “mere conclusory allegations w ith no citations to
the record or any legal authority for support” constituted inadequate briefing such
that the points of error w ere waived).
4. Improper A ttorneys’ Fees Granted to M r. Bailey, M r. Burruss, and Earp
Electric
The district court awarded attorneys’ fees against Selrahc and in favor of
M r. B urruss, M r. Bailey, and Earp Electric in the total amount of $96,938.46.
Selrahc argues that M r. Bailey was the only party entitled to recover attorneys’
fees and he was only entitled to recover fees earned in pursuing his open account
claim.
In Oklahoma, a prevailing party cannot recover attorneys’ fees “in the
absence of a statute or an enforceable contract.” Sisney v. Smalley, 690 P.2d
1048, 1049 (Okla. 1984). Here, the award to M r. Burruss, M r. Bailey, and Earp
Electric was predicated on O kla. Stat. Ann. tit. 12, § 936. That statute reads:
4 (...continued) M r. B ailey.
-24- 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.
The Oklahoma Supreme Court has held that “the mandatory provisions of § 936
that the prevailing party in an action to recover for labor and services shall be
allowed a reasonable attorney fee are strictly applied.” Kay v. Venezuelan Sun
Oil Co., 806 P.2d 648, 650 (Okla. 1991) (footnote call number omitted). Selrahc
argues that while M r. Bailey should have been allowed to recover attorneys’ fees
on its open account claim, “[t]he Oklahoma Supreme Court and the Court of
Appeals have made it clear that [§ 936] does not cover damages for breach of
contract.” Aplt. Opening Br. at 25. Selrahc misapprehends the law. The
Oklahoma Supreme Court has held:
It is the underlying nature of the suit itself which determines the applicability of the labor and services provisions of section 936. If the action is brought for labor and services rendered, the provisions of section 936 apply. If the nature of the suit is for damages arising from the breach of an agreement relating to labor and services the provisions of this section do not necessarily apply. The question is whether the damages arose directly from the rendition of labor or services, such as a failure to pay for those services, or from an aspect collaterally relating to labor and services, such as loss of profits on a contract involving the rendition of labor and services.
Burrows Constr. Co. v. Indep. Sch. Dist. No. 2, 704 P.2d 1136, 1138 (Okla. 1985)
(footnote call numbers omitted). The district court held that Selrahc’s claims
-25- against M r. Burruss “clearly related to damages arising from architectural
services rendered.” Aplt. App., Vol. I at 104. It further held that M r. Bailey was
entitled to recover on his open account claim, as conceded by Selrahc, and that
Selrahc’s claims against Earp Electric and Earp Electric’s breach-of-contract
counter-claim against Selrahc, “all relate to the rendition of labor or services.”
Id., Vol. I at 105.
W e disagree that Selrahc’s action was one “to recover for labor or services
rendered” under § 936. Under Burrows Construction Co. “[t]he question is
whether the damages arose directly from the rendition of labor or services, such
as a failure to pay for those services.” 704 P.2d at 1138. Here Selrahc did not
render any labor or services under the contract. In Russell v. Flanagan, 544 P.2d
510 (O kla. 1975), the Oklahoma Supreme Court examined and partially
overturned Walls v. Russell, 519 P.2d 936 (Okla. Civ. App. 1974). In Walls, a
plumber sued a landowner for money due on a plumbing contract and to foreclose
on a mechanics lien. The landowner then sued the plumber for breach of contract.
Both parties successfully defended and sought attorneys’ fees under § 936 but the
trial court awarded attorneys’ fees only to the landowner for her defense of the
plumber’s action. The court of appeals reversed the trial court’s denial of fees to
the plumber. The O klahoma Supreme Court then overturned the court of appeals,
holding that the landowner’s suit w as not an action for labor or services. Russell
v. Flanagan, 544 P.2d at 512; see also Indep. Sch. Dist. No. 4 v. Energy
-26- Conservation Eng’g, Inc., 727 P.2d 599, 600-01 (Okla. Civ. App. 1986) (holding
that a school district’s suit against an engineering firm for breach of a contract to
improve its school’s heating systems w as a suit to recover an increase in the costs
of construction and therefore did not directly relate to the rendition of labor or
services).
Consequently, the award of attorneys’ fees to M r. Burruss must be
reversed. W e affirm the award of attorneys’ fees in regard to M r. Bailey and Earp
Electric’s claims for breach of contract and quantum meruit. M r. Bailey and Earp
Electric claimed that they provided services for Selrahc and that Selrahc ran them
off the job and did not pay for their contracted services. Nevertheless, because
the order awarding attorneys’ fees did not specify what portion of the $96,938.46
attorneys’ fee award was due to each of the three parties, we must remand to the
district court for further findings.
05-7116
In their cross appeal, M r. Bailey and Earp Electric complain that the district
court erred in awarding $56,254.53 in attorneys’ fees to M r. Roye individually.
As noted above, M r. Bailey and Earp Electric brought claims against both Selrahc
and M r. Roye. The district court granted judgment as a matter of law to M r. Roye
as to all of the claims asserted against him and subsequently awarded him
attorneys’ fees.
-27- M r. Bailey and Earp Electric do not appeal the district court’s grant of
judgment as a matter of law to M r. Roye, nor do they dispute that he was entitled
to some attorneys’ fees for prevailing on the claims against him. But they argue
that the amount of attorney fees awarded to Charles Roye improperly included
practically all of the attorney fees incurred by Selrahc. W e agree.
M r. Bailey and Earp Electric argued to the district court that almost all of
the attorneys’ fees claimed by M r. Roye were also incurred by Selrahc. They
then argued that M r. Roye should only be allowed to recover attorneys’ fees
incurred solely in his defense of M r. Bailey and Earp Electric’s claims against
him because the other fees would have been incurred even if M r. Roye had not
been a party. The district court then held that
no authority has been presented by Bailey and Earp to support their contention that a prevailing party cannot recover its attorney’s fees and costs because the same attorney represented a non-prevailing party. The fact the two parties represented by M r. Hayes in this case had parallel interests does not logically preclude recovery.
Aplt. App. at 153.
On appeal, M r. Bailey and Earp Electric reiterate their district court claims,
citing to Oklahoma case law regarding apportionment of attorneys’ fee awards in
arguing that the district court should have apportioned the attorneys’ fees between
M r. Roye and Selrahc. M r. Roye counters that M r. Bailey and Earp Electric’s
claims w ere against both him and Selrahc and that
-28- [i]t was [M r. Bailey and Earp Electric’s] decision to frame their case on the theory that Charles Roye and SELRAHC were identical. This unavoidably resulted in attorney time being expended in the defense of both Charles Roye and SELRAHC, and the lower court did not award any attorney fees for work performed exclusively for SELRAHC.
Aplee. Br. at 3.
There is no need to resort to discussion of Oklahoma case law regarding
apportionment of attorneys’ fees among various legal claims to resolve this point.
A review of the billing records submitted in support of M r. Roye’s motion for
fees shows that many of the listed charges applied to both M r. Roye and Selrahc.
The most obvious example is the billing for the four-day trial and the preparation
for that trial. The fee affidavit from M r. Roye’s lead attorney shows that his
hourly billing rate was $150. The affidavit shows twelve hours charged at that
rate for “Trial at M cAlester” on September 8, 2003; nine hours charged for the
trial on September 9, 2003; thirteen hours charged for the trial and “work on
invoices” on September 10, 2003; and nine hours charged for the trial on
September 12, 2003. Aplt. App. at 113. These are full days of legal work that
could not have been legally charged to both M r. Roye and Selrahc.
In this case there were two clients to whom these legal fees were to be
charged. W hen an attorney has done legal work that benefits two clients, it is not
proper for that attorney to aver after the fact that all of the legal work was solely
for the benefit of the client who has been awarded attorney’s fees. The burden of
-29- proof is on the party claiming attorneys’ fees to prove entitlement and to
“document[] the appropriate hours expended and hourly rates.” Hensley v.
Eckerhart, 461 U.S. 424, 437 (1983). The district court abused its discretion in
awarding attorney’s fees pursuant to an affidavit that was improper on its face.
Reversal and remand is therefore required so that the district court may determine
the amount of attorneys’ fees applicable to M r. Roye individually. 5
CONCLUSION
The judgment of the district court in favor of M r. Bailey on his claim for
open account against Selrahc is REVERSED. The district court’s order awarding
attorneys’ fees to M r. Burruss is REVERSED. The district court’s order awarding
attorneys’ fees to M r. Bailey and Earp Electric is VACATED and remanded to the
district court for determination of the proper amount to be awarded to M r. Bailey
and Earp Electric in accordance with this Order and Judgment. The district
court’s order awarding $56,254.53 in attorneys’ fees to M r. Roye is VA CA TED
and remanded to the district court for determination of the proper amount to be
awarded in accordance with this Order and Judgment. The remainder of the
5 In light of our ruling on this point, we need not address M r. Bailey and Earp Electric’s argument that the amount of attorneys’ fees awarded was so high as to be unreasonable and to constitute an abuse of discretion.
-30- district court decisions appealed from are AFFIRMED.
Entered for the Court
Terrence L. O’Brien Circuit Judge
-31-