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State ex rel State Insurance Fund v. Great Plains Care Center9/30/2003
__ P.3d __
ON CERTIORARI TO THE OKLAHOMA COURT OF CIVIL APPEALS, DIVISION II
The controversy involves an action brought by the State Insurance Fund against Great Plains Care Center, a nursing home, to recover workers' compensation premiums of approximately $52,000, allegedly owed on behalf of various contractors who performed services for the nursing home between 1994 and 1996. The matter went to bench trial in the District Court of Oklahoma County, and the court sustained the nursing home's demurrer to the evidence. The nursing home then made a post-judgment motion for attorney's fees and costs, which motion was denied.
The State Insurance Fund appealed the trial court's order sustaining the demurrer. The nursing home (Great Plains) counter-appealed the denial of attorney's fees and costs. The Court of Civil Appeals, Division II, affirmed the judgment of the District Court, and affirmed the post-judgment order denying attorney's fees and costs. Great Plains then sought certiorari in this Court on whether the trial court erroneously denied the post-judgment motion for attorney's fees.
The appellate adjudication by the Court of Civil Appeals affirming the trial court's judgment on the demurrer to the evidence is left undisturbed by our opinion today. We thus vacate only that part of the opinion by the Court of Civil Appeals addressing the trial court's order on attorney's fees and costs. The sole questions before us on certiorari are whether Great Plains was entitled to an award of attorney's fees and/or costs against the State Insurance Fund.
Great Plains argues that inasmuch as it was prevailing party in a contract action for open account or statement of account, it is entitled to attorney's fees under 12 O.S.2001 § 936, and further that if § 936 be held not applicable, it would be entitled to fees under § 941 for successfully defending a frivolous suit brought by a state agency.
I. Section 936 and Insurance Contracts
The underlying nature of the cause of action determines the applicability of § 936. Natkin & Co. v. Midwesco, Inc., 1993 OK 143, 863 P.2d 1222, 1225. The State Insurance Fund alleged the existence of a contract for insurance and an unpaid premium. May § 936 fees be awarded on an action to recover an insurance premium as asserted by Great Plains? Remarkably, this issue has never been squarely addressed by this Court. We answer in the negative, as we now explain.
Section § 936 states as follows:
In any civil action to recover 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, or for labor or services, unless otherwise provided by law or the contract which is the subject to 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.
12 O.S.2001 § 936.
In Kay v. Venezuelan Sun Oil Co., 1991 OK 16, 806 P.2d 648, we said the following:
As originally enacted, § 936 authorized the award of attorney fees for collection on an open account, and was subsequently amended to include seven additional specific categories evidencing contractual indebtedness sought to be recovered. Our strict application rule preserves the obvious legislative intent to authorize awards of attorney fees to the prevailing parties in actions for money judgments for debts created by the contracts enumerated in the statute.
Id. 806 P.2d at 651-652, note omitted.
We explained that the history of amendments to § 936 resulted in authorizin
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