KEOTA MILLS ELEVATOR v. GAMBLE

EDMONDSON, C.J., dissenting.

¶ 28 The majority has determined this matter on an issue — tolling under 12 O.S. 2001, § 101[ 12-101] — which was not framed or argued by the parties. This 2001 action on a 1989 promissory note was submitted to the trial court by the parties as an agreed question of law on stipulated facts and we are not free to substitute our own issues for those issues which were actually presented below.

¶ 29 It is well settled that appellate courts are not free to raise issues sua sponte and address claims or defenses that the parties did not present in the court below. Jordan v. Jordan, 2006 OK 88, 151 P.3d 117, 120. Our decisions recognize that in a case such as this where the parties have submitted their case to the trial court on an agreed statement of facts, it is our duty on appeal to apply the law to those facts as a court of first instance and to direct judgment accordingly. Rist v. Westhoma Oil Co., 1963 OK 126, 385 P.2d 791, 792; Landy v. First National Bank Trust Co. Of Tulsa, 1962 OK 12, 368 P.2d 987, 989. A judgment based on an agreed statement of facts is a mere legal conclusion on such facts and the only question presented for review is the propriety of the judgment on the facts so agreed upon. Anderson v. Keystone Supply Co., 1923 OK 410, 93 Okla. 224, 220 P. 605, 605-606.

¶ 30 In Whitten v. Kroeger, 183 Okla. 327, 82 P.2d 668, 671 (1938), an action brought to recover on a promissory note was submitted to the trial court upon an agreed statement of facts and we rejected the defendants' attempt to raise for the first time on appeal the defense of a statute of limitations which they had not raised by the agreed statement of facts. Another limitations statute had been raised below, but it was held inapplicable and not subject to review. Based on previous decisions, this Court found that where a case is submitted on an agreed statement of facts, that agreed statement supersedes the pleadings and the only question which may be considered is whether such facts require judgment for plaintiff as a matter of law. McGrath v. Rorem, 123 Okla. 163, 252 P. 418, 419-420 (1926), followed the general rule that where facts are submitted to the court by agreement, it is necessary only for the court to apply the law to those facts; further, that only questions of law are raised for review on appeal. The Court concluded that such an agreement has the effect of waiving any error in the action of the court in its rulings on the pleadings. See also Goodwin v. Kraft, 23 Okla. 329, 101 P. 856, 859 (1909).

¶ 31 The parties before us agreed to their statement of facts and submitted to the trial court the legal issue of which statute of limitations applied to the action on the subject promissory note: was it five years under 12 O.S. 1981 § 95, which was in effect when the note was executed, or six years under 12A O.S. Supp. 1992 § 3-118[ 12A-3-118](a), which was enacted after the note was executed. The parties stipulated that the time period which was the focus of concern was March 5, 1991 to October 18, 1996, during which time defendant made no payments on the note. The parties agreed that if the five year general statute applied, plaintiffs cause of action would be time barred because defendant's October 18, 1996 payment was beyond five years from the March 5, 1991 payment. Conversely, if the six year limitation of 12A O.S. Supp. 1992 § 3-118[ 12A-3-118](a) should apply and be given retroactive application, the matter would proceed to trial on the merits as a result of defendant's October 18, 1996 payment, which was within the 6 year period from the prior March 5, 1991 payment, creating another 6 year period and making the September 28, 2001 filing of suit timely. Which limitations statute applied is the question the parties framed and submitted to the trial court and then to us. The trial court found that 12A O.S. Supp. 1992 § 3-118[ 12A-3-118](a) could not be applied retroactively and that the statute of limitations applicable to the action was five years under 12 O.S. 95. The trial court accordingly dismissed Plaintiffs suit as time-barred as it was filed fewer than six years but more than five years after the 1996 payment, as agreed upon by the parties. In this appeal from an agreed question it is our duty to apply the law to the question submitted by the parties and answered by the trial court.

¶ 32 I believe the trial court's ruling that 12A O.S. Supp. 1992 3-118(a) could not be applied retroactively was correct and I would affirm its judgment in favor of defendant.

WATT, J. dissenting.

¶ 1 The majority opinion not only calls into question, but essentially destroys, over ninety-five years of precedent laid down by this Court. After publication of the majority's pronouncement, the practice of utilizing "trial stipulations" as we have known it and its effectiveness in streamlining the trial process will be forever lost. The opinion's change of the rules regarding trial preparation: blind sides the appellee/defendant, Othel Gambel, Jr. (Gamble), without any opportunity for a response to an issue first considered sua sponte on appeal; robs Gamble of the trial court's discretionary award of a lodestar and bonus fee where no abuse of discretion in allowing either award exists; causes an unnecessary waste of judicial resources by creating a situation where the trial court must hear the testimony of witnesses in a situation where it was obvious previously that no such testimony was required; and surprises the appellant/plaintiff, Keota Mills Elevator (Keota), with a late Christmas present, tied up in ribbon and bows created out of whole cloth by the majority through the changing of all the rules and by declaring it the winner on grounds neither party thought were relevant or even part of the rule book.

¶ 34 The concurring opinion lends no credence to the majority position. Rather, it is a blatant demonstration of the lengths to which the majority will go to reach a result in an individual cause without giving any fidelity or allegiance to the importance of stipulation law as it has developed in Oklahoma over the last century.

¶ 35 Most certainly, if the majority prevails, the only appropriate manner in which to handle this cause is to make it prospective to this cause and in all others which may be in the appellate pipeline. Otherwise, this Court has, through judicial fiat, set a snare for unsuspecting litigants, lawyers, and trial courts who were well versed in stipulation law as it stood throughout this litigation and by which they understood themselves to be governed. Failure to apply the majority opinion prospectively deprives those who have relied on this Court's pronouncements of due process protections.

¶ 36 My allegiance to precedent carefully and thoughtfully crafted by this Court over almost a century and my oath of office prevent me from participating in a decision which will have unwarranted legal ramifications and place this Court in the position of a "Supreme Trial Panel." Therefore, I dissent. The only way to keep from completely disrupting this cause and any other currently pending is to give absolute prospective application to the majority's surprising defection from well-settled stipulation law.

¶ 37 The only applicable facts in the instant cause are those to which the parties stipulated in a hearing scheduled before the trial court on September 12, 2005. On the record, the parties agreed that whether the cause should proceed would be governed by a single issue: whether the five-year or the six-year statute of limitations should apply. If as Gamble contended and the five year statute of limitations governed the cause, the collection effort would be barred. Conversely, if Keota was successful in its attempt to apply the six-year statute of limitations, the cause would proceed for a determination of the balance due on the note along associated issues.

¶ 38 When argued to the trial court on November 17, 2005, the parties presented the statute of limitations as the "crux" of the issue. In preparing its order, filed on January 12, 2006, the trial court recognized that the cause was to be governed by the parties' binding stipulations and that the first step in the adjudication would be to determine the applicable statute of limitations period. In ruling that the cause was governed by the five-year limitations period, the trial court again recognized the stipulations and agreement of the parties.

¶ 39 In Maule v. Independent School Dist. No. 9 of Tulsa County, 1985 OK 110, ¶ 7, 714 P.2d 198, we held the union and the employer to stipulations entered defining the bargaining unit on grounds that parties to a contract are bound by the stipulated terms thereof. In White v. Amoco Prod. Co., 1985 OK 55, ¶ 8, 704 P.2d 470, Niemeyer v. United States Fidelity Guaranty Co., 1990 OK 32, ¶ 12, 789 P.2d 1318, and Mehdipour v. State ex rel. Dept. of Corrections, 2004 OK 19, ¶ 5 n. 9, 90 P.3d 546, not only did this Court not sua sponte raise issues not presented to the trial court on appeal, but also we refused to allow the parties to engage in the activity. In Westinghouse Elec. Corp. v. Grand River Dam Auth., 1986 OK 20, ¶ 17 n. 11, 720 P.2d 713 and Tulsa County Budget Bd. v. Tulsa County Excise Bd., 2003 OK 103, ¶ 18 n. 31, 81 P.3d 662, we refused to issue advisory opinions. Furthermore, in Tulsa County, the Court acknowledged that it was bound by the record presented for review. Inexplicably, the author of each of the above cited cases is the same Justice authoring the majority opinion here.

¶ 40 Here, the majority ignores the teachings of all these causes. It throws out stipulations that the parties and the trial court agreed were determinative of the issue to be decided. The majority decides the cause on an issue which was never presented to the trial court and which it raises sua sponte. Finally, it issues an advisory opinion on an issue which can be found nowhere in the record presented either to the trial court or on appeal. The practical result of adopting the majority opinion is to overrule all the cases cited in ¶ 5 to the extent that they conflict with today's pronouncement.

¶ 41 The majority does not attack the opinions relied upon herein regarding the history of the sanctity of stipulations and their place in the resolution of issues before the trial court, because it cannot. Rather, the majority takes issue with the statement that "[t]he majority decides the cause on an issue which was never presented to the trial court and which it raises sua sponte." In so doing, it again "misses the point." The fact that the parties may have mentioned in closing arguments a statute which their stipulations make inapplicable will not justify the kind of judicial avarice represented by the majority's ignoring the specific stipulations made and presented to the trier of fact as governing the cause.

¶ 42 The majority's reference to the syllabus in First Nat'l Bank of Cordell v. City Guaranty Bank of Hobart, 1935 OK 1105, 174 Okla. 545, 51 P.2d 573 as standing for the proposition that parties may not affect the law applied to a cause by the Court through the utilization of stipulations is misplaced. In First Nat'l, the Court determined that the garnishee could not affect the jurisdiction of the trial court by stipulation. The holding in First Nat'l is consistent with case law which refused to allow parties' stipulations to confer jurisdiction where none existed.

¶ 43 In a more recent decision, State ex rel. State Ins. Fund v. JOA, Inc., 2003 OK 82, 78 P.3d 534, we held that the State Insurance Fund would be bound by its stipulation during litigation that a specific attorney fee statute would apply to the action. In so doing, we recognized that the Court was being presented with a stipulation of law. We also acknowledged that limitations existed on stipulations involving the power and structure of government.

¶ 44 The JOA Court relied heavily on a cause authored by Justice Opala, Strelecki v. Oklahoma Tax Comm'n, 1993 OK 122, 872 P.2d 910. In that case, we noted that the Tax Commission had entered a stipulation on an issue of law and taken inconsistent positions on issues of law. In addressing the extent to which the Tax Commission was bound by its counsel's argument in the litigation, the Strelecki Court stated the following:

A party on appeal cannot take a position inconsistent with that maintained before a trial tribunal. While this court may decide a public-law case on dispositive issues, it will not relieve a party of a solemn commitment to a position argued both below and on appeal unless it is so contrary to the applicable law that it would amount to an ultra vires act. . . . The Commission will not be heard — at this late hour — to deny liability upon a changed interpretation of the state's remedial regime for refunds. The government stands before us on the footing of an ordinary appellee. It will not receive a more favorable treatment than that afforded other appellate litigants in a similar situation. [Footnotes omitted. "Bold" added for emphasis.]

The above quotation is supported by authority recognizing that: neither party on appeal will be allowed to change the theory of the case from that on which it was presented to the trial court; and, parties are bound in the appellate court by the theories on which a case was tried below. Nevertheless, the majority here strips private parties of the protections granted by this Court's jurisprudence on stipulations where it would not do so to a State agency. There can be no justice in such a result.

¶ 45 For the most part, the concurring opinion is interesting in what it does not do. First, in its exposition on what it perceives as being the dividing line between the duties of a trial court and those of appellate adjudicator, it finds little support in Oklahoma law. It does rely upon an opinion authored by Justice Opala, Broadway Clinic v. Liberty Mutual Ins. Co., 2006 OK 29, 139 P.3d 873, as one such cause which delineates the differences between a trial court's fact finding and this Court's appellate review. In that opinion, Justice Opala wrote the following:

". . . It is not the function of this court to make first-instance determinations of fact or legal questions which have been neither raised nor assessed at nisi prius . . . " [Bold added.]

As noted, the issue upon which the majority decides this cause was merely mentioned in arguments before the district court. It was not presented as a deciding factor for consideration by the trial tribunal.

¶ 46 The second thing which is interesting for its lack of discussion by the concurring opinion is any attempt to distinguish Strelecki v. Oklahoma Tax Comm'n, 1993 OK 122, 872 P.2d 910. Justice Opala authored Strelecki in which he emphasized that this Court will not relieve parties of the "solemn commitment" taken before the finder of fact.

¶ 47 Even if the result which the majority proposes would be appropriate under its analysis, it cannot bind these parties. To do so would be patently unfair. It "changes the rules of the game" which, heretofore, had been settled by precedent-setting jurisprudence at the time the cause was heard by the trial court. Due process requires adequate notice to parties whose rights may be adversely affected by judicial action. As Justice Opala stated for the majority in footnote No. 21 of McDaneld v. Lynn Hickey Dodge, Inc., 1999 OK 30, 979 P.2d 252:

"The standard of fairness exacted by the Due Process Clause mandates that notice meeting minimum constitutional standards precede judicial action. . . . Notice must be reasonably calculated to inform interested parties of every critical stage so as to afford them an opportunity to meet the issues at a meaningful time and in a meaningful manner. . . ." [Citations omitted.]

Here, all the parties, along with the trial court, will be amazed to discover that the rules they all thought were applicable are inapposite to this proceeding. Due process necessitates, just as it did in McDaneld, that the majority opinion be given completely prospective application.

¶ 48 Before today, stipulations were solemn admissions binding on the parties and the court. They were agreements between counsel concerning the business before the court and were a favored means to shorten, clarify or settle litigation. Stipulations have served as evidentiary substitutes dispensing with the need to take testimony. Through the use of stipulations, parties could expand or contract issues for determination. Having done so, they were bound by the same. That was the well-settled law in Oklahoma before today's majority opinion.

¶ 49 Today's pronouncement is a death knell to trial practice and procedures as we and the practicing bar have known it for over nine decades. Every case, now in the appellate pipeline along with those to be appealed in the future will be adversely affected. No longer may trial stipulations be agreed to and faithfully followed, as did the trial court below, with any confidence. Instead, the parties, the sitting trial judges, and the practicing bar must realize that such stipulations are now "fresh meat" for any appellate court to carve up as it sees fit. Those tribunals are now free to go outside the stipulated records and "make it up as they go along."

¶ 50 I cannot now nor shall I ever in the future turn this Court into a "Supreme Trial Court" with the unlimited ability to give "overs" where none have heretofore been allowed. To do so, would require that ninety-five years of precedent be trampled and result in my violating my oath of office. As I will do neither, I dissent.

¶ 51 The only way to guarantee that the litigants here and those who may have made stipulations upon which trial tribunals have relied in their decisions to be guaranteed the constitutional protections of due process is to make the majority's pronouncement completely prospective. In so doing, the change in stipulation practice forecasted by the majority opinion would have no effect in the present cause or in those now pending in the appellate pipeline.