SMITH v. JENKINS

OPALA, Justice.

The dispositive issue on certiorari is whether, in comparative-negligence litigation, where both parties prevail on their respective claim and compulsory counterclaim arising from the same tortious event, controlling statutory and fundamental law requires that each party litigant be allowed an attorney's fee for the successful prosecution of its own claim and that the amount awarded be reduced by the percentage of negligence found by the fact trier? We answer in the affirmative.

I

THE ANATOMY OF LITIGATION

In May of 1989 the automobiles driven by appellant Leroy R. Smith [Smith] and appellee Debra Jean Jenkins [Jenkins] collided, with damage occasioned to both vehicles. Smith sued Jenkins for property loss and Jenkins brought a counterclaim for like recovery. After a jury-waived trial the court found the parties to have been equally at fault; in conformity to the comparative-negligence statute, 23 O.S. 1981 § 13,1 the nisi prius judgment went to each party for 50% of its property damage — $645.34 to Smith and $1,290.68 to Jenkins.

By their post-judgment motions both parties sought attorney's fee, invoking the provisions of 12 O.S. 1981 § 940.2 The trial court concluded that (a) in an action arising from the same occurrence there can be only one prevailing party and (b) because the amount of the judgment on Jenkins' compulsory counterclaim3 exceeded that recovered by Smith, Jenkins, qua prevailing party, was entitled to costs and attorney's fee against Smith. Smith appealed from the nisi prius denial of his quest for counsel-fee award as the prevailing party on his own claim and from the counsel-fee ruling in Jenkins' favor.

The Court of Appeals affirmed, holding that where, as here, claims are "inexorably interrelated" — because they arise from the same transaction — and a judgment goes to both parties, one against the other, the party with the greater amount, or a "net judgment", is the sole prevailing party in the case who is entitled to an award of attorney's fee.4 We granted certiorari on Smith's petition for review of the Court of Appeals' counsel-fee pronouncement.

II

THE PARTIES' ARGUMENTS

Smith asserts that in applying the net-recovery test to determine one's prevailing-party status, the Court of Appeals erroneously assumed an automatic setoff of the respective awards, contrary to controlling Oklahoma jurisprudence.5 Under 12 O.S. 1981 § 940(A) and (B),6 Smith argues, a plaintiff is the "prevailing party" if he/she recovers a judgment, except only in those cases where the plaintiff's recovery is not more than the amount of defendant's offer.7 By not making a pretrial offer, Smith points out, Jenkins failed to trigger the statutory mechanism by which she might have become the prevailing party.

The "one judgment," "one prevailing party" and "net judgment" analytical approach for identifying a litigant as "prevailing party" in an action, Smith argues, is neither compatible with the comparative-negligence regime nor equitable in the context of this case scenario. According to Smith, the law's policy of an automatic, inflexible setoff of mutual awards for assessment of counsel fee to the "victor" undermines the very purpose of the apportionment-of-negligence concept and would result in one party's recovery that is grossly disproportionate to the adjudged percentage of its fault. Lastly, Smith urges that certain controlling or strongly persuasive Oklahoma jurisprudence, overlooked by the Court of Appeals, supports his position that under some circumstances there can be in the same action more than one prevailing party entitled to an attorney's fee.8

Jenkins repeats the perceived teaching that there can be but one prevailing party in an action where, as here, claims are not separate and distinct,9 but all interrelated because they arise from the same occurrence or transaction. According to Jenkins, the party recovering the greater amount (or the net judgment) is the only "statutory prevailing party" who is entitled to a counsel-fee award.10

III

UNDER THE FACTS OF THIS CASE, BOTH THE STATE FUNDAMENTAL AND STATUTORY LAW CALL FOR RECOGNIZING BOTH PARTIES, WHO WERE VICTORIOUS ON THEIR RESPECTIVE CLAIMS, AS PREVAILING PARTIES IN THE ACTION

Section 940 Viewed In Light Of The Comparative-Negligence Regime

Before the advent of our comparative-negligence regime, a plaintiff's contributory negligence11 operated at common law as a complete bar to recovery. No recovery could be had if a plaintiff's slight negligence combined with the substantial fault of the defendant to produce the loss in suit. The harsh result of this "winner-take-all" approach led to the enactment of our comparative negligence statute. The latter regime apportions the loss among those whose fault contributed to the harm-dealing event.12 Under Oklahoma's "modified" comparative-negligence scheme, prescribed by 23 O.S. 1981 §§ 1313 and 14,14 when the litigants are equally at fault, each party is liable for that proportion of the other's damage which is attributable to its own substandard conduct.15

In assessing counsel-fee expenses against one's vanquished opponent we generally follow the American rule.16 The prevailing party may not recover an attorney's fee against its adversary absent some authorizing statute or contract.17

The parties in this appeal agreed that § 940(A) governs the counsel-fee regime for this case. The term "prevailing party" has been construed to mean one (a) who, at the conclusion of the case, has an affirmative judgment in its favor18 or (b) who has secured a net recovery on its own claim.19

It would greatly undermine, if not indeed offend, the comparative-negligence regime if in the case at bar the litigant with a net recovery were declared the only prevailing party in the action. The § 940 counsel-fee statute must be construed together with both our comparative-negligence system as well as with the inexorable command of Art. 23, § 6, Okl. Const.20 The last cited source of our law makes both primary and contributory negligence an issue of fact.21 Were we to allow the party gaining net recovery to be considered the prevailing party in the action, even when both parties are adjudged equally liable on their interrelated claims for the same tortious event, one's prevailing-party status would be assessable on the basis of pure fortuity — one litigant's higher amount of monetary loss than that of its adversary. This result would lead to a grossly disproportionate aggregate recovery for the party with a net recovery. The latter could "tack on" a generous counsel fee against the less damaged opponent.

When the applicable counsel-fee enactment (§ 940) and the comparative-negligence statutes (§§ 13, 14) are construed together, as they must, it is at once clear that in comparative-negligence cases — where, as here, both parties prevail on a claim and compulsory counterclaim that arise from the same tortious event — each party prevailing on its own claim against the other must be allowed a counsel-fee award, which, once ascertained, should be reduced by the percentage of negligence ascribed by the fact trier.22

Extant jurisprudence pressed on us by Jenkins, which teaches that there can be but one judgment and hence only one prevailing party for allowance of a counsel-fee award,23 is factually distinguishable from the present scenario. None of the cited cases arose in context of comparative-negligence litigation. To the extent that these authorities could be construed as contrary to today's pronouncement, they may no longer be regarded as a correct exposition of legal principles that govern comparative-negligence litigation.

The counsel-fee approach we announce today is entirely consistent with that in our general cost statutes, 12 O.S. 1991 §§ 938,24 92925 and 930.26 By the terms of §§ 928 and 929 a successful plaintiff or defendant is entitled to costs from the vanquished adversary in actions for the recovery of money only or for the recovery of specific, real or personal property.27 Section 930, on the other hand, unequivocally provides that in other actions the court may tax costs and apportion them between the parties as it might think right and equitable. In Moses v. Hoebel,28 we raised the question whether an attorney's-fee award should be regarded as a taxable item of costs or an additional element of recoverable damage. We need not today settle this legal doubt, if there be one. Our conclusion would be the same whether counsel fee were termed "recovery" or "costs". If the fee allowance to be authorized in this case may be treated as an element of recovery, the comparative-negligence law would most certainly compel that, like damages, it be reduced by the percentage of fault. But if the fee is to be viewed as an item of costs, the governing statute, § 930, calls, with equal force, for the item's equitable apportionment. That apportionment is best rested on the fact trier's resolution of the merits.

SUMMARY

The single-party-victory approach to an allowance of attorney's fee in this case would offend the comparative-negligence regime. Controlling statutory and fundamental law requires that in negligence litigation counsel-fee pleas by victorious parties be allowed in the same manner as their damages are reduced. When § 940 — the counsel-fee statute here in dispute — is construed together with the applicable principles of our comparative-negligence law (§§ 13, 14), the general cost enactment (§ 930), as well as with the command of our fundamental law (Art. 23, § 6) that governs trials of negligence issues, it is clear that parties who stand victorious on their respective claims for the same tortious event are each entitled to a counsel-fee allowance against the other, which award, once ascertained, must be reduced by the fact trier's percentage allocation of negligence. Today's departure from our general counsel-fee regime under prevailing party statutes will apply only in comparative-negligence cases to claims and compulsory counter-claims for the same tortious event. We hence direct that on remand a reasonable attorney's fee for each of the two successful litigants for their trial-29 and appeal-related services be determined and then diminished (or reduced) in the same manner as that party's damage to its property.30

ON CERTIORARI PREVIOUSLY GRANTED, THE COURT OF APPEALS' OPINION IS VACATED, THE TRIAL COURT'S POST-JUDGMENT COUNSEL-FEE RULING IS REVERSED, AND THE CAUSE REMANDED FOR FURTHER PROCEEDINGS NOT INCONSISTENT WITH THIS PRONOUNCEMENT.

LAVENDER, V.C.J., and HARGRAVE, ALMA WILSON and KAUGER, JJ., concur.

SUMMERS, J., concurs in result.

HODGES, C.J., and SIMMS and WATT, JJ., dissent.