text:
    SANTA MARGARITA ST TRUST, Appellant, v. JPMORGAN CHASE BANK, N.A., Respondent.
    No. 77136
    Supreme Court of Nevada.
    FILED AUGUST 16, 2019
    DISMISSED.


source: Caselaw Access Project

license: Public Domain

text:
    Allen Stanislouis HEUSNER, Appellant, v. The EXECUTIVE DEPARTMENT of the State of Nevada; Governor Brian Sandoval, and Former Governors; Steven Wolfson, Clark County District Attorney; Attorney General of the State of Nevada Adam Laxalt; the Legislature of the State of Nevada; Patricia "Pat" Spearman; Moises "MD" Denis; "Tick" Segerblom; Kelvin Atkinson; Joyce Woodhouse; Nicole Cannizzaro; David Parks; Patricia Farley; Becky Harris; Yvanna D. Cancela; Aaron D. Ford; Joseph "Joe" P. Hardy, M.D.; Julia Ratti; Don Gustavson; Heidi S. Gansert; Ben Kieckhefer; James A. Settlemeyer; Scott T. Hammond; Pete Goicoechea; Michael Roberson; Mark A. Manendo; Daniele Monroe-Moreno; John Hambrick; Nelson Araujo, Jr.; Richard McArthur ; Brittney Miller; William McCurdy, II; Dina Neal; Jason Frierson; Steve Yeager ; Chris Brooks; Olivia Diaz ; James Ohrenschall; Paul Anderson; Maggie Carlton; Elliot Anderson ; Heidi Swank; Tyrone Thompson; Richard A. Carrillo; Chris Edwards; Ellen Spiegel ; Ozzie Fumo; Keith Pickard ; Melissa Woodbury; Amber Joiner; Jill Tolles; Lisa Krasner; Teresa Benitez-Thompson; Edgar Flores; Lesley Elizabeth Cohen; Michael Sprinkle; Richard "Skip" Daly; Ira Hansen; John Ellison ; Shannon Bilbray-Axelrod; Justin Watkins ; James Oscarson; Jim Marchant; Robin L. Titus ; Jim Wheeler; Al Kramer ; Sandra Jauregui; Irene Bustamente Adams, and Past Legislatures; the Judicial Department of the State of Nevada; the Supreme Court of the State of Nevada; the Court of Appeals of the State of Nevada; Judge Justices, Ron Parraguirre; James W. Hardesty; Michael L. Douglas ; Michael A. Cherry ; Mark Gibbons; Kristina Pickering; Lidia Stiglich; Michael Gibbons; Jerome Tao; Abbi Silver, and Past Judges and Justices of the Supreme Court of the State of Nevada, Respondents.
    No. 79076
    Supreme Court of Nevada.
    FILED AUGUST 16, 2019
    Dismissed.


text:
    Ruben MARQUEZ-AGAPITO, Individually, Appellant, v. Robert CALDERON, Individually, Respondent.
    No. 77934
    Supreme Court of Nevada.
    FILED AUGUST 14, 2019
    Dismissed.


text:
    In the MATTER OF the GUARDIANSHIP OF the Person and Estate of Sean Lester KAZI, an Adult Protected Person.
    Sean Lester Kazi, Appellant, v. Nazir Kazi; and Kathleen Ann Kazi, Respondents.
    No. 78371
    Supreme Court of Nevada.
    FILED AUGUST 16, 2019
    DISMISSED.


text:
    Maurice Alfonso GARCIA, Appellant, v. The STATE of Nevada, Respondent.
    No. 78269
    Supreme Court of Nevada.
    FILED AUGUST 16, 2019
    DISMISSED.


text:
    Mary C. BARONE, Individually, Appellant, v. COAST HOTELS AND CASINOS, INC., a Nevada Corporation d/b/a Gold Coast Hotel and Casino, Respondent.
    No. 76013
    Supreme Court of Nevada.
    FILED AUGUST 16, 2019
    DISMISSED.


text:
    Billy CEPERO, Appellant, v. The STATE of Nevada, Respondent.
    No. 79184
    Supreme Court of Nevada.
    FILED AUGUST 16, 2019
    DISMISSED.


text:
    Skylar Gene MENDONCA, Appellant, v. The STATE of Nevada, Respondent.
    No. 78854
    Supreme Court of Nevada.
    FILED AUGUST 23, 2019
    DISMISSED.


text:
    Frank Milford PECK, Appellant, v. The STATE of Nevada; Washoe County; Washoe County Crime Lab; Rene Romero, Director; and Jeffrey Riolo, Sr. Analyst, Respondents.
    No. 79240
    Supreme Court of Nevada.
    FILED AUGUST 20, 2019
    Dismissed.


text:
    Manuel Alfredo PENA; and Mirna Elizabeth Pena, Appellants, v. FEDERAL NATIONAL MORTGAGE ASSOCIATION, Respondent.
    No. 78303
    Supreme Court of Nevada.
    FILED AUGUST 20, 2019
    Dismissed.


text:
    Jack L. COCHRAN, an Individual; and Barbara Cochran, an Individual, Appellants, v. VANDERBILT MORTGAGE AND FINANCE, INC., Respondent.
    No. 77301
    Supreme Court of Nevada.
    FILED AUGUST 20, 2019
    Dismissed.


author: OPINION BY P. THOMAS THORNBRUGH, JUDGE:

text:
    In the Matter of the ESTATE OF Margaret J. STOLBA:
    Daniel W. Lowther, Personal Representative of the Estate of Margaret J. Stolba, Deceased, Appellant, v. Mark S. Stolba, Appellee.
    Case No. 116,512
    Court of Civil Appeals of Oklahoma, Division No. 2.
    FILED July 8, 2019 Mandate Issued: August 7, 2019
    Trey Abraham, Louis Abraham III P.C., Tulsa, Oklahoma, for Appellant
    James H. Ferris, Blake M. Feamster, MOYERS MARTIN, LLP, Tulsa, Oklahoma, for Appellee
   OPINION BY P. THOMAS THORNBRUGH, JUDGE:

¶1 Daniel W. Lowther, as personal representative of the estate of Margaret J. Stolba, deceased (Decedent), appeals a decision by the district court finding that a restriction on the alienation of property in the Decedent's will was invalid, and distributing the subject property to decedent's heirs.

BACKGROUND

¶2 Decedent's will was admitted for probate in December 2012. It was evidently composed by Decedent without legal assistance. Among its provisions was this:

The home stead will remain in trust, Not to be sold or split. All four of you have got to get along. Work it out, you should be able to have fun doing things there. Everyone should behave themselves. (sic)

In January 2017, probate was still open, and one of Decedent's sons, Mark S. Stolba, filed an application to distribute the remaining property in the form of the homestead because either 1) the "trust" failed for lack of required elements, or 2) the homestead provision created an unenforceable perpetuity or restriction on alienation.

¶3 In October 2017, the district court entered a decree of distribution, distributing the homestead to Decedent's four children, per the rules of intestate succession. Representative Daniel Lowther filed a motion for new trial, which was denied. He now appeals.

STANDARD OF REVIEW

¶4 Probate proceedings are of equitable cognizance. In re Estate of Holcomb , 2002 OK 90, ¶ 8, 63 P.3d 9. We will not disturb the trial court's decision unless it is "found to be clearly contrary to the weight of the evidence or to some governing principle of law." In re Estate of Maheras , 1995 OK 40, ¶ 7, 897 P.2d 268. This matter involves questions of statutory interpretation. We are required to review questions of law, such as the construction of statutes, under a de novo standard of review. In re Estate of Jackson , 2008 OK 83, ¶ 9, 194 P.3d 1269.

ANALYSIS

¶5 Appellant states the following questions on appeal, which we reproduce below.

1. Whether the trial court erred in granting Appellee's application for distribution in that Appellee did not contest the validity of the admitted will within 90 days and by the operation of 58 O.S. § 67, the probate is conclusive and the trial court did not have jurisdiction to hear and decide the application for distribution.

2. Whether the trial court erred in granting Appellee's application for distribution in that he did not contest the validity of the admitted will within 90 days and by the operation of 58 O.S. § 67, the application for distribution was time barred.

3. Whether the trial court erred in granting Appellee's application for distribution in that the application was not a sworn petition as required by 58 O.S. § 61.4.

4. Whether the trial court erred in granting Appellee's application for distribution in that no citations were served on the executors, legatees, devisees and heirs within the state as required by 58 O.S. § 62.

5. Whether the trial court erred in granting Appellee's application for distribution in that the order admitting the will to probate establishes the will as valid and was never revoked.

6. Whether the trial court erred in granting Appellee's application for distribution in that the testamentary trust in the admitted will contained a power to sell, exchange or otherwise convey the real or personal property vested in Appellant, and by the operation of 60 O.S. § 175.47 the Rule Against Perpetuities is not violated and the testamentary trust may exist in perpetuity.

7. Whether the trial court erred in granting Appellee's application for distribution in that the testamentary trust in the admitted will must be construed and or reformed to avoid invalidity based on the Rule Against Perpetuities by the operation of 60 O.S. § 75.

8. Whether the trial court erred in granting Appellee's application for distribution in that the testamentary trust in the admitted will must be construed and/or reformed to avoid invalidity based on the Rule against Perpetuities by the operation of 60 O.S. § 77.

¶6 The core question before us is whether the "trust" provision of the will represents an unenforceable perpetual ban on the alienation of real property. We will first address Appellant's jurisdictional arguments, however. These arguments appear to arise from a fundamental misunderstanding of the legal nature of the proceedings. Appellant argues that Appellee attempted to contest the validity of the will , thereby rendering it entirely ineffective, and forcing an intestate probate, and that the district court rejected the will and proceeded with an intestate distribution. This is incorrect. Appellee's "application for distribution" specifically requested that the court find the will valid, and requested the court to interpret whether a specific clause of the will was legally enforceable.

I. The Operation of 58 O.S. § 67

¶7 Appellant argues that, by the operation of 58 O.S. § 67, the probate was "conclusive" three months after the will was admitted, and the trial court did not have jurisdiction to hear and decide the application for distribution. This argument arises from a misreading of § 67. Section 67 must be read in conjunction with 58 O.S. § 61, which states:

When a will has been admitted to probate, any person interested therein may at any time within three (3) months from the date the will was admitted to probate contest the same or the validity of the will. For that purpose he must file in the court in which the will was proved a sworn petition in writing containing his allegations, that evidence discovered since the probate of the will, the material facts of which must be set forth, shows:
1. That a will of a later date than the one proved by the decedent, revoking or changing the will, has been discovered, and is offered; or
2. That some jurisdictional fact was wanting in the probate; or
3. That the testator was not competent, free from duress, menace, fraud, or undue influence when the will allowed was made; or
4. That the will was not duly executed and attested.

¶8 Section 61 makes it clear that challenges to the validity of the will in toto, or to probate jurisdiction must be made within three months of a will's admission to probate. This does not include any request to interpret a specific clause, including the argument here that the alienation clause of the will is legally unenforceable. A party requesting that the court interpret a provision of a will inherently relies on the premise that a valid will exists.

II. The Sworn Petition As Required by 58 O.S. § 61(4)

¶9 Appellant's next argument springs from the same misapprehension. Section 61 regulates challenges to the validity of a will in toto , but not requests to interpret a particular provision. No "sworn petition" is required in these circumstances.

III. "The Service of Citations on the Executors, Legatees, Devisees and Heirs Within the State As Required by 58 O.S. § 62."

¶10 The same argument applies here. The provisions of 58 O.S. §§ 61 through 67 govern attempts to have the document presented as the testator's will declared invalid, but not requests for distribution or to interpret the will's provisions.

IV. Whether the Trial Court Erred In Granting Appellee's Application for Distribution In That the Order Admitting the Will to Probate Establishes the Will As Valid and Was Never Revoked

¶11 This argument also springs from the misapprehension that Appellee was attempting to "revoke" the admission of the will to probate. It is not valid in this context.

V. The Question of the "Trust" Provision

¶12 We now return to the core question. The will contained two significant provisions. The first was the "homestead" provision, which stated (sic):

The home stead will remain in trust, Not to be sold or split. All four of you have got to get along. Work it out, you should be able to have fun doing things there. Everyone should behave themselves.

The second is the "powers" provision, which states:

I name and appoint Daniel W. Lowther and Teresa Michele Lauscher as Co-Personal Representatives and request that they accept appointment. ... Without limiting any powers conferred by law, I declare that they shall have the power to sell, lease, mortgage, and dispose of all or any part of my estate without the necessity of obtaining court approval ... and to do all other acts related to administration and disposition of my estate that are required of them as Personal Representatives.

¶13 The first provision, as written, apparently violates the first part of 60 O.S. § 175.47 - Suspension of absolute power of alienation-Period of suspension.

A. Except as otherwise provided in subsection B of this section, the absolute power of alienation of real and personal property, or either of them, shall not be suspended by any limitations or conditions whatever for a longer period than during the continuance of a life or lives of the beneficiaries in being at the creation of the estate and twenty-one (21) years thereafter.

¶14 The mandate that the homestead is "not to be sold or split" without a time limitation facially violates § 175.47. Appellant argues, however, that this directive is saved by the second part of § 175.47 which states:

The absolute power of alienation is not suspended if there is any person in being who, alone or in combination with one or more others, has the power to sell, exchange, or otherwise convey the real or personal property.

¶15 Appellants argue that, pursuant to the second part of § 175.47, there is a person in being who has the power to sell the real property because of the clause stating that the Co-Personal Representatives "have the power to sell, lease, mortgage, and dispose of all or any part of my estate."

¶16 The will is specific that the property is "not to be sold." If the Co-Personal Representatives had attempted to sell a validly restrained property pursuant to their general powers of sale , we are certain that this specific restraint would control over the general power. We find that the provisions of the will permanently suspending the power of alienation as to the homestead are not saved by the grant of a general power of sale to the Co-Personal Representatives.

VI. "Reformation"

¶17 Appellant next argues that the combination of 60 O.S. § 75, "Reformation of interests violating rule against perpetuities," and 60 O.S. § 77, "Reformation of offending instruments," required the trial court to essentially re-write the "homestead" clause of the will to make it compliant with the alienation prohibition of § 175.47. These statutes state:

60 O.S. § 75 - Reformation of interests violating rule against perpetuities-Intent
Any interest in real or personal property that would violate the rule against perpetuities shall be reformed, or construed within the limits of the rule, to give effect to the general intent of the creator of that interest whenever that general intent can be ascertained. This provision shall be liberally construed and applied to validate such interest to the fullest extent consistent with such ascertained intent.
60 O.S. § 77 - Reformation of offending instruments
If an instrument violates the rule against perpetuities, but can be reformed or construed in accordance with the provisions of this act, it shall not be declared totally invalid. Rather, the provisions thereof that do not offend the rule shall be enforced, and only the provisions thereof that do violate, or might violate, the rule shall be subject to reformation or construction under the doctrine of cy pres within the terms of this act.

¶18 The immediate problem, however, is that this case does not truly involve a perpetuity , but involves a restraint on alienation.

¶19 The rule against perpetuities is one of property law which precludes the postponement of vesting of contingent interests for a period of time considered to be too long. Denney v. Teel , 1984 OK 63, 688 P.2d 803. A restraint on alienation does not have any contingent interest or future vesting of rights. "Restraints upon alienation where there are no provisions for forfeiture or reversion are 'disabling restraints' and void." Shields v. Moffitt , 1984 OK 42, ¶26, 683 P.2d 530. Commenting on Kentucky law, Denney noted the same distinction: The common-law rule against restraint on alienation is designed to prevent owners from losing their power to alienate property while the rule against perpetuities is designed to prevent interests from being created too far in the future. Id ., n. 18. See also Producers Oil Co. v. Gore , 1980 OK 62, 610 P.2d 772 (in contrast to rules against restraints on alienation, the rule against perpetuities, although aimed at preventing restrictions on alienation, is directed toward duration of the rights rather than toward absolute restraints); 70 C.J.S. Perpetuities § 12 ("the rule against perpetuities limits the power of an owner to create future interests, whereas the rule against restraints on alienation prohibits the owner from creating provisions blocking his or her grantee from disposing of the property").

¶20 In this case, the will as written clearly creates a restraint on alienation rather than an impermissibly remote future interest - the homestead is "not to be sold or split." Title 60 O.S. §§ 75 and 77 do not apply at all to void restraints on alienation. In reforming a perpetuity that vests too late, a court can simply shorten the vesting period and maintain the grantor's wishes in all other ways. It is not possible to reform an absolute restriction on alienation and maintain the grantor's intent.

¶21 Further, although these statutory sections were enacted almost 50 years ago, there are only three Oklahoma cases interpreting them. Producers Oil Co. v. Gore held that the rule against perpetuities did not apply to interests created by preemptive option provisions of oil and gas lease operating agreements. Am. Nat. Res., LLC v. Eagle Rock Energy Partners, L.P. , 2016 OK 67, 374 P.3d 766, discussed the preservation of the issue of reformation for appeal, and found it had not been preserved. Matter of Estate of Crowl , 1987 OK 13, 737 P.2d 911, noted that, where an instrument is fairly susceptible to two or more constructions, the court should choose the one which does not violate the rule against perpetuities.

¶22 None of these cases give any indication of how far a court may go in "reforming" an instrument that violates the rule. As noted in In re Prather's Estate , 1974 OK CIV APP 24, n. 4, 527 P.2d 211, however:

The rule of construction that the intent of the testator must be carried out if possible does not authorize courts to make a new will to conform to what they may think the testator intended. The intent of the testator must be ascertained from the will as it stands.

¶23 Even if we could ascertain that the testator intended the restriction on alienation to last only for the life of her children , we are left with no clue as to the disposition of her property after that period. Simply assuming the property would fall into the estate residual does not solve the problem because the will has no residuary beneficiary. We find that, even if the void restraint on alienation could legally be reformed pursuant to §§ 75 & 77, the will is so defective in this area that a court could not reform it without re-writing the will to include a final disposition that is no more than a guess of the testator's intent.

¶24 As such, when faced with a trust provision that appears to lack any duties for the trustee, and contains an absolute prohibition on alienation, coupled with a will that gives no clue as to what the final disposition of the property should be, we find the trial court did not err in holding the homestead provisions of the will invalid, and distributing the property as a partial intestacy.

CONCLUSION

¶25 We find no error in the district court's decision.

¶26 AFFIRMED .

FISCHER, P.J., and GOODMAN, J., concur.

      In the opinion, the word "homestead" is used in its generic meaning, and not in its legal sense.

      Even this is less than certain, as the will appears to mention non-beneficiaries using the property, including school-age children.


text:
    In re: The MEDEIROS REVOCABLE TRUST, Petitioner/Appellee, v. MORGAN STANLEY SMITH BARNEY LLC, Respondent/Appellant.
    Case No. 116,915
    Court of Civil Appeals of Oklahoma, Division No. 1.
    FILED JULY 1, 2019 Mandate Issued: August 7, 2019
    Phillip G. Whaley, Grant M. Lucky, RYAN WHALEY COLDIRON JANTZEN PETERS & WEBBER PLLC, Oklahoma City, Oklahoma, for Respondent/Appellant,
    Arthur R. South, Vickie Leyja, Lawton, Oklahoma, for Petitioner/Appellee.
   OPINION BY BRIAN JACK GOREE, CHIEF JUDGE:

¶1 Morgan Stanley Smith Barney, LLC (Morgan Stanley) filed a motion to compel arbitration and the trial court denied it. We have jurisdiction to review the decision de novo as an interlocutory order appealable by right. Okla. Sup. Ct. R. 1.60(i) ; 12 O.S. § 1879(a)(1) ; Johnson v. Convalescent Center of Grady County , LLC, 2014 OK 102, ¶5, 341 P.3d 71, 73. The primary issue is whether a receiver, who did not sign the agreement containing the arbitration clause, is nevertheless bound by it. We answer yes and reverse.

I.

Background

¶2 Milton and Pearl Medeiros formed the Medeiros Revocable Trust, naming themselves as trustees. They signed a client agreement and made deposits to an account in California with Citigroup Smith Barney (Smith Barney). The client agreement contained an arbitration clause, the terms of which are undisputed. It is also undisputed that Morgan Stanley is the successor to Smith Barney. Milton and Pearl agreed that their contract would be binding on their assignees or successors in interest as well as successors to Smith Barney.

¶3 Pearl Medeiros died in 2015 and was survived by her husband, Milton, her son, Jon Katvala, and her daughter, Karen Stewart. Jon and Karen (Petitioners) filed this suit in Comanche County, Oklahoma, to construe the trust. A few weeks later, Milton, together with his daughter, Kimberly Sue Lafinier, and his step-daughter, Carol A. Phillips, commenced an action in Washoe County, Nevada, asserting a different construction of the trust and its assets. The ownership and control of the funds on deposit with Morgan Stanley is highly contested.

¶4 The district court in Comanche County appointed Allen McCall (Receiver) to receive and collect the outstanding assets including the Morgan Stanley accounts. Four months later, the court entered judgment in favor of Petitioners in the amount of $500,000, against Carol Philips, Kimberly Medeiros Lafinier, and Milton H. Medeiros, jointly and severally. In the same judgment, the court ordered Petitioners to participate with Receiver "to pursue all legal remedies to return the sum of $500,000.00 and all other assets to this Trust to be distributed only by further orders of this Court."

¶5 Receiver filed a petition asking for judgment against Morgan Stanley for reimbursement to the trust in the amount of $440,537.05. Morgan Stanley filed a motion to compel arbitration based upon the agreement between Milton and Pearl Medeiros and Morgan Stanley's predecessor-in-interest, Smith Barney. This is an interlocutory appeal from the court's March 9, 2018, order denying Morgan Stanley's motion to compel arbitration.

II.

Personal Jurisdiction

¶6 Morgan Stanley proposes the Oklahoma district court does not have personal jurisdiction over it. In Montgomery v. Airbus Helicopters, Inc. , 2018 OK 17, 414 P.3d 824, the court stated: "[I]f a defendant has purposefully directed activities at the residents of the forum, and the litigation results from alleged injuries that arise out of or relate to those activities, specific jurisdiction over a nonresident defendant may exist unless jurisdiction would be unreasonable or would offend the traditional notions of substantial justice and fair play." Montgomery , ¶16. Morgan Stanley concedes that it mailed client account records to the Oklahoma residence of Milton and Pearl Medeiros in 2014 or 2015. It is plain that Morgan Stanley held assets owned by the Medeiros Revocable Trust and it directed communications regarding those assets to the trustees who were residents of Oklahoma. The Receiver's claim arises from the account agreement between Morgan Stanley and Milton and Pearl Medeiros. It does not offend traditional notions of fair play and substantial justice to require Morgan Stanley to defend itself in Oklahoma. We conclude the district court had personal jurisdiction over Morgan Stanley and the trial court did not err when it denied Morgan Stanley's motion to dismiss on that basis.

III.

Arbitration

¶7 When a court is asked to compel arbitration it must first determine whether the parties agreed to arbitrate that dispute. Johnson v. Convalescent Center of Grady County, LLC , 2014 OK 102, ¶6, 341 P.3d 71, 73. We review an order granting or denying a motion to compel arbitration de novo . Thompson v. Bar-S Foods Co. , 2007 OK 75, ¶9, 174 P.3d 567, 572.

¶8 Receiver did not sign the arbitration agreement with Morgan Stanley and therefore urges he cannot be compelled to arbitrate. Receiver contends he is an arm of the court whereas Morgan Stanley argues Receiver stepped into the shoes of the trustees. Both are correct.

¶9 Receivers are appointed by the court and serve under its authority when they bring actions to collect debts. 12 O.S. §§ 1551, 1554. A receiver is an officer of the court who holds property and funds coming into his hands by the same right and title as the person for whose title he is the receiver. Norman v. Trison Development Corporation , 1992 OK 67, ¶7, 832 P.2d 6, 8. The receiver is the representative of the court regarding the right of possession of property, but the right to receive it derives from the entity that has been placed in receivership. Farrimond v. State ex rel. Carroll Fisher, Insurance Commissioner , 2000 OK 52, ¶15, 8 P.3d 872, 875. A receiver's claims are subject to the claims and defenses possessed by all interested parties. Oklahoma Dept. of Securities ex rel. Faught v. Blair , 2010 OK 16, ¶36, 231 P.3d 645, 664. For example, a receiver of an insolvent corporation takes the property for the creditors subject to such equities, liens, or encumbrances which existed against the property at the time of his appointment. Id . at ¶36, referencing Harn v. Smith , 1921 OK 328, ¶9, 85 Okla. 137, 204 P. 642, 647.

¶10 However, none of the aforementioned cases hold that a receiver who did not agree to arbitrate can nevertheless be compelled to do so. Receiver relies on Carter v. Schuster , 2009 OK 94, 227 P.3d 149, to support his argument that he is not required to arbitrate with Morgan Stanley. Carter cited an opinion of the 2nd Circuit that identified five theories for binding non-signatories to arbitration agreements, and an entity's status as a receiver for a signatory was not one of them. The holding in Carter is that an agent who signs a contract containing an arbitration provision, in his capacity as a corporate representative, cannot be compelled to arbitrate claims made against him as an individual in absence of fraud or some wrongful act. Carter , supra at ¶26. We disagree with Receiver that Oklahoma recognizes only these five exceptions to the general rule that non-signatories cannot be bound by arbitration agreements.

¶11 Morgan Stanley directs our attention to Javitch v. First Union Securities, Inc. , 315 F.3d 619 (6th Cir. 2003). In Javitch , the court found that a receiver was bound to an arbitration agreement to the same extent that the receivership entities would have been absent the appointment of the receiver. Javitch , p. 627. In reaching its decision, the court assessed the nature of the claims being asserted by the receiver and the authority granted to him in the appointing order.

¶12 In the case now before us, Receiver claims that Morgan Stanley was aware of the conflicting claims to the ownership of the trust funds, but nevertheless transferred the funds to another brokerage firm without disclosure to Petitioners. If the original trustees had commenced such an action against Morgan Stanley it would have been subject to arbitration. It is equally clear that the Receiver's appointing order authorized him to collect trust assets against Morgan Stanley.

¶13 When Receiver initiated a claim for the benefit of the trust that contracted with Morgan Stanley, his interest was subject to the agreements in that contract. Because the original trustees agreed to arbitration, Receiver's derivative claim is likewise subject to arbitration. The trial court's denial of Morgan Stanley's motion to compel arbitration was error.

IV.

Bond and Stay of Proceedings

¶14 After filing its petition-in-error, Morgan Stanley filed a motion in the district court requesting that the trial court proceedings be stayed during the pendency of the appeal. Receiver responded that 12 O.S. § 990.4(D) required Morgan Stanley to post a bond. The trial court entered an order granting the stay contingent upon Morgan Stanley posting a bond for $440,537.05. Morgan Stanley asks that we review the trial court's order.

¶15 After a petition-in-error is filed, the trial court retains jurisdiction to, among other things, decide motions to stay the enforcement of interlocutory orders appealable by right. Rule 1.37(a)(4). A party aggrieved by such an order may seek review in the appellate court by motion without amending the petition in error. Rule 1.37(b). Morgan Stanley has filed a timely motion seeking review of the trial court's order requiring a bond.

¶16 The appeal in this case is not from a judgment or a final order but from an interlocutory order denying a motion to compel arbitration. Therefore, a stay of proceedings is governed by 12 O.S. § 990.4(D) and Rule 1.15(b). Accordingly, the trial court had discretion to stay the proceedings on terms which would protect the rights of the parties. Morgan Stanley's position is that requiring a bond equal to the amount in controversy was an abuse of discretion. We agree.

¶17 The appealed order denied arbitration and retained in the district court jurisdiction over Receiver's claim against Morgan Stanley. No judgment was ever entered against Morgan Stanley. Morgan Stanley requested a stay of the proceedings, not a stay of execution or enforcement of a judgment. A bond was not required to secure Receiver's or Petitioners' rights which remain contingent and unliquidated.

V.

Conclusion

¶18 The order filed March 9, 2018, is reversed because the trial court erroneously denied Morgan Stanley's motion to compel arbitration. Morgan Stanley's motion to review the stay order is granted pursuant to Okla. Sup. Ct. R. 1.37(b). The order filed November 30, 2018 is affirmed insofar as it stays the proceedings in the district court during the pendency of this appeal. The order is reversed as to the requirement that Morgan Stanley post a bond in the amount of $440,537.05.

¶19 The case is remanded for further proceedings consistent with this opinion. AFFIRMED IN PART, REVERSED IN PART AND REMANDED.

JOPLIN, P.J., and BUETTNER, J., concur.

      Paragraph 6 of the Agreement provided: "I agree that all claims or controversies, whether such claims or controversies arose prior, on or subsequent to the date hereof, between me and SB and/or any of its present or former officers, directors, or employees concerning or arising from (i) any account maintained by me with SB individually or jointly with others in any capacity: (ii) any transaction involving SB or any predecessor firms by merger, acquisition or other business combination and me, whether or not such transaction occurred in such account or accounts; or (iii) the construction, performance or breach of this or any other agreement between us, any duty arising from the business of SB or otherwise, shall be determined by arbitration before, and only before, any self-regulatory organization or exchange of which SB is a member."

      Paragraph 7 of the Agreement provided: "The provisions of this Agreement shall be continuous, shall cover individually and collectively all accounts which I may open or reopen with SB, and shall insure to the benefit of SB's present organization, and any successor organization or assigns; and shall be binding upon my heirs, executors, administrators, assigns or successors in interest." Any question of who are the successor trustees to The Medeiros Revocable Trust is neither presented nor decided in this appeal.

      Receiver's petition was not commenced as a separate action. It was filed in the same case as Petitioners' suit filed in Comanche County.

      "The United States Court of Appeals for the Second Circuit has identified five theories for binding nonsignatories to arbitration agreements: 1) incorporation by reference, when a party has entered into a separate contractual relationship with the nonsignatory incorporating the existing arbitration clause; 2) assumption, when subsequent conduct indicates nonsignatory has assumed the obligation to arbitrate; 3) agency, when traditional principles of agency law may bind a nonsignatory to an arbitration agreement; 4) veil-piercing/alter ego, when the corporate relationship between a parent and its subsidiary are sufficiently close to justify piercing the corporate veil and holding one corporation legally accountable for the actions of the other, such as, to prevent fraud or other wrong or when a parent dominates and controls a subsidiary; and 5) estoppel, when the claims are integrally related to the contract containing the arbitration clause." Carter v. Schuster , 2009 OK 94, ¶14, 227 P.3d 149, 153, quoting Thomson-CSF, S.A. v. American Arbitration Ass'n , 64 F.3d 773, 776-779 (2d Cir.1995).

      This is the sum Receiver claims Morgan Stanley must distribute to the Medeiros Revocable Trust.

      Okla. Sup. Ct. R. 1.37(b) provides: "Except as provided in Subdivision (a)(3) & (10), review of the trial court's ruling upon any of the matters set forth in part (a) of this Rule shall be by motion filed in the Supreme Court which shall be entertained in the principal appeal. However, a petition in error or amended petition in error shall be filed in the Supreme Court to seek review of the trial court's ruling when statute or the Rules of the Supreme Court require review of the trial court's ruling by a petition or amended petition in error. See, e.g., Rule 1.36(k). When review of a trial court's ruling is sought by motion, it must be filed in the Supreme Court within thirty (30) days of the date the trial court's ruling is filed in the trial court."

      A stay of enforcement of a judgment , decree or final order is obtained by filing with the court clerk a written undertaking and the posting of a supersedeas bond or other security. 12 O.S. § 990.4(A). Section § 990.4(D) provides: "In any action not provided for in subsection A, B or C of this section, the court may stay the enforcement of any judgment, decree or final order during the pendency of the appeal or while any post trial motion is pending upon such terms as to bond or otherwise as it considers proper for the security of the rights of the parties."

      Okla. Sup. Ct. R. 1.15(b) provides: "Stay of enforcement of the decision of a lower tribunal in any proceeding other than an appeal from a final decision of a district court shall be governed by any applicable statutory law or rules governing that tribunal. Except where an applicable statute or rule provides otherwise, the lower tribunal may in its sound discretion stay enforcement of the decision which is the subject of the proceedings in this Court on terms which will protect the rights of the parties. No motion shall be filed in this Court to stay the decision of the lower tribunal where such relief may be sought from the lower tribunal until application has first been presented to and ruled upon by the lower tribunal."


author: Kenneth L. Buettner, Judge:

text:
    David S. ELDRIDGE, Plaintiff/Appellant, v. KAVON, LLC, Defendant/Appellee.
    Case No. 117,911
    Court of Civil Appeals of Oklahoma, Division No. 1.
    FILED JULY 9, 2019 Mandate Issued: August 7, 2019
    David S. Eldridge, Oklahoma City, Oklahoma, Pro Se,
    C. Todd Ward, Brion B. Hitt, FENTON, FENTON, SMITH, RENEAU & MOON, Oklahoma City, Oklahoma, for Defendant/Appellee.
   Kenneth L. Buettner, Judge:

¶1 Plaintiff David Eldridge (Eldridge) appeals from the trial court's grant of summary judgment in favor of Defendant Kavon LLC (Kavon). Eldridge brought claims of breach of contract and violation of the Oklahoma Consumer Protection Act for Kavon's refusal to serve Eldridge at a Chick-fil-A restaurant at which Eldridge had purchased a "Cow Calendar" containing coupons for the purchase of food. Kavon moved for summary judgment, alleging Eldridge had prevented performance of the contract and had not demonstrated damages as a result of the breach. The trial court granted Kavon's motion. Eldridge appeals. We affirm.

¶2 Eldridge purchased an $8 Cow Calendar at a Chick-fil-A restaurant in Oklahoma City operated and franchised by Kavon. The Cow Calendar included an offer for the registration of a "Cow Calendar Card," which gives users access to special offers each month, the total benefit of which is $96 for the calendar year. The Card may be used at any participating Chick-fil-A restaurant across the country. There are approximately thirteen Chick-fil-A restaurants in the Oklahoma City metro area.

¶3 Eldridge often frequented the Chick-fil-A location operated by Kavon, allegedly for hours at a time. Kavon alleges that Eldridge became inappropriate in his interactions with guests and restaurant staff, resulting in Kavon requesting that Eldridge not return to that particular Chick-fil-A location. When Eldridge did return, Kavon again requested that he leave. Eldridge filed suit against Kavon, alleging breach of contract and violation of consumer protection laws.

¶4 At trial, Kavon moved for summary judgment, arguing it was entitled to judgment as a matter of law because (1) Eldridge prevented Kavon's performance of the contract by behaving in an inappropriate manner; and (2) Eldridge could not demonstrate damages because he was not restricted from using his Cow Calendar Card at other Chick-fil-A

locations. The trial court granted Kavon's motion. Eldridge appeals.

¶5 On appeal, Eldridge asserts that the trial court erred by granting summary judgment on his breach of contract and consumer protection claims. A trial court should grant summary judgment where there is no dispute as to a material fact and the moving party is entitled to judgment as a matter of law. Wood v. Mercedes-Benz of Okla. City, 2014 OK 68, ¶ 4, 336 P.3d 457. The trial court should view all facts and inferences in the light most favorable to the non-moving party. Id. Summary judgment is not appropriate where reasonable persons might reach different conclusions based upon the undisputed evidence. Id. "In attempting to show the existence of a question that must be tried, the party may not rely on bald contentions that facts exist to defeat the motion." Okla. Dep't of Sec. ex rel. Faught v. Wilcox , 2011 OK 82, ¶ 19, 267 P.3d 106 (citing Roberson v. Waltner, 2005 OK CIV APP 15 ¶ 8, 108 P.3d 567 ). The standard of review for a grant of summary judgment is de novo . Carmichael v. Beller , 1996 OK 48, ¶ 2, 914 P.2d 1051. "Under the de novo standard, this Court is afforded 'plenary, independent, and non-deferential authority to examine the issues presented.' " Wood, 2014 OK 68, ¶ 4, 336 P.3d 457 (citing Harmon v. Cradduck, 2012 OK 80, ¶ 10, 286 P.3d 643 ).

¶6 In this case, the parties do not dispute the existence of a contract based upon Kavon's sale of a Cow Calendar to Eldridge and his subsequent registration for a Cow Calendar Card, nor do they dispute that Kavon refused service to Eldridge. Instead, the important legal determinations to be made are whether Kavon was excused from performance and whether Eldridge suffered damages. In order to maintain a breach of contract action, a party must demonstrate (1) the existence of a contract, (2) failure of a party to perform its contractual duty, and (3) damages suffered as a result of the breach. Dig. Design Grp., Inc. v. Info. Builders, Inc., 2001 OK 21, ¶ 33, 24 P.3d 834. Performance of a contract may be excused where one party prevents the other party's performance. Allen v. State ex rel. Bd. of Trs. of Okla. Unif. Ret. Syst. For Justices & Judges, 1988 OK 99, ¶ 14, 769 P.2d 1302.

¶7 Kavon alleges it was prevented from performing its duty of offering Eldridge the Cow Calendar Card special offers because Eldridge behaved in an inappropriate manner at the restaurant, resulting in his exclusion from that particular Chick-fil-A location. In so arguing, Kavon cites to Chilton v. Oklahoma Tire & Supply Co ., 1937 OK 168, 180 Okla. 39, 67 P.2d 27, in which the defendant, a refrigerator servicer, was prevented from performing his contractual duties as a result of the plaintiff, a refrigerator salesman, complaining to the state refrigerator distributor and causing the plaintiff to no longer be a designated servicer. There, the Supreme Court excused defendant's nonperformance because he had been prevented from performing his contractual duties by plaintiff's own actions. Id.

¶8 It is generally true that the owner of real property has "the right to exclude other members of society from any present occupation of the land." 3 C.J.S. Property § 45. Except as prohibited by anti-discrimination laws, business owners in most states have the common law right to refuse business for any reason or no reason. See, e.g., Feldt v. Marriott Corp. , 322 A.2d 913, 915 (D.C. 1974) ("[A] restaurant owner had the right to arbitrarily refuse service to any guest."). Logically, one reason a business owner might refuse service to a customer would be that customer's disruption of the business environment. Here, Kavon alleges that Eldridge behaved in a manner that was offensive to restaurant employees and patrons. Thus, Eldridge's exclusion from the restaurant was self-inflicted as a result of his continued inappropriate behavior. Where it would be unreasonable to require Kavon to allow Eldridge to remain on restaurant premises while Eldridge persisted in his disruptive behavior, we conclude that Kavon was rendered unable to honor Eldridge's requests to benefit from the Cow Calendar Card coupons because of Eldridge's own behavior. A breach of contract is excused where the breaching party was prevented from performing as a result of the other party's conduct. Therefore, Kavon's breach by failing to continue to honor Eldridge's requests to benefit from the Cow Calendar discounts is excused.

¶9 As an alternate defense theory, Kavon also argued that Eldridge could not demonstrate damages resulting from the breach of contract because Eldridge was free to use his Cow Calendar Card at any of the other thirteen Chick-fil-A restaurants in the Oklahoma City metro area. In response, Eldridge alleged he was unable to visit the other locations because he did not own a vehicle. We agree with Kavon and note that the availability of public transportation in Oklahoma City-including buses, taxis, and ride sharing programs-renders Eldridge's argument regarding lack of transportation ineffective. Eldridge otherwise fails to demonstrate what damages he incurred as a result of Kavon's refusal of service and we hold that, in the alternative to the rationale of excused performance above, Eldridge has failed to demonstrate damages and his breach of contract claim must fail as a matter of law.

¶10 Because Kavon was prevented from honoring Eldridge's requests to use his Cow Calendar Card discounts as a result of Eldridge's own behavior, and because Eldridge has failed to demonstrate what damages he incurred as a result of such breach, we hold that there is no dispute as to a material fact and that Kavon was entitled to judgment as a matter of law.

¶11 AFFIRMED.

GOREE, C.J., and JOPLIN, P.J., concur.

      Eldridge's claims under the Oklahoma Consumer Protection Act (OCPA) are not supported by any evidence other than his own conclusory affidavit. Because self-serving affidavits do not meet the evidentiary burden necessary to withstand summary judgment, we affirm the trial court's judgment with regard to the OCPA claims and do not further address them herein.

      We also suppose that Eldridge could make use of his Cow Calendar Card at the drive-through window by walking up, placing and receiving his order.


author: NAKAMOTO, J.

text:
    STATE of Oregon, Plaintiff-Respondent, v. Robert Paul LANGLEY, Jr., Defendant-Appellant.
    CC 88C21624 (SC S062353)
    Supreme Court of Oregon.
    August 1, 2019
    On appellant's petition for reconsideration and motion for remand filed October 29, 2018; considered and under advisement on July 9, 2019.
    Karen A. Steele, Salem, filed the petition for reconsideration and motion for remand on behalf of appellant. Also on the brief was Jeffrey E. Ellis, Portland.
    No appearance contra.
    Before Walters, Chief Justice, and Nakamoto, Flynn, Nelson, and Garrett, Justices, and Brewer and Baldwin, Senior Justices pro tempore.

      363 Or. 482, 424 P.3d 688 (2018).

      Balmer and Duncan, JJ., did not participate in the consideration or decision of this case.

   NAKAMOTO, J.

Defendant petitions for reconsideration of this court's decision in State v. Langley , 363 Or. 482, 424 P.3d 688 (2018) ( Langley IV ), affirming his death sentence. Defendant also moves for remand to the circuit court for an evidentiary hearing. We allow the petition for reconsideration, modify that decision as to three statements of fact, and adhere to that decision as modified. We deny the motion for remand.

First, defendant contends in his petition for reconsideration, among other things, that this court erroneously described the facts concerning how Judge James of the Marion County Circuit Court came to preside over his penalty-phase proceedings after remand from this court pursuant to State v. Langley , 351 Or. 652, 273 P.3d 901 (2012) ( Langley III ). Specifically, defendant notes that the opinion's procedural narrative states that, before defendant's new sentencing trial,

"[o]n April 6, 2012, Judge Jamese Rhoades, Presiding Judge of the Marion County Circuit Court, filed a circuit court form titled Criminal Assignment Notice as part of the run-up to defendant's latest penalty-phase proceeding. In that document, Judge Rhoades assigned Judge Mary Mertens James to preside over defendant's remanded sentencing trial."

Langley IV , 363 Or. at 487, 424 P.3d 688. Defendant argues that that statement is inaccurate because the record does not show that Judge Rhoades actually "filed" such a notice or that she was personally responsible for assigning Judge James to defendant's case.

We agree with defendant, and we modify the opinion by disavowing the quoted text set out above and instead describe the facts through the following text:

"On April 6, 2012, the Marion County Circuit Court generated a Criminal Assignment Notice as part of the run-up to defendant's latest penalty-phase proceeding. In that document, Judge Mary Mertens James was assigned to preside over defendant's remanded sentencing trial."

Second, the opinion recites that, in the course of further discussing her own recusal with the parties, Judge James

"acknowledged that she and Judge Rhoades had, at some point as part of the case assignment process , discussed whether she, Judge James, could impartially preside over defendant's case."

Langley IV , 363 Or. at 488, 424 P.3d 688 (emphasis added). In seeking reconsideration, defendant argues that, because the record fails to establish that Judge Rhoades had personally appointed Judge James to preside over defendant's case, it was incorrect to describe the subsequent conversation between the two jurists regarding Judge James's impartiality as being "part of the case assignment process."

That argument is well-taken. On review of the record, we agree that the conversation occurred after Judge James was assigned to the case. Accordingly, the court modifies the opinion by disavowing the emphasized text quoted above.

Third, defendant contends that there is at least a factual dispute regarding when defense counsel first filed motions seeking Judge James's removal from the case. In that regard, the opinion states:

"Defendant's newly appointed defense counsel apparently learned of that assignment on Monday, April 23, 2012, and, on Friday, April 27, 2012, filed two motions seeking Judge James's removal from the case ."

Langley IV , 363 Or. at 487, 424 P.3d 688 (emphasis added). The motions were time-stamped by the clerk of the circuit court on April 27, 2012. But defendant argues in his petition for reconsideration that other evidence in the record, including an affidavit of service, indicates that the filing occurred the day after defense counsel was assigned to represent defendant and that the date stamped on the motions reflects a time lag in the court clerk's processing of the motions. To describe with particularity the date of the time stamp on the motions, we disavow the emphasized text above and instead describe the filing of the motions with the following text:

"Defendant's newly appointed defense counsel apparently learned of that assignment on Monday, April 23, 2012, and filed two motions-which contain time stamps by the circuit court clerk's office dated April 27, 2012-seeking Judge James's removal from the case."

Although we modify the opinion in those three aspects, we disagree with defendant's further argument that (1) those modifications materially affect the analysis of his contentions on appeal that Judge James, once assigned, should not have presided over the penalty-phase proceedings on remand and (2) the factual inaccuracies that defendant notes rise to the level of constitutional error because defendant's death sentence was affirmed based on inaccurate and incomplete facts. We have considered and reject each of the other issues that defendant raises in his petition for reconsideration, and we adhere to our opinion as modified.

In conjunction with his petition for reconsideration, defendant has filed a motion for remand for an evidentiary hearing. Defendant contends that disputes of fact material to the resolution of the following claims require an evidentiary hearing:

"Judicial bias (Assignments of Error Nos. 1-20 and 21-23 ); ex parte (Assignments of Error Nos. 3, 4, 11 and 14 ); Motion for New Trial (Assignments of Error Nos. 21-25 ); limiting instruction / probative versus prejudice (Assignments of Error Nos. 33-37 ); proportionality (Assignments of Error Nos. 39-45 ); and failure to disclose discovery of victim's sister not wanting a death sentence (Assignment of Error No. 48 )."

(Emphases in original; footnotes to pages of petition for reconsideration omitted.) In accordance with our disposition of defendant's petition for reconsideration, we conclude that a remand for an evidentiary hearing is not required and deny the motion for remand.

The petition for reconsideration is allowed. The former opinion is modified and adhered to as modified. The motion for remand for evidentiary hearing is denied.


text:
    STATE of Oregon, Plaintiff-Respondent, v. Daniel Poe GALE, Defendant-Appellant.
    A161932
    Court of Appeals of Oregon.
    Argued and submitted September 12, 2017. June 12, 2019
    David J. Celuch argued the cause for appellant. On the brief was Rankin Johnson IV.
    Susan G. Howe, Assistant Attorney General, argued the cause for respondent. Also on the brief were Ellen F. Rosenblum, Attorney General, and Benjamin Gutman, Solicitor General.
    Before DeHoog, Presiding Judge, and Egan, Chief Judge, and Aoyagi, Judge.
   EGAN, C. J.

After a bench trial, defendant was convicted of two counts of third-degree sodomy, ORS 163.385, and two counts of first-degree online sexual corruption of a child, ORS 163.433. On appeal, defendant assigns error to the trial court's denial of his motion for a judgment of acquittal (MJOA) on the two online sexual corruption charges. For purposes of the offense of online sexual corruption of a child, "child" means "a person who[m] the defendant reasonably believes to be under 16 years of age." ORS 163.431(1). Defendant argues that no reasonable factfinder could find beyond a reasonable doubt that he "reasonably believed" that the victim in this case was under 16. We agree with defendant and, thus, reverse his convictions for first-degree online sexual corruption of a child.

In reviewing the denial of an MJOA, we state the facts in the light most favorable to the state. State v. Greene , 283 Or. App. 120, 121, 388 P.3d 1132 (2016). Defendant met the victim, B, on the online dating site "Boy Ahoy." At the time, B was 15 years old and defendant was 41. In order to use the site, B lied and said that he was 18. At trial, B testified that he used "gay chat apps" to explore his feelings, and that he communicated with multiple men through several different "apps." B said that he was not sure he could physically pass for 18, but that he hoped that he would be accepted as 18 by other users of the apps. B's mother testified that at the time he was using the apps, B was around five feet 10 inches or five feet 11 inches tall, was very thin, had very little body hair and wore braces. She was unaware of anyone ever mistaking him for being older than he was. Detective Dolyniuk, the lead investigator in B's case, testified that B's appearance was consistent with his age.

For several months, B and defendant communicated very frequently over cell phone calls, text messages, Skype video chats, and other online communication applications. B testified that defendant "[p]robably just asked [him] once if [he] was actually above age and [B] lied about that." Defendant and B "chatted" about sexual things, exchanged nude photos, and exchanged phone numbers. Defendant asked B to send him nude and clothed photographs, which B did. B also sent nude photographs to defendant without being asked.

At some point, B and defendant arranged to meet in person "to get to know each other better and have sex." They talked about the meeting ahead of time and agreed that they would engage in sexual activity with each other. They agreed that defendant would pick B up in the parking lot of B's high school. B testified that he had told defendant that he was held back or had started late, so he was 18 and in his last year of high school. B also said that he "may have" lied and told defendant that his license was suspended, and that was why he could not drive. Ultimately, on two separate occasions, defendant picked B up at his high school, and the two went to a Motel 6 and engaged in sexual activity. Defendant continued to correspond with B after the meetings.

In January 2013, B's mother contacted the police regarding concerns she had about B. She related that she had noticed "behavior changes" and "withdrawal," and that she had found letters written to men crumpled up in his room. She had also logged on to B's computer and found communications between B and other men. When she asked B about defendant, B cried and said, "He's a bad one." B's mother turned B's phone and computer over to the police. Dolyniuk testified that B's phone had an image of defendant on it, as well as over 6,800 text messages between B and defendant.

B testified that, when his parents found out about his online activities, he tried to warn defendant. Dolyniuk recovered one communication that had occurred over the messaging function of the application "Words With Friends" around that time, in which B told defendant, "My parents are on to me." The following conversation ensued:

"[DEFENDANT:] Oh, shit. Are you okay?
"[B:] No.
"[DEFENDANT:] I'm sorry. Can you meme me or call?
"[B:] I definitely can't call anyone out of state.
"[DEFENDANT:] Okay. Send me an e-mail.
"[B:] I pretty much just told you what's going on. There's nothing more to it than that.
"[DEFENDANT:] Oh, okay, I won't push it then. I'm just concerned for your well-being.
"[B:] You should be concerned about yourself as should the other guys I've been talking to.
"[DEFENDANT:] What's going on? Are your parents coming after me?"

Eventually, defendant asked B if his parents had defendant's name. B said, "Yes," and stated that he had told his parents that he would "stop talking to men."

At the close of the state's case, defendant moved for a judgment of acquittal on the two counts of online sexual corruption of a child on the ground that, even in the light most favorable to the state, the evidence did not support a verdict of guilty. Defendant argued that the state had failed to prove beyond a reasonable doubt that he "reasonably believed that the person that he had this online communication with was under 16." Defendant contended that the facts-specifically, that B lied about his age, was around five feet 10 inches tall, and told defendant that his license was suspended and that he was held back in school-were insufficient to support a finding that defendant reasonably believed B was under age 16. The state responded that B "lied in order to protect the defendant" and that a factfinder could reasonably infer that "defendant knew how old [B] was." The state argued that the Words With Friends conversation further supported that inference because, when defendant learned that B's parents had found out about the relationship, his answer was, "Are they coming after me?" The state posited, "Why on earth would the defendant be concerned about [B's] parents coming after him if he didn't know that this boy was underage[?]" The state argued that that conversation showed that defendant "absolutely knew that B was under 16." The court agreed with the state and denied defendant's MJOA.

After the denial of his MJOA, defendant testified. Defendant said that he stated in his profile on "Boy Ahoy"

that he was looking for men ages 18 to 35. He testified that he had asked B about his age "a few different times," including one time particularly because of B's "rosy cheeks." Defendant said that B had old him that he was 18, that he was attending community college for forensics, and that his cheeks could be explained by a skin condition. Defendant stated that he always believed B was 18 until B told him otherwise several weeks after their second meeting at the Motel 6. Defendant testified that he picked B up at his high school because B had said that his sister had his car and the high school was close to his house. After closing arguments, the court found defendant guilty on all counts.

On appeal, "[w]e review the denial of an MJOA for whether a rational factfinder could find, after viewing the evidence in the light most favorable to the state and making reasonable inferences and credibility choices, that the state proved every element of the offense beyond a reasonable doubt." State v. Davis , 261 Or. App. 38, 39, 323 P.3d 276 (2014). The statute at issue in this case, ORS 163.433, provides that a person commits first-degree online sexual corruption of a child when that person commits second-degree online sexual corruption of a child and "intentionally takes a substantial step toward physically meeting with or encountering the child." The elements of second-degree online sexual corruption of a child are as follows:

"(1) a person who is 18 years of age or older (2) for the purposes of arousing or gratifying the sexual desire of the person or another person (3) knowingly uses an online communication to solicit a child to engage in sexual contact or sexually explicit conduct and (4) offers or agrees to physically meet with the child ."

State v. Lewis , 292 Or. App. 1, 2, 423 P.3d 129 (2017), rev. den. , 363 Or. 744, 430 P.3d 566 (2018) (emphases added; footnote omitted). "Child," for purposes of ORS 163.433, is statutorily defined as "a person [whom] the defendant reasonably believes to be under 16 years of age." ORS 163.431(1). As noted above, the only issue in this case is whether, viewed in the light most favorable to the state, the evidence would permit a rational factfinder to find beyond a reasonable doubt that defendant "reasonably believed" B to be under 16 years of age.

The parties generally reprise the arguments they made below, but point to additional facts to support their respective positions. Defendant acknowledges that B's appearance was "consistent" with his true age of 15, and he concedes that a factfinder could reasonably infer that defendant believed that B was under 18. However, defendant argues that, due to the "natural variation between people," no factfinder could look at B and find, beyond a reasonable doubt, based solely on B's appearance, that defendant reasonably believed B to be under 16. The state, on the other hand, encourages this court not to "discount the trial court's opportunity" to observe B's "youthful" appearance on the stand and notes that B's mother was "unaware of any time in which someone mistook B for being older than he was." The state also encourages us not to discount the trial court's opportunity to assess defendant's credibility, particularly with regard to defendant's own testimony. Finally, the state argues that defendant's meetings with B were "clandestine" and, thus, that defendant "acted like he believed he was having sex with someone under sixteen years of age and chose not to question B's age in order to maintain plausible deniability."

Although neither party has presented us with statutory construction arguments or legislative history, it is helpful to briefly discuss the legislative history of the statutory provision defining "child" for purposes of this offense. ORS 163.433 was enacted "in response to the internet predator issue." Testimony, Joint Subcommittee on Public Safety, HB 3515, June 15, 2007 (statement of Senate Judiciary Committee Counsel Darian Stanford). The legislature included the definition of "child" so that it would be no defense if the "child" with whom a defendant contacted online was actually a police officer conducting a sting. Id. Thus, the victim's actual age is not an element of the crime; rather, the element is the age that the defendant reasonably believes the victim to be.

In light of that history, under the statute, the state must first prove that the defendant subjectively believed the victim to be under the age of 16. Then, after establishing that belief, the state must prove that the defendant's belief was objectively reasonable .

In this case, the evidence fails on the subjective prong. In other words, the record does not permit a factfinder to find beyond a reasonable doubt that defendant actually believed that B was under 16. The state has produced evidence from which a rational factfinder could infer that defendant believed B to be under 18. For example, there is evidence that defendant knew that B was still in high school, that B looked younger than 18, and that defendant asked if B's parents were going to "come after him" after learning about their communications. From those facts, a rational factfinder could infer that defendant believed that B was under 18 years old and, thus, that his sexual contact with B was potentially criminal. See ORS 163.415 (The crime of sexual abuse in the third degree is established if a person "subjects another person to sexual contact and * * * the victim is incapable of consent by reason of being under 18 years of age."); see also ORS 163.315(1) ("A person is considered incapable of consenting to a sexual act if the person is * * * [u]nder 18 years of age.") However, the statute at issue here requires that the state prove that defendant believed that B was under 16, not 18. No reasonable factfinder could infer from this record that defendant believed that B was specifically under 16, rather than more broadly under 18.

We do not second guess the trial court's first-hand observations and we defer to the trial court's credibility findings. State ex rel. Juv. Dept. v. Smith , 185 Or. App. 197, 228, 58 P.3d 823 (2002), rev. den. , 335 Or. 402, 68 P.3d 231 (2003). However, here, we agree with defendant that based on appearance alone, a rational factfinder could not find, beyond a reasonable doubt, that defendant believed that B was 15 years old, versus 16 or older. The evidence in this case was that B's appearance "was consistent" with his age of 15 and that no one had ever, to B's mother's knowledge, mistaken him for being older than he was. Evidence that a 15-year-old boy's appearance is consistent with his age amounts to little more than evidence that the boy looks like a teenager. And that limited inference reveals the issue at the heart of this case: small differences in age become increasingly difficult to distinguish with the passing of years; while few would confuse a newborn child for a one-year-old, the same is not true for a 29 versus 30-year-old. In our view, B's actual age, together with the minor difference in apparent age on which the state's theory depended-that defendant must have believed him to be 15 years old as opposed to 16-puts this case in the latter category. By the time an average child reaches age 15, it is not possible to discern from appearance alone whether the child is 15 or 16. As such, no reasonable juror could find, beyond a reasonable doubt, that defendant subjectively believed that B was specifically 15, rather than 16, based solely on B's appearance. Because no reasonable juror could make that finding on this record, the trial court erred in not granting defendant's motion for judgment of acquittal, with respect to the charges that depended on the state proving that defendant reasonably believed that B was under 16 years old.

Convictions for first-degree sexual corruption of a child reversed; remanded for resentencing; otherwise affirmed.

      Defendant does not challenge his convictions of third-degree sodomy.