author: KEITH RAPP, Judge.

text:
    2002 OK CIV APP 77
    Ron CRAIN, Plaintiff/Appellant, v. NATIONAL AMERICAN INSURANCE COMPANY, an Oklahoma corporation, and Chandler (U.S.A.), Inc., an Oklahoma corporation, Defendants/Appellees.
    No. 96,370.
    Court of Civil Appeals of Oklahoma, Division No. 2.
    July 9, 2002.

      Jeff A. Lee, Lee & Freedman, P.C., Oklahoma City, OK, for Plaintiff/Appellant.
    Michael L. Darrah, Hilary S. Allen, Dur-bin, Larimore & Bialick, Oklahoma City, OK, for Defendants/Appellees.
   Opinion by

KEITH RAPP, Judge.

1 1 Trial court plaintiff, Ron Crain, (Crain) appeals the trial court's order sustaining the defendants', National American Insurance Company and Chandler (USA) Inc., (collectively as NAICO) motion to dismiss for failure to state a claim for which relief can be granted. This Court finds that Crain's amended petition describes conduct by NAI-CO which was contrary to a defined, established, and clear and compelling public policy. Crain's reporting of NAICO's conduct, if proven, falls within the limited and tightly cireumseribed public policy exeeption to the at-will employment doctrine. The record, as it here exists, cannot determine beyond any doubt that Crain cannot prove a set of facts which would entitle him to relief, Thus, the trial court's ruling must be reversed and the matter remanded for further proceedings.

BACKGROUND

12 Crain was employed by NAICO as an assistant vice-president. Crain's job responsibilities included reporting the status of "estimated recoveries" on claim files and reporting this information to his supervisor. For several years, Crain monitored and reported the "estimated recoveries" status on claim files to his supervisor. In December 1999, he reported this information to an outside, independent auditor hired by NAICO upon their inquiry to him of the claim status. NAICO hired this auditor for purposes of preparing financial statements and reports to regulatory agencies, including the Oklahoma State Insurance Department.

T3 On February 17, 2000, NAICO terminated Crain's employment for what NAICO refers to as "alleged budgetary reasons." Crain asserts that the actual reasons for his termination were "bis continued complaints to his supervisors and others of the finan-clal irregularity of the records of the company." Crain asserts that his complaints were of a whistleblowing nature. These complaints to his supervisor and to the outside auditors involved the financial reporting to the State Insurance Commission, as required by statute. He also alleges that he reported activities that constituted a violation of the established public policy of this State. In addition, he alleges that his discharge was retaliatory in nature because of his reports. He claims that he falls within the provisions of Oklahoma law protecting whistleblowers and that he is protected from discharge for refusing to give false information to a regulatory agency.

T4 In response to Crain's Amended Petition, NAICO filed a Special Appearance and Motion to Dismiss asserting Crain failed to state a cause of action for which relief can be granted. The main thrust of its argument is that NAICO may discharge Crain, as an at-will employeé, for any reason without incurring liability. NAICO also argues that Crain's specific whistleblowing activities do pot fall within the public policy exception to the at-will employment termination rule as described in Burk v. K-Mart Corp., 1989 OK 22, 770 P.2d 24. It also argued that under Hayes v. Eateries, Inc., 1995 OK 108, 905 P.2d 778, internal whistleblowers within a business organization, in general, do not receive Burk protection, because as the Court pointed out in Hayes, only a private internal business matter is implicated.

15 The district court agreed with NAICO and granted its motion to dismiss. Crain appeals.

STANDARD OF REVIEW

T6 The trial court sustained NAI-CO's motion to dismiss for failure to state a claim upon which relief can be granted pursuant to 12 0.98.2001, § 2012(B)(6). The Oklahoma Supreme Court discussed the standard of review for a motion to dismiss for failure to state a claim under 12 0.$8.2001, § 2012(B)(6) in Indiana Nat'l Bank v. State Department of Human Services, 1994 OK 98, ¶¶ 2-4, 880 P.2d 371, 375-76 (citations omitted).

[Rleview of a trial court's dismissal for failure to state a claim upon which relief can be granted involves a de novo consideration ... as to whether the petition is legally sufficient....
When reviewing a motion to dismiss, the court must take as true all of the challenged pleading's allegations together with all reasonable inferences which may be drawn from them. 'A pleading must not be dismissed for failure to state a legally cognizable claim unless the allegations indicate beyond any doubt that the litigant can prove no set of facts which would entitle him to relief"...
Motions to dismiss are generally viewed with disfavor under this liberal standard and to withstand a motion to dismiss it is not necessary for a plaintiff to either identify a specific theory of recovery or set out the correct remedy or relief to which he/ she may be entitled. Generally, a petition may be dismissed as a matter of law for two reasons: (1) lack of any cognizable legal theory, or
(2) insufficient facts under a cognizable legal theory.

ANALYSIS AND REVIEW

17 The question before this Court is whether the trial court erred in granting NAICO's motion to dismiss for failure to state a claim upon which relief can be granted. This Court holds the trial court erred.

T8 This Court finds that Crain's first amended petition, based on the public policy exeeption to the at-will employment rule, may prove a set of facts that may entitle him to relief. See Groce v. Foster, 1994 OK 88, 880 P.2d 902.

T9 In defense of the trial court's action, NAICO correctly recites the Supreme Court's holding recognized in Burk that an at-will employee may be discharged "for good cause, for no cause or even for cause morally wrong, without being thereby guilty of legal wrong." Burk, 1989 OK 22 at 15, 7170 P.2d at 26. However, the Burk Court, in clarifying the at-will employment rule, held that "the terminable-at-will doctrine is not absolute" and noted a number of limited and specific exceptions to the rule. Id. NAI-CO correctly noted the Burk Court did not attempt to list all the exceptions to the rule, but held that such determinations should be made on a case-by-case basis. Id., 1989 OK 22 at 1 14, 770 P.2d at 28.

110 After Burk, the Supreme Court continued to recognize the existence of the limited public policy exception to the employment-at-will doctrine. See Clinton v. State ex rel. Logan County Election Bd., 2001 OK 52, ¶ 6, 29 P.3d 543, 548. The Clinton Court, citing Burk, reiterated the right of "an employee [who] is discharged for refusing to act in violation of an established and well-defined public policy or for performing an act consistent with a clear and compelling public policy," to bring a tort claim for wrongful discharge. Id. However, the Supreme Court clearly held that a Burk tort lies only where the employer's wrongful discharge of an at-will employee is for refusing to act in violation of an established and clearly-defined public policy or for performing an act consistent with such policy. Id. Moreover, the tort applies only to a "narrow class of cases and must be tightly cireumseribed." Id. As stated in Hayes v. Eateries, Inc., the identified "public policy must truly be public, rather than merely private or proprietary." Hayes, 1995 OK 108 at ¶ 24, 905 P.2d at 786.

{11 In Barker v. State Ins. Fund, 2001 OK 94, 40 P.3d 463, the Supreme Court recently took the opportunity to clarify an apparent misunderstanding that internal whistleblowers were not part of the protected class. The Court stated: "Oklahoma law protects both internal and external reporting of whistle-blowers who establish a sufficient public policy violation from retaliatory discharge." Id., 2001 OK 94 at T16, 40 P.3d at 468.

¶ 12 Thus, Crain must show that NAICO violated an established and well-defined public policy by discharging him. Barker, 2001 OK 94, 40 P.3d at 468. The task is to decide "between claims that genuinely involve the mandates of public policy that are actionable and ordinary disputes between employee and employer that are not." Id., 2001 OK 94 at ¶ 17, 40 P.3d at 469. According to the Barker Court, the public policy may be grounded in a statute or employee actions, such as reporting fraudulent activity or criminal misuse of funds. Id., 2001 OK 94 at ¶¶ 23-24, 40 P.3d at 469-70.

113 Therefore, the basic principle that an employer may discharge an at-will employee without incurring liability still applies, unless it can be established that an employee's action lies within the Burk public policy exception. As stated in Burk, the question here is whether Crain's conduct constituted an act "consistent with a clear and compelling public policy."

{14 The record indicates Crain was charged with the reporting of the "estimated recoveries" on claims which, in turn, could adversely effect an insurance company's financial status. Apparently, Crain's difficulty arose in his reporting alleged inaccuracies of these recoveries to the outside auditing company hired by NAICO when questioned by the auditors. He asserts he was required under 36 O.S. Supp.2000, § 311.1 and 36 0.9$.1991, $ 1505 to provide accurate and truthful information to the outside auditors to assist the auditors' determination of NAI-CO's financial stability, and that his failure to do so could have lead to a criminal charge against him.*

1 15 NAICO asserts Crain does not qualify for the Burk exception based on Richmond v. ONEOK, Inc., 120 F.3d 205 (10th Cir.1997) and Hayes In Richmond, the plaintiff reported to the ONEOK personnel department a dispute she had with her supervisor regarding overtime pay and illegal and unethical conduct her supervisor had committed. The conduct concerned the fact that the plaintiff had seen her supervisor's 1998 federal income tax return, which did not reflect any income other than his salary earned at ONEOK. The court rejected plaintiffs claim that Oklahoma law provides an exception to at-will employment on the basis of reporting this type of illegal and unethical activity.

1 16 It is readily apparent that the facts of Richmond, and the nature of the whistle-blowing activities there, are distinguishable from the present case. In Richmond, the illegal and unethical conduct bore no relation to ONEOK's responsibilities to its customers or the supervisor's job-related duties. The conduct concerned only the supervisor's personal criminal Habilities and individual risks associated with accurately reporting one's income taxes. The activity was of a personal rather than public nature.

17 NAICO has cited no cases relative to the public policy exception to employment at-will termination within the insurance industry in support of its position. This Court must thus consider the facts in the regulatory context, and must do so cautiously. Burk, 1989 OK 22 at ¶ 16, 770 P.2d at 29.

$18 The Oklahoma Supreme Court considers the insurance industry to be a unique industry in that this industry, unlike ordinary business corporations, is highly regulated by the State, as mandated by Okla. Const., art. 6, § 22 (2001). Oklahoma Benefit Life Ass'n v. Bird, 1948 OK 103, ¶ 5, 192 Okla. 288, 135 P.2d 994, 996. Insurance companies have been placed under the general supervisory control of the State Insurance Department, and that department is charged with the execution of all laws in relation to insurance and to insurance companies doing business in the State. Okla. Const. art. 6, § 22 (2001). Bird held that insurance companies "have come to be looked upon as at least quasi-public in nature, subject to state control for the general benefit of not only the policyholders but of the public." Bird, 1943 OK 103 at ¶ 12, 185 P.2d at 997. Further, reinforcing the importance of the State's statutory directives for the insurance industry, Bird concluded that the objects of insurance corporations "invest them with such a public interest that the state has placed them within the superintendence of a special department; and every consideration militates in favor of the protection which the state has thrown around these companies." Id., 1943 OK 103 at ¶ 13, 135 P.2d at 997 (citing Swan v. Mutual Reserve Fund Life Assoc., 155 N.Y. 9, 49 N.E. 258 (1898)). Therefore, under Oklahoma constitutional mandate, statutory law, and prior holdings, this Court must give substantial consideration to the public's protection when construing the statutes governing insurance companies.

119 Crain asserts that the financial irregularities he reported had direct bearing on the monetary amounts an insurance company must maintain in reserve, as prescribed by 386 0.8.1991, $ 1505. Section 1505(B) mandates that "[alll life insurance companies and fraternal benefit societies shall establish and maintain mandatory securities valuation reserves in accordance with the guidelines established by the National Association of Insurance Commissioners." Moreover, the financial information concerning the amount of reserves is a factor in "any determination of the financial condition of an insurer." 36 § 1505. Thus, it would be a reasonable inference that irregularities, discrepancies, or false information in the "estimated reserves" on file claims are of the nature that could involve a public policy violation by conceivably affecting or resulting in a misrepresentation of the accurate assessment of an insurance company's financial condition.

$20 Crain reported the irregularities to NAICO's outside auditor when its representatives interviewed him in December of 1999, as part of the auditing process for which it was hired. NAICO argues that it hired the auditor to ensure that it was complying with the rules and regulations of the Insurance Commission and to help it accurately prepare its financial statements. NAICO asserts that there was no public purpose served by Crain telling the auditing company that the estimated recoveries were being falsely reported. The short answer to this is that in Oklahoraa, insurance companies are mandated by 86 O.S8. Supp.2000, § 1452, to hire certified public accountants to audit their books. This statute specifically requires insurance companies to report "the year-to-date reserve status." The information Crain provided the auditors during their interview would be relevant to an accurate assessment of the reserve status and would be of public interest and in accord with public policy.

1 21 Further, both parties here agree that the auditor's report is used directly by the Insurance Commission during its examinations. The examinations by the Insurance Commission are statutorily mandated by 36 O.S. Supp.2000, $ 309.2, and 86 0.8.1991, § 309.4, and rely on accurate "testimony of its officers or agents or other persons examined concerning [the company's] affairs." 36 ©.S.1991, § 309.4 (emphasis added). Again, under the wording of the statute, Crain's testimony falls within the kind of data the examiner could appropriately consider for assessing the financial condition of the insurer. NAICO implies that the internal audit was an independent and private business decision by the company to gather financial information about its own operation, when in fact, the audit is part of a highly regulated, statutorily prescribed process-from the annual reports to the Commissioner's examinations-ensuring that the public can safely rely on the ability of insurance companies to serve its interests in time of need.

§22 NAICO also mistakenly relies on Hayes to establish that internal whistleblow-ing activities are not protected by the Burk exception. In Hayes, the plaintiff, an assistant manager of a restaurant, had discovered that his manager was embezzling money from the restaurant. When Hayes informed the manager he intended to investigate and report the embezzlement further, he was fired, The Hayes Court concluded that plaintiff's claim did not meet the Burk tort criteria because the reporting of embezzlement within a private business, whether to internal or external sources, involved "merely private and proprietary interests insufficient to support a Burk claim." Hayes, 1995 OK 108 at ¶ 29, 905 P.2d at 789. The Hayes Court reasoned that no clear and compelling policy was involved because the embezzlement concerned only a private business matter that affected the profits of the restaurant but did not jeopardize the health, safety or welfare of the public. Id., 1995 OK 108 at ¶ 27, 905 P.2d at 788. NAICO's reliance on Hayes is misplaced as shown herein and also by the recent decision in Barker. Moreover, the Hayes Court did distinguish this type of internal whistleblowing from the "protected 'whistleblowing' activity geared toward the good faith reporting of infractions by the employer or co-employee of rules, regulations or the law pertaining to the public health, safety or general welfare." Id., 1995 OK 108 at ¶ 24, 905 P.2d at 786. Thus, Hayes is easily distinguishable from the case at bar.

11 23 Where Hayes involved internal whis-tleblower activities affecting only private and proprietary business interests, and also the . plaintiff's own interests, Crain reported information for an audit conducted according to statute, which involved a well-defined public policy regulating the insurance industry. The audit was an integral part of the process by which the State maintains accountability of insurance companies so that the public can be confident that insurance companies will have the resources to uphold their part of the bargain to policyholders and the public. In short, the activity was in accord with Bird-part of a legitimate state-sponsored plan to preserve and protect the quasi-public interest of the insurance companies' policyholders.

1124 Further, Crain asserts he is protecting a legal interest of his own by referring to the mandate of 36 O.S. Supp.2000, §.811.1(A), which states in part that "[aluy officer, actuary, or employee of such insurer who causes such statement to be filed, knowing the fraudulent and materially false nature thereof, upon conviction, shall be guilty of a felony...." (Emphasis added.) Crain was a NAICO employee, an assistant vice-president, who had knowledge of irregular and false financial statements, and under the wording of this statute, he could reasonably conclude that withholding or willfully failing to provide, during an audit, the correct information of which he was privy might carry a possible criminal liability as to him.

125 The Oklahoma Court of Civil Appeals in Gabler v. Holder and Smith, Inc., 2000 OK CIV APP 107, 11 P.3d 1269, drew a similar conclusion. In Gabler, the plaintiff discovered that the defendant kept two sets of corporate records and reported his concern that defendant used the dual set to mislead auditors. The Gabler Court noted that under 21 O.S.1991, §§ 1635, 1636, even concurring in falsification of corporate records may make a corporate officer criminally liable. Id., at ¶ 46, 11 P.3d at 1278. Following the distinction made by the Hayes Court, the Gabler Court held that plaintiff's "action in reporting the dual record keeping was protected under the Burk rule," because the plaintiff was acting to vindicate his own interests. Id. Likewise, in the present case, Crain's reference to 36 O.S. Supp.2000, § 311.1, establishes that he also was vindicating his own interests where he could be criminally liable for not reporting financial irregularities if he knew this information could result in, or cause the filing of, false statements. According to the Gabler Court, this action is protected by Burk.

126 The Supreme Court clarified the parameters of the Burk tort in Clinton, 2001 OK 52 at ¶ 10, 29 P.3d at 548, which were then further refined in Barker, 2001 OK 94, 40 P.3d 468. As stated earlier, the plaintiff must "articulate an established and well defined public policy" that NAICO violated in discharging him. Barker, 2001 OK 94, 40 P.3d at 468.

127 This Court, in accord with Barker, finds that Crain's reporting of what he asserts was false information upon which NAI-CO's outside auditors may have based their annual reports of the company to the Insurance Commission is consistent with a clear and compelling public policy goal of maintaining the financial integrity of an insurance company so it can fulfill its critical function of protecting the public. The compelling nature of this policy is articulated by the specific statutes in Title 36 that closely regulate insurance companies. Because the insurance industry carries such an important public mission, Oklahoma recognized the need to regulate the State's insurance companies by constitutional provisions and establishment of the Insurance Commission to oversee the execution of the industry's state-related policy goals. These were recognized in the Supreme Court's clearly articulated decision in Bird, holding that insurance companies are a regulated industry under statutory control to protect the public. Bird, 1948 OK 103 at ¶ 12, 135 P.2d at 997.

{ 28 Therefore, this Court holds that there does exist a specific, well-established, clear and compelling public policy defined by the Oklahoma law regulating the insurance industry. The parties agree that Crain is an at-will employee. To proceed under Burk, Crain must still establish before the trial court on remand that the reason for his discharge violates the identified public policy goal by his performance of an act consistent with a clear and compelling public policy as set forth in Burk. Moreover, given the posture of the record here, it is conceivable that Crain may be able to prove that his termination violated a public policy goal. Thus, the criteria for dismissing a case for failure to state a claim have not been met and the trial court erred in its grant of dismissal.

€29 The trial court's decision is reversed and the case remanded for further proceedings.

©3830 REVERSED AND REMANDED WITH INSTRUCTIONS.

GOODMAN, J., coneurs, and COLBERT, P.J., concurs in result.

      . Both defendants are Oklahoma corporations.

      . The trial court did not have the benefit of Barker v. State Ins. Fund, 2001 OK 94, 40 P.3d 463, prior to its ruling.

      . NAICO does not deny in its motion to dismiss that Crain was, while employed by NAICO, an at-will employee.

      . This determination is a part of a domestic insurance company's licensing requirements.


source: Caselaw Access Project

author: CAROL M. HANSEN, Presiding Judge:

license: Public Domain

text:
    2002 OK CIV APP 78
    FEDERATED RURAL ELECTRIC INSURANCE CORPORATION, Plaintiff/Appellant, v. Mark WILLIAMS d/b/a Cherry Tree Service, Defendant/Appellee. and Federated Rural Electric Insurance Corporation, Plaintiff/Appellee, v. Colony Insurance Company, Defendant/Appellant.
    Nos. 97,043, 97,051.
    Court of Civil Appeals of Oklahoma, Division No. 3.
    July 12, 2002.

      James W. Dobbs, Chubbuck, Smith, Rhodes, Stewart & Elder, P.LL.C., Oklahoma City, OK, for Plaintiff/Appellant, Federated Rural Electric Insurance Corp.
    June E. Matchette, Shannon K. Emmons, Manchester & Pignato, Oklahoma City, OK, for Defendant/Appellee, Mark Williams d/b/a Cherry Tree Service.
    Michael C. Stewart, Chubbuck, Smith, Rhodes, Stewart & Elder, PLLC., Oklahoma City, OK, for Plaintiff/ Appellee, Federated Rural Electric Insurance Corp.
    Jamés L. Gibbs, II, Collins, Zorn, Wagner & Gibbs, Oklahoma City, OK, for Defendant/Appellant, Colony Ins. Co.
   SUPPLEMENTAL OPINION ON REHEARING

Opinion by

CAROL M. HANSEN, Presiding Judge:

T1 Rehearing was granted this same day by order to address the correctness of the trial court's award of attorney fees and costs to Appellee, Federated Rural Electric Insurance Co. (Federated), and the denial of prejudgment interest and to determine whether Federated is entitled to appellate attorney fees. j

T2 On January 4, 2002, the trial court awarded attorney fees in the amount of $18,567.00 and costs in the amount of $798.88 against Appellant, Colony Insurance Co. (Colony). The trial court denied Federated prejudgment interest.

13 Federated argues the trial court abused its discretion in "prorating" its award of attorney fees attributed to its claims against Colony on the basis it only recovered 50% of the total recovery sought in the indemnification case. In its Motion for Attorney Fees, Interest, and Costs Against Defendant Colony Insurance Company, Federated contends that, pursuant to 836 O0.8.2001 § 3629(B), attorney fees, costs, and interest shall be allowable to the prevailing party.

{4 Federated made a demand on Colony to pay that portion of the settlement covered under its insurance policy. Colony denied coverage, and made no offer of settlement within 90 days receipt of the demand. Federated submits the attorney fees incurred in enforcing the insurance coverage provided by the Colony insurance policy total $37,134.00. Attached to Federated's motion are the affidavits of its counsel, Mr. Dobbs and Mr. Stewart, setting forth the time and labor required in the matter. These affidavits detail the number of hours of work and the rate charged for the legal services. However, the affidavits also state, "There is still a pending claim in this lawsuit, and the judgment against Colony Insurance Company is still subject to appeal, therefore, in accordance with State ex rel. Burk v. City of Oklahoma City, 1979 OK 115, 598 P.2d 659, the time and labor required to date in this matter can be verified by detailed contemporaneous time records which are available for in camera review so as to protect and preserve attorney client privileges."

{5 Colony argues Federated's counsel has not submitted an itemized statement for services rendered. In Burk, supra, the Supreme Court specified that "... attorneys in this state should be required to present to the trial court detailed time records showing the work performed and offer evidence as to the reasonable value for the services performed for different types of legal work...." Because detailed time records were not a part of the record on appeal, this Court cannot say the trial court abused its discretion in awarding Federated $18,567.00 in attorney fees.

16 Federated also contends the trial court abused its discretion in "prorating" its award of costs against Colony on the basis Federated only recovered 50% of the total recovery sought in the indemnification case. It argues that pursuant to § 3629(B) and 12 ©.8.2001 § 928, it is entitled to recover its costs. It is undisputed Federated has incurred costs in the amount of $1,597.75 in this action which are directly related to the claims against Colony. Colony cites this Court to no authority which would indicate an award of costs must be reduced by one-half of such costs incurred because the prevailing party was awarded one-half of the recovery sought in the lawsuit. The trial court abused its discretion in awarding only $798.88 in costs.

17 Next Federated submits that pursuant to § 3629(B), Colony is liable for interest in the amount of 15% per year from the date the loss was payable until the date of the trial court's judgment against Colony. However, Colony argues that to be entitled to prejudgment interest, the trial court must be able to determine the date from which the defendant's liability for prejudgment interest begins.

T8 The purpose of prejudgment interest is to make the plaintiff whole by repayment of interest for loss of the use of the money to which the plaintiff was entitled. See Woolard v. JLG Industries, Inc., 210 F.3d 1158, (10th Cir2000). Pursuant to § 3629(B), prejudgment interest begins from the date the loss was payable. In Taylor v. State Farm Fire and Casualty Co., 1999 OK 44, 981 P.2d 1258, an insurance bad faith case, the Supreme Court held that if a "demand's value is unaseertainable until its quantum is judicially settled, no prejudgment interest is the victor's due. But if the value of the demand is fairly ascertainable before its settlement by judgment, prejudgment interest will accrue." Although Colony argues the loss was not ascertainable until judgment, when the trial court determined Federated should be awarded $75,000.00, Federated's demand of $150,000.00 was ascertainable at mediation, on December 6, 1996, before judgment, even though the amount awarded at judgment was a setoff of the ascertainable amount demanded.

19 Federated calculates that 15% interest on the $75,000.00 award from the December 6, 1996, mediation until the August 6, 2001, judgment is $59,208.91 ($770.55 for 1996; $11,250 per year for 1997, 1998, 1999, 2000, and $6,719.18 for 2001 until the August 6, 2001 judgment). Colony does not dispute these calculations, only that Federated is not entitled to prejudgment interest in the first instance. The trial court abused its discretion in denying Federated prejudgment interest in the amount of $59,208.91.

10 Federated's request for appellate attorney fees is granted and remanded to the trial court for a Burk hearing.

AFFIRMED IN PART, REVERSED IN PART, AND REMANDED FOR PROCEEDINGS CONSISTENT WITH THIS OPINION.

ADAMS, J., and MITCHELL, J., concur.

      . In the underlying case (the Wells case), Federated as the insurer of Peoples' Electric Cooperative (PEC) settled with the plaintiffs, Mr. and Mrs. Wells, for $150,000.00. After Colony refused to defend and indemnify PEC for any claims made against PEC, Federated, as subro-gee to PEC's rights, filed a lawsuit against Colony and others seeking indemnification. The trial court found the settlement of $150,000.00 was in good faith and ordered Colony to pay one-half ($75,000.00) of the settlement. The Court of Appeals affirmed.

      . Section 3629(B) provides:
      B. It shall be the duty of the insurer, receiving a proof of loss, to submit a written offer of settlement or rejection of the claim to the insured within ninety (90) days of receipt of that proof of loss. Upon a judgment rendered to either party, costs and attorney fees shall be allowable to the prevailing party. For purposes of this section, the prevailing party is the insurer in those cases where judgment does not exceed written offer of settlement. In all other judgments the insured shall be the prevailing party. If the insured is the prevailing party, the court in rendering judgment shall add interest on the verdict at the rate of fifteen percent (15%) per year from the date the loss was payable pursuant to the provisions of the contract to the date of the verdict. This provision shall not apply to uninsured motorist coverage.


author: JOE C. TAYLOR, Presiding Judge.

text:
    2002 OK CIV APP 80
    Carroll YOUNG and Alvin Young, Individually and as Co-Administrators of the Estate of Ataienza Alvin Young, Deceased, Plaintiffs/Appellants, v. BOB HOWARD AUTOMOTIVE, INC., an Oklahoma corporation, d/b/a Bob Howard Mitsubishi, Defendant/Appellee.
    No. 95,849.
    Court of Civil Appeals of Oklahoma, Division No. 4.
    July 23, 2002.

      Roland V. Combs, III, Roland V. Combs & Associates, Oklahoma City, OK, for Plaintiffs/Appellants.
    Reggie N. Whitten, Kent R. McGuire, Derrick T. DeWitt, Whitten, Nelson, McGuire, Wood, Terry, Roselius & Dittrich, Oklahoma City, OK, for Defendant/Appellee.
   Opinion by

JOE C. TAYLOR, Presiding Judge.

11 Plaintiffs, Carroll and Alvin Young (Parents), appeal an order of the trial court granting summary judgment to Defendant, Bob Howard Automotive (Bob Howard). In this negligence action arising out of the death of Parents' son, Ataienza Alvin Young (A.J.), the issue is whether the uncontroverted facts show that Bob Howard owed a duty to protect A.J. from the criminal acts of a third party. We find that they do not and affirm the trial court's order.

FACTS

12 Bob Howard contracted with Golden Eagle Security, Inc., for security services to be provided at its automobile dealership. Golden Eagle provides three different types of security service: unarmed officers, armed officers, and patrol service. Bob Howard chose the first type of service, two unarmed officers. Bob Howard chose unarmed security officers because it wanted them to be present at the dealership lot, patrol the lot, and contact police in the event of trouble.

18 AJ. was employed by Golden Eagle Security as a security guard and was assigned to one of the unarmed posts at Bob Howard's dealership. On the night of August 24, 1996, A.J. was working his assigned night shift when an intruder, who came onto Bob Howard's premises to steal cars, murdered A.J. His parents brought this negligence action against Bob Howard. Bob Howard moved for summary judgment, arguing that it did not owe a duty to protect A.J. from the eriminal acts of third parties. The trial court granted summary judgment to Bob Howard, and Parents appeal.

ANALYSIS

14 In a negligence action, "the first prerequisite must be to establish the existence of a legally cognizable duty." First Nat'l Bank in Durant v. Honey Creek Entertainment Corp., 2002 OK 11, ¶ 17, 54 P.3d 100 (petition for rehearing pending). Whether one person owes a duty to another is a question of law and often depends on the relationship of the parties. Id. "The court decides whether a defendant stands in such a relationship to a plaintiff that the defendant owes an obligation of reasonable conduct for the benefit of the plaintiff" Delbrel v. Doenges Bros. Ford, Inc., 1996 OK 36, ¶ 7, 913 P.2d 1318, 1320-21. We review questions of law de movo; meaning, we have "plenary, independent, and non-deferential authority to re-examine the [trial court's] legal rulings." Bouziden v. Alfalfa Elec. Coop., Inc., 2000 OK 50, ¶ 14, 16 P.3d 450, 456.

15 "Summary judgment is appropriate where it appears there is no substantial controversy as to any material fact and one party is entitled to judgment as a matter of law." Allen v. Lynn Hickey Dodge, Inc., 2001 OK 93, ¶ 5, 39 P.3d 781, 783. The summary judgment process "is a search for undisputed material facts that would support but a single inference which favors the mov-ant." Shamblin v. Beasley, 1998 OK 88, ¶ 9, 967 P.2d 1200, 1208. Our standard of review on an appeal from a summary judgment is clear. Although a trial court considers factual matters when deciding whether summary judgment is appropriate, its ultimate decision is purely legal: whether one party is entitled to judgment as a matter of law because there are no material disputed facts. Carmichael v. Beller, 1996 OK 48, ¶ 2, 914 P.2d 1051, 1053. Therefore, our standard of review on appeal is de novo. Id.; see also Copeland v. The Lodge Enter., Inc., 2000 OK 36, ¶ 8, 4 P.3d 695, 699. "Like a trial court, an appellate court examines the pleadings and evi-dentiary materials submitted by the parties to determine if there is a genuine issue of material fact and, as in the trial court, all inferences and conclusions arising from the evidentiary materials are viewed in a light most favorable to the non-moving party." Cranford v. Bartlett, 2001 OK 47, ¶ 2, 25 P.3d 918, 920 (citation omitted).

A. Bob Howard's duty to protect A.J. from the criminal acts of a third party.

§$6 An independent contractor doing work on another's premises is an invitee. McKinney v. Harrington, 1993 OK 88, ¶ 8, 855 P.2d 602, 604. As the invitor, the owner owes the independent contractor and its employees "a duty to keep the premises reasonably safe for the performance of the work." Id. at ¶ 9, 855 P.2d at 604. "This duty applies only to conditions or defects in the nature of hidden dangers, traps, snares or pitfalls that are not known or readily observed by the invitee." Id. The invitor is liable for injuries to its invitees if the invitor knew or should have known of the dangerous condition but failed to warn the invitee. Id. The invitor is not, however, an insurer of the safety of its invitees and is not required to prevent all injury occurring on the property. Taylor v. Hynson, 1993 OK 93, ¶ 16, 856 P.2d 278, 281.

¶ 7 Generally, an invitor does not have a duty to protect invitees from eriminal acts by third persons. Id. at ¶ 17. However, the Oklahoma Supreme Court has recognized an exception to this general rule in "unique" or "exceptional cireamstances." Id. at ¶¶ 19-20, 856 P.2d at 281-82. Exceptional cireum-stances are found where "the invitor knows or has reason to know 'that the acts of the third person are occurring, or about to occur?" Id. at ¶ 17, 856 P.2d at 281 (quoting Restatement (Second) of Torts $ 844 emt. f (1965)). In other words, "[the invitor will not be responsible for injury unless the invitor has notice or could be charged with gaining knowledge of the situation in time to remove it or to give warning of its presence." McClure v. Group K Enter., Inc., 1999 OK CIV APP 29, ¶ 4, 977 P.2d 1148, 1150.

18 The record is devoid of any evidence showing that Bob Howard knew that "the acts of the [intruder] were occurring or were about to occur." The evidence presented to the trial court showed that the incident occurred at night, when none of Bob Howard's employees were present. One of Golden Security's employees discovered AJ.'s body, but the assailant, Anthony Bush, had already left. Parents have simply failed to present any evidence that Bob Howard knew that the attack on A.J. was occurring or about to occur.

19 By focusing on the history of car thefts at Bob Howard's dealership, Parents attempt to show that Bob Howard knew or should have known that A.J. would be attacked. However, Parents fail to show that Bob Howard knew or should have known that this particular incident was occurring or about to occur. See Folmar v. Marriott, Inc., 1996 OK CIV APP 51, ¶ 5, 918 P.2d 86, 88 ("A review of Oklahoma Supreme Court cases has found that a duty on the part of proprietors only arises when the situation involved an immediate event which the pro-prictor knew was occurring or about to occur.").

{10 Moreover, Parents presented no evidence of criminal history foreshadowing this type of violent eriminal activity. Although Bob Howard had experienced crimes such as car theft, vandalism, and embezzlement (involving someone taking a car with permission and not returning it) at its lot, it had not experienced violent crimes on the premises. In particular, prior to A.J.'s murder, no security guard had been harmed by confronting anyone on the property. Bob Howard also presented evidence of limited criminal activity in the area surrounding the dealership, and a particularly low incidence of violent criminal activity. There is no evidence in the record to show that Bob Howard knew or should have known of the criminal activity of Anthony Bush that led to A.J.'s murder.

111 McMillin v. Barton-Robison Convoy Co., 1988 OK 241, 78 P.2d 789, is instructive on the issue of Bob Howard's duty to protect A.J. from the criminal acts of a third party. In McMillin, the defendant's employee was murdered on the defendant's premises by robbers who were engaged in stealing an automobile. The defendant's premises were located within a town that allegedly had a high crime rate. Because cars had been stolen from the defendant's premises, the defendant hired guards to protect it. The Oklahoma Supreme Court refused to impose liability on the defendant, finding that (1) an employer does not have a general duty to protect its employees from the assaults of criminals, and (2) there were "no exceptional cireumstances" surrounding the employee's death which would give rise to such a duty. Id. at 10, 78 P.2d at 790.

T12 Parents also argue that Bob Howard increased A.J.'s risk of homicide by providing A.J. and the other security guards with access to all the vehicles on the lot. In particular they focus on the fact that Anthony Bush had worked for Golden Security and knew that the security guards at Bob Howard had access to the vehicles. Parents, however, fail to link this fact with the fact of the homicide-there is no evidence that Anthony Bush knew A.J. and other Golden Security employees had access to the cars, that Anthony Bush stole cars by using A.J.'s key, or that the access caused A.J.'s murder.

B. Bob Howard's duty to provide A.J. with a reasonably safe place to work.

¶ 13 Parents argue that Bob Howard breached its duty to provide A.J. with a reasonably safe place to work. Generally, a hirer of an independent contractor will be liable to the independent contractor and its employees "for an injury occasioned by an unsafe condition of the premises encountered in the work, which is known to the property owner but unknown to the injured person." Hatley v. Mobil Pipe Line Co., 1973 OK 42, ¶ 13, 512 P.2d 182, 185-86 (internal quotation marks omitted). However, the hirer's general duty is qualified by the rule that " 'one who engages an independent contractor to do work for him, and who does not himself undertake to interfere with or direct that work, is not obligated to protect the employees of the contractor from hazards which are incidental to or part of the very work which the independent contractor has been hired to perform?" Id. at ¶ 16, 512 P.2d at 186 (quoting Veechio v. Anheuser-Busch, Inc., 328 F.2d 714, 718 (2d Cir.1964)). See also Marshall v. Hale-Halsell Co., 1997 OK 3, ¶ 11, 932 P.2d 1117, 1119 ("as long as [hirer of independent contractor] did not interfere with or direct the work for [the independent contractor's employee], [hirer] was not obligated to protect him from hazards which were incidental to or part of the very work he was hired by the independent contractor to perform"); Echazabal v. El Toro Meat Packing Corp., 506 So.2d 1100, 1101 (Fla.Dist.Ct.App.1987) ("the employee of an independent contractor cannot maintain a cause of action against a property owner where ... the precise duty for which he was employed (guarding the premises) resulted in his injury"); Turner v. Northwest Gen. Hosp., 97 Mich.App. 1, 293 N.W.2d 713, 715 (1980) (security guard's murder while on duty in emergency room "was the very reason [he] and his employer were hired, ie, to safeguard against criminal acts of violence"; "(Jt would be ironic to hold defendant hospital liable to an employee of the very security guard company it hired for protection"); Carter v. Mercury Theater Co., 146 Mich.App. 165, 379 N.W.2d 409 (1985) (relying on Turner to hold that employer of security guard company was not liable to its employee who was murdered while performing his duties as security guard).

14 Here, A.J. was killed while performing the "very work" that Golden Security had been hired to perform-he was killed performing his job as a security guard. However, Parents argue that Bob Howard interfered with or exercised control over Golden Security and A.J.'s work by prohibiting A.J. from carrying a gun. We disagree. Golden Security offered three types of security services: unarmed, armed, and patrol. Bob Howard merely selected one of the types of security offered by Golden Security. There is no evidence in the record to show that, beyond selecting unarmed security, Bob Howard exercised any control over the manner in which the security was provided. Therefore, Bob Howard had no duty to protect A.J. from a hazard which was incidental to or part of the very work which Golden Security had been hired to perform.

C. Bob Howard's liability for the action of an independent contractor engaged in an inherently dangerous activity.

$15 Parents also argue that Bob Howard cannot escape liability because it hired Golden Security to perform an inherently dangerous activity. "The rule in Oklahoma is that a person who performs work through an independent contractor is not liable for damages to third persons caused by the negligence of the contractor except where the work is inherently dangerous or unlawful or where the employer owes a contractual or defined legal duty to the injured party in the performance of the work." Williamson v. Fowler Toyota, Inc., 1998 OK 14, ¶ 7, 956 P.2d 858, 860 (emphasis added) (internal quotation marks omitted). "Inherently dangerous activity includes work that is obviously dangerous and work which in the ordinary course of events will cause injury to others if certain precautions are not taken." Bouziden v. Alfalfa Electric Coop., Inc., 2000 OK 50, ¶ 24, 16 P.3d 450, 458.

116 The cases in Oklahoma which have recognized and used the "inherently dangerous" exception impose liability on the hirer of an independent contractor for injuries to third parties. For example, see Copeland v. Lodge Enter., Inc., 2000 OK 836, 4 P.3d 695 (referring to "damages to third persons"); Williamson, 1998 OK 14, 956 P2d 858 (same); Hudgens v. Cook Indus., Inc., 1973 OK 145, 521 P.2d 818 (same). Oklahoma courts have not addressed. the issue of whether this exception should be applied to impose liability for damages to an independent contractor or its employees. In other words, Oklahoma courts have not addressed the issue of whether employees of independent contractors should be treated as third parties.

117 Courts in other jurisdictions have wrestled with the issue of whether independent contractors and their employees are third persons to whom the hirer of an independent contractor engaged in an inherently dangerous activity owes a duty. For several logical and persuasive reasons, the majority of courts have declined to impose such a duty. See Fleck v. ANG Coal Gasification Co., 522 N.W.2d 445, 450-51 (N.D.1994) (giving a comprehensive list of authorities adopting the majority and minority viewpoints). The policy reason behind the exception-assuring a remedy for persons injured by the inherently dangerous activity-is satisfied when the injured party, an employee of the independent contractor, may pursue workers' compensation benefits Id. at 451. The worker's compensation scheme, "which affords compensation regardless of fault, advances the same policies that underlie" the inherently dangerous exception. Privette v. Superior Count, 5 Cal.4th 689, 21 Cal.Rptr.2d 72, 854 P.2d 721, 723 (1980). "Furthermore, many courts recognize that, because the cost of workers compensation premiums are necessarily included in the contract price, the employer of the independent contractor has indirectly paid those premiums and should be protected by the exelusive remedy provision in the workers compensation laws." Fleck, 522 N.W.2d at 451 (citing cases from Minnesota, California, Kansas, Kentucky, Maryland, Massachusetts, Missouri, Wisconsin, and Wyoming). Limiting the inherently dangerous activity exeeption to injuries to such third persons also prevents employees of independent contractors from reaping a windfall by avoiding the statutorily mandated limits of workers' compensation. Id. at 453; see also Vertentes v. Barletta Co., Inc., 392 Mass. 165, 466 N.E.2d 500, 503 (1984).

118 Courts have also questioned a rule that would subject the hirer of an independent contractor to greater liability for injuries to the independent contractor's employees than the liability to which the hirer would be subjected if it used its own employees.

'[Tlhe principal employer should be subject to the same liability when the work is performed by employees of an independent contractor as when the work is performed by the principal employer's own employees. If the principal employer uses his own employees, he is subject to worker's compensation payments, not tort liability. If the principal employer incurs tort liability when he hires an independent contractor, the principal employer would, for reasons of cost, prefer to use his own employees, who may be inexperienced, rather than employ an independent contractor skilled in the task. Thus, several courts conclude that to impose tort liability on the principal employer would have unfavorable consequences to the principal employer, the independent contractor, the employees and the public.'

Fleck, 522 N.W.2d at 452 (quoting Wagner v. Continental Cas. Co. 143 Wis.2d 379, 421 N.W.2d 835, 842 (Wis.1988)); see also Privette, 21 Cal.Rptr.2d 72, 854 P.2d at 727-28 (applying the inherently dangerous exception to employees of independent contractors "produces the anomalous result that a non-negligent person's liability for an injury is greater than that of the person whose negligence actually caused the injury"); Tauscher v. Puget Sound Power & Light Co., 96 Wash.2d 274, 635 P.2d 426, 430-31 (1981). "The majority rule, which encourages the hiring of trained professionals with special expertise to perform work that is inherently dangerous or encompasses a peculiar risk, better promotes the dual policy concerns of safety to the general public and safety to those performing the work...." Fleck, 522 N.W.2d at 452.

119 Valid reasons also exist for distinguishing between members of the general public and employees of independent contractors. Members of the general public are less likely to be aware of work site dangers and thus could not adequately protect themselves, while employees at the work site would possess knowledge of the nature of the project and its attendant risks. Id. at 453 (quoting Zueck v. Oppenheimer Gateway Properties, Inc., 809 S.W.2d 384, 387-88 (Mo.1991)).

120 We agree with the majority of jurisdictions and hold that the inherently dangerous exception, which prevents a party who hires an independent contractor to do inherently dangerous work from escaping liability for injuries to third persons, does not extend-to employees of the independent contractor. Thus, Bob Howard is not liable for the death of A.J. while engaged in the allegedly inherently dangerous work of his employer, Golden Security.

D. Bob Howard's liability for negligently hiring Golden Security.

121 Next Parents argue that Bob Howard negligently hired and supervised Golden Security. This argument is based on Parents' complaint that Golden Security had only been in business for a short time, allowed its former employee, Anthony Bush, to retain his security uniform, and did not equip A.J. with adequate communication equipment. As with Parents' argument that Bob Howard should be liable for hiring an independent contractor to perform an inherently dangerous job, we find that the hirer of an independent contractor is not liable to employees of the independent contractor for negligent hiring.

122 "One of the conditions under which the employer is relieved of liability for the negligent acts of an independent contractor which he has employed is when the employer has borne the duty which requires him to exercise due care in selecting a competent contractor for the necessary work." Hudgens v. Cook Ind., Inc., 1978 OK 145, 112, 521 P.2d 813, 816. While Oklahoma courts have not addressed the issue of whether this negligent hiring theory applies to employees of an independent contractor, other courts have done so and rejected such a theory under those cireumstances. In Chapman v. Black, 49 Wash.App. 94, 741 P.2d 998 (1987), an employee of an independent contractor sued homeowners for injuries sustained when he fell from the roof of a house being constructed for homeowners. The employee sought to impose liability on the homeowners for negligently hiring the independent contractor for whom the employee worked. The Washington Court of Appeals refused to find that the homeowners owed the employee "a duty to protect him from the negligence of his own employer." Id. at 1004. " 'The general rule is that the owner of premises owes to the servant of the independent contractor employed to perform work on his premises the duty to avoid endangering him by his own negligence or affirmative act, but owes no duty to protect him from the negligence of his own master." Id. (quoting Lamborn v. Phillips Pacific Chemical Co., 89 Wash.2d 701, 575 P.2d 215 (1978)). See also Woodson v. Rowland, 92 N.C.App. 38, 373 S$.E.2d 674, 678-79 (1988), offd in part and rev'd in part on other grounds, 329 N.C. 330, 407 S$.E.2d 222 (1991); of Wagner v. Continental Cas. Co., 148 Wis.2d 379, 421 N.W.2d. 885, 888-89 (1988) ("negligent hiring does not by itself constitute an affirmative act of negligence upon which the liability of a principal employer .to a contractor's employee can be based").

123 Thus, we conclude Bob Howard cannot be held liable to Parents for negligent hiring of Golden Security, A.J.'s own employer. Bob Howard did not have a duty to protect A.J. from the negligent acts of his own employer.

CONCLUSION

124 Bob Howard did not owe a duty to protect A.J. from the criminal acts of a third party under the undisputed facts presented. There is no evidence in the record to support a finding that Bob Howard knew or should have known that the acts of the intruder were occurring or about to occur. Furthermore, Bob Howard did not breach its duty to provide A.J. with a reasonably safe workplace. Finally, the inherently dangerous exception to the general rule of nonliability of the hirer of an independent contractor and the theory of negligent hiring of an independent contractor will not be applied to impose liability for injuries to an independent contractor's own employees. Therefore, we affirm the order granting summary judgment to Bob Howard.

125 AFFIRMED.

T26 REIF, C.J., and STUBBLEFIELD, J., concur.

      . McMillin, 1938 OK 241, 78 P.2d 789, is also instructive on the issue of whether Bob Howard failed to provide A.J. with a reasonably safe place to work. Despite the defendant's knowledge of previous car thefts and its decision to hire guards to prevent theft, the Supreme Court determined that the defendant did not fail to furnish the employee a safe place to work.

      . We assume for purposes of this argument that the job of a security guard is inherently dangerous. >


author: CAROL M. HANSEN, Presiding Judge.

text:
    2002 OK CIV APP 81
    STATE of Oklahoma, acting by and through the OKLAHOMA CAPITOL IMPROVEMENT AUTHORITY, Plaintiff/Appellee, v. UNITED STATES BEEF CORPORATION, an Oklahoma corporation, Defendant/Appellant, and Francis Investments, an Oklahoma general partnership; Forrest Freeman, County Treasurer of Oklahoma County; and, Board of County Commissioners of Oklahoma County, Defendants.
    No. 97,546.
    Court of Civil Appeals of Oklahoma, Division No. 3.
    Aug. 16, 2002.
    Rehearing Denied July 19, 2002.

      James M. Waldo, Mock, Schwabe, Waldo, Elder, Reeves & Bryant, Oklahoma City, OK, for Plaintiff/Appellee.
    William J. Doyle, III, Doyle & Salisbury, Tulsa, OK, for Defendant/Appellant.
   Opinion by

CAROL M. HANSEN, Presiding Judge.

{1 Defendant/Appellant, United States Beef Corporation (U.S.Beef), seeks review of the trial court's order granting summary judgment in favor of Plaintiff/Appellee, State of Oklahoma, acting by and through the Oklahoma Capitol Improvement Authority (State), in State's action for condemnation of property leased by U.S. Beef. We reverse and remand, holding U.S. Beef has standing to challenge the award of the commissioners.

{2 U.S. Beef, an Arby's franchisee, has operated an Arby's restaurant since 1988 on property it leased in 1987 from Defendant, Francis Investments, at 3801 North Lincoln Boulevard in Oklahoma City. State filed its amended petition to condemn the subject property on April 18, 2000. It sought fee title to the property in order to construct and operate the Lincoln Renaissance Project pursuant to its authority under 73 O.S.8upp.1997 § 161(5). The commissioners filed their report assessing compensation of $400,000.00 for the condemnation. State deposited the assessed amount with the court clerk on July 28, 2000.

T3 U.S. Beef demanded jury trial. State moved for summary judgment, arguing U.S. Beef lacked standing to pursue a jury trial because it had agreed in its lease with Francis Investments it would not be entitled to any part of any condemnation award. U.S. Beef objected. The trial court granted State's motion. U.S. Beef appeals without appellate briefs in conformance with the procedures for the appellate accelerated docket, Okla. Sup.Ct. R. 1.36, 12 0.8.8upp.1996, Ch. 15, App. 1.

T4 The lease agreement between U.S. Beef and Francis Investments provided,

EMINENT DOMAIN: If at any time during the existence of this lease the City, County, State, or Federal authorities under any legal power or threat of eminent domain, shall acquire title to any portion of the premises, or any portion of the property in which the premises is located, and such taking does not materially adversely effect [sic] the LESSEE'S ability to use and enjoy the premises, then the rent herein stipulated shall be decreased in proportion to the amount of portion of the premises as shall be taken under such proceedings. -If such taking materially adversely effects [sic] the LESSEE'S ability to use and enjoy the premises, then LESSOR or LESSEE may terminate this lease. In the event of any taking, LESSEE shall not be entitled to any portion of any award except for moving expenses, if allowed by law, and that portion of the award clearly attributable to LESSEE'S trade fixtures, if any.

The primary term of the lease was for five years, with two five year renewal options. U.S. Beef currently holds the lease under the second five year renewal term. According to John R. Davis, U.S. Beef's vice president, U.S. Beef remodeled. the restaurant in 1998 and 1999 pursuant to an agreement with Francis Investments to extend the lease term beyond December 31, 2008.

15 In his affidavit, Davis stated neither U.S. Beef nor Francis Investments terminated the 1987 lease agreement. He said that on November 9, 2000, U.S. Beef entered a lease and remodel agreement for an alternate Arby's site at 8628 North Lincoln Boulevard as a substitute for the condemned premises. The restaurant moved to the new site in March 2001.

16 Private property may not be taken for public use without just compensation. Okla. Const. Art. 2, § 24. The word "property" as used in this section "include[s] every valuable interest which can be enjoyed as property and recognized as such." Southern Kansas Ry. Co. v. Oklahoma City, 1902 OK 63, 12 Okla. 82, 69 P. 1050, 1056. A lease agreement is such a property interest, Perkins Whistlestop, Inc. v. State ex rel. Dept. of Transp., 1998 OK CIV APP 7, 954 P.2d 1251, 1254-1255. In a total taking, the rights of the lessee to share in the award become vested at the time of the taking, absent an agreement to the contrary. Garibaldi v. Oklahoma Indus. Finance Corp., 1975 OK 108, 543 P.2d 555, 558. In a condemnation case, the taking is effective at the time the condemmnor pays the compensation awarded by the commissioners to the owner, or into court for the owner. Okla. Const. Art. 2, § 24, and Stinchcomb v. Oklahoma City, 1921 OK 154, 81 Okla. 250, 198 P. 508.

17 The elements of damage in a condemnation case include relocation costs. City of Oklahoma City v. Hamilton, 1999 OK CIV APP 62, 984 P.2d 247, 250. A lessee's damages when a leasehold interest is taken is the difference between the fair rental value of the leased premises for the unexpired term of the lease and the rent reserved in the lease. Garibaldi v. Oklahoma Indus. Finance Corp., 1975 OK 108, 543 P.2d 555, 558. However, a lessor and lessee may otherwise agree as to the apportionment of damages between them. A condemnor has no interest in the apportionment of damages between lessor and lessee. Perkins Whistlestop, Inc. v. State ex rel. Dept. of Transp., 1998 OK CIV APP 7, 954 P.2d 1251, 1254 n. 2.

18 In the instant case, the taking was effective July 28, 2000, the date State paid compensation to the court clerk for the property owner. U.S. Beefs rights to share in the award vested at that time. On that date, U.S. Beef held a leasehold interest in the property pursuant to a written lease. The lease provision relating to eminent domain did not terminate the lease upon the property's condemnation; it merely gave the parties the option to do so. It did not provide U.S. Beef gave up its entitlement to part of any condemnation award; rather, it specified the manner in which the parties agreed to apportion the award. They agreed U.S. Beef would receive the portion of the award attributable to moving expenses and trade fixtures. Accordingly, U.S. Beef is the owner of private property taken for public use and is entitled to compensation. It has standing to demand jury trial and challenge the commissioners' award. The trial court's order granting summary judgment to State is REVERSED and this matter is REMANDED for jury trial.

ADAMS and MITCHELL, JJ., concur.


author: WILKINS, Justice:

text:
    2002 UT 53
    BREIGGAR PROPERTIES, L.C., a Utah limited liability company, Plaintiff and Appellant, v. H.E. DAVIS & SONS, INC., a Utah corporation, and Sundance Development Corporation, a Utah corporation, Defendants and Appellee.
    No. 20000882.
    Supreme Court of Utah.
    June 7, 2002.

      John C. Rooker, Salt Lake City, for plaintiff,
    Stephen Quesenberry, Provo, David P. Williams, Eric K. Schnibbe, Salt Lake City, for defendants.
   WILKINS, Justice:

1 1 Breiggar Properties, L.C., ("Breiggar") appeals from the trial court's grant of summary judgment in favor of H.E. Davis & Sons, Inc. ("Davis"). Because Breiggar's complaint was barred by the three-year statute of limitations in section 78-12-26(1) of the Utah Code, we affirm.

BACKGROUND

12 In reviewing a trial court's grant of summary judgment, we view all the facts and the reasonable inferences drawn from them in a light most favorable to the non-moving party. E.g., Pigs Gun Club, Inc. v. Sanpete County, 2002 UT 17, T7, 42 P.8d 379.

3 Davis entered into an agreement with the Utah Department of Transportation ("UDOT") to do slope work, rock removal, and shoulder-widening work on a portion of State Road 92. In the course of this work, Davis dumped rocks, soil, and other debris on property owned by Breiggar, without Breiggar's permission or knowledge. Davis completed the work by December 10, 1996.

1 4 In September 1997, Breiggar discovered that debris had been dumped on its property. Breiggar demanded that Davis remove the debris and attempted to negotiate a settlement of the dispute. After negotiations failed, Breiggar filed a complaint on March 21, 2000, against Davis and Sundance Development Corporation ("Sundance"), alleging causes of action for trespass, continuing trespass, and negligence.

T5 Before the trial court, Davis moved for summary judgment on the grounds that (1) the three-year statute of limitations in seetion 78-12-26(1) of the Utah Code barred Breiggar's trespass and negligence claims, and (2) the debris did not constitute a continuing trespass, thereby rendering the claim time barred as well. Breiggar responded by arguing that (1) the discovery rule should be changed and applied to toll the statute of limitations for the trespass claim and (2) the statute of limitations did not bar the continuing trespass claim. Breiggar likewise moved for summary judgment in its favor.

T6 The trial court granted Davis' motion, and, noting that both parties conceded "that the debris was not placed on Plaintiff's property after December 10, 1996," held that the trespass was permanent and that, therefore, as the three-year statute of limitations began to run by December 10, 1996, the complaint-filed on March 21, 2000-was time barred. The trial court declined to modify the discovery rule. Breiggar appeals.

ISSUES PRESENTED AND STANDARD OF REVIEW

T7 The determinative issue before us is whether Breiggar's complaint was barred by the statute of limitations in section 78-12-26(1) of the Utah Code. The proper application of the statute of limitations hinges on the distinction between permanent and continuing trespass. In addressing this issue, we consider only whether the trial court correctly applied the law and correctly concluded that no disputed issues of material fact exist. See, eg., Pigs Gun Club, Inc. v. Sanpete County, 2002 UT 17, ¶ 7, 42 P.3d 379.

ANALYSIS

I. CHARACTERIZATION OF TRESPASS

T8 The dispute before us today arises out of confusion created by the seemingly different application of the statute of limitations to a trespass depending on whether the trespass is characterized as permanent or continuing. We have previously addressed this issue in Walker Drug Co. v. La Sal Oil Co., which explains:

When a cause of action for nuisance or trespass accrues for statute of limitations purposes depends on whether the nuisance or trespass is permanent or continuing. Where a nuisance or trespass is of such character that it will presumably continue indefinitely it is considered permanent, and the limitations period runs from the time the nuisance or trespass is created. However, if the nuisance or trespass may be discontinued at any time it is considered continuing in character.... [In the case of a continuing trespass or nuisance, the person injured may bring successive actions for damages until the nuisance [or trespass] is abated, even though an action based on the original wrong may be barred, but recovery is limited to actual injury suffered within the three years pri- or to commencement of each action.

902 P.2d 1229, 1282 (Utah 1995) (citations, alterations, and quotations omitted) ("Walker I"). Under Walker I, if a trespass is characterized as permanent, the statute of limitations begins to run from the time the trespass is created, and the trespass may not be challenged once the limitations period has run. If, on the other hand, the trespass is characterized as continuing, the trespass may be challenged at any time, but recovery is limited. While these concepts may be clear, we acknowledge that characterizing a trespass as permanent or continuing can be confusing with only the standard articulated in Walker I. >

T9 In the instant case, Breiggar asserts that the debris dumped by Davis constitutes a continuing trespass. In support of this assertion, Breiggar suggests that Utah law on the characterization of permanent and continuing trespasses is unclear, and that a "reasonable abatability" test, adopted by several other jurisdictions, should be adopted here. See, e.g., Mangini v. Aerojet-General Corp., 12 Cal.4th 1087, 51 Cal.Rptr.2d 272, 912 P.2d 1220, 1225-30 (1996). We disagree that a "reasonable abatability" test should be adopted and take this opportunity to clarify the distinction between permanent and continuing trespasses under Utah law.

110 In Walker Drug Co. v. La Sal Oil Co., 972 P.2d 1238 (Utah 1998) ("Walker II"), we explained that, "(whether [a] trespass ... is continuous or permanent is a different question from whether the resulting injury ... is temporary or permanent.... A continuing trespass may cause either a permanent or a temporary injury." Id. at 1246 n. 9. As Walker II makes clear, in classifying a trespass as permanent or continuing, we look solely to the act constituting the trespass, and not to the harm resulting from the act.

BREIGGAR PROPERTIES, L.C., a Utah limited liability company, Plaintiff and Appellant, v. H.E. DAVIS & SONS, INC., a Utah corporation, and Sundance Development Corporation, a Utah corporation, Defendants and Appellee 11 Under this view, the difference between a permanent or continuing trespass is purely seraantic. Once an act of trespass has occurred, the statute of limitations begins to run. If there are multiple acts of trespass, then there are multiple causes of action, and the statute of limitations begins to run anew with each act. We characterize a trespass as "permanent" to acknowledge that the act or acts of trespass have ceased to occur. We characterize a trespass as "continuing" to acknowledge that multiple acts of trespass have occurred, and continue to occur, and that, in the event the statute of limitations has run on prior acts of trespass, recovery will only be allowed for those acts which are litigated in a timely fashion. Thus, as we explained in Walker I, "in the case of a continuing trespass ... the person injured may bring successive actions for damages until the [trespass] is abated, even though an action based on the original wrong may be barred, but recovery is limited to actual infu-ry suffered within the three years prior to commencement of each action." 902 P.2d at 1232 (internal quotations, alterations, and citations omitted).

€ 12 The same position has been taken by the Massachusetts Supreme Court in Carpenter v. Texaco, Inc., 419 Mass. 581, 646 N.E.2d 398 (1995). Carpenter involved the release of gasoline from an underground tank, which seeped onto the plaintiff's property no later than 1984. Id. at 399. The plaintiff brought suit in 1991, alleging a continuing trespass. Id. In holding that the suit was barred by the statute of limitations, the Massachusetts Supreme Court rejected the characterization of the trespass as continuing, noting that "a continuing trespass ... must be based on recurring tortious or unlawful conduct and is not established by the continuation of harm caused by previous but terminated tortious or unlawful conduct." Id. (emphasis added). Thus, the court looked solely to the act of trespassing to determine whether the trespass was continuing, ignoring the injury caused by the trespass. The Massachusetts Supreme Court reaffirmed this principle in Taygeta Corp. v. Varian Assocs., Inc., 436 Mass. 217, 763 N.E.2d 1053, 1064-65 (2002), again making a clear distinction between the act of trespassing and the injury caused by that act. Id. at 1065 (citing, inter alia, Walker II, 972 P.2d at 1246 n. 9).

¶ 13 By classifying acts of trespass in this manner, we give full effect to the intent of the Utah Legislature in adopting a three-year statute of limitations for trespass. See Utah Code Ann. § 78-12-26(1) (1996) (setting forth a three-year limitations period for trespass); cf. Carpenter, 646 N.E.2d at 400 ("We decline to recognize ... a continuing trespass ... concept ... because, in adopting a three-year statute of limitations ... the Legislature stated a guiding public policy."). To hold otherwise by, for example, adopting a reasonable abatability test as advocated by Breiggar, would allow a plaintiff to bring a complaint against any trespasser-even if the act of trespass occurred decades earlier-as long as the harm caused by the trespass could be reasonably abated. Such a view would clearly undermine the purposes behind statutes of limitations. See, e.g., Vigos v. Mountainland Builders, Inc., 2000 UT 2, ¶ 22, 993 P.2d 207 ("Statutes of limitations are intended to prevent unfair dilatory litigation against a defendant and to require that claims be litigated while proper investigation and preservation of evidence can occur."); Horton v. Goldminer's Daughter, 785 P.2d 1087, 1091 (Utah 1989) ("In general, statutes of limitation are intended to compel the exercise of a right of action within a reasonable time and to suppress stale and fraudulent claims so that claims are advanced while evidence to rebut them is still fresh."). While we do not condone acts of trespass, we agree with the Massachusetts Supreme Court that in cases of trespass, "plaintiffs [are] obliged to protect their own interests by timely action." Carpenter, 646 N.E.2d at 400.

II. APPLICATION TO BREIGGARS COMPLAINT

{14 With the foregoing legal principles in mind, we look to the record before the trial court at the time it made its ruling to determine when the statute of limitations began to run on Breiggar's causes of action. The uncontested facts before the trial court established that the act of trespass-the dumping of debris by Davis onto Breiggar's property-occurred not later than December 10, 1996. The trial court correctly determined that the applicable statute of limitations is found in section 78-12-26(1) of the Utah Code, which provides for a three-year limitations period. Because the date was not contested, the trial court was correct in holding as a matter of law that the act of trespass occurred by December 10, 1996, and that, consequently, the three-year statute of limitations began to run on that date. The fact that the pile of debris continued to remain on Breiggar's property, or the possibility that it could be reasonably abated is irrelevant to this conclusion. Thus, Breiggar was required to file its complaint by December 10, 1999, in order to be within the three-year limitations period. See Utah Code Ann. § 78-12-26(1) (1996). Breiggar's complaint-filed March 21, 2000-was not timely filed and was therefore barred by the statute of limitations. Thus, because the trial court "correctly applied the law and correctly concluded that no disputed issues of material fact existed," Pigs Gun Club, Inc. v. Sanpete County, 2002 UT 17, 17, 42 P.8d 379 (citations and quotations omitted), we affirm the trial court's grant of summary judgment in favor of Davis.

CONCLUSION

{15 It was undisputed before the trial court that the act of trespass occurred, at the latest, on December 10, 1996. This date marked the beginning of the three-year limitations period. Breiggar's suit was filed after the limitations period expired and was, therefore, time barred. Aceordingly, we affirm the trial court's grant of summary judgment.

16 Chief Justice DURHAM, Associate Chief Justice DURRANT, Justice HOWE, and Justice RUSSON concur in Justice WILKINS opinion.

      . The role of Sundance in this case is unclear from the record, as is the precise relationship between Sundance, Davis, and UDOT. However, the trial court stated that its decision applied to both Sundance and Davis, a determination which neither party has opposed. Likewise, our holding applies to both Sundance and Davis, and any reference to one party incorporates the other.

      . Breiggar also raises the issue of whether the discovery rule should be broadened to toll the statute of limitations until a plaintiff knows or should know of its claim. The discovery rule allows for tolling in several instances, including in "exceptional circumstances" when "application of the general rule would be irrational or unjust." Walker Drug Co. v. La Sal Oil Co., 902 P.2d 1229, 1231 (Utah 1995) ("Walker I ") (quoting Warren v. Provo City Corp., 838 P.2d 1125, 1129 (Utah 1992)). Breiggar concedes that it cannot satisfy these standards but argues that application of the discovery rule as articulated in Walker I would be inequitable and that the rule should consequently be broadened and applied. We see no "exceptional circumstances" in this case and see no reason to modify the current discovery rule.

      . Because we look to the act constituting the trespass, Utah law cannot support a "reasonable abatability" test, which looks at the harm caused by the trespass.


author: DURRANT, Associate Chief Justice:

text:
    2002 UT 56
    FIRST EQUITY FEDERAL, INC., on its own behalf and on behalf of Aspen Meadows Homeowners Assoc., Plaintiffs and Appellees, v. PHILLIPS DEVELOPMENT, LC, Peter O. Phillips, Lydia Phillips, Alden B. Turnbow, Larry Andrews, John E. Phillips and Gregory Skabelund, Defendants and Appellants.
    No. 20010417.
    Supreme Court of Utah.
    June 18, 2002.
    Rehearing Denied Aug. 5, 2002.

      Graden P. Jackson, Salt Lake City, for plaintiffs.
    Michael F. Skolnick, Wendell K. Smith, Salt Lake City, for defendants.
   DURRANT, Associate Chief Justice:

T1 This appeal concerns the application of the two-dismissal provision of rule 41(a)(1) of the Utah Rules of Civil Procedure. In two previous actions against the defendants, First Equity Federal, Inc., obtained dismissals of claims identical to the claims set forth in this suit. Specifically, First Equity had earlier filed a notice of dismissal pursuant to rule 41(a)(1) in a state court action and obtained a dismissal pursuant to an ex parte motion to dismiss in a federal court action.

12 Based on this procedural history, the defendants moved the district court to dismiss the present action, arguing that First Equity had filed a notice of dismissal, or the equivalent of such a dismissal, on two separate occasions and that its suit was precluded by rule 41(a)(1). The district court denied this motion. We affirm because the plain language of rule 41(a)(1) does not extend to motions to dismiss.

BACKGROUND

T3 When reviewing a district court's denial of a defendant's motion to dismiss, we "accept the factual allegations in the complaint as true and draw all reasonable inferences from those facts in a light most favorable to [the] plaintiff." Pendleton v. State Bar, 2000 UT 96, ¶ 5, 16 P.3d 1230 (internal quotation and citation omitted). We recite the facts accordingly.

T4 On August 25, 2000, First Equity filed a complaint in First Judicial District Court against the defendants, alleging several causes of action in connection with two large parcels of real property in Cache County, Utah. First Equity then filed a complaint in federal court raising similar claims against the defendants on September 17, 2000. It did so because one of the defendants, Peter O. Phillips, had filed for bankruptcy and jurisdiction over him was necessary and proper in federal court.

15 On September 22, 2000, First Equity filed a voluntary notice of dismissal pursuant to rule 4l(a)(1) of the Utah Rules of Civil Procedure and thereby dismissed its state court action without prejudice. See Utah R. Civ. P. 4l(a)(1). On October 25, 2000, the bankruptey proceeding involving Phillips was dismissed over First Equity's objection, thereby leaving First Equity without a basis for jurisdiction to pursue the claims it had filed against the defendants in federal court. First Equity then filed a motion to have its federal suit remanded to state court on October 80, 2000. One month later, it moved to dismiss its federal suit without prejudice. It did not notify the defendants of these two motions.

16 Before obtaining a decision on either motion, First Equity returned to First Judicial District Court on December 6, 2000, and filed a complaint against the defendants. This complaint, which is the basis for the action presently before us, included the same claims as raised previously.

T7 On December 18, 2000, First Equity's ex parte motion to dismiss its federal court action against the defendants was granted. The federal district court that granted this motion later clarified that its order of dismissal resulted from its lack of jurisdiction over First Equity's lawsuit and that the dismissal was without prejudice.

T8 Thereafter, the defendants moved to dismiss the present action on the ground that First Equity had violated the two-dismissal provision of rule 41(a)(1) of the Utah Rules of Civil Procedure. The district court conducted a hearing on this issue on March 26, 2001. It denied the defendants' motion to dismiss in a memorandum opinion issued on April 17, 2001, reasoning, inter alia, that First Equity did "the right thing" in moving to dismiss its federal court claims because the dismissal was necessary.

19 We granted defendants' petition for an interlocutory appeal pursuant to rule 5 of the Utah Rules of Appellate Procedure on July 18, 2001. See Utah R.App. P. 5a) On appeal, the defendants assert that the district court erred in three respects in denying their motion to dismiss. First, they contend that First Equity filed a notice of dismissal, or the equivalent of such a dismissal (Le., an ex parte motion to dismiss), on two separate occasions and that its suit is precluded by the two-dismissal provision of Utah Rule of Civil Procedure 4l(a)(1). To support this argument, they rely on Thomas v. Heirs of Braffet, 6 Utah 2d 57, 305 P.2d 507 (1956), for the proposition that rule 41(a)(1) treats a motion to dismiss the same as a notice of dismissal. Second, they assert that it does not matter what motive First Equity had for requesting the motion to dismiss. Finally, they claim that First Equity was not compelled to dismiss its federal lawsuit because it had other options, such as pursuing its remand motion.

1 10 In response, First Equity claims that the federal court's order of dismissal did not qualify as a second notice of dismissal under rule 41(a)(1) of the Utah Rules of Civil Procedure for two reasons. First, it argues that Thomas is distinguishable because the motion to dismiss it filed in its federal lawsuit against the defendants was compulsory, not perfunctory. Specifically, it contends that it was compelled to dismiss its federal lawsuit against the defendants because it would have been a violation of rule 11 to continue with the suit while knowing that the court lacked subject matter jurisdiction. Second, it alleges that the purpose behind rule 4l1(a)(1) was not violated because the motion to dismiss it filed in federal court was not intended to harass the defendants or abuse the legal system.

ANALYSIS

I. STANDARD OF REVIEW

111 "We review the district court's denial of [the] defendants' motion to dismiss for correctness, granting no deference to the district court's ruling." Pendleton, 2000 UT 96 at ¶ 5, 16 P.3d 1280. Where this review requires us to examine a rule of civil procedure, we look to the express language of that procedural rule and to the cases interpreting it. See First Sec. Bank v. Conlin, 817 P.2d 298, 299 (Utah 1991). We may affirm the decision rendered below denying the defendants' motion to dismiss on a ground on which the district court did not rely. See O'Neal v. Div. of Family Servs., 821 P.2d 1139, 1141 (Utah 1991). Indeed, it is well established that an appellate court may affirm the judgment appealed from

if it is sustainable on any legal ground or theory apparent on the record, even though such ground or theory differs from that stated by the trial court to be the basis of its ruling or action, and this is true even though such ground or theory is not urged or argued on appeal by appellees, was not raised in the lower court, and was not considered or passed on by the lower court.

Dipoma v. McPhie, 2001 UT 61, ¶ 18, 29 P.3d 1225 (quoting Limb v. Federated Milk Producers Ass'n, 28 Utah 2d 222, 225-26 n. 2, 461 P.2d 290 (Utah 1969) (citation and emphasis omitted)).

II THE PLAIN LANGUAGE OF RULE 4l(a@)(1) OF THE UTAH RULES OF CIVIL PROCEDURE DOES NOT EXTEND TO MOTIONS TO DISMISS

1 12 The defendants argue that this lawsuit is barred by the two-dismissal provision of rule 41(a)(1) of the Utah Rules of Civil Procedure. We disagree.

183 According to the express language of rule 41(a)(1) of the Utah Rules of Civil Procedure, a "notice of dismissal" regarding a claim that has previously been dismissed "operates as an adjudication upon the merits" with respect to that claim. Utah R. Civ. P. 4l(a)(1). In fact, rule 41(a)(1) declares that

an action may be dismissed by the plaintiff without order of court by filing a notice of dismissal at any time before service by the adverse party of an answer or other response to the complaint permitted under these rules. Unless otherwise stated in the motice of dismissal, the dismissal is without prejudice, except that a notice of dismissal operates as an adjudication wpon the merits when filed by a plaintiff who has once dismissed in any court of the United States or of any state an action based on or including the same claim.

Id. (emphasis added).

114 Here, it is undisputed that the claims raised by First Equity in its federal court action against the defendants had been voluntarily dismissed in a prior state court proceeding. It is also undisputed that First Equity's federal court action was dismissed as a result of an ex parte motion to dismiss. Accordingly, in order to determine whether First Equity's suit is precluded by the two-dismissal rule, we must ascertain whether a motion to dismiss qualifies as a notice of dismissal under rule 41(a)(1).

¶ 15 Relying on Thomas v. Heirs of Braffet, 6 Utah 2d 57, 305 P.2d 507 (1956), the defendants assert that the ex parte motion to dismiss filed by First Equity in its federal lawsuit against them constituted a second notice of dismissal. In Thomas, this Court refused to draw a distinction between a notice of dismissal and a "perfunctory" motion to dismiss, stating that "(whether the plaintiff proceeds merely by filing a motice of dismissal, or has the court sign an order, it is an ex parte dismissal without notice to the other side." Id. at 513 (emphasis added). In explaining its decision, the Thomas court reasoned that a perfunctory motion to dismiss was indistinguishable from a notice of dismissal "because the usual practice in this State is to present an order of dismissal for the judge to sign, which he does as a matter of course where there has been no appearance on the other side." Id. Thus, Thomas clearly expanded the meaning of a notice of dismissal to include a perfunctory, or ex parte, motion to dismiss.

116 We disagree with such an expansive interpretation of rule 41(a)(1) of the Utah Rules of Civil Procedure, however, and now overrule Thomas. We do so because the plain language of that rule demonstrates that it does not apply to all types of dismissals. Instead, it refers exclusively to notices of dismissal. Indeed, without mentioning motions to dismiss or any other dismissal procedure, rule 4l(a)(1) explicitly declares that "an action may be dismissed by the plaintiff without order of the court by filing a notice of dismissal" and that "[ulnless otherwise stated, the dismissal is without prejudice, except that a notice of dismissal operates as an adjudication upon the merits when filed by a plaintiff who has onee dismissed [the same claim]." Utah R. Civ. P. 41(@)(1) (emphasis added). We therefore construe rule 41(a)(1) to mean exactly what it says and hold that its language does not apply to motions to dismiss.

T17 Our decision to strictly construe rule 4l(a)(1) and limit its application to notices of dismissal is supported by three factors. First, the rule has a harsh effect on claims previously dismissed by a party. In particular, a violation of rule 41(a)(1) "operates as an adjudication upon the merits" and precludes a suit from going forward. Utah R. Civ. P. 4l1(a)(1). It is therefore a dispositive procedural rule and should be applied narrowly. Cf Guar. Mortgage Co. v. Wilcox, 62 Utah 184, 193-94, 218 .P. 183 (1928) (noting that the drastic penalties of the "Blue Sky Law" required it be interpreted strictly).

{18 Second, a broad application of the two-dismissal rule is not warranted because its underlying purpose is less than compelling. As we noted in Thomas, the ostensible purpose behind the two-dismissal rule is "to prevent vexatious suits and delays in litigation by repetitious filings and dismissals." 305 P.2d at 518. In our view, however, multiple notices of dismissal seem an ineffective and unlikely tool for harassing a defendant who has not appeared or supplied an answer. Even the Thomas court was troubled by rule 4l(a)(1)'s apparent rationale, noting that "[olne may wonder how such dismissals could vex or annoy a defendant who had not appeared or whether the rule is good or bad in its overall effect." Id.

{19 Finally, even if we accept the Thomas court's conclusion as to the purpose behind the rule, the threat of harassment is reduced in the context of a motion to dismiss because such motions require court involvement. Indeed, rule 41(a)(2) of the Utah Rules of Civil Procedure states that "TuJluless the plaintiff files a notice of dismissal under [41(a)(1) 1, an action may only be dismissed at the request of the plaintiff on order of the court based ... on ... a stipulation of all of the parties who have appeared in the action| ] or ... upon such terms and conditions as the court deems proper." Utah R. Civ. P. 4l(a)(2)(G)-(ii). Accordingly, there is no compelling reason to extend rule 41(a)(1) to include motions to dismiss.

1 20 We therefore overrule Thomas to the extent that it held a motion to dismiss qualifies as a notice of dismissal under rule 4l(a)(1) of the Utah Rules of Civil Procedure.

III, RULE 41(q@)(1) OF THE UTAH RULES OF CIVIL PROCEDURE

HAS NO EFFECT ON THE PRESENT LAWSUIT

21 Because a motion to dismiss does not constitute a notice of dismissal under our ruling today, First Equity did not file a notice of dismissal and then the equivalent of a notice of dismissal as the defendants assert; rather, it filed a notice of dismissal followed by a motion to dismiss. Accordingly, rule 41(a)(1) is inapplicable to the situation at bar, and the district court, although relying on a different rationale, correctly denied the defendants' motion.

CONCLUSION

122 The two-dismissal provision of rule 41(a)(1) of the Utah Rules of Civil Procedure does not extend to motions to dismiss. Consequently, rule 41(a)(1) has no application to the present case because First Equity filed a motion to dismiss its federal court action, not a notice of dismissal. We therefore affirm the district court's denial of the defendants' motion to dismiss.

128 Chief Justice Durham, Justice Rus-son, and Justice Wilkins concur in Associate Chief Justice Durrant's opinion.

HOWE, Justice, concurring in result.

41 24 I concur in the result but for reasons other than those expressed by Associate Chief Justice Durrant. A plaintiff should not be able to escape the consequences of rule 41(a)(1) by going outside the rule and voluntarily obtaining a dismissal by a motion and order rather than by following the procedure prescribed by the rule, which is to do it by a notice of dismissal. To allow such maneuvering is to undereut our own rule and make a mockery of it.

125 There is no basic difference between the two methods. Both are done without notice to the opposing parties. One method entitles the pleading "notice of dismissal." The other method uses the caption "motion for dismissal," but the motion is ex parte. We have always looked beyond the caption placed on pleadings and instead focused on the intent of the pleader,. In Watkiss & Campbell v. Fou & Son, 808 P.2d 1061, 1063-64 n. 11 (Utah 1991), this court treated an "exception to order and motion for reconsideration of summary judgment" as simply a motion for a new trial. Similarly, in Howard v. Howard, 11 Utah 2d 149, 158, 356 P.2d 275, 277 (1960), we looked beyond the caption of a "notice of intention to move for a new trial" and held that it was, in fact, a motion for a new trial. In the instant case, an ex parte motion for voluntary dismissal is the equivalent of a notice of voluntary dismissal under rule 41(a)(1). The order signed by the judge granting the motion for voluntary dismissal should be disregarded by us as sur-plusage. Therefore, I believe this court made a sound decision in Thomas v. Heirs of Broffet, 6 Utah 2d 57, 65-6, 305 P.2d 507, 513 (1956), where we held that regardless of which method is used to obtain a voluntary dismissal, the same consequence follows under rule 41(a). I would not overrule that case.

126 However, in the instant case, there have not been two voluntary dismissals. Dismissal of the federal action came after the bankruptcy of one of the defendants was dismissed over First Equity's objection. That left the federal district court without jurisdiction over First Equity's action, and First Equity properly dismissed it. However, rule 41(a)(1) imposes its penalty only where a plaintiff twice voluntarily dismisses an action based on or including the same claim. This dismissal of the federal action was required when the court lost jurisdiction. As the trial court correctly observed, counsel for First Equity "did the right thing" in dismissing its action onee jurisdiction was lost. Otherwise, counsel would be subject to sanctions imposed by rule 11. Thus, the dismissal of the federal action was a compelled dismissal, not voluntary, and the penalty of rule 41(a)(1) does not apply.

      . First Equity conceded this fact at oral argument.

      . We note that defendant Skabelund was identified as a "John Doe" in both the state court proceeding and the federal court action. Whether this prevents him from taking advantage of the dismissals in those cases is an issue we leave unaddressed, however, because we resolve the appeal on a separate ground.

      . In so doing, we note that in'order to overturn prior precedent of this Court, an appealing party must demonstrate "that the rule was originally erroneous or is no longer sound because of changing conditions and that more good than harm will come by departing from [the previous rule." State v. Menzies, 889 P.2d 393, 399 (Utah 1994) (internal quotations and citation omitted). We further note that this burden has been satisfied in the present case because the original rule was erroneous and has harsh consequences thai militate against enforcing it now and in the future.

      . Justice Howe asserts that by taking this action we make a "mockery" of rule 41(a)(1). Specifically, he argues that there is no basic difference between a "notice of dismissal" and an ex parte motion to dismiss because "[bloth are done without notice to the opposing parties." Based on this reasoning, he contends both types of dismissals should be treated similarly. We disagree.
      There is at least one important substantive difference between a "notice of dismissal" and an ex parte motion to dismiss. Whereas a "notice of dismissal" becomes effective the moment it is filed, see Utah R. Civ. P. 41(a)(1) (declaring that "an action may be dismissed by the plaintiff without order of court by filing a notice of dismissal"), an ex parte motion to dismiss becomes effective only after it is granted by the district court. Hence, judicial involvement is required in one situation, but not the other. This distinction is significant in that judicial involvement reduces any potential for harassment that may exist. The distinction between the two types of dismissals therefore transcends the captions attached to the pleadings. Accordingly, the two forms of dismissal are inherently different. Regardless, the plain language of rule 41(a)(1) applies only to a "notice of dismissal." Id.

      . We note that the federal courts have a rule of procedure that is almost identical to our own rule. See Fed.R.Civ.P. 41(a)(1)-(2) (stating that in the absence of a notice of dismissal or .a stipulation by the parties, "an action shall not be dismissed at the plaintiff's instance save upon order of the court and upon such terms and conditions as the court deems proper").