author: SUMMERS, J.

text:
    2003 OK 63
    In re Lannie D. ARNOLD and Deborah Ann Arnold, Debtors.
    No. 97,700.
    Supreme Court of Oklahoma.
    June 24, 2003.
    J. David Ezzell, Elliott, Enabuit, Newby, Ezzell, Overstreet, Riffel & Riffel, PLLC, Enid, OK, for Debtors.
    Joe Pelofsky, United States Trustee, Herbert M. Graves, Assistant United States Trustee, Office of the U.S. Trustees, Oklahoma City, OK.
   SUMMERS, J.

T1 Pursuant to the Revised Uniform Certified of Questions of Law Act, 20 0.8.2001, §§ 1601 et seq., the Honorable TM. Weaver, Judge of the United States Bankruptcy Court for the Western District of Oklahoma submitted this question: Under recent amendments to 31 0.8. Supp.2001, § 2, "may joint debtors who are married and living together on the same homestead property each claim 160 acres for a combined 820 acres as a homestead exemption pursuant to [the statute]?" We answer in the negative, as we find the amendments do not effect such a change in entitlement to exemptions. Where husband and wife are living together on the same rural homestead property they may claim only one homestead exemption, not in excess of 160 acres.

12 The facts of this matter are not in dispute. The debtors, Mr. and Mrs. Arnold, filed a joint voluntary petition seeking relief under Chapter 11 of the Bankruptcy Code. The 820 acres the Arnolds claimed as exempt homestead include land on which their marital home is located and land used in their business operations. Those 820 acres are not located within any city, town or village, and are a portion of approximately 1,300 acres of real property the debtors own which is a single contiguous tract of land.

8 The Arnolds base their claim for combined 160 acre exemptions on 1997 amendments to the statute wherein the legislature deleted the words "family" and "single, adult person", and replaced them with the word "person".

Prior to 1997, section 2 of Title 81 provided that:
"The homestead of any family in this state or the homestead of a single, adult person in this state not within any city, town or village, shall consist of not more than one hundred sixty (160) acres of land, which may be in one or more parcels, to be selected by the owner. The homestead within any city or town owned and occupied as a residence only, shall consist of not exceeding one (1) acre of land, to be selected by the owner: Provided, that the same shall not exceed in value the sum of Five Thousand Dollars ($5,000.00) and in no event shall the homestead by reduced to less than one-quarter (1/4) of an acre, without regard to value: And provided, further, that in case said homestead is used for both residence and business purposes, the homestead interests therein shall not exceed in value the sum of Five Thousand Dollars ($5,000.00) ..." 81 O.S. 1991, § 2. (emphasis added.)
The current version of the section in pertinent part provides:
A. The homestead of any person in this state, not within any city or town, shall consist of not more than one hundred sixty (160) acres of land, which may be in one or more parcels, to be selected by the owner.
B. Effective November 1, 1997, the homestead of any person in this state, not within any city or town, annexed by a city or town on or after November 1, 1997, owned and occupied and used for both residential and commercial agricultural purposes shall consist of not more than one hundred sixty (160) acres of land, which may be in one or more parcels, to be selected by the owner.
C. The homestead of any person within any city or town, owned and occupied as a residence only, or used for both residential and business purposes, shall consist of not exceeding one (1) acre of land, to be selected by the owner.
For purposes of this subsection, at least seventy-five percent (75%) of the total square foot area of the improvements for which a homestead exemption is claimed must be used as the principal residence in order to qualify for the exemption. If more than twenty-five percent (25%) of the total square foot area of the improvements for which a homestead exemption is claimed is used for business purposes, the homestead exemption amount shall not exceed Five Thousand Dollars ($5,000.00) ..." 81 0.8. Supp.2001, § 2. Amended by Laws 1997, c. § 1; Laws 1997, c. 345, § 1. {emphasis added.)

¶ 4 In Oklahoma the homestead right is both constitutional and statutory. The Arnolds assert that the only reasonable construction of the amended statute's substitution of "person" for "family" is the removal of what they claim was an existing "marriage penalty" which encouraged separation and divorce, since two individuals who were not married to each other could claim 320 acres of exemption, whereas married debtors were denied individual separate exemptions. They contend that other exemptions involving personal property, such as automobiles and horses, are available to both husband and wife individually, and we should conclude the Legislature intended the amendment to give spouses separate rights to each claim 160 acres of homestead exemption. They also submit that exemption statutes should be liberally construed, and doubt should be resolved in favor of granting exemptions.

T5 The United States Trustee suggests that substituting "person" for "family" and "single, adult person," was merely intended to "streamline" the statutory language, not to change the meaning of the homestead interest, and that the real intended subject of the Legislature's amendment was to clarify the limitation on the business use of the urban homestead set forth in subsection C. We agree with the Trustee's position that the statutory changes do not encourage married people to divorce or separate in order to claim individual homestead interests. Under both versions married persons could arguably divorcee with equal results if they chose to do so in order to obtain an additional exemption.

T6 We are not persuaded by the Arnold's contention that the substitution of "person" is inconsistent with the meaning and intent of the prior version of the statute which recognized the eligibility for homestead of "any family" and also a "single, adult person." Neither have the Arnolds presented any convincing support for their claim that these legislative amendments were intended to change the historical character and established purpose of the homestead.

17 The Arnolds' position approaches this amended homestead statute as if it concerns individual property ownership, unconnected to the historical character and public policy served by the homestead laws. This view is erroneous. In Oklahoma, the homestead exemption has long been seen as a character or designation which attaches to the land itself in order to preserve the family home for occupation, and to protect the family from demands of creditors. Jones v. Berger, 2002 OK 31, 46 P.3d 698.

¶ 8 Homestead is not an incidence of ownership. Nor does its presence or non-presence change ownership of the land. Nothing like it is known at common law. Pettis v. Johnston, 1920 OK 224, ¶ 38, 78 Okla. 277, 190 P. 681, 683. It is a special and peculiar interest in real property, the domicile of the family, which vests jointly in husband and wife for the benefit of the entire family although the title to the land may be entirely in one spouse. The joint interest is regarded as paramount to the rights of any individual family member, and it survives the death of either or both the husband and wife for the benefit of the family. Pettis v. Johnston, supra. A person cannot have two homesteads at the same time, so it is well settled that once a tract of land is impressed with homestead character it continues to possess such character until it has been definitely repudiated or abandoned by the persons entitled to claim it. We have also held that the plain language of the constitutional and statutory provisions and the intent of the exemption is to insure the preservation of the family home, and never to enable a debtor to escape just liabilities or perpetrate a fraud or injustice. Glaze v. Drawver, 1941 OK 293, 189 Okla, 402, 117 P.2d 544.

T9 We have long recognized that under our constitutional and statutory provisions

"the homestead of the family may consist of more than one tract of land, and it may be owned either by the husband or wife, or by both jointly, or one tract be owned by one and another tract owned by the other, so long as the aggregate number of acres occupied as the home shall not exceed 160 acres." Gooch v. Gooch, 1913 OK 377, 38 Okla. 300, 133 P. 242, 244.

10 Related statutes regarding the homestead ad valorem tax exemption make it clear that both prior to and after 1997, married couples could claim only one homestead for ad valorem tax purposes. Title 68 0.8.2001, § 2892, which was amended in other respects by Laws 1997, c. 845 § 3, concurrently with 31 00.98.1991, § 2, provides:

"I. Any single person of legal age, married couple and their minor child or children, or the minor child or children of a deceased person, whether residing together or separated, or surviving spouse shall be allowed under this Code only one homestead exemption in the State of Oklahoma."

T11 While this question has not been raised in Oklahoma before, the United States Trustee has presented us with analogous decisions from other jurisdictions where efforts made by spouses to combine or "stack" separate homestead exemptions have been denied. While it is true as the Arnolds argue; that the statutory provisions in these matters do vary in some respects from Oklahoma's, we do not find the differences to be of meaningful significance, and we find those decisions instructive in resolving the question before us.

112 In Pruitt v. Wilson, 829 F.2d 1002 (10th Cir.1987) the Tenth Cireuit Court of Appeals adopted the district court's affir-mance of the bankruptcy court's order deducting the value of debtor's homestead from the value of entire property owned jointly with non-filing spouse, rather than solely from debtor's interest. Based on Colorado homestead law which is similar to Oklahoma's, the Court held that homestead is a property right rather than a personal right, and whether realty is held jointly or singly there is only one homestead right which attaches to realty in such a way that its protection cannot be claimed by one joint owner to the exclusion of others.

13 In Stevens v. Pike County Bank, 829 F.2d 693 (8th Cir.1987), the Eighth Circuit Court of Appeals held that husband and wife, joint debtors, were not entitled to include 120 acres of their property as homestead by claiming separate exemptions and thereby exceeding the 80 acre constitutional and statutory homestead exemption. In its affir-mance the Court noted that the district court had relied on Campbell v. Geheb, 258 Ark. 225, 523 S.W.2d 185(1975), wherein the Arkansas Supreme Court had quoted with approval from an earlier decision of the Eighth Circuit regarding the nature of homestead rights: "while the husband and wife are not separated, but are living together as husband and wife, there can be no such thing as a separate homestead of the wife, separate and apart from her husband ..." (quoting Rosenberg v. Jett, 72 F. 90 (8th Cir.1896)).

1 14 Similarly, in In re Riebow, 114 B.R. 656 (Bankr.E.D.Mo., 1990), it was held that under Missourt's statute granting "every person" a homestead exemption, husband and wife as joint debtors could not "aggregate" the exemption amount of $8,000.00 so as to create an exemption of $16,000.00.

115 The Arnolds urge us to apply the general rule that homestead laws are to be liberally construed in favor of the debtor, and rule in their favor. This we cannot do. While it is true that homestead laws should be liberally construed to comport with their beneficent spirit of protecting the family home, a liberal construction cannot be the means of defeating a positive law or a rule established by judicial precedent. Enosburg Falls Savings Bank v. McKinney, 1935 OK 64, 44 P.2d 987. Our jurisprudence recognizes that the homestead interest is a creature of the constitution and statutes, and is therefore extended or limited by the provisions creating it. In the Matter of the Estate of Wallace, 1982 OK 80, 648 P.2d 828, 831. This Court cannot strain its construction of a statute beyond the intention of the Legislature, and the Legislature has not expressed any intention to change our long established law to now allow a husband and wife living together on the same property to claim separate exemptions. It is not the province of this Court to expand the homestead exemptions as written into the constitution and statutes, and we will not do so here.

[ 16 In answer to the certified question we declare that under Oklahoma law where husband and wife are living together on the same rural homestead property they may claim only one homestead exemption which does not exceed 160 acres.

T 17 WATT, C.J., HODGES, LAVENDER, HARGRAVE, KAUGER, BOUDREAU and WINCHESTER, JJ., concur.

1 18 OPALA, V.C.J., concurs in result.

      . The provisions of Title 31 O.S §§ 1-5 vitalize Article 12, §§ 1-3 of the Oklahoma Constitution. Art., 12, Okla. Const, § 1, was similar to the provisions of 31 O.$.1991, § 2, and it was amended concurrently with and similarly to 31 0.$.1991, § 2 in 1997.

        Art., 12, Okla. Const., § 2:
      "The homestead of the family shall be, and is hereby protected from forced sale for the payment of debts, except for the purchase money therefor or a part of such purchase money, the taxes, due thereon, or for work and material used in constructing improvements thereon; nor shall the owner, if married sell the homestead without the consent of his or her spouse, given in such manner as may by prescribed by law; Provided, Nothing in this article shall prohibit any person from mortgaging his homestead, the spouse, if any, joining therein; nor prevent the sale thereof on foreclosure to satisfy any such mortgage."
      Art., 12, § 3 provides in relevant part: "... The Legislature may change or amend the terms of this article."

      . This same provision is set forth in 68 0.$.2001, § 2888.

      . Colorado law, C.R.S. Section 38-41-201 pro'vides: "Every homestead ... occupied as a home ... shall be exempt from execution and attachment ..." Art. 12, Okla. Const., Section 2 provides "The homestead of the family shall be ... protected from forced sale ..."


source: Caselaw Access Project

author: BOUDREAU, Justice.

license: Public Domain

text:
    2003 OK 66
    Roger SPEARS and Virginia Spears, Plaintiffs/ Appellees, v. SHELTER MUTUAL INSURANCE COMPANY, a Missouri Corporation, Defendant/Appellant.
    No. 97,875.
    Supreme Court of Oklahoma.
    June 24, 2003.

      Robert M. Butler, Ramona A Jones, Tulsa, OK, for Plaintiffs/Appellees.
    Loyal J. Roach, Steven V. Buckman, Diane M. Black, Tulsa, OK, for Defendant/Appellant.
   BOUDREAU, Justice.

{1 This is an insurance coverage dispute. The material facts are undisputed and simple to state. Lightning struck the home of Roger and Virginia Spears (plaintiffs) and caused damage to part of the electrical wiring. Because the home and its wiring are about sixty years old, the entire home must be rewired to meet current construction codes adopted by ordinance. Shelter Mutual Insurance Company (defendant) paid $1,700 to repair the portion of the wiring directly damaged by lightning but refused to pay an additional $4,280 to rewire the entire home. The trial court entered summary judgment in favor of plaintiffs. The Court of Civil Appeals reversed. Although we reach the same result as that of the Court of Civil Appeals, we previously granted certiorari to address the first impression question of the effectiveness of the "ordinance or law exclusion" upon which defendant relies.

I,. ISSUE AND STANDARD OF REVIEW

12 The precise issue on certiorari is whether the "ordinance or law exclusion" effectively limits defendant's liability to $1700 (the cost to repair the section of wiring directly damaged by lightning). Because the material facts are not disputed, the issue is one of law which we review de novo. In conducting a de novo review we claim plenary, independent and non-deferential authority to examine a trial court's legal rulings. Manley v. Brown, 1999 OK 79, ¶ 22, n. 30, 989 P.2d 448, 456, n. 30.

II. THE EXCLUSION

T3 The relevant portions of the policy begin on page 6 of the policy with the section entitled "PERILS WE INSURE AGAINST-SECTION I". The first clause of this section reads:

We cover accidental direct physical loss to property covered under Dwelling and Other Structures Coverages except for losses excluded in this section.

{emphasis added). The exelusions begin at the bottom of the next page of the policy under the heading "EXCLUSIONS-SECTION I". The exclusions section begins with the following language which applies to each exclusion:

EXCLUSIONS-SECTION I.

We do not cover loss;

(a) resulting directly or indirectly from any of the following events;
(b) which would not have occurred in the absence of any of the following events;
(c) which occurs regardless of the cause of any of the following events; or
(d) if loss occurs concurrently or in any sequence with any of the events.

Immediately following this introductory language are ten separately numbered exclusions, the first of which is the "ordinance or law exclusion":

Enforcement of any ordinance or law regulating the construction, repair or demolition of a building or other structure, unless specifically provided under this policy....

IIH. APPLICABLE LAW

T4 Oklahoma law governing insurance coverage disputes is well-established. The foremost principle is that an insurance policy is a contract. Cranfill v. Aetna Life Ins. Co., 2002 OK 26, ¶ 5, 49 P.3d 703, 706. "Parties are at liberty to contract for insurance to cover such risks as they see fit and they are bound by the terms of the contract. It necessarily follows that courts are not at liberty to rewrite the terms of an insurance contract." Id.

¶ 5 However, it is also true that "Linsurance contracts are contracts of adhesion because of the uneven bargaining position of the parties." Max True Plastering Co. v. USF & G Co., 1996 OK .28, 912 P.2d 861, 864. Consequently, in the event of ambiguity or conflict in the policy provisions, a policy of insurance is to be construed strictly against the insurer and in favor of the insured. Id. at 865. This rule has been consistently applied in this jurisdiction for many years.

16 In Max True Plastering Co., supra, we adopted the doctrine of reasonable expectations. This doctrine evolved as an interpretive tool to aid courts in discerning the intention of the parties, id. at 864, when the policy language is ambiguous or when an exclusion is "masked by technical or obscure language" or "hidden in a policy's provisions." Id. at 870. Under the reasonable expectations doctrine, when construing an ambiguity or uncertainty in an insurance policy, the meaning of the language is not what the drafter intended it to mean, but what a reasonable person in the position of the insured would have understood it to mean. Id. Thus, in construing an ambiguity or uncertainty against the insurer and in favor of the insured, Oklahoma now looks to the "objectively reasonable expectations" of the insured to fashion a remedy.

1 7 We made it clear in Max True Plastering Co., supra, that if an insurer desires to limit its liability under a policy, it must employ language that clearly and distinctly reveals its stated purpose. After Max True Plastering Co., supra, unclear or obscure clauses in an insurance policy will not be permitted to defeat coverage which is objectively reasonably expected by a person in the position of the insured.

IV. DISCUSSION

¶ 8 This case involves a "physical loss" policy excluding loss arising from "enforcement of any ordinance or law regulating the construction, repair or demolition of a building or other structure." Both parties cited various cases addressing the "ordinance or law exclusion" from other jurisdictions to support their respective positions. These cases have come down on both sides of the issue. However, they are not extremely helpful because the wording of each policy clause is different. Also, some states, like Alaska, do not even require an ambiguity-they apply the doctrine of reasonable expectations whether the policy is ambiguous or not. See Bering Strait School Dist. v. RLI Ins. Co., 873 P.2d 1292 (Alaska 1994). Under Max True Plastering Co., supra, we must review the exact language in the policy that is before us to determine whether the policy is ambiguous, whether the exclusion is hidden in the policy's provisions, and whether the exclusion is masked by technical or ob-secure language.

A. The Policy is Not Ambiguous With Respect to the Exclusion

19 We have carefully reviewed the policy and we find it is not ambiguous with respect to the "ordinance or law exclusion." The test for ambiguity is whether the language "is susceptible to two interpretations on its face ... from the standpoint of a reasonably prudent lay person, not from that of a lawyer." Cranfill, 2002 OK 26, ¶ 7-8, 49 P.3d at 706; Max True Plastering Co., 912 P.2d. at 869. In our view, the only fair construction of the "ordinance or law exclusion" is that the portion of the loss to the wiring that arises from the existence of new building codes is not to be considered as a loss or damage by a covered peril, but is instead to be excluded from consideration, and the loss is to be calculated as if there were no new building codes affecting the situation. We can see no other interpretation.

B. The Exclusion is Not Hidden Within the Policy's Provisions

T10 Similarly, we find the "ordinance or law exclusion" is sufficiently conspicuous and not hidden. The policy contains headings that are in all capital letters and the text under the headings is all in the same size print. On page 6 of the policy, under the heading "PERILS WE INSURE AGAINST-SECTION I", the policy prominently states that it covers "accidental direct physical loss to property covered under Dwelling and Other Structures Coverage except for losses excluded in this section." (emphasis added). The exclusions begin on the following page of the same section of the policy, and begin with the heading "EXCLUSIONS-SECTION I" in all capital letters. This heading is followed by broad preliminary language that clearly applies to all of the listed exceptions. Immediately following the preliminary language is a list of ten separately numbered and indented exclusions. The "ordinance or law exelusion" is the first listed exclusion. We find the exclusion is sufficiently prominent and not hidden.

C. The Exclusion is Not Masked by Technical or Obscure Longuage

¶ 11 Finally, we find the "ordinance or law exclusion" is sufficiently clear and not masked by technical or obscure language. The exelusion consists of only 24 words. It excludes loss arising from:

Enforcement of any ordinance or law regulating the construction, repair or demolition of a building or other structure, unless specifically provided under this policy....

The language used in this exclusion is not technical or obscure. It does not set a trap for the unwary. We find the exclusionary language to be clear, straightforward and understandable from the point of view of an objectively reasonable insured.

{12 In sum, because the policy with respect to the "ordinance or law exclusion" is not ambiguous, and because the exelusion is neither hidden in the policy's provisions nor masked by technical or obscure language, the doctrine of reasonable expectations is not applicable in this case. Instead, we must accept the plain and ordinary meaning of the words used in the exclusion. The "ordinance or law exclusion" effectively limits defendant's liability in this case to $1700 (the cost to repair the section of wiring directly damaged by lightning).

V. DEFENDANTS MOTIONS

13 Defendant's motion for oral argument is denied.

¶ 14 Defendant's motion for appeal-related attorney's fees pursuant to 12 O.S. § 936 and 86 0.8. § 3629(B) is denied. Defendant is not entitled to fees under § 986 because that section is not applicable to this insurance coverage dispute. (Globe & Republic Ins. Co. of America v. Independent Trucking Co., 1963 OK 274, 387 P.2d 644, 647. Nor is defendant entitled to fees under § 3629 in this case. Section 3629 states that fees to the prevailing party in an insurance coverage dispute are allowable. However, one of the stated prerequisites within § 3629(B) is that the insurer "submit a written offer of settlement or rejection of the claim to the insured within ninety (90) days of receipt" of a proof of loss. In this case, defendant's motion for attorney's fees did not demonstrate that defendant submitted a written offer of settlement or rejection of the claim to plaintiffs within ninety days of receipt of a proof of loss.

¶ 15 Defendant also seeks its appeal-related costs pursuant to 12 0.8. § 929. Defendant requests reimbursement for photocopies and delivery costs. These costs are treated as overhead and are not recoverable. Oklahoma Turnpike Authority v. New, 853 P.2d 765, 765 (Okla.1993). Defendant also requests reimbursement of a $100.00 fee for designation of the record and a $5.00 certification fee, both paid to the Tulsa County District Court. Fees paid to the district court are not recoverable in this court. Chamberlin v. Chamberlin, 1986 OK 30, 720 P.2d 721. Finally, defendant requests reimbursement of its $200.00 filing fee in this court. This filing fée, required by 20 O.S. 2001 § 15, is recoverable pursuant to 12 O.S. 2001 § 978 by the successful appellant. Wilson v. Glancy, 1995 OK 141, 913 P.2d 286. Defendant's motion for appeal-related costs is granted only to the extent of $200.00 to be recovered against plaintiffs, and otherwise denied.

VI. CONCLUSION

{ 16 The insurance policy with respect to the "ordinance or law exelusion" is plain and unambiguous. It is neither hidden in the policy's provisions nor masked by technical or obscure language. Accordingly, the doctrine of reasonable expectations is not applicable in this case. To the contrary, we must accept the plain and ordinary meaning of the language used in the exclusion. Applying the plain and ordinary meaning of the language used in the "ordinance or law exclusion", we conclude that the cost to rewire the entire home to meet current construction codes is a loss that is excluded from coverage.

T17 Defendant's motions for oral argument and for appeal-related attorney's fees are denied. Defendant's motion for appeal-related costs is granted only to the extent of $200.00 to be recovered against plaintiffs, and otherwise denied.

OPINION OF THE COURT OF CIVIL APPEALS VACATED; JUDGMENT OF THE TRIAL COURT REVERSED; CAUSE REMANDED FOR ENTRY OF JUDGMENT IN FAVOR OF DEFENDANT; DEFENDANTS MOTION FOR ORAL ARGUMENT DENIED; DEFENDANTS MOTION FOR APPEAL-RELATED FEES DENIED; - DEFENDANTS - MOTION FOR APPEAL-RELATED COSTS GRANTED IN PART.

OPALA, vV.C.J., HODGES, LAVENDER, KAUGER, WINCHSETER, JJ., concur.

WATT, C.J., HARGRAVE, SUMMERS, JJ., dissent.

      . In the Court of Civil Appeals, defendant also argued that paragraph 2(a) of the portion of the policy - entitled "CONDITIONS-SECTION I" limits its liability. Paragraph 2(a) reads:
      2. How Losses Are Settled
      (a) Loss to the following types of property will be settled at the actual cash value of the damaged property at the time of loss. Actual cash value includes deduction for depreciation.
      Personal property.
      Structures that are not buildings.
      Antennas, carpeting, awnings, domestic appliances and outdoor equipment, all whether or not attached to buildings, and additionally, in Oklahoma only, roof surfacing.
      We will pay no more than:
      (1) the cost to repair or replace the damaged property with property of like kind and quality; or
      (2) the limits of liability of this policy.
      (emphasis added). Defendant argued that the underlined language limits its liability to replacing only the damaged portion of the wiring. We need not decide the precise effect of this provision because, like the Court of Civil Appeals, we conclude it applies only to the types of property listed immediately above it, not to the electrical wiring system of the home.

      . This exclusion is also sometimes referred to as the "civil authority exclusion".

      . The following cases found in favor of the insured: Dupre v. Allstate Ins. Co., 62 P.3d 1024 (Colo.App.2002) (held that building codes did not cause the loss, the fire did); Garnett v. Trans-america Ins. Svcs., 118 Idaho 769, 800 P.2d 656 (1990); Daniels v. Aetna Life & Casualty Co., No. IP 81-1413-C, 1983 WL 13684 (S.D.Ind. June 29, 1983) (held that PCB removal ordinance did not cause the extra cost, the fire did); Unified School Dist. No. 285 v. St. Paul Fire & Marine Ins. Co., 6 Kan.App.2d 244, 627 P.2d 1147 (1981) (held that since the insurer undertook to insure the building as a school known to be subject to building codes, it also assumed liability to comply with the codes upon loss); Farmers Union Mutual Ins. Co. v. Oakland, 251 Mont. 352, 825 P.2d 554 (1992) (held that asbestos regulations did not cause the loss, the fire did); Dombrosky v. Farmers Ins. Co., 84 Wash.App. 245, 928 P.2d 1127 (1996); Starczewski v. Unigard Ins. Group, 61 Wash.App. 267, 810 P.2d 58 (1991) (applied reasonable expectations doctrine); - Odessa School Dist. 105 v. Insurance Co. of America, 57 Wash.App. 893, 791 P.2d 237 (1990) (applied reasonable expectations doctrine}.
      The following cases found in favor of the insurer: Bischel v. Fire Ins. Exch., 1 Cal.App.4th 1168, 2 Cal.Rptr.2d 575 (1991); Breshears v. Indiana Lumbermens Mut. Ins. Co., 256 Cal.App.2d 245, 63 Cal.Rptr. 879 (1967); Regency Baptist Temple v. Insurance Co. of North America, 352 So.2d 1242 (Fla.App.1977); Cohen Furniture Co. v. St. Paul. Ins. Co., 214 Ill.App.3d 408, 158 Ill.Dec. 38, 573 N.E.2d 851 (1991) (clause excluded losses caused by enforcement of ordinance "regardless of any other cause or event that contributes concurrently or in any sequence to the loss"); Prytania Park Hotel v. General Star Indemnity Co., 896 F.Supp. 618 (E.D.La.1995) (plain and unambiguous exclusion); Hewins v. London Assurance Corp., 184 Mass. 177, 68 N.E. 62 (1903); Bradford v. Home Ins. Co., 384 A.2d 52 (Maine 1978).
      See, generally, H. Wood, Jr., "The Insurance Fallout Following Hurricane Andrew: Whether Insurance Companies are Legally Obligated to Pay for Building Code Upgrades Despite the 'Ordinance or Law' Exclusion Contained in Most Homeowners Policies," 48 U.Miami L.Rev. 949, 956 (1994); Couch § 176.66 n. 21; George J. Couch, Couch Cyclopedia of Insurance Law § 54:166, at 551-53 (2d rev. ed.1983).

      . For example, in Bering Strait School Dist. v. RLI Ins. Co., 873 P.2d 1292 (Alaska 1994), there were three relevant clauses. First, the insuring clause of the policy:
      this Company ... does insure ... to the extent of the [replacement cost] of the property at the time of the loss, but not exceeding the amount which it would cost to repair or replace the property with material of like kind and quality within a reasonable time after such loss, without allowance for increased cost of repair or reconstruction by reason of any ordinance or law regulating construction or repair against all [risks of physical loss or dam-agel....
      Second, the civil authority clause:
      The policy does not insure against loss or increased cost occasioned by any Civil Authority's enforcement of any ordinance or law regulating the reconstruction, repair or demolition of any property insured hereunder.
      Finally, the replacement cost endorsement:
      3. This Company shall not be liable under this endorsement for any loss-occasioned directly or indirectly by enforcement of any ordinance or law regulating the ... construction, repair or demolition of property unless such liability has been specifically assumed under this policy.
      The Alaska Supreme Court found these clauses ambiguous.
      In Prytania Park Hotel v. General Star Indemnity Co., 896 F.Supp. 618 (E.D.La.1995). the exclusion provided:
      General Star will not pay for loss or damage caused directly or indirectly by any of the following. Such loss or damage is excluded regardless of any other cause or event that contributes concurrently or in any sequence to the loss.
      a. Ordinance or Law
      The enforcement of any ordinance or law: (1) Regulating the construction, use of repair of any property....
      The district court for the Eastern District of Louisiana found this exclusion plain and unambiguous.
      Finally, in Bradford v. Home Ins. Co., 384 A.2d 52 (Maine 1978), the exclusion provided:
      [TJhis company ... does insure ... to the extent of actual cash value of the property at the time of loss, but not exceeding the amount which it would cost to repair or replace the property with material of like kind and quality within a reasonable time after such loss, without allowance for any increased cost of repair or reconstruction by reason of any ordinance or law regulating construction or repair.
      The Maine Supreme Judicial Court found this exclusion plain and unambiguous.

      . We express no opinion as to whether the word "allowable" in 36 O.S. § 3629(B) means fees to the prevailing party are mandatory or discretionary. The Tenth Circuit Court of Appeals has twice addressed this issue. In Adair State Bank v. American Cas. Co., 949 F.2d 1067, 1077-78 (10th Cir.1991), the Tenth Circuit predicted we would hold the trial court has discretion to award fees under § 3629(B). Ten years later, in Stauth v. National Union Fire Ins. Co. of Pittsburgh, 236 F.3d 1260 (10th Cir.2001), the Tenth Circuit altered its prediction, because of two intervening opinions from the Oklahoma Court of Civil Appeals. See Shadoan v. Liberty Mut. Fire Ins. Co., 894 P.2d 1140 (COCA 1995); Williams v. Old Am. Ins. Co., 907 P.2d 1105, 1107 (COCA 1995).


text:
    2003 OK 65
    CITIZENS AGAINST TAXPAYER ABUSE, INC., an Oklahoma Not-for-Profit Corporation, Petitioner/Appellant, v. The CITY OF OKLAHOMA CITY, Oklahoma, a municipal corporation, et al., Respondents/Appellees.
    No. 98,641.
    Supreme Court of Oklahoma.
    June 24, 2003.

      Peter B. Bradford, Shelia M. Darling, Conner & Winters, P.C., Oklahoma City, Oklahoma, for petitioner/appellant, Citizens Against Taxpayer Abuse, Inc.
    William R. Burkett, Municipal Counselor, Diane Lewis, Deputy Municipal Counselor, Kenneth D. Jordan, Assistant Municipal Counselor, Oklahoma City, Oklahoma, for respondents/appellees, The City of Oklahoma City, Oklahoma, a municipal corporation, et al.
   BOUDREAU, Justice.

T1 Petitioner, Citizens Against Taxpayer Abuse, Inc., appeals the district court's order granting the City of Oklahoma City's motion for summary judgment. Petitioner timely filed a petition in error and motion to retain. We granted petitioner's motion to retain the appeal in this Court on January 23, 2003. We affirm the trial court's order granting summary judgment in favor of the City of Oklahoma City.

I. FACTS AND PROCEDURAL HISTORY

12 On March 12, 2002, the law firm of Conner & Winters, P.C., on behalf of certain taxpayers and other citizens, submitted a written request to the City of Oklahoma City (City) under the provisions of the Oklahoma Open Records Act (Act), 51 0.98.2001, §§ 24A.1 et seq. The firm requested permission to inspect and copy all documents pertaining to a proposed lease of City property to Bass Pro Shops (Bass Pro). The City complied with the request in part but refused to release Bass Pro's financial documents. The City claimed the documents were used solely to determine Bass Pro's credit worthiness, were not "records" under the Act and accordingly were exempt from disclosure.

13 On March 26, 2002, Citizens Against Taxpayer Abuse, Inc. (CATA), a nonprofit corporation, filed a petition for declaratory judgment and writ of mandamus alleging the documents withheld by the City were subject to disclosure under the Act. In the petition, CATA maintained that even if the City initially examined Bass Pro's financial documents to determine credit worthiness, City officials subsequently used the documents or information contained therein for a political purpose to gain support for the project by arguing it made financial sense to spend $17,000,000 in taxpayer funds. CATA contended the City's actions went beyond the Act's credit evaluation exemption and accordingly the documents were "records" subject to disclosure under the Act. CATA also maintained that the City cannot rely on a confidentiality agreement signed by a city official prior to review of Bass Pro's financial documents to alter the Act's requirement of disclosure of public records.

T4 The City answered that CATA did not have standing to object to the City's response to the Open Records request because CATA did not make the request at issue. In addition, the City contended that the documents were exempt from disclosure under the Act because the documents were used solely to determine Bass Pro's credit worthiness. The City also maintained that it had not waived the credit evaluation exemption. While it acknowledged that city officials had made statements concerning the economic viability of the project, the City contended the statements were based on information included in a revenue analysis of the proposed project prepared for the City by the consulting firm of Peckham Guyton Albers & Viets (PGAV) and not on information secured from Bass Pro's financial documents. The City maintained that all information contained in Bass Pro's financial documents has remained confidential and has not been reviewed by any city employee other than Catherine O'Con-nor, the City's Finance Director and Assistant City Manager, and attorneys in the municipal counselor's office. While the City admits that its finance director and its independent auditor, Price Waterhouse Cooper, signed confidentiality agreements prior to reviewing Bass Pro's financial documents, the City argued that it never relied upon the agreements in withholding the documents at issue.

15 Both parties moved for summary judgment. The district judge, after in camera review of Bass Pro's financial documents, denied CATA's motion for summary judgment and granted the City's motion for summary judgment. The trial court held the Act expressly protects Bass Pro's financial documents because the documents were submitted to and reviewed by the City for the purpose of evaluating Bass Pro's credit worthiness. The court held there was no evidence the City abandoned or waived the credit worthiness exemption. Finally, the court determined the City fully complied with the provisions of the Open Records Act. CATA timely appealed and we granted CATA's motion to retain the appeal in this Court.

II. STANDARD OF REVIEW

¶ 6 Whether summary judgment was properly entered is a question of law which we review de novo. Manley v. Brown, 1999 OK 79, ¶ 22, 989 P.2d 448, 455. In a de movo review, we have plenary, independent and non-deferential authority to determine whether the trial court erred in its application of the law and whether there is any genuine issue of material fact. Kluver v. Weatherford Hosp. Auth., 1993 OK 85, ¶ 14, 859 P.2d 1081, 1084. Like the trial court, we examine the pleadings and summary judgment evidentiary materials submitted by the parties to determine if there is a genuine issue of material fact. Carmichael v. Beller, 1996 OK 48, ¶ 2, 914 P.2d 1051, 1053. We view the facts and all reasonable inferences arising therefrom in the light most favorable to the non-moving party. Id.

III. ANALYSIS

A. CATA has Standing to Tender the Issues Under Consideration.

¶ 7 The City challenges CATA's standing to pursue this action. Standing refers to the legal rights of a person to challenge the conduct of another in a judicial forum. Hendrick v. Walters, 1993 OK 162, ¶ 4, 865 P.2d 1232, 1236 (footnote omitted). A party whose standing is challenged must show (1) actual or threatened injury, (2) for which relief can be given, and (8) the interest to be protected is "within a statutorily or constitutionally protected zone". Id. at 1236-87; In re Initiative Petition No. 363, 1996 OK 122, ¶ 13 n. 29, 927 P.2d 558, 565 n. 29. These interests must not only be "direct, immediate and substantial", but the litigant must also have a personal stake in the outcome. Hendrick, 865 P.2d at 1237; Brandon v. Ashworth, 1998 OK 20, ¶ 6, 955 P.2d 233, 235. In standing issues, the question is whether the party invoking the court's jurisdiction has a legally cognizable interest in the outcome of the controversy. Democratic Party of Oklahoma v. Estep, 1982 OK 106, ¶ 7, 652 P24 271, 274 (footnotes omitted). The doctrine of standing ensures a party has a personal stake in the outcome of a case and that the parties are truly adverse. See Hendrick, 865 P.2d. at 1237.

18 The Open Records Act provides that "any person denied access to a record of a public body or public official may bring a civil suit for declarative and/or injunctive relief". 51 0.98.2001, § 24A.17(B). According to the record, two attorneys from the law firm of Conner & Winters submitted the request at issue on behalf of certain taxpayers and other citizens,. CATA's certificate of incorporation reveals that the two attorneys who submitted the records request are listed as CATA's incorporators, along with one other person. Further, Conner & Winters represented CATA at the trial level and in this appeal.

19 We conclude there is a sufficient connection between Conner & Winters and CATA as it relates to the Open Records request to support CATA's standing to pursue this appeal. Although CATA was not legally formed until after the request at issue was made, two of its three incorporators tendered the request which the City denied. Accordingly, CATA can be said to be substantially aggrieved by the City's refusal to disclose the documents at issue.

¶ 10 The purpose of a standing requirement is to ensure courts address actual controversies between parties who have suffi-client adverse interests. This case has been litigated intensely at both the trial level and on appeal, and there is no danger this Court will be misled by the failure of the parties to adequately explore and argue the issues. Accordingly, we find CATA has a sufficient stake in the outcome of this case to prosecute the appeal. We now turn to CATA's contentions on appeal.

B. The Summary Judgment Record Demonstrates the City's Actions Did Not Amount to a Waiver of the Applicable Exemption Under the Open Records Act.

¶ 11 The Oklahoma Legislature enacted the Open Records Act, 51 00.98.2001, §§ 24A.1 et seq., in 1985. This Act provides that "all records of public bodies and public officials shall be open to any person for inspection, copying, and/or mechanical reproduction during regular business hours." 51 0.8.2001, § 24A.5. "Record" is defined as all documents, regardless of physical form or characteristic, created by, received by, under the authority of, or coming into the custody, control or possession of public officials, public bodies, or their representatives in connection with the transaction of public business, the expenditure of public funds or the administering of public property. 51 0.98.2001, § 24A.3(1).

¶ 12 The purpose of the Act is to ensure and facilitate the public's right of access to and review of government records so they may efficiently and intelligently exercise their inherent political power. 51 0.8. 2001, § 24A.2. Each public body subject to the Act is responsible for making records available to the public 51 0.S8.2001, § 24A.5(5). Unless a record falls within a statutorily prescribed exemption in the Act, the record must be made available for public inspection. The public body urging an exemption has the burden to establish the applicability of such exemption. See Merrill v. Oklahoma Tax Comm'n, 1992 OK 53, ¶ 8, 831 P.2d 634, 641.

1183 The Act exempts certain information and documents from the definition of the word "record". See 51 0.98.2001, § 244.8. Section 24A.3(1) provides that "record" does not include "personal financial information, credit reports or other financial data obtained by or submitted to a public body for the purpose of evaluating credit worthiness, obtaining a license, permit, or for the purpose of becoming qualified to contract with a public body." The City relied upon this exemption to avoid disclosure of the financial documents at issue.

T 14 In its summary judgment motion, the City maintained it examined and used Bass Pro's financial documents solely to determine whether Bass Pro was financially able to perform the terms of its proposed lease agreement with the City, le., its credit worthiness. In its response, CATA acknowledged that the City initially reviewed Bass Pro's financial documents to evaluate Bass Pro's credit worthiness. However, CATA asserted that the uncontroverted facts establish the City subsequently waived the credit worthiness exemption by using the doeu-ments to publicly support its position that the Bass Pro project be implemented, a purpose other than what the exemption is limited to.

115 The City, as the moving party, had the initial burden of showing that there is no substantial controversy as to any material fact on the issue of waiver. Bowers v. Wimberly, 1997 OK 24, ¶ 14, 933 P.2d 312, 315. To that end, the City submitted the affidavit of Catherine O'Connor, the City's Finance Director and the City official who received and reviewed Bass Pro's financial documents. In the affidavit she stated she used the financial data for the exclusive purpose of evaluating Bass Pro's credit worthiness. She stated that she did not disclose the financial documents or the data contained in the documents to anyone at anytime other than her attorneys in the municipal counselor's office for the sole purpose of defending the City in this action.

T16 Once the City made the required showing of the moving party, CATA assumed the burden of demonstrating the existence of a material fact that would justify a trial on the issue. Bowers, 933 P.2d at 315. To establish the existence of a disputed material fact on the issue of waiver, CATA submitted five (5) statements made by public officials which, according to CATA, referenced or relied upon Bass Pro's financial documents. An examination of these statements reveals that CATA has failed to establish the existence of a material fact on the issue of whether the City subsequently waived the credit worthiness exemption.

17 CATA offered the following statement allegedly made by the City Manager: "[blased upon the financial information that he reviewed, but did not disclose", he concluded:

1. "the sales estimates of the Oklahoma City Bass Pro ... are reasonable";
2. "the analysis of trade area and distances traveled by customers ... are reasonable";
3. "Bass Pro, Inc. has the financial resources to meet or exceed the lease and sales expectations in Oklahoma City"; and
4. "[The City Manager] did not see any indication based upon the data reviewed that the City Council should not continue its consideration of the Bass Pro Shops proposal".

A review of the record reveals that these statements were not made by the City Manager, but were made by Catherine O'Connor in a memorandum to the City Manager. In addition, when Catherine O'Connor's statements are reviewed in full (that is, with the conveniently placed ellipses removed), it is clear that her conclusions in this statement refer to the PGAV report. Catherine O'Con-nor's memorandum actually stated that "the sales estimates for the Oklahoma City Bass Pro Shops included in the Revenue and Economic Impact Analysis Report by PGAV are reasonable" and "the analysis of trade area and distances traveled by customers included in the Revenue and Economic Impact Analysis Report by PGAV are reasonable". (emphasis added) These statements fail to contradict Catherine O'Connor's affidavit and actually support the City's position that city officials relied upon the PGAV report to support other statements.

1 18 CATA points to two statements by the City Manager, one declaring that "we stand by PGAV's report, because of what we've done to verify those numbers" and another "that the Bass Pro project was beneficial economically because it would strengthen the City's sales taxes and even soften future budget cuts". It is clear from the context of these statements that the City Manager was promoting the reliability of the PGAV report prepared by an independent consultant. The statements reveal no specific information about the financial data contained in Bass Pro's financial documents.

{ 19 CATA directs this Court to two other statements, one in which the "Mayor argued to the public that the Bass Pro project made economic sense and would generate $5 in tax revenues for every dollar spent in incentives" and another in which Catherine O'Connor stated at a City Council meeting "that the project would generate $24.6 million in direct revenue and $129.9 million in indirect revenues over the 20 year lease period". Both of these statements are opinions of public officials in the form of an economic forecast of future revenues expected to be derived from the project. Neither statement reveals any specific information about the financial data contained in Bass Pro's financial documents. Finally, both statements were made by public officials who had access to the PGAV report.

1 20 Waiver is defined as a voluntary relinquishment of a known right. Faulkenberry v. Kansas City S. Ry. Co., 1979 OK 142, ¶ 6, 602 P.2d 203, 206-07. This Court has not yet addressed when a waiver occurs under the Act. Other state jurisdictions which have addressed the issue have narrowly construed when waivers of exemptions occur under its own public records laws. See eg., Rackauckas v. Superior Court of Orange County, 104 Cal.App.4th 169, 128 Cal.Rptr.2d 234, 240 (2002)(exemptions are not waived by inter-agency disclosures made in confidence); An Unincorporated Operating Div. of Indiana Newspapers, Inc. v. The Trustees of Indiana Univ., 787 N.E.2d 893, 2003 WL 2010385 (Ind.App. May 2, 2003)(university's release of a summary report and sanctions documents relating to a disciplined coach did not result in waiver of exemption; documents did not quote integral and extensive portions of the records and only contained a overview of the findings of the investigation, the trustees' conclusions, and the president's decision); State ex rel. Cincinnati Enquirer v. Sharp, 151 Ohio App.3d 756, 785 N.E.2d 822, (1 Dist. 2003){exemptions are fully applicable lacking evidence the public office disclosed the records to the public).

{121 Federal courts that have considered the Freedom of Information Act (FOIA), 5 U.S.C. §§ 552, et seq., have similarly concluded that waivers of exemptions from public release of documents can exist, but should be narrowly construed. See eg., Simmons v. United States Dept. of Justice, 796 F.2d 709, 712 (4th Cir.1986)(exemption remains intact if there has been less than full disclosure of the information from an official source); Afshar v. Department of State, 702 F.2d 1125, 1130-1132 (D.C.Cir.1983)(any showing by the public ageney that the information sought is different from the information disclosed to the public defeats the waiver claim); Coastal States Gas Corp. v. Department of Energy, 617 F.2d 854, 866 (D.C.C.1980)(exemption continues to be applicable unless material is formally or informally adopted as the agen-ey's position or used by the agency in its dealings with the public); Murphy v. Department of Army, 613 F2d 1151, 1155-57 (D.C.C.1979)(release of documents to a congressional committee did not constitute waiver of exempt status where the documents were not disclosed to the public and where an expectation of confidentiality could be assumed from the nature of the documents).

¶ 22 The trial judge held a hearing in which he examined the parties motions for summary judgment, heard oral arguments, and conducted an in camera review of Bass Pro's financial documents. He subsequently entered judgment for the City on its motion for summary judgment and denied CATA's motion for summary judgment. In the journal entry, he found that the summary judgment record is devoid of anything "to suggest an abandonment or waiver by the Respondent City of the exemption provided by 51 0.8.2001, § 24A.3(1), for financial data obtained by or submitted to a public body for the purpose of evaluating eredit worthiness." We agree. Waivers of exemption of public records can exist, but should be narrowly construed. In this instance, there was no release of the documents to the public. An examination of each statement offered by CATA reveals that the statements did not quote any portion of the financial documents, contained no specific information regarding the financial data and did not summarize the information contained in the documents. Rather the statements related to the PGAV report or they were merely the expressions of opinions of public officials. A public body does not waive an exemption merely by relying on the financial information contained in the documents in some fashion. Such a construction would unjustifiably constrain the public body in the exercise of its official duties. CATA has failed to meet its burden of demonstrating the existence of a material fact that would justify a trial on the issue of whether the City waived the credit worthiness exemption. Accordingly, we affirm the trial court's order granting summary judgment to the City.

C. The Summary Judgment Record Contains No Evidence that the City Relied Upon the Confidentiality Agreement to Support Its Decision to Withhold the Documents at Issue.

23 CATA also alleged the City refused to disclose Bass Pro's financial documents because of a confidentiality agreement it signed with Bass Pro. The City maintained, however, that it never relied upon the confidentiality agreement to support its decision to withhold the documents at issue. In fact, the City concedes a confidentiality agreement cannot change the statutory requirements of disclosure of public records imposed upon a public body under the Act and that any basis for withholding a public record must be found in the statute.

[ 24 The City's summary judgment motion established that Bass Pro's financial documents are exempt from disclosure by virtue of the credit worthiness exemption. The City had a clear legal basis for withholding the documents under the statute. CATA's summary judgment motion does not establish that the City relied on something other than this exemption when it withheld the documents at issue. As long as the City had an adequate basis under the statute to withhold Bass Pro's financial documents, it is entitled to summary judgment. Accordingly, we affirm the trial court's order granting summary judgment to the City.

IV. CONCLUSION

125 CATA has standing to tender the issues under consideration because there is a sufficient connection between Conner & Winters and CATA as it relates to the Open Records request at issue. In addition, it is undisputed in the summary judgment record that the City reviewed Bass Pro's financial documents to evaluate Bass Pro's credit worthiness. The record does not demonstrate that the City's actions amounted to a waiver of the applicable exemption under the Open Records Act. Finally, the record does not demonstrate that the City relied upon the confidentiality agreement to support its decision to withhold the requested documents. Accordingly, we affirm the trial court's order granting summary judgment to the City.

SUMMARY JUDGMENT AFFIRMED.

WATT, C.J., OPALA, V.C.J., and HODGES, LAVENDER, KAUGER, SUMMERS, and WINCHESTER, JJ., concur.

HARGRAVE, J., concurs in result.

      . The City asserts CATA was not formed until March 20, 2002, approximately eight (8) days after the Open Records request at issue was made.

      . 1985 Okla.Sess.Laws, ch. 355, created the Oklahoma Open Records Act.

      . In their briefin-chief, CATA mentions under the Summary of Record that the trial court entered a protection order that prevented them from taking the deposition of Catherine O'Con-nor. If this can be considered an argument for reversal of summary judgment, it is not supported by legal authority and is deemed abandoned. See Hadnot v. Shaw, 1992 OK 21, ¶ 2, 826 P.2d 978, 981; Wetsel v. Independent Sch. District I-1, 1983 OK 85, ¶ 8, 670 P.2d 986, 991.

      . We find federal precedent concerning Freedom of Information Act proceedings to be persuasive. See Tulsa Tribune Co. v. Oklahoma Horse Racing Comm'n, 1986 OK 24, ¶ 23 n. 15, 735 P.2d 548, 555 n. 15, superseded by statute on other grounds, see State ex rel. Oklahoma State Bd. of Medical Licensure and Supervision v. Migliaccio, 1996 OK CIV APP 37, 917 P.2d 483.

      . The financial documents at issue were not included in the record on appeal. The appellant bears the burden of presenting the court with a record to support the issues raised. Smith v. The Baptist Foundation of Oklahoma, 2002 OK 57, ¶ 27, 50 P.3d 1132, 1144.

      . In view of our holding that the City did not waive the credit worthiness exemption under the Open Records Act, we need not pass on the absence of Bass Pro, a party, who under 12 0©.$.2001, § 2019, appears to be necessary for an effective adjudication of its interest in privacy.


author: WINCHESTER, J. OPALA, V.C.J., BOUDREAU, J.,

text:
    2003 OK 68
    Jane A. MERRITT, Appellee, v. Michael L. MERRITT, Appellant.
    No. 95,742.
    Supreme Court of Oklahoma.
    July 1, 2003.

      Charles Gaunce, Norman, OK, for appellant.
    Silas C. Wolf, Jr., Norman, OK, for appel-lee.
   WINCHESTER, J.

1 1 The appellant, Michael L. Merritt, filed an application for an indirect contempt citation and a motion to reduce arrearage to judgment. The appellee, Jane A. Merritt, filed a motion to dismiss the contempt citation based on the payment of Social Security benefits to the child of the parties The Social Security payment made subsequent to the commencement of this action exceeded the amount of the arrearage. After finding that the payment purged the contempt, the trial court granted the appellee's motion to dismiss. The appellant filed a "motion to reconsider," which the trial court denied. The appellant filed an appeal that was subsequently assigned to the Court of Civil Appeals, Division III. That court reversed and remanded. The appellee filed a petition for certiorari, which this Court granted. We vacate the opinion of the Court of Civil Appeals and affirm the judgment of the trial court.

FACTS

T2 The record reveals that the parties were granted a divorcee on October 16, 1987. The trial court subsequently modified the custody provisions for the son of the parties on April 27, 1989, and on December 28, 1994. On the latter date, the court modified the decree by granting sole custody of the minor child to the appellant (the father). The trial court ordered, pursuant to the Oklahoma Child Support Guidelines, that the appellee (the mother) pay $120.00 per month.

«[ 3 In 1996, the court further modified the custody provisions by terminating the parental rights of the mother. The father asserts that the action to terminate parental rights was the result of the mother's failure to support their child for over a year. The mother's pleadings assert that the 1996 judgment was obtained by default. The father alleges in his application for an indirect contempt citation that the order for the payment of child support remained in full force and effect, The application alleges that the mother failed to make payments beginning in March 1996, and missed all but two months until he filed his application for contempt on January 31, 2000. He claimed that the mother was indebted to him in the amount of $5,400.00 for child support, plus interest on that amount. The father filed his application one day before the parties' son attained majority.

4 The trial court heard the mother's motion to dismiss on November 1, 2000. The court found that the mother had failed to pay the court-ordered child support as alleged by the father. The court further found that the mother had been legally disabled since May 1997, and that the Social Security Administration made a payment of $13,101.00 directly to the child of the parties on June 2, 2000, and had paid $355.00 per month directly to the child of the parties every month since that time. Those payments represented Social Security benefits payable to the child as a result of the mother's disability. The sums were in excess of the sum claimed as delinquent child support by the father in his application for an indirect contempt citation.

5 The court made these findings. Equity required the application of the equitable es-toppel doctrine to the father's claim for delinquent child support. The mother's disability, and the Social Security benefit payments of a lump sum and monthly payment made in excess of the delinquent child support supported this decision. The mother was not responsible for the payment of the lump sum directly to the adult child of the parties by the Social Security Administration. The journal entry of judgment stated that the father should seek reimbursement of the child support he sought in his motion from his adult son by having a constructive trust imposed on the benefits paid to the adult son to the extent of the unpaid child support while the child was a minor. The court granted the motion to dismiss the indirect contempt citation and also dismissed the father's motion to reduce arrearage to judgment.

T6 The Court of Civil Appeals, Division III, cited the 1998 supplement to 483 O.S8. § 187, which provides that when an installment of court-ordered child support becomes past due, it becomes a judgment by operation of law. The court concluded that it was inequitable to allow Social Security disability payments on behalf of the mother to the child to extinguish the father's in personam judgment for child support.

I. STANDARD OF REVIEW

¶ 7 The trial court stated that its judgment was based on equitable considerations. We have recently reaffirmed that child support proceedings are of equitable cognizance. Hedges v. Hedges, 2002 OK 92, ¶ 10, 66 P.3d 364, 370. In Thrash v. Thrash, 1991 OK 32, ¶ 9, 809 P.2d 665, 668, we noted that equitable defenses may be invoked to bar the recovery of delinquent child support payments. Those defenses include the equitable doctrines of waiver, estoppel and lach-es. Thrash, 1991 OK 32, ¶ 9, 809 P.2d at 668. When reviewing the decision of the trial court in an equity proceeding, this Court has long held that the judgment will not be disturbed unless the trial court abused its discretion or unless the court's finding was clearly contrary to the weight of the evidence. Creech v. Creech, 1956 OK 10, ¶ 9, 292 P.2d 376, 378; Tschauner v. Tschauner, 1952 OK 230, ¶¶ 22, 25, 245 P.2d 448, 451.

IL - EQUITABLE JURISDICTION

T8 The trial court based its decision on principles of equity. In 1987, the legislature enacted a new law, codified in the Oklahoma Statutes as § 1291 of Title 12, now 48 O.S. 2001, § 137. Section 187(A) provides that "Any payment or installment of child support ordered pursuant to any order, judgment, or decree of the district court or administrative order of the Department of Human Services is, on and after the date it becomes past due, a judgment by operation of law." Except for the rearranging of some commas, the sentence is identical to that which was originally enacted. The Court of Civil Appeals has construed this statute as eliminating equitable defenses to excuse noncompliance with a support order. Aguero v. Aguero, 1999 OK CIV APP 38, ¶ 10, 976 P.2d 1088, 1090. Cowan v. Cowan, 2001 OK CIV APP 14, ¶ 10, 19 P.3d 8322, 825-826, relied on Aguero to reach the same result.

T9 In his Response of Michael L. Merritt to Motion to Dismiss Contempt Citation, the appellant argues that he has a series of judgments for unpaid child -support as a result of the appellee's failure to make her required child support payments. Appellant cites 48 0.98.2001, § 187, which uses the term "judgment by operation of law." The term "judgment by operation of law" appears to be incorporated into Oklahoma's statutes as a result of a requirement by Congress.

¶ 10 A money judgment is discharged by actual payment in full to a person authorized to receive it. Hart v. Jett Enterprises, Inc., 1985 OK 24, ¶ 6, 744 P.2d 561, 562. Due process requires that an obligor be allowed a hearing for any legally-cognizable defense to an assertion of arrearage. The Supreme Court of Alaska recognized this in State v. Maxwell, 6 P.3d 733 (Alaska 2000). That court observed that an alleged obligor be allowed an opportunity for a fair and impartial hearing before finalizing and implementing a continuing child support order that would become a series of enforceable judgments. Maxwell, 6 P.3d at 737.

T 11 North Dakota likewise recognized this right to a hearing in Ruscheinsky v. Ulrich, 2000 ND 133, ¶ 10, 612 N.W.2d 283, 286. There the court noted that simply because obligor's arrearages constituted judgments by operation of law did not necessarily mean that North Dakota's Social Services could collect on the judgments. Pursuant to North Dakota statutes, the claims were subject to a statute of limitations or cancellation by N.D.C.C. § 28-20-85.

112 Like support alimony, child support becomes vested at the time each payment becomes due. Nantz v. Nantz, 1988 OK 9, ¶ 10, 749 P.2d 1137, 1140. "[Aln action which seeks to recover unpaid installments for child support is an action for a debt created by law and evidenced of record, and is maintainable in the court which directed payment, or any other court of competent jurisdiction...." Turk v. Coryell, 1966 OK 194, ¶ 10, 419 P.2d 555, 558.

¶ 13 Even though the arrearages are judgments by operation of law, they are nevertheless subject to equitable defenses. We have already stated that Oklahoma recognizes equitable defenses. Hedges, 2002 OK 92, ¶ 10, 66 P.3d at 370. "[Thhe equitable jurisdiction of a district court is not dependent upon specific statutory authorization." Marley v. Cannon, 1980 OK 147, ¶ 8, 618 P.2d 401, 404. "The purpose of a court sitting in equity is to promote and achieve justice with some degree of flexibility." Garett v. Arrowhead Improvement Ass'n, 826 P.2d 850, 855 (Colo.1992). Therefore, the trial court's exercise of equitable jurisdiction requires an inquiry into the particular circumstances of the case. Garreff, 826 P.2d at 855. There is a legal maxim that equity must follow the law; it will not allow legal limitations to be abridged unless there are equitable considerations of a compelling nature. Hedges, 2002 OK 92, ¶ 8, 66 P.3d 364, 370. Equity will follow both the letter and the spirit of the law.

114 Pursuant to the standard of review, we must examine the record to determine if the trial court abused its discretion or if its findings were clearly contrary to the weight of evidence. In concluding that equitable estoppel applied, the trial court specifically considered the mother's disability, the fact that Social Security paid an amount in excess of the arrearage, and that the mother was not responsible for Social Security's decision to pay the adult son.

¶ 15Equitable estoppel is em ployed to prevent one party from taking a legal position inconsistent with an earlier action that places the other party at a disadvantage. First State Bank v. Diamond Plastics Corp., 1995 OK 21, ¶ 39, 891 P.2d 1262, 1272. Equitable estoppel holds a person to a representation made, or a position assumed, where otherwise inequitable consequences would result to another, who has in good faith, relied upon that representation or position. Oxley v. General Atlantic Resources, Inc., 1997 OK 46, ¶ 20, 936 P.2d 943, 947. In the case at bar, the representation or position assumed must be the amount of time the father delayed before filing for his application for an indirect contempt citation and motion to reduce arrearage to judgment.

¶ 16 Both estoppel and the equitable defense of laches share the elements of delay and resulting prejudice to the other party,. In Hedges, cited above, this Court found that a ten-year delay was not sufficient to support a laches defense where the only prejudice that could be shown was the fact that the party owing the arrearage must now pay the accrued interest along with the ar-rearage. Hedges, 2002 OK 92, ¶ 11, 66 P.3d at 370. In the case at bar, the mother is alleged to have failed to pay child support for three years and nine months. Concerning resulting prejudice from a delay in enforcement, the mother could claim to be prejudiced by the fact that the father's delay resulted in the Social Security Administration's paying the parties' adult child instead of paying the father. But she cannot claim that her failure to pay child support was in good faith. Also, there is no evidence that the father has taken now a legal position inconsistent with his earlier action. The evidence is insufficient to support the conclusion of the trial court that equitable estoppel applies.

117 But to affirm the decision of the trial court, it is not necessary for this Court to agree with the reason for the decision. "It is a settled rule of appellate review in this jurisdiction that a judgment, if correct, must stand, regardless of the correctness of the reasons, theory or conclusions upon which it was based." McDaniel v. McCauley, 1962 OK 72, ¶ 10, 371 P.2d 486, 489, quoting Duncan v. Golden, 1957 OK 194, ¶ 6, 316 P.2d 1116, 1118.

118 The judgment of the trial court is based on an assumption that Social Security disability benefits may be eredited for court-ordered support of a minor child. That assumption is correct. The foundation for crediting disability benefits for a minor child as child support payments was laid in Nibs v. Nibs, 1981 OK 25, 625 P.2d 1256. The Court found that the trial court in Nibs was within its discretion to credit Social Security payments against a child support obligation, although the Court held that the evidence in Nibs weighed against such a credit. Nibs, 1981 OK 25, ¶ 10, 625 P.2d at 1257. The entire Nibs court agreed that credit for Social Security disability benefits toward a child support order should be allowed. Nibs, 1981 OK 25, T1, 625 P.2d at 1258 (dissent). "Social Security benefits are not gratuitous, but are earned, and they constitute, in effect, insurance payments substituting for lost earning power. [Citations omitted.] It is therefore equitable to substitute Social Security disability benefits for child support for the period during which such benefits are paid." Nibs, 1981 OK 25, ¶ 1, 625 P.2d at 1258 (dissent).

¶ 19 In the case before us, Social Security benefits have been paid for child support. The amount paid was in excess of that owed as an arrearage. The mother is entitled to credit for that payment. The trial court found that the mother was not responsible for the lump sum payment directly to the adult child of the parties. In balancing the equities, we will not require a disabled party on Social Security to pay a second time. McNeal v. Robinson, 1981 OK 43, ¶ 13, 628 P.2d 358, 360. We do not find an abuse of discretion in the decision of the trial court.

III. ATTORNEY FEES

¶ 20 The trial court granted the mother's motion for attorney fees, and awarded the mother $1,175.00. The father appeals from that award. Thielenhaus v. Thielenhaus, 1995 OK 5, 890 P.2d 925, 934-935, reiterated the rule, established by 43 O.S.2001, § 110(C), that either spouse may be required to pay the reasonable expenses of the other in the prosecution or defense of the action. The trial court must take into account what is just and equitable considering the respective parties and the means and property of each. Attorney fees are granted only to that litigant who qualifies for the benefit through the process of a judicial balancing of the equities. The court's decision will not be disturbed on appeal in the absence of an abuse of discretion. Hester v. Hester, 1983 OK 50, ¶ 7, 663 P.2d 727, 729. We do not find an abuse of discretion in the trial court's decigion.

CERTIORARI PREVIOUSLY GRANTED; COURT OF CIVIL APPEALS OPINION VACATED; JUDGMENT OF THE TRIAL COURT AFFIRMED.

WATT, C.J., LAVENDER, KAUGER, SUMMERS, WINCHESTER, JJ., concur.

HARGRAVE, J., concurs in result.

OPALA, V.C.J., HODGES (who joins OPALA), BOUDREAU, JJ., concur in part; dissent in part.

OPALA, V.C.J.,

dissenting in part.

I concur in affirming the trial court's order that exonerates Mother of liability for child support arrearage; I dissent from leaving undisturbed the trial court's order that imposes on Father the liability for payment of Mother's counsel-fee services. I would let each party bear its own expenses for legal representation in the case.

BOUDREAU, J.,

concurring in part; dissenting in part:

¶ 1 I agree with the majority opinion to the extent it allows the mother an equitable ered-it against her child support obligation, in the amount of social security disability payments which the Social Security Administration paid directly to the child as a consequence of the mother's disability. The majority opinion need not have gone farther than that. Instead, the majority opinion proceeds to make a hyper-global pronouncement by way of obiter dicta that child support judgments are subject to the equitable defenses of waiver, estoppel and laches.

¶ 2 In Hedges v. Hedges, 2002 OK 92, 66 P.3d 364, our most recent decision concerning the availability of equitable defenses to child support judgments, we restrained from making a pronouncement about the availability of equitable defenses to child support judgments because no such pronouncement was necessary to the holding. See also Myers v. Lashley, 2002 OK 14, ¶ 17, 44 P.3d 553, 561 (not making global pronouncements). In exercising this restraint in Hedges, we said: "We need not globally address ourselves today to the continued invocability of laches as an equitable defense in arrearage enforcement proceedings. This is so because, on this record, we hold that it does not avail in this case." Hedges, 66 P.3d at 369 (emphasis in original). Contrary to what we did in Hedges, the majority opinion in this case makes an across-the-board pronouncement on an issue that was neither necessary to the holding nor clearly framed by the parties.

[ 3 If the holding of the majority opinion in this case is indeed that child support judgments are subject to the equitable defenses of waiver, laches and estoppel, then I dissent. In 1987 the Legislature enacted a statute that says a child support obligation becomes a judgment by operation of law on the date it becomes past due. 48 0.98.2001 § 137(A). The result of that statute was to transform an order in equity for the payment of continuing child support into a judgment by operation of law as each installment falls due and remains unpaid. Hedges, 66 P.8d at 373 n. 41. When § 187(A) is viewed in connection with subsequent enactments, I am con-vinceed that the Legislature intended to eliminate the equitable defenses of waiver, laches and estoppel to the enforeement of child support judgments.

WAIVER

¶ 4 It need hardly be repeated that 48 ©.8.2001 § 112 eliminated the equitable doe-trine of waiver as a defense to the enforcement of child support judgments. In Hedges we recognized that with the enactment of § 112, parents have statutory authority to mutually agree to relinquish payment of all or a portion of past due child support. Noting that the effect of § 112 was to eliminate the equitable defense of waiver in this context, we said: "[TJhe latter defense characterized by the parties and by the trial court as 'waiver' is [now] statutorily declared ... its effectiveness stands to matured and unpaid installments either reduced or relinquished by mutual agreement." Hedges, 66 P.3d at 369 (emphasis in original). Waiver as a defense to child support judgments is now restricted to the terms of § 112(A)(8).

LACHES

1 5 We have held that laches is an affirmative defense to stale claims not yet barred by limitations. Hedges, 66 P.3d at 369; Sooner Federal Sav. & Loan Ass'n. v. Smoot, 1995 OK 31, 894 P.2d 1082. Laches is defined as delay that disadvantages another. Hutchinson v. Pfeil, 105 F.3d 562, 564 (10th Cir.), cert. denied, 522 U.S. 914, 118 S.Ct. 298, 139 L.Ed.2d 230 (1997). In 1996 the Legislature enacted new laws concerning delay in asserting child support claims. The new statutes provide, among other things:

A child support judgment is not subject to a statute of limitations:
Court-ordered child support is ... not subject to a statute of limitations. 12 0.8.2001 § 95(9).
A child support judgment never becomes dormant:
A child support judgment shall not become dormant for any purpose, except that it shall cease to be a lien on real property five (5) years from the date it is filed.... 48 0.8.2001 § 137(B).
A child support judgment is enforceable until paid in full:
Except as otherwise provided by court order, a judgment for past due child support shall be enforceable until paid in full. 48 0.8.2001 § 137(B)(1).
A child support judgment is owed until it is paid:
Court-ordered child support is owed until it is paid.... 12 0.98.2001 § 95(9).

T6 Because these statutes are in derogation of common law, they must be liberally construed to effect their purpose. Finnell v. JEBCO Seismic, 2003 OK 35, ¶ 15, 67 P.3d 339, 345; see also 25 0.8.2001 § 29. The purpose of these statutes is to ensure that delay on the part of the obligee in seeking to enforce child support obligations does not in any way affect his or her entitlement to those obligations. Construing these statutes liberally to effect their purpose, I am convinced the Legislature, in enacting these various statutes, intended to eliminate the equitable defense of laches to the enforcement of child support judgments.

ESTOPPEL

T7 Equitable estoppel holds a person to a representation made, or a position taken, where otherwise inequitable consequences would result to another who in good faith relied upon the representation or position. Oxley v. General Atlantic Resources, Inc., 1997 OK 46, 936 P.2d 943, 947. Estoppel and waiver are closely akin and their legal effect is much the same. Grant v. Norris, 249 Iowa 236, 85 N.W.2d 261 (Iowa 1957); First National Bank of Hastings v. Davis, 123 Neb. 304, 242 N.W. 655 (1932); Woodmen of the World Life Ins. Soc. v. Greathouse, 242 Ala. 529, 7 So.2d 89 (1942). Although there are well recognized distinctions between the two doctrines, both are based on acts, conduct or declarations of the party against whom the defenses are asserted. In my view, 43 0.8.2001 § 112, which prohibits (with a single exception) waiver of "payment of all or a portion of the past due amount [of child support]" applies to all acts, conduct or declarations relating to child support obligations, whether denominated waiver or es-toppel. I am convinced the Legislature, in enacting this statute, intended to eliminate the equitable defense of estoppel to the enforcement of child support judgments.

THRASH v. THRASH

¶8 The majority opinion relies on Thrash v. Thrash, 1991 OK 32, 809 P.2d 665, for the across-the-board proposition that equitable defenses may be invoked against the enforcement of child support judgments. - In Thrash, the parties' divorcee decree provided that father was to pay $220 per month child support until his gross salary reached $1,500, at which time he was to pay child support in an amount equal to 15% of his gross salary. In 1987, mother filed an application for contempt citation alleging that father was in arrears for child support in the amount of $31,876.80, based upon his income tax returns for the years through 1986. The trial court found father not guilty of indirect civil contempt, but entered judgment against father for the arrearage. On appeal, father argued that since mother made no attempt to enforce the automatic increases in child support based on his gross salary from the time the parties were divorced until 1987, the equitable doctrines of waiver, laches and es-toppel barred mother's recovery of the ar-rearage. We disagreed, saying: "No set of facts has been stated for this Court to conclude that the appellant may in this case defeat the claim for the arrearage by interposing equitable defenses." Thrask, 809 P.2d at 668. In reaching this decision, we made a gratuitous comment regarding the availability of equitable defenses,. We said:

"The appellant is correct in concluding that equitable defenses may be invoked to bar the recovery of delinquent child support payments." - Id. This comment was certainly not essential to our holding in the case and is mere obiter dicta.

9 More importantly, Thrask was decided in 1991, and was based on pre 1987 child support arrearages. Thus, it was decided before 48 0.8. § 137(A) transformed an order in equity for the payment of continuing child support into a judgment by operation of law as each installment falls due and remains unpaid, and before the Legislature made child support judgments enforceable until paid in full, with no statute of limitations and no dormaney.

CONCLUSION

10 I agree with the majority opinion to the extent it allows the mother an equitable credit against her child support obligation, in the amount of social security disability payments which the Social Security Administration paid directly to the child as a consequence of the mother's disability. However, I dissent to that portion of the opinion that holds that the equitable defenses of waiver, estoppel and laches are available as defenses to the enforcement of child support judgments because the pronouncement was not necessary to the holding and because I think it is wrong.

T 11 If this Court is going to declare that these equitable defenses may be invoked as defenses to the enforcement of child support Judgments, we should do it in a case in which such declaration is essential to the holding of the case, and our opinion should include a reasoned discussion of all relevant statutory enactments subsequent to 1986.

      . We express no opinion on this obiter dictum of the trial court. Although the parties have argued whether or not such a trust may be imposed, this issue is not properly before this Court and does not affect the reasoning in this opinion.

      . 42 U.S.C. § 654(20)(A) provides that "... to the extent required by section 666 of this title, that the State (A) shall have in effect all of the laws to improve child support enforcement effectiveness which are referred to in that section...." Section 666(a) provides that "... each State must have in effect laws requiring the use of the following procedures, consistent with this section and with regulations of the Secretary. ..." Section 666(a)(9)(A) provides: "Procedures which require that any payment or install ment of support under any child support order, whether ordered through the State judicial system or through the expedited processes required by paragraph (2), is (on and after the date it is due)-
      (A) a judgment by operation of law, with the full force, effect, and attributes of a judgment of the State, including the ability to be enforced...."

      . This is consistent with the holding of McNeal v. Robinson, 1981 OK 43, 628 P.2d 358. In McNeal, we held that the non-custodial father should receive an equitable credit for his alternative compliance with the child support order. He received credit for the payments made by him during the time his children lived with him.

      . This provision became effective October 1, 1987, codified at 12 0.8. § 1291(A). Laws 1987, c. 230, § 16. In 1989, 12 O.S. § 1291 was renumbered to 43 O.S. § 137. Laws 1989, c. 333 § 1. Section 137 was amended again in 1994, 1996, 1998 and 2000, but none of the amendments altered § 137(A).

      . This provision became effective September 1, 1996. Laws 1996, c. 233 § 1. Section 95 was amended again in 2002, but the amendment did not alter § 95(9).

      . This provision became effective November 1, 1996 and was codified at 43 O.S. § 137(C). Laws 1996, c. 233 § 3. Section 137 was amended again in 1998 and 2000. Neither the 1998 nor the 2000 amendment altered the quoted language, but the 1998 amendment renumbered § 137(C) to § 137(B). Laws 1998, c. 323 § 12.

      . This provision became effective November 1, 1996 and was codified at 43 O.S. § 137(C)(1). 1996 Laws c. 233 § 3. Section 137 was amended again in 1998 and 2000. Neither the 1998 nor the 2000 amendment altered the quoted language, but the 1998 amendment renumbered § 137(C)(1) to § 137(B)(1).

      . This provision became effective September 1, 1996. Laws 1996, c. 233 § 1. Section 95 was amended again in 2002, but the amendment did not alter § 95(9).

      . "The rule of the common law, that statutes in derogation thereof are to be strictly construed, has no application to the laws of this state, which are to be liberally construed with a view to effect their objects and to promote justice." 25 O.S. 2001 § 29.