author: KITE, Justice.

text:
    2004 WY 83
    Joan Rea JOHNSON, Individually and as Conservator for Donald R. Johnson, Appellant (Plaintiff), v. Linda J. REIGER and Gerald Reiger, Appellees (Defendants).
    No. 03-123.
    Supreme Court of Wyoming.
    July 15, 2004.

      Representing Appellant: R. Michael Shic-kich of the Law Offices of R. Michael Shic-kieh, LLC, Casper, Wyoming and Keith P. Tyler of Casper, Wyoming. Argument by Mr. Shickich.
    Representing Appellees: Pro se. Argument by Mr. Reiger.
    Before HILL, C.J., and GOLDEN, LEHMAN, KITE, and VOIGT, JJ.
   KITE, Justice.

[¶ 1] Joan Rea Johnson (Mrs. Johnson), individually and as conservator for her husband, Donald R. Johnson (Mr. Johnson), filed claims for undue influence, constructive fraud, conversion and replevin against her daughter and son-in-law, Linda and Gerald Reiger (the Reigers), alleging that they wrongfully persuaded Mr. and Mrs. Johnson to transfer over to them 596 shares of stock in the Johnson family ranch valued at $1,500 per share. The claims against the Reigers were tried to a jury but at the close of Mrs. Johnson’s case the district court entered judgment as a matter of law for the Reigers. Mrs. Johnson appeals that judgment and we reverse, holding that questions of fact existed for jury determination on the claims of undue influence, constructive fraud and conversion.

ISSUES

[¶2] Mrs. Johnson raises the following issues:

(1) Whether the trial court improperly analyzed the law of undue influence when it entered judgment as a matter of law on this claim.
(2) Whether the trial court improperly analyzed the law of constructive fraud when it entered judgment as a matter of law on this claim.
(3) Whether the trial court improperly analyzed the law of conversion when it
entered judgment as a matter of law on this claim.
(4) Whether the trial court erred when it denied plaintiffs the opportunity to amend the pleadings to conform to the evidence.
(5) Whether the trial court improperly decided damage questions, rather [than] allowing the jury, when it entered judgment as a matter of law.

[¶ 3] The Reigers, appearing pro se, did not present any issues for review.

FACTS

[¶ 4] The Rim Rock Ranch, located in Natrona County, Wyoming, has been owned and operated by the Johnson family since it was homesteaded in the early 1900s. Mr. and Mrs. Johnson were married in 1946 and have lived and worked on the ranch since that time. When Mr. Johnson’s father passed away, ownership of the ranch passed to Mr. Johnson and his brother, and Mr. Johnson took over ranch operations.

[¶ 5] In 1999, Mr. Johnson fell ill, and the Reigers moved him to Denver to be near them while he recuperated. Not long thereafter, Mrs. Johnson was diagnosed with congestive heart failure. Mr. Johnson was subsequently declared legally incompetent and Mrs. Johnson was appointed guardian.

[¶ 6] Up until his illness in 1999, Mr. Johnson took care of the couple’s financial affairs. Mrs. Johnson had not been involved in and had no knowledge of the ranch finances. After Mr. Johnson’s illness, a family meeting was convened at the ranch over Labor Day 1999 and was attended by Mrs. Johnson, the Reigers, the Johnsons’ other daughter Melissa Larson and her husband Tim, and the Johnsons’ son Johnny Johnson and his wife Patty. The Johnsons’ other son Paul was not present at the meeting. The purpose of the meeting was to assist Mrs. Johnson in figuring out the couple’s finances. During the weekend, the family discovered that Mr. Johnson had been covering expenses with credit cards and had incurred $54,000 in credit card debt. At this, and subsequent meetings, family members devised a plan for payment of the credit card debt whereby each of the four Johnson children would be responsible for one-quarter of the debt. In exchange for their assumption of the debt, Mrs. Johnson would transfer the stock in the ranch to the four children. In all, Mrs. Johnson claimed she transferred to her four children 596 of the 614 shares held by her and Mr. Johnson. Valued at $1,500 per share, the total value of the transferred stock was $894,000.

[¶ 7] In May of 2001, Mrs. Johnson filed a complaint against three of her children claiming undue influence, conversion, constructive fraud, replevin and civil conspiracy. Prior to the filing, the oldest son, John, returned the stock he had received to his mother. After the complaint was filed, Paul Johnson and Melissa Larson returned the stock they had received and were dismissed from the action. The case went to trial against the Reigers, who appeared in the action pro se, as they do on appeal. Mrs. Johnson proceeded on the theory that, due to her husband’s illness, her own poor health, her lack of knowledge and experience with financial matters, and her reliance on Mr. Reiger who allegedly had some expertise in financial matters, she was unduly influenced into transferring stock in exchange for her children’s assumption of a debt — stock of significantly greater value than the debt assumed. On the third day of trial, after the close of Mrs. Johnson’s casein-chief, the trial court granted the Reigers’ sua sponte motion for judgment as a matter of law, holding in relevant part as follows:

(1) undue influence is not an independent cause of action under Wyoming law, and although undue influence may be considered in connection with the plaintiff’s other claims, plaintiffs presented no evidence that they actually were influenced by the defendants, whether unduly or otherwise;
(2) constructive fraud is an equitable claim and the plaintiffs failed to offer evidence that the defendants had any legal or equitable duty to the plaintiffs, or that, assuming such a duty existed, there was a breach of this duty; (3) plaintiffs’ conversion claim fails because plaintiffs transferred title to the stock at issue and there is no evidence that the transfer was the result of undue influence by the defendants under the definitions of undue influence that exist in Wyoming case law; ...

The trial court determined the maximum number of shares at issue was 144 shares and held the Reigers were entitled to retain that number of shares. Mrs. Johnson timely appealed, claiming that 225 shares with a value of $337,500 were at issue and that sufficient evidence was presented on her claims of undue influence, conversion and constructive fraud to warrant denial of the Reigers’ motion for judgment as a matter of law.

STANDARD OF REVIEW

[¶ 8] Judgment as a matter of law should be granted cautiously and sparingly. Dewey v. Wentland, 2002 WY 2, ¶ 28, 38 P.3d 402, ¶ 28 (Wyo.2002). However, where the evidénce is not legally sufficient to support a claim, the district court has an obligation to enter such a judgment. Id. We review de novo a decision to grant or deny judgment as a matter of law, meaning we examine the record anew affording no deference to the district court’s views. Id. The test is whether the evidence appearing in the record is such that reasonable persons could reach but one verdict. Id. We view the evidence in the light most favorable to the nonmoving party, giving that party the benefit of all reasonable inferences that may be drawn from the evidence. Id. When the evidence permits more than one reasonable inference or the inferences favorable to the moving party are subject to doubt, the matter is properly for the jury to decide and a motion for judgment as a matter of law must be denied. Id.

DISCUSSION

1. Undue Influence

[¶ 9] Mrs. ■ Johnson claims the district court improperly analyzed the law of undue influence when it granted the Reigers’ motion. She claims, first, the district court erred in summarily concluding there was no confidential relationship between the parties as required for an undue influence claim; second, the district court erred when it held in essence that an undue influence claim cannot be established by circumstantial evi-denee; and, third, even under the strictest of standards, the evidence was sufficient to withstand the motion and submit the issue of undue influence to the jury. The Reigers respond generally that the evidence presented by Mrs. Johnson did not substantiate her allegations and was disproved by other evidence presented to the district court. We hold that the district court erred in granting the Reigers’ motion for judgment as a matter of law.

[¶ 10] Contrary to the district court’s conclusion that undue influence is not an independent cause of action in Wyoming, this Court has recognized the claim in a number of cases involving inter vivos or testamentary transactions. Marchant v. Cook, 967 P.2d 551 (Wyo.1998); Bowers v. Hawkey, 837 P.2d 78 (Wyo.1992); In re Estate of Wafers v. Holkan, 629 P.2d 470 (Wyo.1981). In order to prove undue influence in an inter vivos transaction, the plaintiff must show: 1) opportunity to control; 2) a condition permitting subversion; and 3) activity on the part of the person charged. Marchant, 967 P.2d at 558. We have said transactions will be carefully scrutinized where the parties involved have a confidential relationship. Id. Once the person seeking to void the transaction establishes that a confidential relationship existed between the grantor and grantee, the burden shifts to the grantee to prove the transaction was fair and conducted in good faith. Id. The party asserting the claim must present evidence showing the actual application of control and undue influence by the party charged with exercising undue influence. Id.

[¶ 11] In the context of an undue influence claim, the existence of a family relationship alone is not enough to establish the requisite confidential relationship. Walsh v. Walsh, 841 P.2d 831, 835 (Wyo.1992). Such a relationship can be shown, however, by evidence that one party is under the domination of another or, because of the relation between them, is justified in assuming that the other party will not act in a manner inconsistent with his or her welfare. Johnson v. Soulis, 542 P.2d 867, 874 (Wyo.1975); Walsh, 841 P.2d at 834. A grantor’s dependence on the grantee may also create a confidential relationship. Perry v. Vaught, 624 P.2d 776, 783 (Wyo.1981); Walsh, 841 P.2d at 835.

[¶ 12] We applied these factors in Mar-chant to uphold summary judgment on an undue influence claim where the party asserting the claim testified she had no facts tending to show that the party against whom she alleged the claim exercised control over, manipulated or directed the grantor to transfer the stock at issue and, in fact, had no information whatsoever concerning the grantor’s reasons for making the transfer. We concluded from this testimony that the undue influence claim was based upon suspicion rather than actual facts. Id. at 558. We said the evidence was insufficient to show that the grantor’s mental abilities were failing or that the party charged with undue influence was aware his abilities were failing. Id. We also held specific evidence proving the exertion of undue influence or control was required. Id.

[¶ 13] We reached the same result in Estate of Short, 785 P.2d 1167, 1171 (Wyo.1990), affirming summary judgment on an undue influence claim where no evidence was presented that the party against whom the claim was made controlled or influenced the transaction at issue and two witnesses testified the grantor managed his own financial affairs. Likewise, we affirmed a summary judgment in Walsh, 841 P.2d at 835, where there was no showing of a confidential relationship, dependency or reliance by the grantor or involvement in the transaction by those charged with undue influence.

[¶ 14] In contrast, in Bowers, 837 P.2d 78 (Wyo.1992), we affirmed the trial court’s finding of undue influence where the evidence presented showed in pertinent part:

[The grantorj’s condition and situation were such that he needed guidance, direction, and advice on business and legal matters. The [grantees] recognized this and, in fact, provided such assistance.... [They] accompanied [him] on trips to the attorney’s office and helped counsel and advise him in the course of the proceedings ....
[The grantor] trusted the [grantees] and believed that they were looking out for his best interest.
The [grantees’] close and confidential relationship with [the grantor] provided them an opportunity to exert influence and control, and [the grantor’s] mental condition and alcoholism certainly were such as to permit subversion. There was activity on the part of the [grantees]. They guided [the grantor] through business and legal matters and then into execution of the subject lease.

[¶ 15] With this precedent in mind, we examine the evidence supporting Mrs. Johnson’s undue influence claim. Mrs. Johnson testified Mr. Johnson took care of the ranch finances and she had no understanding of their financial affairs when he became ill in August of 1999. She testified that after the Reigers took Mr. Johnson to Denver and she was diagnosed with congestive heart failure, she turned to her children because she “needed help to figure out where [she] was headed.” She testified that she looked specifically to Mr. Reiger for help because he had the most business experience of all her children and in-laws.

[¶ 16] Mrs. Johnson testified that before the Labor Day family meeting, her children told her to work up a yearly budget, which she attempted to do despite her limited knowledge of financial matters such as property and income taxes. During the Labor Day weekend, Mrs. Johnson’s daughter, Melissa, discovered the credit card statements as she was looking through papers in Mr. Johnson’s office. The children informed Mrs. Johnson about the $54,000 credit card debt that weekend.

[¶ 17] Later in September, Mr. and Mrs. Johnson, their daughter Melissa, their son John and his wife Patty, and Mr. Reiger met with a lawyer and an accountant. Mrs. Johnson testified that Mr. Reiger had an agenda prepared, which was followed during the meeting, and she relied upon him during the meeting. After the meeting, she received pressure from the Reigers to transfer the stock. During this same time, Mrs. Johnson went back to the doctor and learned she had other serious health problems. She testified she thought at the time her days were numbered. She also learned during this time frame that her son Paul had suffered a heart attack.

[¶ 18] The day after she learned about Paul’s heart attack, Mrs. Johnson’s son-in-law Tim Larson arrived at the ranch from Colorado. Mrs. Johnson signed over her stock certificates, retaining ten shares for Mr. Johnson and eight shares for herself and giving the remainder of the stock she and Mr. Johnson owned to Mr. Larson. She testified her children suggested she transfer the stock and she did not understand the consequences of the transfer, did not know how much the stock was worth, was feeling overwhelmed at the time and gave the certificates to her son-in-law because she did not believe she was going to live much longer. She also testified she thought she and her children and their families were working together as a family to figure out the finances.

[¶ 19] Mr. Reiger testified that the idea for the transfer of stock to the Johnsons’ children was his and he proposed it to the rest of the family at the Labor Day meeting. He also testified that he never told Mrs. Johnson that the “gift” of stock was worth considerably more than the $54,000 debt payment in return for which the stock transfer was made a condition. Mrs. Reiger confirmed that it was her husband who made the proposal for paying off the $54,000 debt in return for the stock transfer.

[¶ 20] Bruce Kahn, M.D., a psychiatrist specializing in geriatric psychiatry, testified that in his opinion Mr. Johnson was suffering from unequivocal dementia and would not have had sufficient mental capacity to engage in financial transactions or manage his own personal or financial affairs in the fall of 1999. Douglas McLaughlin, the attorney the family met with in September 1999, also testified that Mr. Johnson was not competent to discuss financial decisions. As for Mrs. Johnson, Dr. Kahn testified that in his opinion she was under considerable to extreme emotional distress due to the events occurring in her life in August and September of 1999 and was extremely susceptible to undue influence. Mr. McLaughlin similarly testified that Mrs. Johnson did not look well and did not seem to understand the financial matters being discussed. He testified that he had the impression Mr. Reiger was involved in the financial planning profession and that ■ he and Mrs. Johnson’s children dominated the meeting.

[¶ 21] Viewing this evidence in the light most favorable to Mrs. Johnson and giving to her all reasonable inferences that may be drawn from it, we conclude the evidence presented raised the inference that the Johnsons’ decision to transfer the shares of stock to their children was unduly influenced by the Reigers. Mrs. Johnson presented evidence from which it might be concluded that a confidential relationship existed between herself and the Reigers, i.e. that she was dependent upon them for advice in sorting out her financial affairs and was justified in assuming they would not act in a manner inconsistent with her welfare. Perry, 624 P.2d at 783. Borrowing the language from Bowers 837 P.2d at 80, the evidence presented raised an inference that Mrs. Johnson’s “condition and situation were such that [she] needed guidance, direction and advice on [financial] matters” and that the Reigers “recognized this and, in fact, provided such assistance.” Additionally, as in Bowers, a reasonable inference could be made that the Reigers’ active involvement in Mrs. Johnson’s financial affairs after Mr. Johnson’s illness “provided them an opportunity to exert influence and control” and Mrs. Johnson’s own health problems combined with the other recent and ongoing events in her life permitted subversion. Also as in Bowers, there was activity on the part of the Reigers, who helped guide Mrs. Johnson through her financial difficulties and came up with the plan for payment of the debt in exchange for transfer of the stock. Although Bowers involved more compelling facts which showed the grantor depended upon others for his care, suffered mental limitations, was unable to make responsible decisions and was highly susceptible to the influence of others, facts that were not present in Mrs. Johnson’s case, we conclude the evidence, viewed in the light most favorable to Mrs. Johnson, was sufficient at least to raise an inference that a confidential relationship existed, shifting the burden to the Reigers to show the transaction Mr. Reiger proposed was fair and conducted in good faith. The entry of judgment as a matter of law was not appropriate on the undue influence claim but was properly a matter for the jury to decide.

2. Constructive Fraud

[¶22] Constructive fraud has been defined as consisting of all acts, omissions, and concealments involving breaches of a legal or equitable duty resulting in damage to another, and exists where such conduct, although not actually fraudulent, ought to be so treated when it has the same consequence and legal effects.

In re Estate of Borton, 393 P.2d 808, 812 (Wyo.1964). The district court held Mrs. Johnson’s constructive fraud claim failed because she presented no evidence that the Reigers owed her a legal or equitable duty.

[¶ 23] Whether a duty exists is a question of law for the court to decide. Lee v. LPP Mortg. Ltd., 2003 WY 92, ¶ 20, 74 P.3d 152, ¶ 20 (Wyo.2003). The existence of a duty is “to be determined by reference to the body of statutes, rules, principles and precedents which make up the law; and it must be determined only by the court.” Id,., quoting W. Page Keeton, Prosser & Keeton on the Law of Tenis § 37 (5th ed.1984). Once it is determined that a duty exists as a matter of law, then any claimed breach of that duty presents a question of fact to be resolved by the trier of fact. Id.

[¶ 24] Ordinarily, for a duty to arise under circumstances like those presented in this case, a fiduciary or other similar relation of trust and confidence must exist between the parties. Id., ¶21. Two basic types of fiduciary relationships exist. Id. The first type is based on formal legal relationships, such as trustee-beneficiary, partnership, attorney-client, and principal-agency relationships, and is clearly not applicable to the Johnsons’ claim against the Reigers. The second type is an informal fiduciary relationship, which is implied in law due to the factual situation surrounding the involved transaction, and the relationship of the parties to each other and to the transaction. Id. This second type of relationship is often called a confidential relationship and would be considered a relation of trust and confidence. Id. When determining whether the second type of fiduciary relationship exists, we are to consider the relationship of the parties to each other and to the transaction. Id. Such a relationship exists when one party has gained the confidence of the other and purports to act or advise with the other’s interests in mind. Id.

[1125] Fiduciary relationships are extraordinary and not easily created. Id. Because they carry significant legal relationships, they cannot be the product of wishful thinking. Id. They are not created by the unilateral decision to repose trust and reliance, but derive from the conduct or undertaking of the purported beneficiary. Id.

[¶ 26] Viewing the evidence presented by Mrs. Johnson in the light most favorable to her, we hold that sufficient evidence was presented to overcome the motion for judgment as a matter of law and submit the constructive fraud claim to the jury. Upon submission of the claim, the jury’s task was to determine the factual issue of whether the relationship of the parties was one of trust and confidence. . In the event of a jury finding that such a relationship existed, an implied-in-Iaw duty existed, as a matter of law, on the part of the Reigers and it was then for the jury to determine whether they breached that duty. This implied-in-law duty is based upon the relationship of the parties to each other and to the transaction. It derives from the evidence presented that the Reigers undertook to act with the John-sons’ benefit in mind and, by that undertaking, assumed a duty of honest advice and full disclosure. Whether or not a jury would have concluded the duty was breached, sufficient evidence existed to withstand the Reig-ers’ motion for judgment as a matter of law.

3. Conversion

[¶ 27] The district court held Mrs. Johnson’s claim for conversion failed because she “transferred title to the stock at issue and there is no evidence that the transfer was the result of undue influence by the [Reigers].” Mrs. Johnson contends the Reigers obtained the stock by means of undue influence, which by definition is a conversion. As we have said, undue influence constitutes an independent claim in Wyoming. We have defined the tort of conversion as any distinct act of dominion wrongfully executed over one’s property in denial of his right or inconsistent therewith. Albrecht v. Zwaanshoek Holding En Financiering, B.V., 816 P.2d 808, 813 (Wyo.1991). We said in Marchant, 967 P.2d at 556:

Conversion occurs when a person treats another’s property as his own, denying the true owner the benefits and rights of ownership. In order to establish a conversion claim, a plaintiff must show that:
(1) he had legal title to the converted property; (2) he either had possession of the property or the right to possess it at the time of the conversion; (3) the defendant exercised dominion over the property in a manner which denied the plaintiff his rights to use and enjoy the property; (4) in those cases where the defendants lawfully, or at least without fault, obtained possession of the property, the plaintiff made some demand for the property’s return which the defendant refused; and (5) the plaintiff has suffered damage by the loss of the property.

Given the elements necessary to state a claim for conversion, elements distinctively different than the elements of undue influence, Mrs. Johnson’s argument that undue influence is by definition conversion is without merit. The two are separate claims requiring proof of different elements.

[¶28] Applying the elements of conversion, we held in Marchant, 967 P.2d at 556, that a conversion claim was not proven where the plaintiff failed to prove she had legal title to the property or the right of possession at the time it was converted. We said the fact that she was the property owner’s daughter and allegedly an hem of his estate and beneficiary under his trust was not sufficient to support her conversion claim. Id. Absent evidence that the plaintiff enjoyed legal title or possessed an immediate right of possession to the disputed property at the time it was converted, we said summary judgment was proper. Id.

[¶ 29] Unlike the party asserting the conversion claim in Marchant, the Johnsons had legal title to the stock at the time it was allegedly converted by the Reigers. There was no dispute that the Johnsons held the stock in their name before they transferred it allegedly as a result of the Reigers’ undue influence. On this basis, Mrs. Johnson argues the district court erred in entering judgment for the Reigers on her conversion claim.

[22] [¶ 30] In Kenyon v. Abel, 2001 WY 135, ¶ 11, 36 P.3d 1161, ¶ 11 (Wyo.2001), we said conversion occurs when a person treats another’s property as his own, denying to the true owner the benefits and rights of ownership. This statement arguably suggests that title to the property must remain in the party alleging conversion for the claim to survive. However, we also said in Kenyon that a converter’s title to stolen property is void, arguably suggesting that conversion can occur even where legal title to the property is transferred to the converter. In Western Nat. Bank of Casper v. Harrison, 577 P.2d 635, 640 (Wyo.1978) we said, “the actual conversion occurred when the defendant improperly took and then transferred title to the mobile home to Darlington,” again implying that the party claiming conversion need not retain title to the property but that conversion can occur where title is transferred. Similarly, Black’s Law Dictionary references “direct conversion”, defining it in pertinent part as the act of wrongfully assuming title to property of another in oneself. Black’s Law Dictionary 333 (7th ed.1999). On the basis of these latter authorities, we hold that Mrs. Johnson was required to show that she had legal title to the stock prior to its alleged conversion by the Reigers. She was not required to show she retained legal title after the alleged conversion. The district court erred in granting judgment as a matter of law for the Reigers on the conversion claim.

4. Amendment of the Pleadings

[¶ 31] After the district court ruled from the bench that it was dismissing her claims as a matter of law, Mrs. Johnson moved to have the pleadings conformed to the evidence presented at trial to allege a claim for quasi contract and/or unjust enrichment entitling her to redress in the form of restitution. The district court denied the motion without explanation. Mrs. Johnson claims the district court erred in denying the motion. She asserts the district court had no discretion to deny the amendment because restitution was at issue throughout the trial. It is not clear from her argument whether she raised the issue for consideration by this Court only in the event we affirm the district court’s judgment or whether she wished to have the issue addressed regardless of our holding on the other issues. Given our resolution of those issues, and the fact that the case is remanded for a new trial on the claims of undue influence, conversion and constructive fraud, we find it unnecessary to address the issue of whether the district court erred in denying the motion to conform the pleadings to the evidence presented. Of course, Mrs. Johnson is free to renew her motion to amend her complaint on remand.

5. Jury Consideration of Damages

[¶ 32] The district court held that 144 shares of stock were at issue. Mrs. Johnson presented evidence that 225 shares of stock were at issue. Our holding that factual questions exist on Mrs. Johnson’s claims of undue influence, conversion and constructive fraud requires remand of the case for a new trial. If conflicting evidence is presented as to the number of shares transferred to the Reigers in exchange for the credit card debt payment, it will be for the jury to determine the correct number of shares.

[¶ 33] Reversed and remanded for a new trial.

      . In their pro se brief, the Reigers do not directly address the issues presented by Mrs. Johnson. Instead, their four page brief consists primarily of assertions that Mrs. Johnson failed to comply with various court rules, fabricated and distorted the facts and generally failed to produce evidence to support her claims. They also accuse appellate counsel of attempting to deceive this Court and having a personal conflict with them. The Reigers' assertions either are not responsive to the issues raised or are not supported by cogent argument or appropriate citation to the record and legal authority. We, therefore, do not address them.

      . The Reigers point to no evidence supporting the trial court’s decision. In fact, their brief is devoid of any mention of any evidence presented at trial and contains no references to the district court record. We have long held to the rule that while we may make allowances for pro se litigants, they are not excused from compliance with the Wyoming Rules of Appellate Procedure. Kelley v. Watson, 2003 WY 127, 77 P.3d 691, 692 (Wyo.2003). While we proceed to address the issues framed by Mrs. Johnson, we note that the Reigers’ brief was of no assistance to this Court in resolving the issues presented.


source: Caselaw Access Project

author: LEHMAN, Justice.

license: Public Domain

text:
    2004 WY 85
    Ronald “Pete” LLOYD, Appellant (Petitioner), v. STATE of Wyoming, ex rel., WYOMING WORKERS’ SAFETY and COMPENSATION DIVISION, Appellee (Respondent).
    No. 03-149.
    Supreme Court of Wyoming.
    July 16, 2004.
    Representing Appellant: R. Michael Shie-kich of Law Offices of R. Michael Shickich, LLC, Casper, WY. Argument by Mr. Shie-kieh.
    Representing Appellee: Patrick J. Crank, Wyoming Attorney General; Steven R. Czoschke, Senior Assistant Attorney General; and Kristi M. Radosevich, Assistant Attorney General. Argument by Ms. Radose-vieh.
    Before HILL, C.J., and GOLDEN, LEHMAN, KITE, and VOIGT, JJ.
   LEHMAN, Justice.

[¶ 1] This is an appeal from the denial of the worker’s compensation benefits claim made by appellant Ronald “Pete” Lloyd (Lloyd). Lloyd’s claim was denied based on the conclusion that Lloyd was acting outside the scope of his employment when the accident occurred. We reverse.

ISSUES

[¶ 2] Lloyd sets forth the following issues:

(1) Whether the Office of Administrative Hearings erred when it failed to apply the Wyoming “nexus” test.
(2) Whether the Office of Administrative Hearings erred when it failed to apply the “special mission” doctrine.
(3) Whether the Office of Administrative Hearings erred when it failed to apply the “dual-purpose” doctrine.

The State phrases the issues as:

I. Whether the hearing examiner properly applied Wyo. Stat. § 27-14-102(a)(xi)(D) as a clear and unambiguous statute to determine that Appellant’s injuries occurred outside the scope of his employment for purposes of worker’s compensation coverage, due to Appellant’s accident while traveling to his home in his personal vehicle without reimbursement.
II. Whether the hearing examiner’s decision to deny medical and temporary total disability benefits to Appellant was supported by substantial evidence.

FACTS

[¶ 3] Sage Technical Services (Sage) operates a truck driving school with locations in Colorado, Idaho, Montana, Utah, and Wyoming. Sage employed Lloyd as a driving instructor in Casper, Wyoming, and Lloyd was later promoted to the position of lead instructor. As lead instructor, Lloyd was not only required to teach Sage students, but also ensure that the trucks and trailers used by Sage were safely maintained and operated.

[¶4] Sage found that as a part of its normal operations it was occasionally necessary to move toucks and trailers from one Sage location to another. From time to time, Sage asked Lloyd to assist in transporting these trucks and trailers. In fact, Lloyd believed that part of his responsibilities as lead instructor included assisting with the transport of Sage’s trucks and trailers from one location to another.

[¶ 5] In February of 2002, Sage needed a truck transferred from its Casper location to its Billings, Montana location. Lloyd indicated that he would deliver the truck if the drop-off location could be changed from Sheridan, Wyoming to Frannie, Wyoming because Lloyd needed to retrieve his personal vehicle in Cody, Wyoming. After considering other options, Sage approved Lloyd’s delivery of the truck on these terms. At the time of this approval, Lloyd understood that, pursuant to established Sage policy, he would be reimbursed for mileage concerning his return trip in his personal vehicle.

[¶ 6] On the morning of February 9,2002, Lloyd delivered the truck in Frannie and was directly transported by a friend from Fran-nie to Cody. After picking up his personal vehicle, Lloyd immediately returned to Fran-nie to check on the security of Sage’s truck. After making sure that Sage’s truck was secure, Lloyd at once commenced his return trip retracing the route that he had taken from Casper. Lloyd was then injured in a single car accident when he fell asleep at the wheel.

[¶ 7] Because Lloyd was incapacitated due to injuries sustained in the accident, Lloyd’s supervisor advised that he would complete the necessary reimbursement documentation for Lloyd concerning his trip. However, upon the supervisor’s inquiry to Sage’s main office, he was advised that Sage had determined that Lloyd would not be reimbursed for his return trip made in his personal vehicle. Lloyd then submitted a timely request for worker’s compensation benefits. This request was denied by the State.

[¶ 8] After a hearing before the Office of Administrative Hearings (OAH), OAH affirmed the denial of benefits. Subsequently, upon filing a petition for review, the district court affirmed the decision of the OAH. This appeal followed.

STANDARD OF REVIEW

[¶ 9] We recently stated the applicable standard of review in Ludwig v. State ex rel. Workers’ Safety and Compensation Div., 2004 WY 34, ¶¶ 5-7, 86 P.3d 875, ¶¶5-7 (Wyo.2004) (footnote in original):

The parameters for judicial review of an agency action are found in Wyo. Stat. Ann. § 16-3-114. Serda v. State ex rel. Work-

ers’ Safety and Compensation Div., 2002 WY 38, ¶ 18, 42 P.3d 466, ¶ 18 (Wyo.2002). Our standard of review when reviewing administrative agency action was clarified and refined in the case of Newman v. State ex rel. Workers’ Safety and Compensation Div., 2002 WY 91, 49 P.3d 163 (Wyo.2002). That case held that “the substantial evidence test is the appropriate standard of review ... when factual findings are involved and both parties submit evidence.” Neuman, at ¶ 22.

In appeals where both parties submitted evidence at the hearing below and the dispute is over the soundness of the factual findings of the agency, Newman mandates the appellate review be limited to application of the substantial evidence test. Id. This is true regardless of which party appeals from the agency decision. The substantial evidence test provides:

In reviewing findings of fact, we examine the entire record to determine whether there is substantial evidence to support an agency’s findings. If the agency’s decision is supported by substantial evidence, we cannot properly substitute our judgment for that of the agency and must uphold the findings on appeal. Substantial evidence is relevant evidence which a reasonable mind might accept in support of the agency’s conclusions. It is more than a scintilla of evidence.

Newman, at ¶ 12 (quoting State ex rel. Workers’ Safety and Compensation Div. v. Jensen, 2001 WY 51, ¶ 10, 24 P.3d 1133, ¶ 10 (Wyo.2001)). This court is required to review the entire record in making its ultimate determination on appeal. Newman, at ¶¶ 19 and 24-26.

In State ex rel. Workers’ Safety and Compensation Div. v. Garl, 2001 WY 59, ¶ 9, 26 P.3d 1029, ¶ 9 (Wyo.2001), we acknowledged that:

The interpretation and correct application of the provisions of the Wyoming Worker’s Compensation Act are questions of law over which our review authority is plenary. Collicott [v. State ex rel. Workers’ Safety and Compensation Div., 2001 WY 35], at ¶ 4[, 20 P.3d 1077, ¶4 (Wyo.2001) ]. Conclusions of law made by an administrative agency are affirmed only if they are in accord with the law. Id. We do not afford any deference to the agency’s determination, and we will correct any error made by the agency in either interpreting or applying the law. Id.

In accord see Vaughan v. State ex rel. Workers’ Compensation Div., 2002 WY 131, ¶ 6, 53 P.3d 559, ¶ 6 (Wyo.2002).

DISCUSSION

[¶ 10] Lloyd mounts three separate arguments that he is entitled to worker’s compensation benefits. He first contends that an exception to the “coming and going” rule, recognized in common law and codified in 1986 within Wyo. Stat. Ann. § 27-14-102(a)(xi)(D), exists when there is a link between the employee’s activities and a benefit to the employer. Hence, Lloyd argues that under this “nexus test,” worker’s compensation benefits must be provided to the employee. Next, Lloyd asserts that another exception to the “coming and going” rule, known as the “special mission” or “special errand” doctrine, is applicable. Under this exception, when an employee undertakes activities at the request of the employer, worker’s eom-pensation benefits extend to the employee even if the employee would technically be excluded under the “coming and going” rule. Finally, Lloyd proffers that the “dual purpose” doctrine also applies. Under this doctrine, an employer remains responsible to provide worker’s compensation benefits to an employee if the employee made the journey at the direction of the employer, even if the employee received a personal benefit. Thus, if the employee’s work creates the necessity for travel and the employee is in the course and scope of employment, even though the employee is serving at the same time a personal purpose of his or her own, worker’s compensation coverage still exists.

[¶ 11] In attempting to counter each of these arguments, the State takes a more simplified view. The State argues that § 27-14-102(a)(xi)(D) is unambiguous, making the exceptions asserted by Lloyd inapplicable. In particular, the State asserts that upon the codification of § 27-14-102(a), any “common law” exceptions to the “coming and going” rule were renounced except for those exceptions specifically enumerated within § 27-14-102(a). In making this argument, the State also relies upon the language within Wyo. Stat. Ann. § 27-14-101(b). In addition, the State contends that sufficient evidence existed to support the denial of benefits.

[¶ 12] Given the facts in this case and simple application of § 27-14-102(a)(xi)(D), we conclude that Lloyd must be afforded worker’s compensation benefits. Therefore, on this occasion, we neither specifically embrace nor reject the “nexus test,” the “special mission” or “special errand” doctrine, or the “dual purpose” doctrine upon which Lloyd relies.

[¶ 13] Wyo. Stat. Ann. § 27-14-102(a)(xi)(D) (LexisNexis 2001) (emphasis added) provides:

(a) As used in this act:
(xi) “Injury” means any harmful change in the human organism other than normal aging and includes damage to or loss of any artificial replacement and death, arising out of and in the course of employment while at work in or about the premises occupied, used or controlled by the employer and incurred while at work in places where the employer’s business requires an employee’s presence and which subjects the employee to extrahazardous duties incident to the business. “Injury” does not include:
(D) Any injury sustained during travel to or from employment unless the employee is reimbursed for travel expenses or is transported by a vehicle of the employer[.]

We agree with the State that § 27-14-102(a)(xi)(D) is unambiguous.

[¶ 14] It is undisputed that Lloyd offered to deliver the truck for Sage if the drop-off location could be changed to Frannie because Lloyd needed to retrieve his personal vehicle in Cody. Sage then approved Lloyd’s delivery of the truck based on the condition that Lloyd would be able to retrieve his personal vehicle and return to Casper in that vehicle. Thus, Lloyd was required to deliver the truck for his employer, Sage.

[¶ 15] At the time of approval, Lloyd understood that he would be reimbursed for mileage concerning his return trip in his personal vehicle pursuant to established Sage policy. Lloyd believed this policy applied to him based, in part, on communications with his supervisor, James Roach, the director of Sage’s Casper facility until January 31, 2002. In addition, Mr. Roach testified that Sage’s mileage reimbursement policy was in effect during the dates of Lloyd’s trip and that he believed that Lloyd’s return trip in his personal vehicle qualified for such reimbursement under the policy. Moreover, although Don Washburn had assumed the position of director of Sage’s Casper facility on February 1, 2002, Lloyd had no conversations with Washburn concerning the mileage reimbursement policy.

[¶ 16] Following the accident, Lloyd’s physical condition did not allow him to submit a request for reimbursement. Mr. Washburn agreed to submit the request for reimbursement. However, following the accident, corporate counsel located in Sage’s main office in Pennsylvania decided that Lloyd would not be reimbursed by Sage for the return trip made in his personal vehicle. It is obvious that the denial of benefits for the return trip was solely motivated by Sage’s desire to exclude Lloyd from receiving worker’s compensation benefits.

[¶ 17] In taking the same position espoused by Sage, the State argues that § 27-14-102(a)(xi)(D) requires that actual reimbursement for mileage be paid before the exception to the “coming and going” rule is applicable. As pointed out by the State, § 27-14-102(a)(xi)(D) provides that no com-pensable injury shall be deemed to have occurred “unless the employee is reimbursed for travel expenses.” Thus, the State argues that because Lloyd was not actually reimbursed by Sage, he cannot now be awarded worker’s compensation benefits.

[¶ 18] We find the State’s argument to be disingenuous. In essence, the State asks this court to allow an employer to manipulate the process through the subsequent denial of mandated reimbursement with the clear intention that such denial would preclude the award of worker’s compensation benefits. In this case, Lloyd’s transport of the vehicle was directly within his scope of employment and in furtherance of Sage’s business purpose. Sage authorized the trip with the express condition that Lloyd would leave the truck at Frannie and collect his personal vehicle in Cody. The evidence presented substantiates that, given this arrangement and Sages’ policies, Lloyd had a reasonable expectation that he would be reimbursed travel expenses for his return trip to Casper in his personal vehicle.

[¶ 19] Moreover, the State’s argument that Lloyd’s employment duties ended when he dropped off Sage’s truck in Frannie is unpersuasive. Again, Sage agreed to the arrangement that allowed Lloyd to collect his personal vehicle in Cody and then return to Casper in that vehicle. Had Sage required Lloyd to transfer the truck without allowing Lloyd to return to Casper in his personal vehicle, Sage would have had to arrange and pay for some other transport to return Lloyd. In other words, but for the work assignment, Lloyd would not have made the trip to Frannie requiring his return trip to Casper. Alternatively had Sage not assigned Lloyd to transport its vehicle, other arrangements would have been necessary to accomplish Sage’s business venture. Obviously, Sage benefited through its arrangement with Lloyd. Therefore, Sage cannot now be allowed to renege on its arrangement after the fact when it learned that Lloyd was involved in an accident.

[¶20] The State also attempts to argue that because Sage believed that Lloyd would be spending the weekend with a friend, Lloyd’s trip after dropping off the truck must be categorized as a personal excursion. However, this simply did not occur. Lloyd testified that he understood his trip was to be accomplished expeditiously so that he could be back in Casper over the weekend to begin implementing numerous policy changes adopted by Sage’s new Casper location leadership. Indeed, Sage often required Lloyd to work over the weekends even though he was not technically scheduled to work these hours. Given this understanding, Lloyd at once collected his personal vehicle after he dropped off Sage’s truck, directly returned to the drop-off site to ensure the truck’s well-being, and then began his return trip using the same route of travel. Under these facts, Lloyd was clearly within his scope of employment when he had the accident.

[¶21] The State also attempts to argue that Lloyd never actually submitted an application for reimbursement of his travel expenses. This argument is specious, given that Lloyd’s 'Supervisor advised that he would complete the necessary reimbursement documentation for Lloyd because Lloyd was incapacitated. As indicated, before the supervisor filled out such paperwork, he was informed that Sage had already determined

that Lloyd would not be paid any reimbursement for his return trip made in his personal vehicle. Additionally, the State’s complaint that Lloyd set an unreasonable schedule for his travel is superfluous. As his employer, Sage could have set a schedule for Lloyd’s travel, yet failed to do so.

CONCLUSION

[¶ 22] The district court’s order affirming the OAH is reversed, and the matter is remanded to the district court with directions that an order be entered reversing the hearing officer’s findings of fact, conclusions of law and order, and that the OAH be directed to enter an order awarding Lloyd benefits consistent with this court’s opinion.

      . Wyo. Stal. § 16-3-114(c) (LexisNexis 2003):
      (c) To the extent necessary to make a decision and when presented, the reviewing court shall decide all relevant questions of law, interpret constitutional and statutory provisions, and determine the meaning or applicability of the terms of an agency action. In making the following determinations, the court shall review the whole record or those parts of it cited hy a party and due account shall be taken of the rule of prejudicial error. The reviewing court shall:
      (i) Compel agency action unlawfully withheld or unreasonably delayed; and
      (ii) Hold unlawful and set aside agency action, findings and conclusions found to be:
      (A)Arbitraiy, capricious, an abuse of discretion or otherwise not in accordance with law;
      (B) Contrary to constitutional right, power, privilege or immunity;
      (C) In excess of statutory jurisdiction, authority or limitations or lacking statutory right;
      (D) Without observance of procedure required by law; or
      (E) Unsupported by substantial evidence in a case reviewed on the record of an agency hearing provided by statute.

      . Wyo. Stat. Ann. § 2V — 14—101 (b) (LexisNexis 2003) states:
      (b) It is the intent of the legislature in creating the Wyoming worker's compensation division that the laws administered by it to provide a worker's benefit system be interpreted to assure the quick and efficient delivery of indemnity and medical benefits to injured and disabled workers at a reasonable cost to the employers who are subject to the Worker's Compensation Act. It is the specific intent of the legislature that benefit claims cases be decided on their merits and that the common law rule of "liberal construction” based on the supposed "remedial" basis of workers’ benefits legislation shall not apply in these cases. The worker’s benefit system in Wyoming is based on a mutual renunciation of common law rights and defenses by employers and employees alike. Accordingly, the legislature declares that the Worker's Compensation Act is not remedial in any sense and is not to be given a broad liberal construction in favor of any party-

      . Sage's policy called for the reimbursement of either mileage at $.21 per mile or actual gasoline expenses incurred when an employee used his personal vehicle for business travel.

      . Sage specifically objected to Lloyd receiving worker's compensation benefits based on its position that Lloyd was purely on personal time after delivering the Sage truck to Frannie.

      .Testimony was received that Sage contemplated other potential arrangements in transporting its truck as required. However, because of a one-on-one-student-to-instructor ratio established by Sage policy and the added expense of using multiple instructors and students along with additional Sage or employee personal vehicles, these alternatives were dismissed.


author: BRYNER, Chief Justice.

text:
    Tara THOMANN, Appellant, v. Seth FOUSE, Appellee.
    No. S-10865.
    Supreme Court of Alaska.
    July 2, 2004.

      Ward Merdes, Merdes & Merdes, P.C., Fairbanks, for Appellant.
    Laura L. Farley and Stacy K. Steinberg, LeGros, Buchanan & Paul, Anchorage, for Appellee.
    Before: BRYNER, Chief Justice, MATTHEWS, EASTAUGH, FABE, and CARPENETI, Justices.
   OPINION

BRYNER, Chief Justice.

I. INTRODUCTION

Tara Thomann sued Seth Fouse for personal injuries arising from a car accident. Fouse unsuccessfully offered to settle the claim for $25,000 plus “medical payments assumed by [Fouse’s] insurance carrier for resolution in a subsequent arbitration.” A jury later returned a verdict resulting in an award that the superior court found to be lower than the pretrial offer. The court thus entered a judgment awarding post-offer costs and attorney’s fees to Fouse under Civil Rule 68. Because Fouse acknowledged below that the agreement for future arbitration raised a “murky” issue as to the status of Thomann’s medical bills, we reverse the award of post-offer costs and fees, holding that the offer of judgment was too indefinite to support an award under Rule 68.

II. FACTS AND PROCEEDINGS

Seth Fouse caused an auto collision that injured Tara Thomann, a passenger in the other car. Thomann sued Fouse for money damages. Fouse acknowledged liability, and a jury trial on damages was scheduled to start before Superior Court Judge Charles R. Pengilly on September 16, 2002. Meanwhile Thomann’s insurer, GEICO, had paid the medical bills she incurred after the accident.

About six weeks before trial, Fouse sent Thomann the following offer of judgment:

NOTICE IS HEREBY GIVEN that Defendant, Seth Fouse, in accordance with Alaska Rule of Civil Procedure 68, herein offers to allow judgment to be taken against him in the sum of TWENTY FIVE THOUSAND DOLLARS ($25,000), exclusive of awardable Rule 79 costs, prejudgment interest at the statutory rate, and Rule 82 attorneys’ fees. This offer represents new money and is offered in addition to the medical payments which have been assumed by Defendant Fouse’s insurance carrier for resolution in a subsequent arbitration. This offer is not to be construed as an admission of liability.[]

Documents later filed in superior court by Fouse revealed that State Farm had agreed to a binding arbitration with GEICO concerning “the allocation of [Thomann’s] medical expenses” and that State Farm had promised “to pay any amount ordered paid by the arbitrator.” An arbitration had been set for January 10, 2003 — about four months after the scheduled trial. Thomann was not a party to the arbitration, and the record provides no indication that she knew of it before receiving Fouse’s offer of judgment. Fouse’s superior court pleadings did not include a copy of State Farm’s arbitration agreement with GEICO, and the record provides no evidence of its terms more definitive than the description given above.

Thomann did not accept Fouse’s settlement offer of judgment, and the case proceeded to trial. The jury awarded Thomann $29,018.88, a total that included the entire amount Thomann claimed at trial for medical expenses, $9,418.88.

Thomann moved for an award of attorney’s fees, asserting that she had prevailed in the action. Fouse opposed her motion and moved for fees himself, arguing that he was the prevailing party under Civil Rule 68 because his offer of judgment surpassed Tho-mann’s verdict. In opposition to Fouse’s position, Thomann argued that Fouse’s pretrial offer lacked specificity and was too vague to be enforced; alternatively, she argued, her verdict exceeded the pretrial offer. The superior court determined Fouse to be the prevailing party under Rule 68, and entered a judgment awarding post-offer costs and attorney’s fees in his favor.

Thomann appeals the award of Rule 68 fees.

III. DISCUSSION

On appeal Thomann renews the arguments she advanced below, contending that the pretrial offer of judgment was too indefinite to be enforced and that she prevailed in any event because the jury’s verdict bettered Fouse’s offer. We consider only the first of these issues — whether Fouse’s pretrial offer was sufficiently definite to be enforceable under Civil Rule 68 — since it is dispositive.

An offer of judgment’s compliance with Rule 68 is a question of law, which we review independently. When a party declines an offer of judgment and then fares worse at trial than under the offer, Rule 68 allows the offering party to claim post-offer costs and attorney’s fees. But to support an award of costs and fees under that rule, the pretrial offer must comport with the rule’s requirements. In deciding whether an offer meets the requirements of Rule 68, we must view the offer’s terms as a reasonable offeree would have understood them at the time the offer was made.

“One of the protections afforded by the Civil Rule 68 procedure is that the offer of judgment must be definite. This protection is designed to avoid post-trial litigation concerning the meaning of the offer.” In keeping with this purpose, we have recognized that, to comply with Rule 68, an offer of judgment “must specify a definite sum and must be unconditional.” Because this requirement basically concerns “the specificity of the offer rather than its communication of a monetary amount,” however, we have recognized that nonmonetary provisions in an offer of judgment can also be valid, “so long as they are unambiguous and unconditional.” Accordingly, we have enforced offers containing nonmonetary references to an insurer’s lien for medical payments when the amount of the payments was undisputed and the meaning of the reference was otherwise unconditional and unambiguous.

In the present case, the contested part of the offer of judgment is its provision specifying that Fouse’s offer to pay Thomann $25,000 was “in addition to the medical pay-merits which have been assumed by Defendant Fouse’s insurance carrier for resolution in a subsequent arbitration.”

Fouse characterizes this language as an unambiguous and unconditional commitment by State Farm to extinguish GEICO’s lien for medical payments: “Fouse simply acknowledged the lien and stated he would pay the lien,[] whatever the amount. This is a valid offer of judgment.” According to Fouse, then, “[t]he resolution of the arbitration between Fouse’s insurer and Geico is not relevant.”

But Thomann disputes this characterization, arguing that the offer’s express dependence on a future arbitration in which GEI-CO and “State Farm agreed to a fight” over the amount of Thomann’s medical payments undermined her ability to assess the offer’s true value. Thus, Thomann insists, the offer is “too indefinite in failing to define what it offers beyond $25,000 — and requiring additional litigation to liquidate that amount.”

In our view, Thomann’s position has merit. On its face, the August 2 offer of judgment does not unambiguously say that State Farm made an unconditional commitment to satisfy GEICO’s subrogated claim through arbitration. At most it hints that this might be the case while literally conditioning State Farm’s duty to reimburse Thomann’s medical payments on a “resolution in a subsequent arbitration” that the offer leaves undescribed. Nothing in the record indicates that Tho-mann had independent knowledge of the arbitration agreement when she received Fouse’s offer, or that she had any definitive way to ascertain how the “subsequent arbitration” might affect her medical damages claim.

Fouse insists that the pending arbitration was irrelevant to Thomann’s claim and suggests that she should have known this to be the case. Yet we do not think it fair to expect Thomann to gamble on this assumption. Since the offer of judgment’s manifest purpose was to propose clear terms for a settlement of Thomann’s claims, upon receiving the offer, Thomann had no reason to expect that its express reference to the outcome of a “subsequent arbitration” had nothing to do with those claims — particularly because Fouse could easily have omitted the reference if in fact he regarded it as an irrelevant detail and meant only to offer a straightforward payoff of the medical claim. At best, then, even if Fouse meant it to be irrelevant, the presence of this detail invited confusion and could reasonably have led Tho-mann to wonder what effect the “subsequent arbitration” might have on her medical claim.

Indeed, the record confirms that State Farm’s agreement to arbitrate on the issue of damages triggered general confusion over the status of Thomann’s medical claims. On August 9, 2002, a week after sending Tho-mann the offer of judgment, Fouse filed a motion in limine, seeking to admit evidence at trial of State Farm’s agreement to arbitrate on medical damages. Fouse’s motion asserted that this evidence proved that “Defendant has agreed to pay all of Plaintiffs medical, hospital, or similar expenses incurred as a result of the vehicle accident.” In a memorandum accompanying his motion, Fouse asserted that “[t]he fact arbitration has not yet occurred and Defendant has not been apportioned his share of Plaintiffs medical expenses is not relevant to any issue to be decided by the jury.” To support his assertion, Fouse attached an affidavit signed by a State Farm claims representative, attesting that “State Farm and GEICO have agreed to binding arbitration with regard to the allocation of Plaintiffs medical expenses. State Farm has promised to pay any amount ordered paid by the arbitrator.”

Thomann opposed this motion on August 20, contesting Fouse’s characterization of the agreement and disputing the existence of any meaningful settlement of the medical damages claim: “First, State Farm hasn’t paid a dime of [Thomann’s] medical bills. They haven’t ‘promised to pay plaintiffs medical expenses.’ ... Rather, State Farm is fighting with GEICO over it[s] obligation to pay this debt as well.” Thomann also asserted that GEICO had never requested her not to seek reimbursement for its medical payments. “Furthermore,” Thomann claimed, “if GEI-CO were to make such a request at this late date, it would be unfair to Thomann because she has already turned down an offer of judgment from Fouse/State Farm, based in part upon her belief that she must repay GEICO from the proposed amount.”

On August 26, 2002, Fouse replied to Tho-mann’s opposition by formally withdrawing his motion to allow evidence of the medical claim’s payment. Fouse’s withdrawal expressly conceded that “[t]he issue of who has paid or who has promised to pay Plaintiffs medical bills reasonably related to the car accident at issue is murky enough that a compromise is necessary.”

At oral argument before this court, Fouse’s counsel suggested that the withdrawal of Fouse’s motion to admit evidence was prompted by a separate argument advanced in Thomann’s opposition to the motion — Tho-mann’s argument that this evidence was barred by the collateral source provisions of AS 09.17.070. Yet Fouse’s concession of murkiness was not limited to the question of admissibility under the statute, but rather explicitly extended to the more general issue of who had paid or promised to pay Tho-mann’s medical bills “reasonably related to the cai' accident.” Given Fouse’s express concession that the question of who had “promised to pay [Thomann’s] medical bills reasonably related to the car accident” remained “murky” on August 26, we see no basis to conclude that three weeks earlier, when Fouse sent his August 2 settlement offer, Thomann should reasonably have understood it as embodying an unambiguous and unconditional commitment by State Farm to settle her entire medical claim.

IV. CONCLUSION

Because Fouse’s offer of judgment was indefinite in its proposed disposition of Tho-mann’s medical claims, we hold that it failed to meet the requirements of Rule 68 and could not support an award of costs and attorney’s fees in favor of Fouse. We thus REVERSE and REMAND for entry of judgment without regard to the offer.

      . Emphasis added.

      . Jaso v. McCarthy, 923 P.2d 795, 801 (Alaska 1996).

      . Alaska Civil Rule 68 (2002), which applies to cases filed after 1997, provides in relevant part:
      (a) At any time more than 10 days before the trial begins, either the party making a claim or the party defending against a claim may serve upon the adverse party an offer to allow judgment to be entered in complete satisfaction of the claim for the money or property or to the effect specified in the offer, with costs then accrued....
      (b) If the judgment finally rendered by the court is at least 5 percent less favorable to the offeree than the offer, or, if there are multiple defendants, at least 10 percent less favorable to the offeree than the offer, the offeree, whether the party making the claim or defending against the claim, shall pay all costs as allowed under the Civil Rules and shall pay reasonable actual attorney fees incurred by the offeror from the date the offer was made as follows:
      (3) if the offer was served 90 days or less but more than 10 days before the trial began, the offeree shall pay 30 percent of the offeror's reasonable actual attorney fees.

      . Grow v. Ruggles, 860 P.2d 1225, 1227 (Alaska 1993) (finding trial court assessing costs and attorney's fees under Rule 68 may not consider offers that fail to comply with this rule) (citing Myers v. Snow White Cleaners & Linen Supply, Inc., 770 P.2d 750, 753 (Alaska 1989)).

      . Bayly, Martin & Fay, Inc., of Alaska v. Arctic Auto Rental, Inc., 517 P.2d 1406, 1407 (Alaska 1974); cf. Hayes v. Xerox Corp., 718 P.2d 929, 937 (Alaska 1986) ("In order to give legal effect to the parties' reasonable expectations, the court examines the written agreement itself and also extrinsic evidence regarding the parties’ intent at the time the contract was made.”).

      . Myers, 770 P.2d at 752-53 (citation omitted).

      . Davis v. Chism, 513 P.2d 475, 481 (Alaska 1973); accord Cook Schuhmann & Groseclose, Inc. v. Brown & Root, Inc., - P.3d -, -, Op. No. 5817 at 11, 2004 WL 1368286 (Alaska, June 18, 2004); Farr v. Stepp, 788 P.2d 35, 37 (Alaska 1990).

      . Cook Schuhmann & Groseclose, -P.3d -, Op. No. 5817 at 11.

      . See, e.g., Jaso, 923 P.2d at 801-02; Grow, 860 P.2d at 1227-28.

      . GEICO's "lien” is in reality a claim that was assigned by law to GEICO in the amount of the medical expenses that it paid on behalf of Tho-mann. We have explained such claims as follows:
      When an insurer pays expenses on behalf of an insured it is subrogated to the insured's claim. The insurer effectively receives an assignment of its expenditure by operation of law and contract. If the insurer does not object, the insured may include the subrogated claim in its claim against a third-party tortfeasor. Any proceeds recovered must be paid to the insurer, less pro rata costs and fees incurred by the insured in prosecuting and collecting the claim. But the subrogated claim belongs to the insurer. The insurer may pursue a direct action against the tortfeasor, discount and settle its claim, or determine that the claim should not be pursued.

        Ruggles v. Grow, 984 P.2d 509, 512 (Alaska 1999) (citatifon omitted).

      . Cf. Grow, 860 P.2d at 1227.


author: FABE and CARPENETI, Justices,

text:
    Jeri L. LUCIER, Appellant, v. STEINER CORPORATION, American Linen and John Oliva, Appellees.
    No. S-11192.
    Supreme Court of Alaska.
    July 2, 2004.
    Before: BRYNER, Chief Justice, MATTHEWS, EASTAUGH, FABE, and CARPENETI, Justices.
   Order

The petition for review, filed on 8/25/03 and granted on 10/21/03, is Dismissed as improvidently granted.

FABE and CARPENETI, Justices,

dissenting.

FABE, Justice, with whom CARPENETI, Justice, joins, dissenting.

I disagree with the court’s decision to dismiss the petition for review as improvidently granted. Our original decision to accept review was correct and fulfilled the principal purpose of undertaking review of a non-final and unappealable order under Appellate Rule 402. The superior court’s order “involves an important question of law on which there is substantial ground for difference of opinion,” and deciding the issue at this time will prevent “injustice because of impairment of a legal right, or because of unnecessary delay, expense, [and] hardship.”

Jeri Lucier, the plaintiff in this case, was covered by Medicaid. Following an accident, Medicaid paid her medical providers only a small fraction of the amount they billed. The trial court ruled that in proving the value of her past medical expenses, Lucier will be limited to the actual amount paid by Medicaid, rather than the value that her providers placed on their services. Under the superior court’s order, the jury will be given only the discounted value of Lucier’s care as part of her damages case. In effect, before the jury’s award has even been made, the trial court has offset it by the amount billed but unpaid. In my view, this ruling is erroneous, both substantively and procedurally, and the court should correct the errors before the parties incur the considerable expense of trial.

By deferring our decision on the merits of the question before us, we place the parties and the trial court at risk of retrying the entire damages portion of this case. Even before we granted the petition for review, the superior court granted a stay of its decision to allow for filing of the petition, recognizing that its ruling touched on “a significant question of first impression in the State of Alaska [on] which there is a division in other states ... and [on which] our Supreme Court hasn’t given us any guidance.” The superior court realized that if it were ultimately reversed on its decision to limit past medical damages to the amount actually paid by Medicaid, it would “be redoing the entire damage trial, in the court’s opinion. And doing a trial like this twice frustrates the purposes of judicial economy.”

In my view, the superior court resolved the legal issue incorrectly. The medical care that Lucier received at Medicaid’s expense was a collateral source benefit and its value may not be used to reduce her damages award, except under the conditions and procedures laid out in AS 09.17.070. An injured person is entitled to recover the reasonable value of services provided by doctors, nurses, and hospitals, and “[t]here may be recovery for these items although they are not yet paid.” “The value of medical services made necessary by the tort can ordinarily be recovered although they have created no liability or expense to the injured person, as when a physician donates his services.” Other courts have held that when a medical provider accepts payment of less than the value of the care and writes off the rest, the collateral source rule covers the entire value, including the amount written off. There is no reason to distinguish between eases, where the provider writes off part of the care’s value out of charity, because it has no hope of collecting, and cases where the payment is coming from an insurer — governmental or private — with bargaining power. The amount discounted out of a medical bill is part of the value of that collateral benefit and should not accrue to the defendant.' Otherwise a plaintiff whose insurer has the leverage to negotiate large reductions in bills is placed in a worse position than a plaintiff whose medical care is provided for free by a charitable doctor. The recipient of charity would be entitled to the full value of her care, but the insured plaintiff, inequitably, would not. By erroneously ruling that the collateral source rule did not cover the value of Lueier’s medical care over the amount that her providers accepted from Medicaid, the trial court set up this situation.

But even if this court wishes to defer its decision on the merits of this issue, the procedure that the superior court chose to implement its decision violates AS 09.17.070 and has additional detrimental effects. If this court ultimately determines that American Linen is entitled to an offset for charges that Medicaid did not pay, pursuant to AS 09.17.070, it is wrong to make that reduction before the end of trial by limiting Lucier’s proof as the superior court has done. Alaska Statute 09.17.070(a) provides that “[a]fter the fact finder has rendered an award to a claimant, and after the court has awarded costs and attorney fees, a defendant may introduce evidence of amounts received or to be received by the claimant as compensation for the same injury from collateral sources that do not have a right of subrogation by law or contract.” (Emphasis added.) And under AS 09.17.070(b) and (c), a reduction of plaintiffs recovery may be made only to the extent that the qualifying collateral benefits exceed her attorney’s fees and the cost of obtaining the coverage, provided that none of the exceptions in AS 09.17.070(d) apply.

Allowing the reduction to be made prior to verdict will result in presentation to the jury of an artificially low value for Lucier’s medical expenses. This, as the superior court recognized when granting the stay, “[c]ould easily impact not only past medical damages but also non-economic damages and future damages.” And although the trial court did not limit Lucier’s ability to present the market cost of her future medical care, which could include five or six additional surgeries, as Lucier points out in her brief, “[t]he jury cannot be expected to understand the discrepancy in relative costs between her past and future medical expenses without it being informed that her past medical expenses were principally covered by Medicaid at discount rates.” Thus, the trial court’s order forces Lucier to reveal to the jury that her past medical expenses were covered by collateral source benefits or risk having the jury underestimate the severity of her injuries and her future medical expenses. This is in direct violation of our longstanding rule that collateral source evidence should not be admitted at trial in order to reduce the amount of damages. “Chief among the reasons [for exclusion] is the possible prejudice to the plaintiff which attends informing the jury that [he or she] has already received some ... compensation for the injuries complained of.” The superior court’s plan to instruct the jury that Lucier’s reasonable medical expenses are limited to the amount paid by Medicaid — even with no mention of Medicaid itself — violates the statute and our case law, and will irreparably prejudice Lucier.

Furthermore, the trial court’s chosen procedure creates the potential for a wasteful and unnecessary second trial. If on appeal we reverse the trial court’s collateral source ruling, the parties will have to retry damages to correct the prejudicial effect of the evidence of the actual Medicaid payments. On the other hand, if the trial court were to follow the procedure envisioned by AS 09.17.070 and allow evidence of the full value of the services to go to the jury but then, after any award, hear the defendants’ evidence on collateral source benefits and make any appropriate statutory offset, then no retrial would be necessary. If a later ruling by this court showed that the wrong value had been used for Lucier s past medical expenses, her proof of other damages would not have been prejudiced at trial, and correcting the award would be simple. Even if this court wishes to leave open the question whether Lucier is entitled to the full value of her medical care under the collateral source rule, it should at least rule on the trial court’s procedure, correcting it to allow that court maximum flexibility in responding to any future mandate.

For ⅛036 reasons, I respectfully dissent from the court’s decision to dismiss the petition ag improvidently granted,

      . In Contento v. Alaska State Housing Authority, 398 P.2d 1000, 1001 (Alaska 1965), this court stated in the context of a denial of a petition for review:
      A denial of a petition for review of an interlocutory order does not mean that we either approve or disapprove of the order sought to be reviewed, but merely that we decline to pass judgment at all on the action of the trial court. Furthermore, denial of review signifies that the petitioner has not convinced us that there is need for early consideration of a non-appeal-able order ....
      This statement equally applies to cases such as the present where petitions for review are initially granted and then dismissed as improvidently granted.

      . Alaska R.App. P. 402(b)(2).

      . Alaska R.App. P. 402(b)(1).

      . See Liimatta v. Vest, 45 P.3d 310, 317 (Alaska 2002) (denominating “free medical and dental care" as "collateral source benefits"); see also RESTATEMENT (SECOND) OF TORTS § 920A cmt. c(4) (applying collateral source rule to "[s]o-cial legislation benefits").

      . RESTATEMENT (SECOND) OF TORTS § 924(c) cmt. f.

      . Id.; see also Ellsworth v. Schelbrock, 235 Wis.2d 678, 611 N.W.2d 764, 768-69 (2000) (“[T]he test is the reasonable value, not the actual charge ....”) (quotation marks and emphasis omitted).

      . E.g., Olariu v. Marrero, 248 Ga.App. 824, 549 S.E.2d 121, 123 (2001); Acuar v. Letoumeau, 260 Va. 180, 531 S.E.2d 316, 322 (2000).

      . See Ellsworth, 611 N.W.2d at 769 ("[The defendant] is not entitled to reap the benefit of [the plaintiff’s] eligibility for public assistance or from the government’s economic clout in the health care market place.”).

      . Liimatta, 45 P.3d at 318 (citing William H. Darme, Jr., Annotation, Admissibility of Evidence That Injured Plaintiff Received Benefits From a Collateral Source, On Issue of Malingering or Motivation to Extend Period of Disability, 47 A.L.R.3d 234 (1973) (brackets omitted)).


author: HARGRAVE, J. OPALA, V.C.J.,

text:
    2004 OK 25
    Julie BARNES, Appellant, v. OKLAHOMA FARM BUREAU MUTUAL INSURANCE COMPANY, Appellee.
    No. 97,259.
    Supreme Court of Oklahoma.
    April 6, 2004.
    Rehearing Denied June 28, 2004.

      James A. Scimeca, Miller, Dollarhide, and Joe E. White, Jr., White Law Firm, Oklahoma City, for PlaintiffAppellant.
    Robert B. Mills and Margaret K. Myers, Oklahoma City, for Defendant/Appellee.
   HARGRAVE, J.

¶ 1 The question in this post-remand proceeding is whether the plaintiff/appellant established entitlement to award of attorney fees under an exception to the American Rule. In Barnes v. Oklahoma Farm Bureau Mutual Ins. Co., 2000 OK 55, 11 P.3d 162, the plaintiff/appellant’s award of attorney fees under Brashier v. Farmers Ins. Co., Inc., 1996 OK 86, 925 P.2d 20, was reversed and the case remanded to give plaintiff the opportunity to seek attorney fees under an exception to the American Rule. On remand, the plaintiff asserted three grounds for entitlement to attorney fees: 1) that attorney fees are allowed by statute: 36 O.S.2001 § 1219; 2) common law exception for bad faith litigation conduct under City National Bank & Trust Co. v. Owens, 1977 OK 86, 565 P.2d 4; and 3) common law exception for conferring a benefit on a class of persons/private attorney general rationale. The third-listed exception is not before us because it was not raised in the petition for certiorari. Hough v. Leonard, 1993 OK 112, 867 P.2d 438.

¶2 Plaintiff had been awarded attorney fees originally by the trial court, under authority of Brashier v. Farmers Ins. Co., Inc., 1996 OK 86, 925 P.2d 20, as a common law element of recovery on a bad faith claim on an uninsured motorist insurance policy. On appeal, we overruled Brashier to the extent that it held a UM/UIM insured entitled to recover attorney fees as a common law element of damage for an insurer’s bad faith refusal to settle a UM/UIM claim. Because Barnes did not have the benefit of our ruling when seeking attorney fees in the trial court, we remanded to the trial court to give her an opportunity to apply for attorney fees under a recognized exception to the American Rule. 11 P.3d at 182. We noted that one such exception is where an opponent engages in bad faith, wanton or oppressive litigation conduct wherein the trial court in the exercise of its inherent equitable power may award attorney fees. We said that whether Barnes could prove herself entitled to such fees under the City National exception would be a question for the trial court upon proper presentation of pleadings and proof. Id. We stated in footnote 17 that no statutory grounds exist for an award of attorney fees in UM/UIM lawsuits by insureds against their insurance companies.

¶ 3 Both the trial court and the Court of Civil Appeals rejected plaintiff’s argument that § 1219 provided a statutory basis for attorney fees. As to the bad faith litigation conduct exception to the American Rule under City National, supra, the trial court found that no such conduct was present. The Court of Civil Appeals reversed, finding that City National applied. The Court of Civil Appeals then applied 23 O.S. § 103 to limit the amount of attorney fees to be awarded to $10,000. We granted certiorari.

¶ 4 Plaintiff argues that there is a statutory basis for award of attorney fees in UM cases under 36 O.S.2001 § 1219, which allows for attorneys fees as a result of litigation in cases brought on “accident and health” insurance policies. Section 1219 requires clean claims of an insured to be reimbursed within 45 calendar days after receipt of the claim. In the event litigation should ensue based upon such a claim, § 1219(G) provides that the prevailing party shall be entitled to recover a reasonable attorney’s fee to be set by the court and taxed as costs against the party or parties who do not prevail. Plaintiff interprets “accident and health policy” to include uninsured motorist policies.

¶ 5 “Accident and health insurance policy” is defined in subsection (B)(1) of section 1219 as any policy that provides accident and health insurance as defined in 36 O.S.1991 § 703. Section 703 defines accident and health insurance as follows:

“ ‘Accident and health insurance’ is insurance against bodily injury, disablement, or death by an accident or accidental means, or the expense thereof, or against disablement or expense resulting from sickness, and every insurance appertaining thereto.”

Plaintiffs primary argument is that because Julie Barnes was involved in an accident and sued her UM insurer, then this was an action under an accident and health insurance policy.

¶ 6 The defendant argues that the definition in 36 O.S. § 703 does not include uninsured motorist coverage. Vehicle insurance is defined separately from health and accident insurance. 36 O.S. § 706 defines vehicle insurance as:

“... insurance against loss of or damage to any land vehicle ... and against any loss, liability or expense resulting from or incident to ownership, maintenance or use of any such vehicle ... together with insurance against accidental death or accidental injury to individuals, including the named insured, while in, entering, alighting from, adjusting, repairing, cranking or caused by being struck by a vehicle ..., if such insurance is issued as a part of insurance on the vehicle ...” (emphasis added).

Section 707 of title 36, which defines “casualty insurance,” specifically states that it includes vehicle insurance as defined in § 706 and accident and health insurance as defined in § 703, along with several other kinds of insurance listed therein. The Health Care Fraud Prevention Act, codified at 36 O.S. § 1219.1 applies to “accident and health insurance policies” as defined therein. A review of the sections of the Insurance Code persuades us that when the legislature intends to include or exclude a particular kind of insurance, it does so. Section 1219 was amended by Laws 2003, ch. 197 § 52 to supplement the definition of “accident and health insurance policy” to include any subscriber certificate or any evidence of coverage issued by a health maintenance organization to any person in this state.

¶ 7 Plaintiff argues that Lester v. Sparks, 1978 OK 68, 583 P.2d 1097 supports her position because Sparks noted that a single automobile insurance policy contains a number of different kinds of insurance coverage; plaintiff quotes from pages 1099-1100:

“As we analyze this policy and similar standardized policies, we find it contains six or more conditions, coverages or contracts interwoven and dealt with. Our statutes contemplate that certain coverages are not only overlapping but are included in an automobile policy; see 36 O.S.1971 §§ 701. It is not bold to say that a modern automobile insurance policy encompasses accident, property, vehicle and casualty coverages.”

Barnes’ reliance on Sparks is misplaced. Sparks says only that certain coverages not only overlap, but are included in an automobile policy. It says only that a modern automobile insurance policy encompasses accident, property, vehicle and casualty coverage. It does not mean that a UM policy is also an “accident and health policy” as defined in § 1219. An automobile insurance policy does encompass many types of coverage, one of which is UM, if that coverage is elected by the insured. We cannot interpret § 1219 as a basis for the award of attorney fees in this uninsured motorist policy case.

¶ 8 Uninsured motorist insurance is covered at 36 O.S.2001 § 3636. Article 36 of the Insurance Code applies to the insurance contract in general. 36 O.S. § 3629 deals with forms of proof of loss and offer of settlement or rejection of claims. Section 3629(B) places a duty on the insurer, after 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. Thus, § 3629(B) provides for prevailing party attorney fees where an insurer fails to submit an offer of settlement or rejection of the claim within 90 days after proof of loss and where judgment is entered. However, the last line of section 3629(B) specifically excludes uninsured motorist coverage from application of the section: “This provision shall not apply to uninsured motorist coverage.”

¶ 9 Section 3629(B) specifically addresses uninsured motorist coverage. It provides for the award of prevailing party attorney fees except for uninsured motorist coverage, to which the section does not apply. Accident and health insurance is defined separately from vehicle insurance, and § 1219 applies only to cases involving accident and health insurance. The accident and health insurer is required to reimburse all clean claims within 45 calendar days after receipt of the claim. It appears that the intent of the legislature was to create a shorter time period for the reimbursement of clean claims on accident and health policies. Defendants point out that the purpose of uninsured motorist insurance is to provide an injured person with the same protection that he would have had if the at-fault motorist had carried liability insurance.

¶ 10 We are not persuaded by plaintiffs arguments. We reiterated in Barnes that there is no statutory authorization for recovery of an attorney fee in this case. Footnote 17 of the opinion stated that the decision was limited to UM/UIM lawsuits by insureds against their insurance companies, ie., a situation where no statute or contractual provision allows for the recovery of attorney fees. 11 P.3d at 182. We referenced, for comparison, Taylor v. State Farm Fire & Cas. Co., 1999 OK 44, 981 P.2d 1253. Plaintiff/appellant relies upon Taylor as support for the award of attorney fees to her. Taylor, however, was a suit by insureds under their homeowner’s insurance policy; it was not an uninsured motorist case. The questions presented were certified to this Court from a federal court, and basically asked whether Brashier v. Farmers Ins. Co., 1996 OK 86, 925 P.2d 20, barred the right to recover attorney fees and prejudgment interest under 36 O.S. § 3629 on the facts presented. Taylor listed two sources of authority for counsel-fee allowances in bad-faith tort claims: 36 O.S. § 3629 and the Brashier rationale. Inasmuch as Brashier’s allowance of attorney fees in UM/UIM cases was overruled in Barnes v. Oklahoma Farm Bureau, 2000 OK 55, 11 P.3d 162, the Taylor ease does not provide support for plaintiff/appellant’s quest. Taylor recognized that UM coverage was explicitly excluded from the purview of 36 O.S. § 3629. 981 P.2d at 1259.

¶ 11 We cannot find that uninsured motorist insurance is “accident and health” insurance as contemplated by section 1219 and section 703. We would be thwarting legislative intent if we ignored the plain language of 36 O.S. § 3629(B)and redefined UM insurance as “health and accident” insurance. If the legislature wishes to provide for attorney fees in UM cases, then they can do so by legislative enactment.

¶ 12 The plaintiff, on remand, also sought to recover attorney fees under “bad faith litigation conduct” exception to the American Rule set out in City National Bank & Trust Co. v. Owens, 1977 OK 86, 565 P.2d 4, which is known as the “bad faith, wanton or oppressive litigation misconduct” exception. See, Barnes v. Okla. Farm Bureau Mut. Ins., 11 P.3d 162 at 182. Plaintiffs argument is that the defendant in this case had no legitimate defense to the underlying contract claim and then compounded its conduct by it’s “ill-fated attempt to defend the bad faith claim.” The trial court denied attorney fees, finding that “the actions in this case do not fall within the exception” as set forth in the case of City National Bank & Trust Co. v. Owens.

¶ 13 City National recognized certain exceptions to the American Rule in Oklahoma, including the award of counsel fees to a successful party when his opponent has acted “in bad faith, vexatiously, wantonly, or for oppressive reasons.” 565 P.2d at 8. Because plaintiffs actions were oppressive, and because the oppressive action of a party was, even at common law recognized as giving rise to an exception to the general rule regarding the awarding of attorney fees, we held that the court, in the exercise of its inherent equitable, powers did not exceed its jurisdiction, powers or discretion. 565 P.2d at 8-9. City National specifically pointed out that the defendant was not seeking recovery of attorney fees as prevailing party in the case, but rather for the time and expense wasted when the plaintiff dismissed its case without prejudice after 4 days of trial, after all the evidence and testimony had been introduced, the parties had rested and the court had prepared instructions. We said that in that case there was little doubt that plaintiffs actions were oppressive because the defendant incurred great time and expense in the trial of the case, which was all for nothing after plaintiffs dismissal of the case without prejudice. The plaintiff took the opportunity to test the strength and weakness of his case, which permitted the plaintiff to use the courtroom as a “rehearsal hall” at the expense of his adversaries and the People. 565 P.2d at 7. City National allowed the award of attorney fees in that case for oppressive litigation conduct. As we noted in Barnes, the trial court is exercising its inherent equitable power in awarding such attorney fees. 11 P.3d at 182.

¶ 14 In the case at bar, the defendant argued that there was no finding of bad faith litigation conduct in this case, as there was in City National v. Owens, but rather that the conduct complained of was what led to filing the lawsuit in the first place. The trial court agreed that no City National circumstances existed. We recently discussed the difference between bad faith litigation conduct, as in City National, and the situation where the conduct sanctioned was for bringing the lawsuit and defending against a motion to dismiss. State ex rel. Tal v. City of Oklahoma City, 2002 OK 97, 61 P.3d 234, 247.

¶ 15 In State ex rel. Tal, we overturned the trial court’s award of attorney fees under City National v. Owens. We said that for the inherent authority of the trial court to award attorney fees against a party for bad faith litigation misconduct to apply, “overriding considerations” must indicate the need for such a recovery. In Tal the trial court had sanctioned the plaintiffs for bringing a qui tam action to challenge Oklahoma City’s development project after the city obtained a declaratory judgment that the agreements were lawful. A review of the record in that case led us to conclude that the plaintiffs were not sanctioned for any actual litigation misconduct or culpable conduct of their own, but yather the conduct sanctioned was for having filed the lawsuit and for mounting a response to the motion to dismiss. We said that it was not objectively unreasonable to have filed the qui tam suit and to have mounted a response to defendants’ motion to dismiss and because the record did not support a conclusion that there was some overriding need for a monetary attorney fee sanction, the trial judge abused his discretion in using his inherent power against plaintiffs as he did. Tal at 248-249. See also, Sooner Trailer Mfg. Co. v. Gay, 1998 OK CIV APP 194, 972 P.2d 1177, 1179 (“The egregious conduct which City National addressed was bad faith conduct during the litigation, not the conduct occurring which gave rise to the litigation. ”)

¶ 16 The conduct complained of in the case at bar by defendant is the conduct that led to the bringing of the action. Defendant’s complained-of actions in the case at bar formed the basis of the bad faith claim filed by the plaintiff, and formed the basis for the award of punitive damages in the case.

¶ 17 Because we agree with the trial court that plaintiff has not shown entitlement to attorney fees under the bad-faith litigation conduct exception of City National, we need not address plaintiffs assertions that 23 O.S. § 103 is unconstitutional. That section limits attorney fees awarded as a penalty in actions for damages for personal injury or to personal rights to $10,000.

In any action for damages for personal injury except injury resulting in death, or in any action for damages to personal rights the court shall, subsequent to adjudication on the merits and upon motion of a prevailing party, determine whether a claim or defense asserted in the action by a nonprevailing party was asserted in bad faith, was not well grounded in fact, or was unwarranted by existing law or good faith argument for the extension, modification or reversal of existing law. Upon so finding, the court shall enter a judgment ordering such nonprevailing party to reimburse the prevailing party an amount not to exceed Ten Thousand Dollars ($10,-000.00) for reasonable costs, including attorneys fees, incurred with respect to such claim or defense, (italics added)

Plaintiff did not assert a right to attorney fees under section 103. See, Meadows v. Wal-Mart Stores, 2001 OK 25, 21 P.3d 48;Beard v. Richards, 1991 OK 117, 820 P.2d 812. Plaintiff argued that section 103 does not apply.

CONCLUSION

¶ 19 On remand from Barnes v. Oklahoma Farm Bureau Mutual Ins. Co., 2000 OK 55, 11 P.3d 162, plaintiff was given leave to seek attorney fees under an exception, if any, to the American Rule. Plaintiff sought to assert a statutory basis for the award under 36 O.S. § 1219, which allows for attorney fees in certain claims upon “accident and health” policies. We find that uninsured motorist insurance is not accident and health insurance as defined by section 1219 and section 703. As an exception to the American Rule, plaintiff sought to recover attorney fees for oppressive litigation conduct under authority of City National Bank v. Owens. But the conduct complained of was not oppressive conduct during litigation so as to trigger the trial court’s inherent power to award attorney fees. We agree with the trial court that the actions complained of do not fall within the City National bad faith litigation conduct exception to the American Rule. Finally, plaintiff did not seek to recover attorney fees under 23 O.S. § 103 and, based on our decision that the City National exception does not apply here, we need not address plaintiffs arguments that § 103 is unconstitutional.

CERTIORARI PREVIOUSLY GRANTED; COURT OF CIVIL APPEALS’ OPINION IS VACATED; TRIAL COURT AFFIRMED.

¶ 20 Concur: WATT, C.J., HODGES, KAUGER, BOUDREAU, WINCHESTER, EDMONDSON, JJ.

¶ 21 Concur in part; dissent in part: LAVENDER, J.

¶ 22

OPALA, V.C.J.,

dissenting.

I must recede from today’s pronouncement. The court’s restrictive construction of the attorney’s-fee allowance provisions of 36 O.S.2001 § 1219 and § 3629(B) offends the prohibition of disuniformity in court-applied procedural norms. That interdiction stands imposed by the provisions of Art. 5 § 46, Okl.Const. See Johnson v. Tony’s Town Mister Quik, 1996 OK 138, ¶ 5, 915 P.2d 355, 357-58; Reynolds v. Porter, 1988 OK 88, ¶¶ 13-19, 760 P.2d 816, 822; Maule v. Independent School Dist. No. 9, 1985 OK 110, ¶ 12, 714 P.2d 198, 203-204. For my own analysis of the insurer’s counsel-fee liability in this very cause see Barnes v. Oklahoma Farm Bureau Mutual Ins. Co., 2000 OK 55, 11 P.3d 162, 183-190 (Opala, J., dissenting).

      . Under the “American Rule” governing the award of attorney fees to a prevailing party, attorney fees are not ordinarily recoverable in the absence of a statute or an enforceable contract. Hall v. Cole, 412 U.S. 1, 4, 93 S.Ct. 1943, 1946, 36 L.Ed.2d 702 (1973).

        . 36 O.S.2001 § 1219 provides, in pertinent part:
      A. In the administration, servicing, or processing of any accident and health insurance policy, every insurer shall reimburse all clean claims of an insured, an assignee of the insured, or a health care provider within forty-five (45) calendar days after receipt of the claim by the insurer.
      B. As used in this section:
      1. "Accident and health insurance policy” or “policy" means any policy, certificate, contract, agreement or other instrument that provides accident and health insurance, as defined in Section 703 of this title, to any person in this state;
      2. "Clean claim” means a claim that has no defect or impropriety, including a lack of any required substantiating documentation, or particular circumstance requiring special treatment that impedes prompt payment.

      G. In the event litigation should ensue based upon such a claim, the prevailing party shall be entitled to recover a reasonable attorney's fee to be set by the court and taxed as costs against the party or parties who do not prevail.

      . We also said in Barnes that if attorney fees are to be recoverable in UM/UIM litigation brought by an insured against his/her insurer, like that brought by Barnes, it is the legislature that must authorize such a course, as it has done for other kinds of insurer/insured litigation in section 3629(B). 11 P.3d at 182.

      . This court previously has determined that attorney fees awarded for personal injury or damages to personal rights under the City National v. Owens exception to the American Rule are limited to $10,000 by 23 O.S. § 103. Gorst v. Wagner, 1993 OK 50, 865 P.2d 1227. In Gorst, we held that the trial court’s award of attorney fees in excess of $10,000.00 for bad faith litigation conduct in a civil conspiracy case violated the limitations of 23 O.S. § 103 and that, to the extent that the legislature had pre-empted the field by enacting § 103, City National v. Owens was inapplicable. 856 P.2d at 1228.