Raven Resources, L.L.C. v. Legacy Bank

Citations: 2009 OK CIV APP 101; 229 P.3d 1273; 2009 Okla. Civ. App. LEXIS 91; 2009 WL 5436022Docket: 106,203. Released for Publication by Order of the Court of Civil Appeals of Oklahoma, Division No. 2

Court: Court of Civil Appeals of Oklahoma; November 17, 2009; Oklahoma; State Appellate Court

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Raven Resources, L.L.C., along with its owner David A. Stewart and his wife Terry Stewart, appealed a district court order that dismissed several claims against Legacy Bank and associated defendants. The appeal stemmed from allegations that an ex-employee, Michael Lee, forged documents and embezzled millions from Raven, claiming the bank and its employees were negligent or complicit in these actions. Raven's petition included thirteen claims against the bank, such as breach of contract, facilitating forgery, gross negligence, aiding and abetting conversion, and violations of the Uniform Commercial Code and Oklahoma Banking Code.

On August 1, 2008, the district court denied the bank's motion to dismiss some claims but granted it regarding others, finding they were inadequately pled in relation to fraud. Specifically, the court dismissed Raven's claims for unsafe and unsound banking practices and facilitating money laundering, concluding no private right of action existed for these claims and that the defect could not be remedied, thus finalizing the bank's liability on those grounds. Raven seeks both actual and punitive damages, along with declarations regarding certain debt instruments and statutory penalties.

On August 14, 2008, Raven voluntarily dismissed all pending grounds for recovery in the district court before the amendment deadline, including those previously dismissed with leave to amend. This voluntary dismissal prevented the automatic dismissal with prejudice of claims 1, 3, 5, 6, 9, and 12, as allowed by sub-paragraph (G) of section 2012. Raven is appealing the order dismissing its Banking Claims.

The appeal raises jurisdictional questions regarding whether the interlocutory dismissal of the Banking Claims became appealable after Raven's voluntary dismissal of other claims. The Bank contends that the interlocutory order is not appealable unless certified by the district court, which it was not. The Bank argues that Raven's dismissal cannot retroactively convert the order into an appealable one.

The jurisdictional challenge presents a novel issue in Oklahoma law: whether a non-appealable order can become appealable due to subsequent voluntary actions by a party. Oklahoma law limits appeals to judgments, final orders, and certain certified interlocutory orders. The excerpt also references a historical precedent affirming a plaintiff's right to control their case, allowing them to dismiss without prejudice before final submission to the court.

A plaintiff may dismiss a case without prejudice at any time before it is submitted to a judge or jury, or prior to trial with payment of costs or consent from all parties, as outlined in Title 12 O.S. Supp. 2004, sections 683 and 684. The Bank’s argument against Raven’s right to appeal relies on a requirement for district court certification that must overcome Raven's common law and statutory dismissal rights. In the case of Patmon v. Block, the Oklahoma Supreme Court ruled that a dismissal without prejudice is appealable, even if it allows for a new claim to be filed against the same defendant. The dismissal of Patmon's remaining claim made the prior judgment in favor of Dr. Block appealable, as it resolved all claims among the parties. The dismissal order marked the beginning of the appeal period for the summary judgment against Dr. Block. As such, the dismissal converted an otherwise non-appealable order into a final, appealable order, establishing that a final order affects substantial rights and conclusively determines the action. Similarly, Raven’s voluntary dismissal of non-Banking Claims converted the order granting the Bank's motion to dismiss the Banking Claims into a final order, thus preventing any further relief for Raven.

In Hammonds v. Osteopathic Hosp. Founders Ass'n, the concept of a "final order" is clarified, with Raven's voluntary dismissal of its non-Banking Claims identified as the first appealable event in the case. The Bank's argument that an appeal must be the sole remedial avenue for it to be considered final is rejected, referencing Gilliland v. Chronic Pain Assocs. Inc. Furthermore, the court suggests that Raven might not need the district court's permission to appeal, as certification under section 994 may not have been an option. It indicates that if Raven's recovery grounds stem from the same transactions as the Banking Claims—specifically Lee's embezzlement—then the district court likely could not certify the dismissal for immediate appeal. Certification is inappropriate when a claim is only partially resolved and related claims remain unadjudicated. The distinction between claims in Patmon is noted, where separate causes of action were based on different transactions. 

Even if the dismissal order could be certified, the Bank's interpretation of section 994 as the sole appeal route lacks support. Without certification, Raven would need to proceed to judgment on its non-Banking Claims. However, principles of claim and issue preclusion would prevent Raven from re-filing the Banking Claims after dismissal. Once an issue has been resolved in court, it cannot be relitigated in a different action by the same parties. The conclusion emphasizes that the Bank's interpretation of section 994 would infringe on Raven's right to control its litigation and access appellate jurisdiction under the Oklahoma Constitution.

Bank argues that the jurisdictional issue regarding the August 1, 2008 order is not previously decided in Oklahoma and supports its position with federal case law, noting that the appealable order criteria in Oklahoma are modeled after Federal Rule of Civil Procedure 54(B). The principle that state statutes based on federal statutes may be interpreted using federal jurisprudence is highlighted, referencing relevant Oklahoma cases. 

Federal case law presents two perspectives on the appealability of uncertified interlocutory orders after a voluntary dismissal without prejudice: the majority view, as established in Ryan v. Occidental Petroleum Corp., holds that such dismissals do not constitute finality, while the minority view, supported by decisions in the Sixth and Eighth Circuits, including Hope v. Klabal, suggests that a dismissal without prejudice can render a prior interlocutory order appealable. The Supreme Court's precedent in Wallace v. Tiernan supports this minority view.

Despite the lack of consensus in federal courts, the minority view aligns with Oklahoma's precedent and its recognition of a plaintiff's right to control their action. Consequently, the court finds Bank's federal law argument unpersuasive and retains jurisdiction over Raven's appeal. 

Additionally, Raven's petition includes a claim concerning "unsafe or unsound banking practices" under 6 O.S. 2001, 204, which empowers the State Banking Commissioner to order banks to cease such practices and impose civil penalties comparable to those from federal regulators.

Oklahoma employs a modified version of the Cort v. Ash test to determine if a legislative enactment allows for a private cause of action. The test requires that: 1) the plaintiff belongs to a class intended to benefit from the statute, 2) there is evidence of legislative intent to create a private remedy, and 3) inferring a remedy aligns with the statute's purposes. The definition of the benefiting class is narrowly construed. In Raven's case, section 204 does not benefit a specific class but serves the public at large; being "especially harmed" does not qualify one as a protected class. Furthermore, section 204 lacks an explicit private remedy and suggests the opposite, as it authorizes the Banking Commissioner to act in regulatory capacities rather than create private enforcement. Raven also failed to connect civil penalties imposed by the Banking Commissioner with the damages sought, undermining the claim for a private remedy related to "unsound banking practices."

Regarding the claim for money laundering, which is governed by federal law, private rights of action under federal criminal statutes are rarely implied. Applying the Cort test to 18 U.S.C. 1956-1957, it is clear that these statutes do not confer benefits to a specific class and exhibit no congressional intent to create a private right of action. Consequently, neither state nor federal statutes provide a private cause of action for Raven's claims related to unsound banking practices or money laundering, leading to the affirmation of the district court's dismissal of these claims.

The court affirmed the decision with concurrence from Goodman, P.J., and Wiseman, J. The petition named the Bank's board of directors, officers, and employees as individual defendants. Lee had pled guilty to federal fraud and money laundering charges in March 2008, and Raven seeks recovery of the embezzled funds by Lee. The court noted uncertainty regarding whether Raven's claims consist of thirteen separate theories of liability or multiple claims for relief, referencing relevant legal standards and prior case law. The order granting the Bank's dismissal referred to "causes of action" rather than "theories of liability," indicating that a single set of facts may only support one cause of action, though different remedies may apply. The court focused on the district court's handling of Raven's 8th and 13th claims for relief and deferred ruling on the Bank's jurisdictional argument until a later stage of the appeal. Section 994(A) permits partial judgments in multi-claim cases only with a clear determination of no delay, otherwise the order is subject to revision until all claims are resolved. Additionally, specific statutes can confer appellate jurisdiction, though none applied here. The excerpt references various cases to illustrate principles of appeal and claim adjudication, emphasizing procedural aspects such as timely appeals and certification for immediate appeal.

Raven's voluntary dismissal differs from the case of *City of Lawton v. Int'l Union of Police Ass'ns*, where the Supreme Court dismissed an appeal because it was not from an appealable order, and the City failed to address this issue adequately. The court emphasized that appellate review is limited to the record available at the time of the trial court's decision. The term "Wewoka Switch" refers to a historical issue regarding missing goods during the 1920s oil boom, illustrating a complex legal dilemma. The court refrained from determining whether Raven's petition included one or multiple claims or from deciding on the potential refiling of voluntarily dismissed claims. Various federal courts have held that certain statutes do not provide a private right of action, even when a commission may impose monetary sanctions. This includes cases involving the insurance commissioner and the federal money laundering statutes, which are interpreted to impose criminal penalties without allowing private causes of action.