INDEX
PROFESSIONAL LIABILITY LAW – NON-MEDICAL PROFESSIONALS
Table of Contents
I. General Standard of Care ............................................................................................ 2
II. Theories of Recovery .................................................................................................. 2
a. Contract ................................................................................................................... 2
i. General Elements.................................................................................................. 2
ii. Damages .............................................................................................................. 3
iii. Defenses ............................................................................................................. 3
b. Negligence ............................................................................................................... 4
i. General Elements.................................................................................................. 4
ii. Duty ...................................................................................................................... 4
Ill. Admissibility of Licensing Board Orders. Findings and Admissions in Civil Actions.. 12
a. General .................................................................................................................. 12
b. Accountants ........................................................................................................... 13
c. Attorneys ................................................................................................................ 13
d. Land Surveyors/Engineers .................................................................................... 13
IV. Professional/Client Privilege .................................................................................... 14
a. Historical ................................................................................................................ 14
b. Doctor/patient ........................................................................................................ 14
c. Attorney/client ........................................................................................................ 14
d. Pastor/parishioner.................................................................................................. 15
e. Accountant/client ................................................................................................... 15
f. Architect/engineer — client ..................................................................................... 15
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I. General Standard of Care
Professionals must abide by a higher standard of care consistent with the degree of
skill, care and knowledge possessed by those of ordinary skill, competency and
standing in the same profession. Keel v. Titan Const. Corp., 1981 OK 148, 639 P.2d
1228. Therefore, a professional must exercise the degree of skill, learning, and ability
possessed and practiced by other members of his or her profession. Failure to abide by
this standard of care can give rise to actions in both tort and contract. Id.
Every professional impliedly warrants that he or she has the education and experience
to perform the services he or she has undertaken to perform. See e.g. Norton v.
Hughes, 2000 OK 32, 5 P.3d 588, 591 (attorneys); Stroud v. Arthur Andersen & Co.,
2001 OK 76, 37 P.3d 783 (accountants).
However, an architect does not guarantee a perfect plan or satisfactory results; he is
only liable for failure to exercise professional skill and reasonable care in preparation
and execution of plans according to his contract. Waggoner v. W& WSteel Co., 1982
OK 141, 657 P.2d 147; Smith v. Goff, 19580K 100, 325 P.2d 1061.
While a professional ordinarily cannot limit his or her potential liability by limiting the
scope of services (responsibility) in the contract. See Waggoner v. W& WSteeICo.,
19820K 141, 657 P.2d 147.
The scope of an accountant’s services can be limited by contract also. (i.e. audit,
review, compilation, bookkeeping). The standard of care applicable to each level of
services is generally determined by the standards adopted by the American Institute of
Certified Public Accountants and Oklahoma’s statutory and regulatory provisions
governing the field. Rules governing the profession can therefore be used to establish
the duty in a civil action. Stroud v. Arthur Andersen & Co., 2001 OK 76, 37 P.3d 783.
II. Theories of Recovery
a. Contract
i. General Elements
To recover on a breach of contract theory, plaintiff must prove the following: (1)
formation of contract; (2) breach of a contractual obligation; and (3) damages as a direct
result of the breach. Digital Design Group, Inc., v. Info. Builders, Inc., 2001 OK 21, 24
P.3d 834, 843; OUJI No. 23.1.
Accompanying every contract for services is an implied duty to perform such services
skillfully, carefully, diligently, and in a workmanlike manner. As to the skill required of
such a person, the standard of comparison or test of efficiency is “that degree of skill,
efficiency, and knowledge which is possessed by those of ordinary skill, competency,
and standing in the particular trade or business for which he is employed.” Keel v. Titan
Const. Corp., 1981 OK 148, 639 P.2d 1228, 1231.
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ii. Damages
1. Specific performance
Specific performance is not available as a remedy when the contract calls for the
rendition of professional services. This is because the court cannot force either party
into a form of involuntary servitude. See 71 Am. Jur. 2d Specific Performance § 183.
2. Rescission
If plaintiff seeks rescission as a remedy, plaintiff will seek to cancel or undo the contract
in its entirety, resulting in no obligations for either party. However, plaintiff is not entitled
to unilaterally revoke the contract unless he or she can prove the existence of one or
more material or extraneous circumstances. Some examples of material or extraneous
circumstances include the following: (1) one party lacked legal capacity to contract, (2)
subject matter of contract is against public policy, (3) fraud in the inducement, or (4) the
contractual obligations are fraudulent, against public policy, or impossible to perform.
Earth Products Co. v. Oklahoma City, 1968 OK 39, 441 P.2d 399, 403.
Plaintiff may rescind only in the following cases: (1) plaintiff was influenced to contract
through duress, menace, fraud, or undue influence by some other party, (2) defendant
caused plaintiff’s consideration to fail, (3) consideration became void from any other
cause, (4) material failure of consideration from any cause prior to plaintiff receiving
such consideration, (5) defendant consents to rescission, or (6) defendant violated the
Oklahoma Consumer Protection Act. 15 0.S. § 233.
3. Monetary Damages
In a breach of contract action, plaintiff may seek monetary damages including but not
limited to the following: compensatory damages, nominal damages, liquidated
damages, and punitive damages (only if breach amounts to intentional tort). However,
neither party to a contract can recover more than he or she could have gained through
full performance by both sides of the contract. 23 0.5. § 96.
iii. Defenses
1. Denial
Defendant may deny the existence of a contract or deny that an existing contract was
breached or that no damage was caused by the alleged breach.
2. Failure of consideration/lack of consideration
Every contract requires adequate consideration. Defendant may therefore assert as a
defense that one or both parties failed to give adequate consideration for the formation
of a valid contract or that the contract became unenforceable when the bargained-for
performance was not provided. See 17 Am. Jur. 2d Contracts § 648.
3. Performance prevented
Defendant may claim that his performance was prevented by either (1) the acts of the
other contracting party or (2) some third party or event outside the bounds of the
contract or outside the control of the defendant. See 17 Am. Jur. 2d Contracts §§ 651,
686.
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4. Breach by plaintiff
Defendant may assert as a defense that plaintiff’s damages or defendant’s inability to
perform was caused solely by plaintiff’s own breach of its obligations under the contract.
Defendant is typically excused from performing under such circumstances. See 17 Am.
Jur. 2d Contracts § 684.
5. Accord and Satisfaction
Defendant may assert as a defense that it made a separate agreement with Plaintiff for
something additional to or different than the original obligation on the contract in order to
satisfy the remainder of the sum on the original agreement. See Hodges v. Anderson
Drilling Co., 1969 OK CIV APP 2, 465 P.2d 784. Such a defense often arises when
defendant offers and plaintiff accepts a proposal for payment of a smaller sum than the
original contract called for. Successful assertion of this defense will result in a finding of
no further obligations for defendant.
6. Fraud in the inducement
Defendant may assert that the contract was void because plaintiff fraudulently induced
defendant into forming the contract. See 17 Am. Jur. 2d. Contracts § 645.
b. Negligence
i. General Elements
Plaintiff must prove three elements: (1) defendant owed plaintiff a duty to protect him or
her from injury; (2) defendant breached this duty; and (3) plaintiff was injured as a result
of defendant’s actions. Johnson v. Hillcrest Health Center, Inc., 2003 OK 16, 70 P.3d
811. See e.g. Stroud v. Arthur Andersen & Co., 2001 OK 76, 37 P.3d 783, 788
(accountants); Waggoner v. W & W Steel Co., 1982 OK 141, 657 P.2d 147 (architects);
Manley v. Brown, 1999 OK 79, 989 P.2d 448 (attorneys).
ii. Duty
1. Sources of Duty
a. Contract
For all professions, the first source of the duties of either party is the contract between
the parties. For accountants, the scope of service and degree of care and skill required
varies with the type of services to be performed, i.e. fraud investigation; audit; review;
agreed procedure; compilation; or bookkeeping. This duty of care is defined by
formalized standards adopted by the American Institute of Certified Public Accountants
and by the Oklahoma statutory and regulatory provisions governing the various scopes
of service. The level of services to be performed is normally determined from the terms
of the engagement agreement.
An architect or engineer is generally not responsible for providing for the safety of
workers and passers-by during construction unless the contract provides otherwise. The
means, methods, techniques, sequences of construction, and safety precautions during
construction are generally the sole responsibility of the general contractor. See
Waggoner v. W& WSteel Co., 1982 OK 141, 657 P.2d 147,151.
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b. Statute/ordinance regulation
Statutes and ordinances applicable to professionals may sometimes be used to
establish the duties of a professional in a civil action. To succeed in a negligence per se
action, plaintiff must prove three elements: (1) injury caused by violation of statute or
ordinance; (2) injury was the type of injury intended to be prevented by the statute or
ordinance; and (3) injured party was within the class meant to be protected by the
statute or ordinance. Busby v. Quail, 1994 OK 63, 885 P.2d 1326.
c. Industry Standard/Industry Practice
As stated above, the standard of comparison or test of efficiency in the realm of
professional liability is whether the professional’s conduct was consistent with the
degree of skill, care, and knowledge possessed by those of ordinary skill, competency,
and standing in the profession or trade which he or she belongs to.
iii. Breach of Duty
1. Expert testimony
In any professional negligence action, expert testimony is required when the fact at
issue is not “within the realm of ordinary experience of mankind.” Strubhart v. Perty
Mem’l Hosp. Trust Auth., 1995 OK 10, 903 P.2d 263, 274. Thus, expert testimony is
ordinarily required to establish the degree of care a reasonable professional would have
exercised in such circumstances. However, expert testimony is not required when the
negligence is so grossly apparent that a layman would have no problem recognizing it.
Turney v. Anspaugh, 1978 OK 101, 581 P.2d 1301, 1307-08; Boxbergerv. Martin,
19760K 78, 552 P.2d 370, 373-74. See e.g., Henry v. Morris & Co., 140 P. 413 (OkIa.
1914) (architects).
iv. Causation
1. General
Defendant’s conduct must be the proximate cause of the injury. Proximate cause
consists of two elements: cause in fact and legal causation. A defendant’s conduct is a
cause in fact if the event or injury would not have occurred “but for” that conduct. Legal
causation requires consideration of common sense and policy to determine whether
liability should be imposed after cause in fact has already been established. Cause in
fact is generally a question for the jury. It becomes a question of law only when “there is
no evidence from which the jury could reasonably find a causal nexus between the
negligent act and the resulting injury.” Worsham v. Nix, 2006 OK 67, 145 P.3d
1055,1066. Plaintiff must prove more than just the possibility of causation. This causal
link may be proved by circumstantial evidence, but the evidence must have “sufficient
probative force to constitute the basis for a legal inference, rather than mere
speculation.” Stroud v. Arthur Andersen & Co., 2001 OK 76, 37 P.3d 783, 788 (quoting
Downs v. Longfellow Corp., 19600K 107, 351 P.2d 999).
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2. Expert testimony
Expert testimony is required to establish both liability and causation if the issues are
beyond the experience of an ordinary person. Strubhart v. Perry Mem’l Hosp. Trust
Auth., 1995 OK 10, 903 P.2d 263, 274.
v. Damages
1. Foreseeability
The requirement of privity can no longer be a bar to recovery in Oklahoma. Liability for
injuries to third person can therefore be imposed in tort under a negligence theory.
Under this theory, plaintiff must establish three elements: duty, breach of duty, and
harm. Mckellips v. St. Francis Hospital, Inc., 1987 OK 69, 741 P.2d 467, 470. See e.g.
Great Plains Fed. Say, and Loan Ass’n v. Dabney, 1993 OK 4, 846 P.2d 1088, 1093
(attorneys); Knudson v. Weeks, 394 F.Supp. 963, 970 (W.D. OkIa. 1975) (land
surveyors and engineers). The ultimate question in a negligence action is whether the
plaintiff’s injury was reasonably foreseeable. If defendant should have reasonably
foreseen the possibility of plaintiff’s injury, defendant has a duty to exercise reasonable
care to prevent the injury.
The court must decide if the relationship between the parties is such that “defendant
owes an obligation of reasonable conduct to persons who are foreseeably endangered
by his conduct with respect to risks which make the conduct unreasonably dangerous.”
Id. Therefore, the primary question becomes whether plaintiff’s injury is foreseeable. If
the injury is foreseeable, defendant has a duty to exercise reasonable care to prevent
injury to the plaintiff. The focus must be on whether defendant’s conduct creates a
broad zone of risk which poses a general threat of harm to others. Delbrel v. Doenges
Bros. Ford, Inc., 1996 OK 36, 913 P.2d 1318,1321.
Architects are responsible for any reasonably foreseeable injury resulting from their
work, regardless of privity. Therefore, if the injury is a foreseeable injury or the plaintiff a
foreseeable plaintiff, the architect can be held liable in tort. Id. However, it is important
to remember that an architect’s duties are limited by the terms of his contract. Thus, an
architect is only responsible for failure to perform his contractual obligations with the
reasonable care and skill required by the profession. Privity is no longer a bar to a
negligence action against an architect. Boren v. Thompson & Assoc., 2000 OK 3, 999
P.2d 438.
The general rule is that attorneys are not liable to anyone except their clients in a
malpractice action. This is especially true when the claim is tort-based rather than
contract-based. Id. But see Stroud v. Arthur Andersen & Co., 2001 OK 76, 37 P.3d 783
(accountants/auditors liable to those who auditor intended to supply data to for guidance
and to those the auditor knew his client intended to supply data to).
2. Duty to mitigate
In actions based on breach of contract, plaintiff typically has a duty to take reasonable
steps to mitigate (lessen) his injury or damage. A plaintiff cannot recover from the
defendant damages which could and would have been avoided had plaintiff attempted
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to mitigate the damages. However, the duty to mitigate only goes to amount of recovery
or loss and cannot be an absolute defense to an injury already sustained. The questions
of whether this duty was performed and how much the damage was enhanced by a
failure to perform are questions of fact to be determined by a jury unless trial is to occur
without a jury. Bailey v. J.L. Roebuck Co., 1929 OK 96, 275 P. 329, 330.
3. Speculative
Plaintiff should not be able to recover purely conjectural or highly improbable damages
that he or she cannot prove with at least some degree of specificity. Defendant may
assert as a defense that plaintiff seeks purely economic losses. If plaintiff’s cause of
action lies in tort rather than contract, defendant can successfully assert the economic
loss doctrine as a complete defense as plaintiff cannot recover purely economic losses
in a tort action. See In re General Motors Corp., 2005 WL 1924331 *3 (W.D. OkIa.
2005) (describing the economic loss doctrine). However, an architect in the absence of
privity of contract may be held liable for purely economic losses to a contractor working
on a construction project when the economic loss was foreseeable and resulted from a
breach of the architect’s common law duty of care in the performance of the contract
with the owner. Boren v. Thompson & Assoc., 2000 OK 3, 999 P.2d 438, 446.
vi. Defenses
a. Denial of elements of cause of action
Defendant may claim that plaintiff failed to satisfy all of the elements of his or her
claim(s).
b. Statute of Limitations
12 O.S. 95: General Statute of Limitations – applicable to most claims against
professionals.
(1) For a breach of a written contract, five (5) years.
(2) For breach of an oral contract, three (3) years.
(3) For an action in tort, two (2) years.
These time periods begin to run when the cause of action accrues. For an action
based on breach of contract, the cause of action accrues when the contract is
completed—when services are performed. See Samuel Roberts Noble Found.,
Inc. v. Vick, 1992 OK 140, 840 P.2d 619. For an action in tort, a cause of action
accrues when the problem is discovered or should have been discovered by the
plaintiff in the exercise of reasonable diligence. Whether this rule applies to a
particular set of facts is a judicial determination that must be made on a case by
case basis. Lovelace v. Keohane, 1992 OK 24, 831 P.2d 624, 629 Weathers v.
Fulgenzi 1994 OK 119, 884 P.2d 538. Under the doctrine of fraudulent
concealment, the statute of limitations is tolled when defendant commits “some
actual artifice to prevent knowledge or some affirmative act of concealment or
some misrepresentation to exclude suspicion and prevent inquiry.” Wills v. Black
and West, Architects, 1959 OK 162, 344 P.2d 581. Generally, the statute of
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limitations for a tort action begins to run when the plaintiff knew or should have
known of the problem or could first have maintained an action.
c. Statute of Repose
12 0.S. 109 et. seq.: Statute of Repose
The statute of repose is applicable as an additional time-bar to claims against
architects, engineers, contractors, and owners or persons in possession of real property
for actions in tort arising from design, planning or construction of an improvement to real
property (architect/engineer typically). Such action must be brought within ten (10) years
from the date of substantial completion of the building or improvement. Unlike a Statute
of Limitations, the Statute of Repose is an outside limit that extinguishes all causes of
action or potential causes of action after the specified time period. The statute of repose
applies regardless of when the defect is discovered. Jaworsky v. Frolich, 1992 OK 157,
850 P.2d 1052,1054-56.
d. Comparative fault/contributory negligence
Historically, contributory negligence was a complete bar to recovery. However, with the
adoption of the doctrine of comparative fault, plaintiff’s negligence merely reduces the
damage award, unless plaintiff’s negligence is determined to exceed 50%. Although this
defense would not preclude liability completely, it may reduce the amount of damages
defendant would be required to pay.
Where the acts of two or more parties combine to cause a single injury and plaintiff is
without fault, joint and several liability applies, and each tort feasor is individually
responsible for the entire obligation. However, the paying party may have a right of
contribution and/or indemnity from the nonpaying party or parties.
For actions accruing after November 1, 2004, the liability for damages caused by two or
more tortfeasors is several only, and each tortfeasor is liable only for the amount of
damages allocated to that tortfeasor. However, if plaintiff proves the defendant is more
than 50% responsible for plaintiff’s injuries or the plaintiff proves the defendant acted
willfully and wantonly or with reckless disregard and proximately caused the plaintiff’s
injuries, then joint and several liability applies and one tortfeasor can be liable for the
entire sum. 23 O.S. § 15.
For actions accruing prior to November 1, 2004, plaintiff may choose from which
tortfeasor to collect judgment (if more than one tortfeasor), provided both tortfeasors are
negligent and plaintiff is free from negligence. Boyles v. Oklahoma Natural Gas, 1980
OK 163, 619 P.2d 613. If plaintiff has some percentage of contributory negligence, then
joint tortfeasors are only responsible for their respective percentage, and the recovery
will be diminished in proportion to the plaintiff’s contributory negligence. 23 O.S. § 14.
This generally must be asserted as an affirmative defense. The elements of this
defense are essentially the same as those of plaintiff’s negligence claim.
Defendant must now prove the following elements: duty, breach of duty, proximate
cause and injury. Bennett v. Morris Farrar Truck Co., 1974 OK CIV APP 9, 520 P.2d
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705, 710. The defense of contributory negligence is a question of fact reserved
exclusively for the jury. OkIa. Const. Art. 23 § 6. This requirement is subject to two
exceptions. First, this defense does not have to be submitted to the jury when plaintiff
fails to show primary negligence on the part of defendant. Second, this defense does
not have to be submitted to the jury when, upon undisputed facts, reasonable people
exercising fair and impartial judgment could not reasonably reach a different conclusion
regarding the defense. Flanders v. Crane Co., 1984 OK 88, 693 P.2d 602. This defense
has been asserted by some professionals. See e.g. Noyce v. Ratliff Drilling Co., 1989
OK CIV APP 99, 790 P.2d 1129 (architects); F.D.I.C. v. Ferguson, 982 F.2d 404, 40607 (10th Cir. 1991) (attorneys). However, an accountant cannot assert contributory
negligence as a defense in a malpractice action by a former client, unless the
accountant can prove that the client’s conduct interfered with the accountant’s provision
of professional services. Stroud v. Arthur Andersen & Co., 2001 OK 76, 37 P.3d 783,
790.
e. Assumption of risk
Defendant may assert as a defense that plaintiff assumed the risk of injury resulting
from defendant’s negligence if plaintiff voluntarily exposed itself to injury with knowledge
and appreciation of the risk involved. In order to successfully assert this defense,
defendant must establish four elements. OUJI 9.14 Thomas v. Holliday, 1988 OK 116,
764 P.2d 165.
i. Plaintiff knew of the risk and appreciated the degree of danger
ii. Plaintiff had the opportunity to avoid the risk
iii. Plaintiff acted voluntarily
iv. Plaintiff’s action was the direct cause of the injury
This defense must be distinguished from contributory negligence. In order to assert
assumption of the risk as a defense, there must be either some express agreement,
some pre-existing status between defendant and plaintiff, or some element of consent
to harm that is known and appreciated by plaintiff. Anything falling outside of these
areas falls within the realm of contributory negligence rather than assumption of the risk.
Thomas v. Holliday, 1988 OK 116, 764 P.2d 165.
This defense must be submitted to the jury unless: (1) there was no primary negligence
on the part of defendant, or (2) reasonable people could not reach differing conclusions
on the defense. Flanders v. Crane Co., 1984 OK 88, 693 P.2d 602. Since this defense
is applicable in any situation in which a voluntary relationship arises, this defense is
available to professionals. See e.g. Tucker v. ADG, Inc., 2004 OK 71,102 P.3d 660
(architects).
f. Intervening/supervening cause
Defendant may assert that another person or party’s actions broke the causal chain
between defendant’s alleged negligent act and the plaintiff’s injury. The general rule is
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that this causal chain may be broken by an intervening event that was a supervening
cause of plaintiff’s injury. Johnson v. Hillcrest Health Center, Inc., 20030K 16,70 P.3d
811, 819. Not every intervening event will be sufficient to break the causal chain and
relieve defendant of compensating plaintiff’s loss. The intervening act must rise to the
level of a supervening cause. To rise to the level of a supervening cause, defendant
must prove that the intervening cause satisfied three elements:
i. The intervening act was independent from defendant’s negligent act
ii. The intervening act must have been capable of causing the injury by itself
iii. The intervening act was not reasonably foreseeable to defendant. Id.
If defendant can establish that the intervening act was a supervening cause of plaintiff’s
injury, defendant can successfully escape liability altogether.
vii. Limiting Liability by Contract: Limiting Duties v. Remedies
The duties of a professional derive primarily from the contract between the parties. As a
result, a professional can generally be held liable for breaching or failing to perform only
those duties outlined in the contract. In contrast, a remedy limitation normally states that
the party providing such services will not be exposed to a particular type of damage, i.e.
consequential damages. See E.H. Schopler, Comment Note—Contractual Provision as
to Remedy as Excluding Other Possible Remedies, 84 A.L.R.2d 322 (1962). The parties
to a contract can limit damages incurred as a result of either party’s ordinary
negligence, but such limitation provisions cannot limit damages incurred as a result of
either party’s gross negligence or fraud. 15 O.S. § 212; Elsken v. Network Multi-Family
Security Corp., 19920K 136, 838 P.2d 1007,1010. Further, in all cases involving nonmedical professionals, the duties of the parties are created by contract. Therefore, any
lawful limitations on liability (i.e. scope of services, duties, etc.) contained within the
contract may also limit each party’s liability in tort. Elsken v. Network Multi-Family
Security Corp., 1992 OK 136, 838 P.2d 1007, 1010; Waggoner v. W & W Steel Co.,
1982 OK 141, 657 P.2d 147.
viii. Fraud/misrepresentation
a. General elements
A plaintiff asserting a fraud claim must prove the existence of four elements. Rogers v.
Meiser, 2003 OK 6, 68 P.3d 967 (overruled on other grounds by White v. Heng Ly Lim,
2009 OK 79, 224 P.2d 679
1. False representation of material fact
2. The false representation was made as a positive assertion and was known to be
false, or was made recklessly without knowledge of the truth
3. The person making the misrepresentation intended that it be acted upon
4. The other party relied on the misrepresentation to his/her own detriment
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Such a claim can be asserted against professionals. See e.g. Hall v. Edge, 1989 OK
143, 782 P.2d 122 (accountants); Antrim Lumber Co. v. Bowline, 19690K 161, 460 P.2d
914 (architects); Robinson v. Southerland, 2005 OK CIV APP 80, 123 P.3d 35
(attorneys); Okland Oil Co. v. Knight, 92 Fed.Appx. 589 (10th Cir. 2003) (land
surveyors/engineers);fraud must be proven by clear and convincing evidence, meaning
the jury must be persuaded that it is highly probable and free from serious doubt that
fraudulent conduct occurred. See OUJI 23.33.
Fraud cannot be presumed, but plaintiff may use circumstantial evidence to prove its
occurrence. Silk v. Phillips Petroleum Co., 1988 OK 93, 760 P.2d 174, 177. Evidence of
events occurring after the fraudulent act can be used as circumstantial evidence of a
wrongdoer’s intent. Sellers v. Sellers, 1967 OK 34, 428 P.2d 230. Normally, to be
actionable, the false representation must be a statement of existing fact and not just a
mere expression of opinion.
However, there is an exception in the case of a knowledgeable opinion where: (1) the
speaker is in a fiduciary position or other position of trust with the listener; (2) the
speaker can reasonably be understood as having based his opinion on facts
unavailable to the listener; and (3) the speaker warrants that he knows of no fact that
will prevent its occurrence. Hall v. Edge, 1989 OK 143, 782 P.2d 122,127.
A fraud claim can only be predicated on the promise to perform a future act if the
plaintiff can show that the promise to act was accompanied by an intention not to
perform and the promise is made with the intent to deceive the other party into acting
where but for the promise the other party would not have acted. Citation Co. Realtors v.
Lyon, 19800K 68, 610 P.2d 788, 790.
When fraud is properly alleged by the plaintiff and denied by the defendant, the
existence of fraud becomes a question of fact, precluding summary judgment for either
party. Hall v. Edge, 1989 OK 143, 782 P.2d 122, 127. However, there must be evidence
of each element of fraud before the issue can be submitted to the jury. Roberts v. Wells
FargoAG Credit Corp., 990 F.2d 1169, 1174 (10th Cir. 1993).
b. Defenses
In order to avoid a fraud claim, defendant may take some action toward the fulfillment of
a future promise, but defendant must make sure the action taken was intended to begin
fulfillment of the promise. However, not all actions by the defendant in this manner will
suffice to preclude liability on the basis of fraud. FD.I.C. v. Hamilton, 58 F.3d
1523,1529(10th Cir. 1995). Further, there can be no fraud where the facts were
available to the plaintiff when the transaction took place. Generally, in a fraud action, a
defendant can assert the same defenses as those mentioned above under a negligence
theory.
Fraud related to the purchase of real property cannot be based on an alleged false
statement or representation when the truth or falsity of the statement could have been
discovered with reasonable diligence by the buyer. Dawson v. Tindell, 1987 OK 10733
P.2d 407.
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In 2003, the Oklahoma State Legislature overruled Rogers v. Meiser and passed 60 OS
§867, which the Supreme Court construes as lacking the legislative intent to supplant or
abrogate a common law actual fraud claim or to preclude the award of punitive
damages. White v. Heng Ly Lim, 2009 OK 79, 224 P.2d 679. The mandatory clear
language of 60 OS §867 limits the rights of a purchaser to recover for failure to disclose
known defects in residential property. Id. Further, 60 OS §867specifically provides that
(1) the sole and exclusive civil remedy at common law or otherwise under the
Disclosure Act shall be actual damages and shall not include exemplary damages; and
(2) the Disclosure Act applies to, regulates and determines rights, duties, obligations,
and remedies therefore. Id.
ix. For professional negligence – affidavit of consultation with qualified expert
Oklahoma now requires that, in any civil action for professional negligence, the plaintiff
attach to the petition an affidavit attesting that (a) plaintiff has reviewed the facts of the
claim with a qualified expert, (b) the plaintiff has obtained a written opinion from the
qualified expert determining that a reasonable interpretation of the facts supports a
finding that the acts or omissions of the defendant constituted professional negligence,
and (c) based on the expert’s opinion, plaintiff has concluded that the claim is
meritorious and based on good cause. 12 O.S. §19(A)(1). If a professional negligence
action is filed without this affidavit, the court shall dismiss the action without prejudice.
12 O.S. §19(A)(2).
Ill. Admissibility of Licensing Board Orders. Findings and Admissions in
Civil Actions
a. General
In state court, consent orders have been recognized as a valid form of settlement
agreement, and the admissions contained within such an order would therefore be
inadmissible if offered to prove liability for, invalidity of, or amount of a claim. OkIa. R.
Evid. 2408; Whitehorse v. Johnson, 2007 OK 11, 156 P.3d 41, 45.
In both federal court and state court, evidence of other crimes, wrongs or acts is not
admissible to prove the character of an individual or to show that such individual acted
in conformity with such character. However, such information may be admissible for
other purposes, such as motive, intent, opportunity, preparation, plain knowledge,
identity, or absence of mistake or accident. Fed. R. Evid. 404(b); OkIa. R. Evid.
2404(B). Therefore, if such information is contained within a consent order, this
information is only admissible for the limited purposes articulated above.
In state court, factual findings by an administrative body are not excluded by the
hearsay rule if such findings resulted from an investigation authorized by law. OkIa. R.
Evid. 2403(8). However, factual findings resulting from a special investigation of a
particular complaint, case or incident are inadmissible hearsay. OkIa. H. Evid.
2403(8)(d). See Rhodes v. Curtis, 2006 WL 1047021 *2 (E.D. OkIa. 2006) (excluding
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Social Security Administration’s finding that plaintiff was disabled because the
information would have resulted in confusion and undue prejudice). Although there does
not appear to be an Oklahoma case directly on point, it appears that the general
consensus is that administrative findings are sometimes admissible as evidence, but the
trial court is given considerable discretion in determining which material should be
admitted. See Halloway v. Milwaukee County, 180 F.3d 820, 827 n. 9 (7th Cir. 1999)
(finding of probable cause for discrimination by Wisconsin equivalent of Equal
Employment Opportunity Commission was excluded by trial court and upheld under
abuse of discretion standard).
Likewise, in federal court, factual findings by an administrative body resulting from an
investigation pursuant to authority granted by law are not excluded by the hearsay rule,
unless there is some indication of a lack of trustworthiness within such findings. Fed. R.
Evid. 803(8)(c). However, some jurisdictions hold that evidence from an administrative
proceeding is per se admissible hearsay under the Federal Rules of Evidence. See e.g.,
Plummer v. Western Int’l Hotels Co., 656 F.2d 502, 505 (9th Cir. 1981) (EEOC probable
cause determination admissible); Smith v. Universal Sen’s., Inc., 454 F.2d 154, 157- 58
(5th Cir. 1972) (EEOC findings admissible).
b. Accountants
Copies of records from meetings by the Oklahoma Accountancy Board are admissible
in evidence if such records are material. 59 O.S. § 15.5(B)(2). Examples of records
which may be admissible include, but are not limited to the following: minutes of
meetings, applications and related document of applicants, registry of registrants,
official documents filed in hearings before the board, and official documents filed in any
proceeding before any court arising out of any rules and regulations adopted by the
board. Id. However, information obtained during an investigation concerning an alleged
violation of the Oklahoma Accountancy Act must remain confidential and cannot be
obtained via the Oklahoma Open Records Act. 59 O.S. § 15.6A(A) and 15.6A(B).
Further, information relating to such an investigation is not admissible in any civil or
criminal proceeding, unless such proceeding relates directly to both the actions of the
board and the affected individual. 59 O.S. § 15.6A(D).
c. Attorneys
Investigations by the General Counsel and Commission regarding alleged violations of
rules governing the profession are confidential and cannot become public until
authorized by the Supreme Court. 5 O.S. app. 1-A § 5.7. Records from such an
investigation cannot be disclosed unless the information contained is relevant and is
being sought by one of four entities: (1) court or bar association of any jurisdiction who
exercises disciplinary authority over attorneys, (2) grievance committee investigating a
complaint against the lawyer, (3) Client Security Fund Committee of the Bar
Association, and (4) a law enforcement agency that shows the information is necessary
to conduct an investigation. 5 0.3. app. 1-A § 5.8.
d. Land Surveyors/Engineers
Records of meetings kept by the State Board of Licensure for Professional Engineers
and Land Surveyors are admissible as evidence. 59 O.S. § 475.10(B). However, if the
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Board so chooses, such records may be kept confidential if they can be classified as
any one of the following: exam materials, records of exam answers, letters of
inquiry/reference regarding applicants, Board inquiry forms regarding applicants,
investigation files, or “any other matter of like confidential nature.” 59 O.S. § 475.10(D).
IV. Professional/Client Privilege
a. Historical
Certain professions have historically enjoyed confidential relationships with their clients.
b. Doctor/patient
A patient may refuse to disclose and prevent others from disclosing confidential
communications made for the purpose of diagnosis or treatment among the patient, the
doctor, and persons who participated in the diagnosis or treatment under direction of the
doctor, including members of the patient’s family. OkIa. R. Evid. 2503(B).
Communications are confidential when not intended to be disclosed to third persons,
except (1) persons present to further the patient’s interests in consultation or
examination, (2) persons reasonably necessary for transmission of the information, (3)
or persons who participated in the diagnosis or treatment under the direction of the
doctor, including members of the patient’s family.OkIa. R. Evid. 2503(A)(4).
The doctor/patient privilege does not extend to the following: (1) communications
relevant to a proceeding to hospitalize the patient for mental illness when the doctor
determined the patient needed such treatment, (2) communications made in the course
of a court ordered examination, (3) communications regarding a condition that is
relevant to patient’s claims or defenses, (4) when a patient is an inmate and the
information is necessary to prevent or lessen a serious and imminent threat to the
health or safety of another, or for law enforcement to identify or apprehend a person
who appears to have escaped from a correctional facility. OkIa. R. Evid. 2503(D).
c. Attorney/client
The purpose of the attorney/client privilege is to promote full and frank disclosure
between attorney and client. 81 Am. Jur. 2d Witnesses § 326. The attorney/client
privilege belongs to the client. That is, a client may refuse to disclose and prevent
others from disclosing confidential communications made for the purpose of facilitating
the rendition of legal services to the client. OkIa. R. Evid. 2502(B). Communications are
confidential when “not intended to be disclosed to third persons other than those to
whom disclosure is made in furtherance of the rendition of professional legal services to
the client or those reasonably necessary for the transmission of the communication.”
OkIa. R. Evid. 2502(A)(5).
The privilege can only extend to communications between the following: (1)
client/representative of client and attorney/representative of attorney, (2) attorney and
representative of attorney, (3) attorney or his client and the attorney representing
another party in a pending action and concerning a matter of common interest, (4)
representatives of the client or client and another representative of the client, and (5)
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among attorneys and their representatives representing the same client. OkIa. R. Evid.
2502(B)(1)-(5).
Further, the privilege cannot extend to the following situations: (1) client sought
attorney’s aid to perpetuate fraud or crime, (2) as to a communication relevant to an
issue between parties who claim through the same deceased client, (3) communication
is relevant to issues of breach of duty by either the attorney or the client, (4) attorney is
accused of crime/fraud in relation to representation of client, (5) communication is
relevant to attested document to which attorney was attested witness, (6) as to a
communication relevant to a matter of common interest between or among two or more
clients when offered in an action between or among any of the clients, or (7)
communication between a public officer/agency and its attorney unless such
communication concerns a pending investigation, claim or action the disclosure of which
the court determines would be a serious impairment to that officer’s or agency’s ability
OkIa. R. Evid. 2502(D).
d. Pastor/parishioner
A parishioner may refuse to disclose and prevent others from disclosing confidential
communications made to a pastor acting in his professional capacity. OkIa. R. Evid.
2505(B). Communications are confidential when made privately and when not intended
for further disclosure, except to other persons present in furtherance of the purpose of
the communication. OkIa. R. Evid. 2505(A)(2). The same confidential relationship
does not exist with other professions.
e. Accountant/client
In federal court, no accountant/client privilege exists. 1 Am. Jur. 2d Accountants § 11.
Thus, a client’s disclosure of certain financial documents to his or her accountant
destroys the confidentiality of those documents. Id.
A communication between account and client is “confidential” if not intended to be
disclosed to third persons other than (1) those to whom disclosure is in furtherance of
accounting services to the client, (2) those reasonably necessary for the transmission of
the communication. Okla. R. Evid. §2502.1(A)(3). This privilege does not apply when
the accountant’s services were sought to aid in the commission of a crime (including
fraud), when the communication is relevant to an issue of breach of duty by the
accountant to the client, or when the communication is relevant to a matter of common
interest between two or more clients in a civil action between clients. Okla R. Evid.
§2502.1(D).
f. Architect/engineer — client
The Oklahoma Rules of Evidence provide that no privilege can exist unless such
privilege is provided by “constitution, statute, or rules promulgated by the Supreme
Court.” OkIa. R. Evid. 2501. Oklahoma does not appear to recognize an architect/client
or engineer/client privilege as there is no statutory, constitutional, or judicial recognition
of such a privilege.
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