Farley v. Stacy, 4:14-cv-00008

Plaintiff Michael A. Farley invested over $890,000 with defendants in 2010–2011 and alleged false promises (14% return and liquidity) that induced his investments.
Farley pleaded six claims: Securities Exchange Act violations, Oklahoma Uniform Securities Act violations, breach of contract, actual fraud, constructive fraud, and breach of fiduciary duty.
The district court granted summary judgment for defendants on all claims (some on substantive grounds, some on statute-of-limitations grounds).
Defendant Paul Ross moved for an award of prevailing-party attorney fees under Oklahoma statute 12 O.S. § 936, relying principally on Farley’s breach of contract theory (the alleged promise of returns).
The key legal question was whether this case fits within § 936’s narrowly construed categories (actions to recover for labor or services rendered, open account, note, bill, negotiable instrument, or contract for purchase/sale of goods).
The court concluded § 936 does not apply to Farley’s securities/fraud-based claims and denied Ross’s motion for attorney fees.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether § 936 authorizes prevailing-party attorney fees here	Farley’s suit arises from fraud and securities claims; attorney fees not recoverable under § 936	Ross: this is an action “to collect money promised” (the 14% return), fitting § 936’s contract categories	§ 936 does not apply; Ross is not entitled to fees under § 936

Kay v. Venezuelan Sun Oil Co., 806 P.2d 648 (Okla. 1991) (interpreting § 936 and emphasizing narrow categories to which statute applies)
Eagle Bluff, L.L.C. v. Taylor, 237 P.3d 173 (Okla. 2010) (Oklahoma courts strictly construe § 936)
Russell v. Flanagan, 544 P.2d 510 (Okla. 1975) (limiting § 936 to actions for labor or services rendered)
Ferrell Constr. Co., Inc. v. Russell Coal Co., 645 P.2d 1005 (Okla. 1982) (rejecting broad reading of § 936 where claim sought lost profits)
Holbert v. Echeverria, 744 P.2d 960 (Okla. 1987) (applicability of § 936 depends on underlying nature of suit; not for damages merely related to labor/service contracts)
ABC Coating Co., Inc. v. J. Harris & Sons Ltd., 747 P.2d 271 (Okla. 1987) (quasi-contract claims not arising directly from rendition of labor/services so § 936 inapplicable)
Morgan v. Galilean Health Enters., Inc., 977 P.2d 357 (Okla. 1998) (fee awards under § 936 must be reasonable and are within trial court’s discretion)
N. Am. Specialty Ins. Co. v. Britt Paulk Ins. Agency, Inc., 401 Fed.Appx. 341 (10th Cir. 2010) (reiterating that Oklahoma narrowly interprets § 936)