FILED
                                                                    United States Court of Appeals
                                       PUBLISH                              Tenth Circuit

                     UNITED STATES COURT OF APPEALS                     September 2, 2016

                                                                       Elisabeth A. Shumaker
                           FOR THE TENTH CIRCUIT                           Clerk of Court
                       _________________________________

SUNDANCE ENERGY OKLAHOMA,
LLC, d/b/a SEO, LLC; SUNDANCE
ENERGY, INC.,

      Plaintiff Counter Defendants -
      Appellees,

v.                                                   Nos. 15-6103 & 15-6135

DAN D. DRILLING CORPORATION,

      Defendant Counterclaimant -
      Appellant.
                     _________________________________

                    Appeal from the United States District Court
                       for the Western District of Oklahoma
                            (D.C. No. 5:13-CV-00991-R)
                      _________________________________

George W. Dahnke (Sarah J. Timberlake and April B. Eberle, with him on the briefs),
Abowitz, Timberlake & Dahnke, P.C., Oklahoma City, Oklahoma, for Appellants.

Mark Blongewicz (Robert P. Fitz-Patrick and Sharon T. Thomas, with him on the brief),
Hall, Estill, Hardwick Gable, Golden & Nelson, P.C., Tulsa, Oklahoma, and Oklahoma
City, Oklahoma, for Appellees.
                        _________________________________

Before GORSUCH, PHILLIPS, and MORITZ, Circuit Judges.
                  _________________________________

MORITZ, Circuit Judge.
                    _________________________________
      Sundance Energy Oklahoma, LLC, brought suit against Dan D. Drilling

Corporation for damages resulting from the total loss of an oil and gas well. A jury

found against Dan D., and the district court denied its motion for a new trial. Dan D.

appeals, arguing the district court erred in (1) giving one jury instruction and

omitting another; (2) admitting certain evidence; and (3) awarding Sundance

attorney’s fees. Finding no reversible error, we affirm.

                                     BACKGROUND

      Sundance contracted with Dan D. to drill seven oil and gas wells in June 2012.

For each of those wells, Sundance and Dan D. executed a single-well contract

(collectively, the June 2012 contracts). The June 2012 contracts used an industry-

standard International Association of Drilling Contractors (IADC) form, with only

minor changes to the form’s language. Notably, in each of the June 2012 contracts,

the parties left section 14 of the IADC form, titled “RESPONSIBILITY FOR LOSS

OR DAMAGE, INDEMNITY, RELEASE OF LIABILITY AND ALLOCATION OF

RISK,” substantially unaltered. App. vol. 16F, 3813. In relevant part, that section

provides, “In the event the hole should be lost or damaged, [Sundance] shall be solely

responsible for such damage to or loss of the hole.” 

That section further

explains:

      [I]t is the intent of [the] parties hereto that all releases, indemnity
      obligations and/or liabilities assumed by such parties under [the] terms of
      the Contract . . . be without limit and without regard to the cause or causes
      thereof, including but not limited to . . . the negligence of any degree or
      character (regardless of whether such negligence is sole, joint or
      concurrent, active, passive or gross) of any party or parties . . . .”



                                            2


ultimately drilled only two of the seven wells due to Sundance’s

inability to secure proper leases and drilling permits for the other five. In lieu of the

undrilled wells, Sundance asked Dan D. to drill a different group of wells—including

one known as the Rother well—and hired Tres Management to provide engineering

services and an onsite supervisor known as a company man for this work. In early

December 2012, Dan D. signed a multi-well contract (the December 2012 contract)

for these new wells. And although Sundance received the signed December 2012

contract—which included terms similar to those contained in the June 2012

contracts—Sundance asserts that its in-house counsel never reviewed or signed the

contract before Dan D. began work on the Rother well.

       Despite the absence of an executed contract, Dan D. began drilling the Rother

well on December 2, 2012, under the supervision of Tres’ company man. On

December 9, 2012, Dan D.’s drill pipe became stuck in the hole. After several failed

attempts to remove the drill pipe, the company man instructed Dan D.’s employees to

stop pulling on the stuck pipe. A driller on the rig ignored these instructions and

continued to try to remove the equipment. During these attempts, the drilling line—a

thick, coiled steel rope routed through derrick and used to raise or lower the drill

string using a pulley system—parted, and portions of the drill rig known as the

traveling blocks fell on the driller, killing him. A medical examiner later determined

that the driller had significant quantities of methamphetamine in his blood at the time

of the accident.


                                            3
      The Occupational Safety and Health Administration (OSHA) suspended

operations for 12 days while it investigated the accident. In its June 19, 2014

technical report, OSHA explained that the accident resulted from fatigue failure of

the drilling line—a progressive failure occurring over time. The report concluded that

“[a] proper ‘cut and slip’ program, visual inspection and attention to the ton-mile

history of the rope would have limited the wear accumulated by this drill line.”1 App.

vol. 15B, 3469. OSHA thus issued Dan D. a citation for failing to inspect and

properly maintain the drilling line. Dan D. and OSHA settled the citation, and OSHA

reduced the fine in return for Dan D. taking corrective actions at the drill site.

      Following OSHA’s investigation, Sundance replaced Tres’ company man.

Under the new company man’s supervision, Dan D. attempted to fish out the drill

pipe stuck in the Rother well. But the wellbore had deteriorated during the 12-day

shutdown, making it impossible to remove the drill pipe. Sundance ultimately

decided to plug and abandon the Rother well, resulting in a total loss of the hole.

      Sundance sued Dan D. for damages, asserting that Dan D.’s negligence, gross

negligence, and breach of implied contract to drill the well in a workmanlike manner

resulted in the loss of the hole. Before trial, Dan D. filed several motions in limine,

including one objecting to the admission of two OSHA narratives as hearsay, and one

objecting to the admission of toxicology evidence showing that the deceased driller

had methamphetamine in his blood at the time of his death. The district court denied


      1
        Slipping and cutting is a process used to repair worn portions of the line that
is generally performed before the start of each new well.

                                            4
the motion to suppress the toxicology evidence, and denied in part the motion to

suppress the OSHA narratives, agreeing to admit only certain portions of those

documents.

       At the subsequent jury trial, Sundance offered testimony indicating that a

driller typically keeps a log of the drilling line’s “ton miles,” i.e., the work done by

the line, as measured by the load lifted in tons and the distance lifted or lowered in

miles. In fact, Sundance’s expert testified, Dan D.’s failure to track and log the ton

miles of the drilling line used at the Rother well was “unheard of” in the industry.

App. vol. 11, 2072. The expert further opined that Dan D. should have slipped and

cut the drilling line before or during the drill to prevent the accident. Sundance relied

on this testimony at closing to argue that Dan D.’s gross negligence caused the line’s

failure or, alternatively, that Dan D. breached an implied contract to drill the Rother

well in a workmanlike manner. And, Sundance maintained, the ensuing 12-day

shutdown caused the wellbore deterioration and ultimately resulted in the total loss of

the hole.

       For its part, Dan D. argued in closing that the jury should attribute most of the

fault not to Dan D., but to Tres and its company man. In any event, Dan D. asserted,

the exculpatory provisions provided in the IADC standard contract—which state that

Sundance is liable for any damage to or loss of the hole, including any loss resulting

from Dan D.’s gross negligence—formed part of an implied contract between Dan D.

and Sundance. And under these provisions, Dan D. maintained, it wasn’t liable for

the loss of the well.


                                            5
       Dan D. also argued to the district court that Sundance owed a non-delegable

duty to Dan D., and, accordingly, that any negligence of its independent contractor—

i.e., Tres—was imputable to Sundance. But when Dan D. asked the district court to

instruct the jury that it should therefore impute any of Tres’ negligence to Sundance,

the district court denied its request, noting that it “just didn’t see sufficient evidence

that this was a non-delegable duty.” App. vol. 11, 2143. And over Dan D.’s

objection, the district court instructed the jury that if it found Dan D. was grossly

negligent, the jury shouldn’t consider whether an implied contract between the

parties incorporated the exculpatory provisions of the IADC standard contract. The

district court based this instruction on its understanding that, under Oklahoma law, a

provision that ostensibly exculpates a grossly negligent party from liability is invalid

and unenforceable.

       The jury returned a verdict in favor of Sundance, finding that Dan D. was

grossly negligent and breached an implied contract to drill the hole in a workmanlike

manner. And because the jury found Dan D. grossly negligent, the jury didn’t

consider whether the implied contract incorporated the exculpatory provisions of the

IADC standard contract. Ultimately, the jury attributed 75% of the loss to Dan D.’s

negligence and 25% of the loss to Tres’ negligence and awarded Sundance $1.2

million in damages.

       Dan D. filed a motion for a new trial under Federal Rule of Civil Procedure

59(a), arguing the court erred by (1) precluding the jury from considering whether the

exculpatory provisions in the IADC form were part of the implied contract; (2) ruling


                                             6
that Sundance didn’t have a non-delegable duty to Dan D. and that Tres’ negligence

therefore wasn’t imputable to Sundance; and (3) admitting the toxicology evidence

and the OSHA narratives. The district court denied the motion and Dan D. appealed

that order.2

       Sundance then filed a motion for attorney’s fees under Okla. Stat., tit. 12,

§ 940(A), which allows a prevailing party to collect reasonable attorney’s fees in

“any civil action to recover damages for the negligent or willful injury to property.”

The district court concluded that § 940(A) applied because Sundance brought this

civil action to recover damages for Dan D.’s negligent injury to the Rother well.

Thus, the court awarded Sundance attorney’s fees. Dan D. also appealed that order,

and we consolidated the two appeals.

                                       DISCUSSION

I.     The district court didn’t err in instructing the jury.

       Dan D. first argues that the district court erred in (1) instructing the jury that it

need not decide whether the allocation of risk provisions formed part of the implied

contract if it found Dan D. was grossly negligent, and (2) refusing to instruct the jury

that it should impute Tres’ negligence to Sundance. We “review for abuse of


       2
         In its first Notice of Appeal, Dan D. indicated that it was appealing only the
district court’s order denying its motion for a new trial, rather than the district court’s
entry of judgment on the jury verdict. A notice of appeal designating a ruling on a
postjudgment motion is typically sufficient to appeal the judgment itself. See, e.g.,
Jones v. Nelson, 

, 1168 (10th Cir. 1973); Cheney v. Moler, 

, 117-18 (10th Cir. 1960). Accordingly, “we will treat this appeal as if” Dan D.
took it “from the entry of judgment on the jury verdict.” Grubb v. Fed. Deposit Ins.
Corp., 

, 1154 n.4 (10th Cir. 1989).

                                             7
discretion a district court’s decision not to give a tendered jury instruction” and

“review de novo whether the instructions as a whole accurately informed the jury of

the governing law.” Sherouse v. Ratchner, 

, 1060 (10th Cir. 2009). An

incorrect jury instruction “requires reversal, however, ‘only if the error is determined

to have been prejudicial, based on a review of the record as a whole.’” 

(quoting Durfinger v. Artiles, 

, 895 (10th Cir. 1984)).

      A.     The Gross-Negligence Instruction

      The jury found Dan D. was grossly negligent—i.e., that Dan D. failed to act

with even “slight care and diligence.” Okla. Stat. tit. 25, § 6. And the district court

instructed the jury that if it so found, it shouldn’t consider whether any implied

contract between the parties included the exculpatory provisions of the IADC form

contract. To support this instruction, the district court explained that “the last word[]

in the Oklahoma Supreme Court was that gross negligence was sufficient to vitiate an

exculpatory clause.” App. vol. 11, 2145. Dan D. disagrees, arguing that the district

court’s gross-negligence instruction was erroneous because provisions exculpating

gross negligence aren’t per se invalid under Oklahoma law. Consequently, Dan D.

argues, the district court should have granted it a new trial on this basis.

      In this diversity action, we look to the rulings of the Oklahoma Supreme Court

to determine the applicable law governing the enforceability of exculpatory

provisions, “and, if no such rulings exist, [we] must endeavor to predict how that

high court would rule.” See Johnson v. Riddle, 

, 1118 (10th Cir. 2002).

In its order denying Dan D.’s motion for a new trial, the district court relied on


                                            8
Schmidt v. United States, 

(Okla. 1996), as the most relevant case

governing exculpatory provisions in Oklahoma. There, the United States District

Court for the Western District of Oklahoma certified a question to the Oklahoma

Supreme Court regarding whether an exculpatory clause was valid and enforceable.

In answering that question, the court held in part that “exculpatory

clauses cannot relieve one from liability for fraud, willful injury, gross negligence or

violation of the law.” 

It later reiterated that an exculpatory

“clause will never avail to relieve a party from liability for intentional, willful or

fraudulent acts or gross, wanton negligence.” 

(second emphasis added).

       Despite the breadth of the Oklahoma Supreme Court’s statements in Schmidt and

their seemingly clear application to the case at hand, Dan D. insists these statements were

mere dicta because the underlying facts in the case involved ordinary (not gross)

negligence, and thus the statements weren’t essential to its holding. But in Schmidt, the

Oklahoma Supreme Court didn’t rule on the merits of the underlying case, which

arguably involved only ordinary negligence. 

. That was the task of the

Western District of Oklahoma. Instead, the Oklahoma Supreme Court answered a


       3
        Although Schmidt dealt solely with a personal injury claim, 

, rather than negligent destruction of property, Dan D. doesn’t argue that
Oklahoma law would distinguish between the two types of injuries. Moreover, in
concluding that exculpatory clauses can’t relieve one from liability for acts of gross
negligence, the Oklahoma Supreme Court cited approvingly cases that examined such
clauses in contexts outside of personal injury claims. See 

& n.15 (citing
Wolf v. Ford, 

, 528 (Md. 1994) (bad stock market investments);
Manhattan Co. v. Goldberg, 

, 174 (D.C. 1944) (loss of property)).
Accordingly, we find Schmidt informative, notwithstanding the different injuries
involved.

                                             9
certified question about the validity of exculpatory clauses under Oklahoma law

generally. Its statements that exculpatory clauses can’t relieve one from liability for gross

negligence were therefore essential to its holding in fully answering that question. Thus,

we decline to treat the statements as dicta. Moreover, even if we characterize the

Oklahoma Supreme Court’s comments as dicta, those comments are nonetheless good

indicators of “how that high court would rule.” See 

.

       Dan D. further argues that what it characterizes as Schmidt’s dicta shouldn’t

control this case because the Oklahoma Supreme Court has repeatedly used the term

“gross negligence” imprecisely—sometimes to refer to acts that are comparable to willful

conduct, and sometimes to refer to conduct that is simply a step above ordinary

negligence. Thus, Dan D. maintains, Schmidt “is unclear and not a reliable source of

Oklahoma law.” Aplt. Br. 16. But as Sundance points out, Okla. Stat., tit. 25 § 6 has long

defined gross negligence as “the want of slight care and diligence.”4 And we see no

indication that the Oklahoma Supreme Court misapplied this well-established statutory

definition when answering the certified question in Schmidt.5




       4
          This is the same standard the jury applied in the instant case. See App. vol. 4,
812 (instructing jury that “[g]ross negligence is the failure to exercise slight care and
diligence”).
        5
          The district court also relied on the Oklahoma Supreme Court’s pre-Schmidt
decision in Elsken v. Network Multi-Family Sec. Corp., 

(Okla. 1992).
There, the court noted that “[c]ourts have refused to uphold limitation of liability
clauses where the defendant’s conduct constituted gross negligence.” 

Dan. D. characterizes this remark as dicta. We need not decide what weight to give
this statement, however, because Schmidt settled any lingering questions left by
Elsken.

                                             10
       Dan D. also offers what it characterizes as multiple “[c]ompelling [r]easons” to

conclude that the Oklahoma Supreme Court wouldn’t invalidate the provisions contained

in section 14 of the IADC form contract. Aplt. Br. 16. For example, Dan D. argues that

(1) the court has routinely expressed a desire to allow parties the freedom to contract;

(2) the provisions are industry standard; (3) the exculpatory provisions run both ways;

(4) under Oklahoma law, gross negligence differs from negligence only in degree and not

in kind; and (5) the exculpatory provisions avoid lengthy and expensive litigation.

       Even if these points have some appeal, they aren’t enough to overcome Schmidt’s

clear directive. See Flores v. Monumental Life Ins. Co., 

, 1250 (10th Cir.

2010) (“As a federal court sitting in diversity, our task is ‘simply to “ascertain and

apply”’ Oklahoma law, attempting to ‘predict what the state’s highest court would do’ if

faced with the specific issues before us on appeal.” (quoting Wankier v. Crown Equip.

Corp., 

, 866 (10th Cir. 2003))). Because Schmidt controls, we decline to set

aside the jury verdict based on the gross-negligence instruction.6




       6
         Dan D. filed a motion asking this court to certify the gross-negligence
question to the Oklahoma Supreme Court. Oklahoma allows for such a procedure “if
the answer may be determinative of an issue” and “there is no controlling decision of
the Supreme Court or Court of Criminal Appeals, constitutional provision, or statute
of this state.” Okla. Stat., tit. 20, § 1602; see also 10th Cir. R. 27.2 (allowing
certification). But we have cautioned that “we apply judgment and restraint before
certifying,” and that “we will not trouble our sister state courts every time an
arguably unsettled question of state law comes across our desks.” Pino v. United
States, 

, 1236 (10th Cir. 2007). Instead, “[w]hen we see a reasonably
clear and principled course, we will seek to follow it ourselves.” 

reasons
discussed, Schmidt answered the question Dan D. seeks to certify, 

, 874, and we deny Dan D.’s motion.

                                             11
       B.     The Non-Delegable-Duty Instruction

       Dan D. proposed two jury instructions that would have directed the jury to

impute Tres’ negligence to Sundance because, Dan D. argued, Sundance owed a non-

delegable duty to Dan D. The district court disagreed that Sundance owed Dan D. a

non-delegable duty and thus declined to give the proposed instructions. Dan D.

insists the district court’s reasoning was flawed under Oklahoma law. And Dan D.

argues the district court should have thus granted it a new trial on this basis. But even

if we agree with Dan D. that the district court erred by not instructing the jury on the

non-delegable duty rule, the error didn’t prejudice Dan D. See McInnis v. Fairfield

Cmtys., Inc., 

, 1140 (10th Cir. 2006) (explaining that failure to give

jury instruction is reversible only if prejudicial).

       Sundance sought relief on two separate theories: gross negligence and breach

of implied contract. As the district court noted, the jury found for Sundance on both

claims. And the jury’s verdict for Sundance on the breach of implied contract claim

independently supports the jury’s award of damages, because under Oklahoma law

there is no reduction of damages for a breach of contract claim in light of a party’s

contributory negligence. See Okla. Stat. tit. 23, § 21 (stating that the measure of

damages for a breach of contract “is the amount which will compensate the party

aggrieved for all the detriment proximately caused thereby”); Chi., R.I. & P. Ry. Co.

v. Rogers, 

, 1133 (Okla. 1916) (explaining that contributory negligence

doesn’t apply to contractual relations); see also Fortier v. Dona Anna Plaza Partners,

, 1337 (10th Cir. 1984) (concluding that district court didn’t err in


                                            12
failing to reduce plaintiff’s breach of contract damages in light of its contributory

negligence “because contributory negligence has no place in contract and fraud

actions”).

      Accordingly, regardless of whether the jury imputed Tres’ negligence to

Sundance or if imputation might have affected the underlying negligence award, any

error in the district court’s refusal to instruct the jury that Sundance owed a non-

delegable duty to Dan D. wasn’t prejudicial because such imputation wouldn’t have

affected the breach of contract award.

      Dan D. nonetheless argues that the court’s failure to give the instruction was

prejudicial because “if the implied contract was to drill the well safely and [the

company man’s] and Tres’ actions were imputable to Sundance, then” the district

court should have instructed the jury “that such failure[s] by Sundance’s

representatives were themselves breaches of the contract, thereby precluding any

recovery on the contract claim.” Aplt. Br. 22.

      Although Dan D. challenges on appeal the gross-negligence jury instructions,

Dan D. doesn’t otherwise challenge the instructions related to the terms of the

implied contract. And the jury’s verdict in light of those unchallenged instructions

establish that the only terms of the implied contract at issue—notwithstanding the

applicability of section 14 of the IADC form—were that Dan D. would drill the

Rother well in a good and workmanlike manner and that Sundance would pay Dan D.

for its work. There is simply no basis for Dan D.’s assertion that Sundance had a duty

to drill the well safely. Thus, we disagree with Dan D.’s assertion that if the non-


                                           13
delegable duty rule applied, then the district court would have instructed the jury

“that [any] failure[s] by Sundance’s representatives were themselves breaches of the

contract.” Aplt. Br. 22. Accordingly, we also decline to set aside the jury verdict

based on the non-delegable-duty instruction.

II.   The district court didn’t err in admitting the OSHA narratives or the
      toxicology evidence.

      Dan D. next argues that the district court erred by admitting the OSHA

narratives and the toxicology evidence. “We review a district court’s rulings on

evidentiary matters and motions in limine for abuse of discretion.” Seeley v. Chase,

, 1293 (10th Cir. 2006). If the district court erroneously admitted

evidence, we will set aside a jury verdict “only if the [admission] prejudicially affects

a substantial right of a party.” 

evidence is prejudicial “if we

can reasonably conclude that without the evidence, there would have been a contrary

result.” 

v. Atl. Richfield Co., 

, 1487 (10th Cir.

1987)).

      Sundance submitted to OSHA a Freedom of Information Act request and

received two narratives relating to the accident, including one labeled “Fatality

Narrative” and one labeled “Safety Narrative.” App. vol. 14, 2708, 2718. Dan D.

argues these two narratives were inadmissible because they are untrustworthy. See

Fed. R. Evid. 803(8)(B) (stating that the rule against hearsay doesn’t exclude a record

or statement of public office unless opponent shows “that the source of information

or other circumstances indicate a lack of trustworthiness”). And Dan D. argues that



                                           14
the erroneous admission of the OSHA narratives was prejudicial because no other

admitted evidence included the derrick hand’s statements that (1) he “heard popping

noises” coming from the drilling line when the drill pipe was stuck, and (2) he told

his supervisor about those noises prior to the accident. App. vol. 14, 2716.

      The district court also admitted a medical examiner’s video deposition and his

corresponding report indicating there was methamphetamine in the deceased driller’s

blood at the time of the accident. Dan D. argues this evidence is irrelevant and

inadmissible under Federal Rule of Evidence 401 because there is no reasonable

certainty that the driller was impaired at the time of the accident and because there is

no reasonable link between the presence of methamphetamine in the driller’s blood

and the accident. Dan D. also argues that, even if relevant, this evidence is

inadmissible under Federal Rule of Evidence 403 because its probative value is

substantially outweighed by the danger of unfair prejudice; according to Dan D.,

methamphetamine use “is particularly inflammatory in today’s culture.” Aplt Br. 25.

And Dan D. argues the erroneous admission of this evidence was prejudicial because

the evidence represented the “critical tipping point” for the jury. 

to consider whether the narratives were untrustworthy under Rule

803(8)(B) or whether the methamphetamine evidence was irrelevant under Rule 401

or unduly prejudicial under Rule 403. Even if we assume the district erred in

admitting this evidence, Dan D. hasn’t established that, but for the alleged errors,

“we can reasonably conclude that . . . there would have been a contrary result” at

trial. 

(quoting 

).


                                           15
      For one, the district court also admitted into evidence both the OSHA citation

and the June 19, 2014 technical report and Dan D. doesn’t challenge their admission

on appeal. The citation indicated that Dan D. committed a “[s]erious” violation by

failing to adequately inspect and maintain the drilling line “to eliminate failure of

[the] drilling line wire rope[,] which expose[d] employees to struck-by hazards

during oil/gas drilling operations.” App. vol. 13B, 2695. Moreover, the June 19, 2014

technical report and other testimony at trial established that Dan D. failed to keep

track of the accumulated ton-miles on the drilling line, an oversight that one expert

testified was “unheard of” in the industry. App. vol. 11, 2072. And Dan D.’s own

president admitted that Dan D. failed to properly slip and cut the line. Finally,

Sundance presented evidence demonstrating that the deceased driller ignored

instructions to stop pulling on the stuck drill pipe, and that during his subsequent,

unauthorized attempts to remove the pipe, the drilling line failed.

      In short—even setting aside the OSHA narratives and toxicology evidence—

Sundance presented overwhelming evidence to the jury of Dan D.’s failure to inspect

and maintain the drilling line, and of the driller’s continued, unauthorized attempts to

free the stuck drill pipe. There is no basis for concluding that the jury would have

granted Dan D. a favorable verdict but for the admission of the OSHA narratives and

methamphetamine evidence. Thus, we decline to set aside the jury verdict based on

the admission of the OSHA narratives and the toxicology evidence.




                                           16
III.   The district court properly awarded Sundance attorney’s fees.

       Finally, Dan D. argues that the district court erred in awarding Sundance

attorney’s fees. “In diversity cases, attorney[’s] fees are a substantive matter

controlled by state law,” and “[w]e review the legal principles underlying an award

de novo.” Combs v. Shelter Mut. Ins. Co., 

, 1001 (10th Cir. 2008).

       In any civil action brought under Oklahoma law “to recover damages for the

negligent or willful injury to property and any other incidental costs related to such

action, the prevailing party shall be allowed reasonable attorney’s fees.” Okla. Stat.

tit. 12, § 940(A).7 The use of the word “shall” renders the award of attorney’s fees

mandatory when an action falls under the purview of § 940(A). See Schaeffer v.

Shaeffer, 

, 1040 (Okla. 1987).

       Sundance requested attorney’s fees under this statute, arguing that the loss of

the hole is the type of damage that squarely falls within § 940(A). Sundance

explained that § 940(A) applies to actions involving the negligent destruction of a

wellbore, relying on Parks v. American Warrior, Inc., 

(10th Cir. 1995),

Marino v. Otis Engineering Corp., 

(10th Cir. 1988), and Busby v.

Canon Well Services, Inc., 

(Okla. Civ. App. 1989). The district court

agreed, finding that the “negligent destruction of an oil and gas well falls within the




       7
         Dan D. doesn’t challenge the reasonableness of the amount awarded, but
rather only argues that Sundance wasn’t entitled to attorney’s fees in the first
instance. We thus limit our discussion to the legal question, and express no opinion
as to the reasonableness of the actual award.

                                           17
scope of § 940(A),” and that Sundance, as the prevailing party, was entitled to

attorney’s fees. App. vol. 5, 1068 (quoting 

).

      In challenging the award of attorney’s fees, Dan D. argues § 940(A) applies

only to actions involving physical damage to property, not to actions involving

“property rights” generally. Aplt. Br. 26 (quoting Woods Petrol. Corp. v. Delhi

Pipeline Corp., 

, 1012 (Okla. 1984)). Dan D. thus attempts to

distinguish the cases Sundance relies on, suggesting those case “involved claims of

damages stemming from actual physical injury to the well, namely damages to the

producing formations and reserves.” 

And “because there was no evidence

here of damage to the producing formation or loss of reserves,” Dan D. maintains

that § 940(A) doesn’t apply to the facts of this case. 

      Although we agree that Woods Petroleum made clear that § 940(A) is limited

to “actions for damages for the negligent or willful physical injury to 

, we disagree that this holding precludes attorney’s fees in this case. In

Woods Petroleum, the Oklahoma Supreme Court reversed an award of attorney’s fees

in an action involving the defendant’s negligent operation of a flow meter, which

resulted in a miscalculation of the amount of gas sold to the defendant. 

13. The Oklahoma Supreme Court held that § 940(A) didn’t apply because the

Oklahoma legislature didn’t intend that section to encompass actions involving

interference with all property rights, but rather to encompass only actions involving

“physical negligent or willful injury to property.” 

                                            18
       In that regard, Woods Petroleum’s facts are distinguishable from the facts here.

Sundance’s recovery here stemmed not from a mere interference with property rights

as in Woods Petroleum, but from the physical deterioration of the Rother well during

the 12-day OSHA investigation. This is precisely the type of “physical injury to

property” to which the Woods Petroleum court indicated § 940(A) would apply. See

       Indeed, notwithstanding Dan D.’s efforts to distinguish Marino and Busby, we

find those opinions particularly instructive. In Marino, a well owner brought an

action against the manufacturer that made and installed a “packer” device in its 

. After the device became stuck and subsequent attempts to remove

it destroyed the well, the well owner sought damages against the manufacturer. 

The jury returned a verdict for the manufacturer, which then sought

attorney’s fees under § 940(A). 

On appeal, we distinguished Woods

Petroleum, concluding that § 940(A) applied because the well owner’s alleged injury

arose from physical damage. Specifically, we explained that the plaintiff’s

“allegations center around the physical injury to property and thus fall within the

mandatory coverage of § 940(A) authorizing the recovery of attorney’s fees.” 

(emphasis added).

       Similarly, in Busby an owner of an oil and gas well hired a contractor to

fracture the well, but the contractor allegedly used the wrong chemical agent,

resulting in a total loss of the 

. The owner brought an action

for breach of contract or in the alternative negligence, but the jury found in favor of


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the contractor. 

then sought attorney’s fees under § 940(A), and on

appeal the Oklahoma Court of Appeals held that section applied. 

That

court also distinguished Woods Petroleum, explaining:

      The Woods decision did not find that oil or gas was not “property” under
      the provisions of § 940(A), but rather found that the required physical
      injury to the property was not present. In [the well owner’s] action against
      [the contractor], damages were sought for negligent destruction of the oil
      and gas well. In awarding attorney[’s] fees to [the contractor] under the
      provisions of § 940(A), the trial court was presented with actual injury to
      the property itself, and not the broader field of rights in property found to
      be outside the meaning of § 940(A) in Woods Petroleum . . . .

(emphasis added).

      Dan D. argues that these cases are distinguishable because they involved

“damages to producing formations and reserves.” Aplt. Br. 27. We disagree. In

concluding that § 940(A) applied, neither Marino nor Busby relied on whether the

producing formations and reserves sustained damage; rather, both courts looked to

whether the property at issue sustained physical injury. See 

; 

. Here, as in Marino and Busby, but unlike in

Woods Petroleum, Sundance sought damages resulting from the physical injury to an

oil and gas well: namely, the deterioration of the wellbore during the 12-day OSHA

investigation. Sundance, as the prevailing party, was thus entitled to reasonable

attorney’s fees. See 

(explaining that in case involving

negligent destruction of oil and gas well, award of attorney’s fees to prevailing party

under § 940(A) is “mandatory”).

      Affirmed.



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