NOT DESIGNATED FOR PUBLICATION
No. 120,933
IN THE COURT OF APPEALS OF THE STATE OF KANSAS
TONN FAMILY LIMITED AGRICULTURAL PARTNERSHIP d/b/a SATCHEL CREEK RANCH,
Appellee/Cross-appellant,
v.
WESTERN AGRICULTURAL INSURANCE COMPANY,
Appellant/Cross-appellee.
MEMORANDUM OPINION
Appeal from Butler District Court; CHARLES M. HART, judge. Opinion filed March 19, 2021.
Affirmed in part, reversed in part, and remanded with directions.
Marc A. Powell, of Powell Law Office, of Wichita, for appellant/cross-appellee.
Roarke R. Gordon, Charles M. Millsap, Lyndon W. Vix, and Nathaniel T. Martens, of Fleeson,
Gooing, Coulson & Kitch, L.L.C., of Wichita, for appellee/cross-appellant.
Before BRUNS, P.J., GREEN and ATCHESON, JJ.
PER CURIAM: Western Agricultural Insurance Company (Western Ag) appeals
after a jury rendered a verdict against it in a breach of contract action brought by the
Tonn Family Limited Agriculture Partnership (Tonn Family) for the failure to pay a
claim for hail damage under the terms of a property insurance policy. The Tonn Family
also cross-appeals the district court's denial of its request for reimbursement of litigation
expenses. Because we conclude the district court erred in awarding the Tonn Family
prejudgment interest, we reverse on that issue and remand this case to the district court to
reconsider the amount of reasonable attorney fees to be awarded in light of the reduction
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in the amount of the judgment. However, we affirm the district court on all of the other
issues presented by Western Ag in its appeal as well as on the issue presented by the
Tonn Family in its cross-appeal. Finally, we award the Tonn Family reasonable attorney
fees on appeal. Thus, we affirm in part, reverse in part, and remand with directions.
FACTS
Most of the underlying facts are undisputed. In particular, the parties do not
dispute that the clay tiles on the roofs of the Tonn Family's residences and other
structures were broken or cracked. However, the parties disagree as to what caused the
damage to the roof tiles. On the one hand, the Tonn Family claims that a hailstorm caused
the damage to the clay tiles. On the other hand, Western Ag suggests that the clay tiles
were damaged by people walking on the roofs at some point in time prior to the alleged
hailstorm.
The Tonn Family has owned the Satchel Creek Ranch in Butler County since
1984. Tiya Tonn-Oppold is the general partner of the family partnership and her four
adult children are also partners. The Satchel Creek Ranch is comprised of multiple
structures. These structures include two houses—the main house that Tiya lives in and
another house in which her son Ty resides. In addition, there are two bunkhouses and a
number of other outbuildings, including two Quonset huts, a generator shed, and a horse
barn.
The roofs of the two houses and the generator shed have Ludowici clay tiles while
the roofs of the other structures are made out of a variety of roofing materials. The clay
tiles are described in the record as being historic and rare. At all times relevant to the
issues presented in this appeal, the ranch was insured under an "AgMax" Commercial
Package Policy issued by Western Ag—a Farm Bureau company—which covered the
2
buildings located on the property and their contents. Significantly, the Western Ag policy
includes coverage for losses caused by wind and hail.
Under the Western Ag policy, the insurer agreed to replace the damaged portion of
the buildings with materials "of like kind and quality," to pay the actual and necessary
amount spent to repair or replace the damaged portion of the buildings, or to pay the
policy limits. There were also various policy restrictions. These restrictions will be
discussed in the analysis portion of our opinion to the extent they are material to the
issues presented on appeal.
Although the parties dispute whether the Tonn Family's ranch suffered hail
damage, it is agreed that a "major" or "intense" thunderstorm struck Butler County on the
night of April 2, 2015, and continued into the early morning hours of April 3, 2015.
According to Tiya, she got out of bed during the middle of the night thinking that there
was a tornado. Tiya testified at trial that after she arose, she observed hail hitting the
property. In addition, Tiya's son testified that he went outside and observed golf-ball-
sized hail on the ground.
Subsequently, Tiya notified her insurance agent that the ranch had been damaged
during the storm. In response to the Tonn Family's claim, Western Ag assigned an
adjustor, Darin Messerli, to inspect the damage to the ranch. Prior to inspecting the
property, Messerli contacted Jack Burks from Eaton Roofing and asked him for
assistance. According to Messerli, he requested Burks' assistance because he was more
familiar with clay tile roofs. Also, Messerli did not want to walk on the roof himself due
to his size and the possibility of breaking the clay tiles.
On May 21, 2015, Messerli and Burks met at the Satchel Creek Ranch to evaluate
the damage allegedly caused by the storm. While Messerli looked at the interior of the
main house, Burks examined the clay tile roofs of the two residences located on the
3
ranch. Walking on the roof of the main house, Burks saw cracks in several of the clay
tiles. Unfortunately, a few of the tiles also broke while Burks was walking on the roof.
The parties dispute what Messerli and Burks told Tiya following the inspection.
However, it is undisputed that Eaton Roofing subsequently submitted an estimate to
Western Ag and the Tonn Family for the replacement of the clay tile roofs on June 8,
2015. Specifically, the estimate was in the amount of $468,453.72.
Messerli also noted leaking in a couple of locations in the main house. One of the
locations was between two dormer windows, which was near the personal property that
the Tonn Family ultimately claimed was damaged as a result of the ongoing leaking
caused by the storm. According to Messerli, he was not told about water damage to
personal property at the time he performed the inspection. However, he estimated the cost
to repair the damage that he noted in the main house to be $886.01.
Following the inspection, Messerli requested that Burks have a crew install tarping
to protect the area between the dormer windows. This involved several men walking on
the roof and removing some of the tiles in order to install a water and ice shield. Messerli
told his supervisor, Leonard Boys, about some of his concerns regarding the nature and
extent of the damage caused by the storm. As a result, Boys took over as the adjustor on
the claim and inspected the ranch on June 17, 2015.
According to Boys, he explained to Tiya and her son that Western Ag was
obligated to replace the roofs "with functionally equivalent construction using current
material and not for replacing with outdated or historic type tile." On June 22, 2015,
Eaton Roofing submitted another estimate to replace the clay tile roofs in the amount of
$230,281.27. Eaton Roofing indicated that the reason for the reduction in the estimate
was that representatives of the company had found a modern clay tile that was "exactly
like the old one."
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Tiya also sought estimates for the replacement of the tile roofs. These estimates
included one from Douglas Fry Roofing to replace the roofs for $378,963 and one from
Rhoden Roofing to replace the clay tiles for $452,436. Rhoden Roofing later submitted a
lower estimate—using modern Ludowici tiles—in the amount of $211,526.
After the second inspection, Boys researched the types of roofing materials that
may be available to replace the clay tile roofs at the ranch. In doing so, he confirmed that
the manufacture of the original clay tiles had been discontinued. However, he found that
there were a limited number of these tiles available for partial repairs. Boys also learned
that Custom Tile Roofing in Colorado had similar products available. In turn, Eaton
Roofing submitted a third estimate to Western Ag for a partial roof replacement at the
Tonn Family ranch using the similar clay tiles from Colorado in place of all of the
cracked tiles at an estimated cost of $14,628.75.
On June 23, 2015, Boys sent the Tonn Family a loss estimate for complete
replacement of the two roofs—using "like kind and quality" materials—at a cost of
$85,852.40. However, Boys indicated that this estimate was contingent on an engineer's
inspection of the property and a determination that the damage was caused by hail. In
addition, Boys sent Tiya a letter dated July 14, 2015, in which he confirmed that an
engineering inspection would be required before a final decision could be made.
Western Ag retained Jonathan S. Goode, P.E., of Haag Engineering, to perform a
forensic engineering consultation. On July 8, 2015, Goode came to Kansas to inspect the
clay tile roofs at the Tonn Family's ranch. Following his inspection, Goode issued a
report in which he opined that the clay tile roofs had not been damaged by wind or hail.
Although Goode did not deny that the roofs had been affected by hail and wind over the
years, he rendered the opinion that the damage he observed was not caused by hail of
sufficient size or density to damage the clay tiles. In his report, Goode relied—at least in
part—on a study published by his forensic engineering firm to conclude that the lateral
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fractures to the clay tiles were caused by "foot traffic" rather than by hail. Relying on
Goode's opinion, Western Ag denied the hail loss claim.
On June 10, 2016, the Tonn Family filed this action against Western Ag. In the
petition, the Tonn Family asserted claims for breach of contract and negligence.
Specifically, it alleged that Western Ag breached the terms of the insurance policy by
denying coverage for the damages allegedly caused by hail. The negligence claim was
based on a theory that Western Ag's failure to pay the claim in a timely manner resulted
in additional damages to the Tonn Family's property as well as the fact that Western Ag's
representatives were negligent when making temporary repairs. In its answer, Western
Ag denied that it had breached the terms of the insurance policy or committed any acts of
negligence. In particular, it relied on Goode's engineering report in asserting that the
damage to the clay tile roofs was not caused by hail but by people occasionally walking
on the roofs over the course of nearly 70 years.
During the pendency of this litigation, the Tonn Family hired Rhoden Roofing to
replace the clay tile roofs on the ranch at a cost of $216,000. According to Tiya, although
she wanted to preserve the historic character of the ranch by using tiles that were of like
kind, she agreed to a less expensive alternative due to financial constraints and the
uncertainty of the ongoing litigation. To pay for the replacement of the clay tile roofs, the
Tonn Family obtained a $400,000 loan. The additional amount borrowed was used to add
a three-season room onto Ty's house and is not material to the issues presented in this
appeal.
The Tonn Family retained Wes Wright, P.E., of Semke Forensic, as an
engineering consultant. Wright inspected the clay tile roofs at the ranch on June 30, 2016.
He subsequently submitted a written report in which he opined that hail had caused the
damage to both the roof on the main house and the roof on Ty's house. Wright noted that
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he also found hail damage on the fiberglass skylights on the Quonset huts, on the asphalt
roofs of the bunkhouses, and on the cedar shingle roof of the horse barn.
During the course of discovery, Western Ag retained Brian J. Heffernan, P.E., of
HDHY Engineering, Inc., to perform another inspection of the clay tile roofs at the Tonn
Family ranch. Heffernan performed his inspection on February 20, 2017, and
subsequently submitted a written report. In his report, Heffernan noted evidence of hail
damage on the metal flashings attached to the clay tile roofs, on the asphalt roofs of the
bunkhouses, and on the cedar roofs on the horse barn. Nevertheless, he opined that most
of the damage was due to foot traffic over the years and not due to a specific event such
as a hailstorm.
In preparation for trial in 2017, Tiya answered written interrogatories on behalf of
the Tonn Family. In doing so, she stated that certain personal property had been damaged
by water leaks caused by the storm in April 2015. Tiya was also questioned about the
personal property damage claim in her deposition but was unable to give specifics at that
time regarding what items were damaged. In the agreed pretrial order submitted by the
parties and entered by the district court on March 8, 2018, the Tonn Family included a
claim for "Personal Property" in the amount of $25,000.
Prior to trial, the parties filed several motions. Significant to this appeal, Western
Ag filed a motion in limine to exclude the expert testimony of the Tonn Family's
engineering expert. In the motion to exclude, Western Ag alleged that Wright did not
have "the requisite knowledge and training on this subject matter to provide admissible
opinions to a jury on the differences between hail damaged tiles and foot damaged tiles."
The district court held a hearing and denied the motion.
The district court commenced a four-day jury trial on April 24, 2018. At trial, the
Tonn Family presented the testimony of seven witnesses, including Tiya, Ty, Wright, and
7
Rhoden. In its defense, Western Ag presented the testimony of nine witnesses, including
Goode, Messerli, Heffernan, and Boys. Over the course of the jury trial, more than 100
exhibits were admitted into evidence. After deliberation, the jury unanimously found in
favor of the Tonn Family and awarded $514,780 in damages for breach of contract and
$50,000 in damages for negligence. After the trial, the Tonn Family agreed that the
$50,000 award was duplicative, and the district court reduced the amount of the verdict
accordingly.
The parties also filed various posttrial motions. In particular, the Tonn Family
filed a motion for prejudgment interest and a motion for attorney fees. Western Ag filed a
motion for a new trial and a motion to alter or reduce the amount of the judgment.
Ultimately, the district court awarded the Tonn Family prejudgment interest in the
amount of $145,822.30 and attorney fees in the amount of $378,818.27 plus $1,650.42
for court costs. However, the district court did not allow the Tonn Family to recover its
expert witness fees.
On February 2, 2019, Western Ag filed its initial notice of appeal, which it labeled
as premature. At the time the notice was filed, the Tonn Family's motion for attorney fees
and expenses was still pending before the district court. On March 14, 2019, the district
court entered a journal entry resolving the remaining posttrial issues. The next day,
Western Ag filed an "[u]pdated" notice of appeal. This notice referenced the rulings as set
forth in the original notice of appeal as well as a new issue relating to the district court's
ruling on attorney fees and expenses. Western Ag filed a docketing statement on March
21, 2019. Furthermore, the Tonn Family filed a cross-appeal from the district court's
denial of its request for expenses on March 28, 2019.
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ANALYSIS
Docketing of Appeal Out-of-Time
At the outset, we note that the Tonn Family challenges this court's jurisdiction
over the issues arising out of the trial. Specifically, the Tonn Family contends that
Western Ag "abandoned" its right to challenge any issue other than the issue of attorney
fees, expenses, and costs. In support of this contention, the Tonn Family argues that
Western Ag failed to properly perfect the initial appeal because it did not file a docketing
statement with our court within 21 days following the filing of its first notice of appeal.
Upon scrutinizing the record on appeal, we find the Tonn Family's jurisdictional
argument to be misplaced.
A review of the record reveals that the district court memorialized the verdict of
the jury in a journal entry filed on August 8, 2018. Subsequently, Western Ag filed timely
posttrial motions that stopped the appeal time from running. See State v. Swafford, 306
Kan. 537, 540, 394 P.3d 1188 (2017). On February 2, 2019, Western Ag filed a timely
notice of appeal following the district court's denial of its posttrial motions. In its initial
notice of appeal—which Western Ag labeled as "premature"—Western Ag appealed
from the district court's pretrial ruling on its motion to exclude the Tonn Family's expert
witness as well as from certain rulings made during the trial and the award of
prejudgment interest. In addition to appealing from the journal entry entered by the
district court on August 8, 2018, Western Ag also appealed from the district court's
rulings on posttrial issues on January 4, 2019.
Western Ag asserts that it did not file a docketing statement within 21 days after
the filing of its initial notice of appeal because the district court had not yet ruled on the
Tonn Family's pending motion for attorney fees and costs. Nevertheless, on March 15,
2019—the day after the district court entered its journal entry on the outstanding motion
9
for attorney fees and costs—Western Ag filed an "[u]pdated" notice of appeal. In addition
to appealing from the district court's ruling on the motion for attorney fees and costs, the
second notice of appeal included all of the challenged rulings raised in the initial notice.
Six days later, on March 21, 2019, Western Ag filed its docketing statement.
Prior to this court receiving the record on appeal, the parties raised the issue of
appellate jurisdiction to the motions panel. On March 4, 2020, our motions panel issued
an order, limiting the issues on appeal. However, after reviewing the record on appeal—
which was filed on November 6, 2020—as well as the briefs filed by the parties, our
motions panel determined that its order limiting the issues on appeal had been
improvidently entered. As a result, our motions panel issued an order on February 3,
2021, withdrawing its previous order and deferring the jurisdictional issue to this panel
for resolution.
It is important to recognize that the "obligation to timely docket an appeal arises
from an appellate rule of this court rather than a statutory mandate." Fowler v. State, 37
Kan. App. 2d 477, 480, 154 P.3d 550 (2007). Likewise, K.S.A. 2020 Supp. 60-2103(a)
provides that an appellant's failure "to take any of the further steps to secure the review of
judgment appealed from [after the filing of a notice of appeal] does not affect the validity
of the appeal" but instead may result in whatever remedy the appellate court "deems
appropriate" under the circumstances presented.
We note that Kansas Supreme Court Rules 2.04(a)(1) (2018 Kan. S. Ct. R. 15) and
2.041(a) (2018 Kan. S. Ct. R. 17) were applicable at the time Western Ag filed its notices
of appeal in this case. These rules provided that an appellant had 21 days to file a
docketing statement with the Clerk of the Appellate Courts after the filing of a notice of
appeal. Under the current rule that went into effect shortly after this appeal was docketed,
an appellant now has 60 days from the filing of the notice of appeal to file a docketing
statement. See Kansas Supreme Court Rule 2.04(a)(1) (2020 Kan. S. Ct. R. 15).
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Although the Tonn Family cites us to the case of Snodgrass v. State Farm Mut.
Auto. Ins. Co., 246 Kan. 371, 789 P.2d 211 (1990), in support of its position, we find it to
be distinguishable from the present case. In Snodgrass, the Kansas Supreme Court held
that a request for statutory or contractual attorney fees typically does not prevent a
judgment on the underlying merits from becoming a final and appealable order. In other
words, an outstanding motion for attorney fees does not toll the time for appeal. 246 Kan.
at 374. Here, of course, Western Ag did file timely notices of appeal from both the merits
judgment and from the ruling on attorney fees and costs.
Unfortunately, Western Ag created unnecessary confusion by labeling its first
notice of appeal as "premature" when in fact it was a timely notice as to the judgment on
the merits as well as pretrial and trial issues. Regardless, we do not find this to be an issue
of appellate jurisdiction. See Adams v. St. Francis Regional Med. Center, 264 Kan. 144,
151, 955 P.2d 1169 (1998). Instead, it is an issue of failing to comply with appellate court
rules governing procedure. Because the obligation to file a timely docketing statement
arises under our court rules, we exercise discretion in applying the rules as appropriate in
this case. See Fowler, 37 Kan. App. 2d at 480-81.
As recognized in Carson v. Eberth, 3 Kan. App. 2d 183, 185, 592 P.2d 113
(1979), where an appellant fails to file a docketing statement in a timely manner, the
appropriate remedy is for the appellee to file a motion to dismiss the appeal under Kansas
Supreme Court Rule 5.05. In this case, the Tonn Family did not file a motion to dismiss
the appeal but instead waited until filing its appellate brief before raising this issue.
Consequently, both parties failed to comply with the appellate court rules relating to the
procedure.
As noted above, the remedy to impose for failing to file a timely docketing
statement is discretionary. See Vorhees v. Baltazar, 283 Kan. 389, 393, 153 P.3d 1227
(2007). Further, in exercising our discretion, we must keep in mind that the law favors the
11
resolution of legal disputes on the merits. See McDaniel v. Southwestern Bell, Inc., 45
Kan. App. 2d 805, 809, 256 P.3d 872 (2011). Here, we find that Western Ag filed two
timely notices of appeal based on the dates in which the respective judgments were
entered by the district court. See K.S.A. 2020 Supp. 60-2103(a). Ultimately, Western Ag
filed its docketing statement six days after filing its second or "[u]pdated" notice of
appeal and 47 days after the initial notice of appeal was filed.
Under the circumstances presented, we do not find that Western Ag's failure to file
a docketing statement within 21 days after the filing of the first notice of appeal to be
prejudicial to the Tonn Family. Rather, we find that both parties have submitted briefs
addressing the merits of the issues presented in the docketing statement. Thus, we
exercise our discretion to address the issues presented by the parties on the merits.
Motion in Limine to Exclude Expert Testimony
Turning to the merits, we will first address the only issue involving a potential trial
error: whether the district court erred in failing to exclude the testimony of the Tonn
Family's engineering expert witness. Western Ag contends that the district court should
not have allowed the Tonn Family's engineering expert to testify at trial regarding his
opinions as to the cause of the damage to the clay tiles on the roofs of various structures
on the ranch. In particular, Western Ag argues that the Tonn Family's engineering expert
failed to meet the standards for expert witnesses set forth in Daubert v. Merrell Dow
Pharmaceuticals, Inc., 509 U.S. 579, 113 S. Ct. 2786, 125 L. Ed. 2d 469 (1993). In
response, the Tonn Family argues that the district court did not abuse its discretion
because their engineering expert based his opinions on his educational background and
on his experience as a civil engineer as well as on his visual inspection of the damaged
clay tiles.
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Our standard of review on appeal is mixed. We first examine the record to
determine whether the district court properly performed its gatekeeping role and applied
the proper standard in admitting expert testimony. Because these determinations involve
questions of law, our review is unlimited. See Smart v. BNSF Railway Co., 52 Kan. App.
2d 486, 493, 369 P.3d 966 (2016). After this determination is made, we then turn to the
question of whether the district court abused its discretion in admitting the expert
testimony at trial. 52 Kan. App. 2d at 493-94; see In re Care & Treatment of Cone, 309
Kan. 321, 325, 435 P.3d 45 (2019). A judicial action constitutes an abuse of discretion
only if (1) it is arbitrary, fanciful, or unreasonable; (2) it is based on an error of law; or
(3) it is based on an error of fact. Biglow v. Eidenberg, 308 Kan. 873, 893, 424 P.3d 515
(2018).
The 2014 Kansas Legislature amended K.S.A. 60-456 through K.S.A. 60-458. In
doing so, our Legislature effectively abrogated the long-held reliance by Kansas courts
on the test for admissibility of scientific evidence under the test first articulated in Frye v.
United States, 293 F. 1013 (D.C. Cir. 1923). As a result, Kansas courts now apply a test
based upon the principles of Daubert and consistent with Federal Rule of Evidence 702.
See In re Care & Treatment of Cone, 309 Kan. at 325-26.
K.S.A. 2020 Supp. 60-456(b) provides:
"If scientific, technical or other specialized knowledge will help the trier of fact
to understand the evidence or to determine a fact in issue, a witness who is qualified as an
expert by knowledge, skill, experience, training or education may testify thereto in the
form of an opinion or otherwise if: (1) The testimony is based on sufficient facts or data;
(2) the testimony is the product of reliable principles and methods; and (3) the witness
has reliably applied the principles and methods to the facts of the case."
In other words, a district court has the discretion to admit a qualified expert to
testify on subjects involving specialized knowledge if such testimony assists the trier of
13
fact in either understanding the evidence presented at trial or in resolving an issue of fact.
To determine if an expert is qualified, the district court should look at such things as the
witness' knowledge, training, or education. Likewise, the district court must determine if
the proposed testimony is founded on sufficient information, based on reliable methods
as applied to the facts of the particular case.
Some of the factors to which a district court may look in examining reliability of
the principles and methods used by an expert witness in rendering his or her opinions
include: (1) whether the theory has been tested; (2) whether the theory has been subject
to peer review and publication; (3) the known or potential rate of error associated with
the theory; and (4) whether the theory has attained widespread or general acceptance.
Daubert, 509 U.S. at 592-94. Although these four factors may be helpful to a district
court in performing its gatekeeping duty, they are not a definitive checklist or test.
Depending on the specific facts and issues presented, a district court may focus on such
things as the expert's personal knowledge or experience. See Smart, 52 Kan. App. 2d at
495 (citing Kumho Tire Co. v. Carmichael, 526 U.S. 137, 150, 119 S. Ct. 1167, 143 L.
Ed. 2d 238 [1999]) (expanding the Daubert inquiry to cover expert testimony that is not
purely scientific in nature).
Accordingly, the district court must make two fundamental decisions: (1) whether
the expert is qualified by knowledge, skill, experience, training, or education to render an
opinion; and (2) whether the proposed expert testimony is reliable and relevant so that it
will assist the trier of fact. Smart, 52 Kan. App. 2d 486, Syl. ¶ 7. The district court
satisfies its gatekeeper role by "reading the briefs on the motion to strike, conducting a
hearing, and ruling on the reliability of the challenged testimony." Smart, 52 Kan. 2d at
493. As this court has previously found, "The purpose of the reliability determination is
not to decide whether the expert's conclusions are correct but whether the analysis used to
reach them is reliable." 52 Kan. App. 2d at 495. On appeal, our review of a district court's
14
determination "begins with understanding whether an expert is basing his or her
testimony on scientific theory, or, rather, on experience." 52 Kan. App. 2d at 495.
Here, Western Ag asserts that Wright was not qualified to render expert opinions
at trial because "he never had a specific course or training in hail damages." Western Ag
also argues that Wright was "unable" to answer certain hypothetical questions posed by
defense counsel during his deposition and was unable to point to any specific articles
regarding what to look for in determining whether clay tiles were damaged by hail.
Rather, Wright relied upon his education, experience, and his visual inspection of the
roofs at the ranch.
Western Ag suggests that visual examination is not a principle or method to
distinguish the difference between damage caused by foot traffic on the roofs versus the
damage caused by hail. However, Western Ag overlooks the Kumho Tire case, which was
decided by the United States Supreme Court six years after Daubert. As indicated above,
Kumho Tire expanded the Daubert inquiry to cover expert testimony that is not purely
scientific in nature. See United States v. Medina-Copete, 757 F.3d 1092, 1101 (10th Cir.
2014).
As the Honorable J. Thomas Marten explained in Seifert v. Unified Government of
Wyandotte County, No. 11-2327-JTM, 2016 WL 107932, at *2 (D. Kan. 2016):
"[A]n expert may be qualified to render opinions based on experience alone.
[Kumho Tire, 526 U.S. 137.] See Bitler v. A.O. Smith Corp., 400 F.3d 1227, 1235 (10th
Cir. 2004). To the extent a witness is relying primarily on experience, he or she 'must
explain how that experience leads to the conclusion reached, why that experience is a
sufficient basis for the opinion, and how that experience is reliably applied to the facts.'
United States v. Frazier, 387 F.3d 1244, 1261 (11th Cir. 2004)."
15
Although the proponent of expert testimony bears the burden of showing that it is
admissible, the exclusion of expert testimony is the exception rather than the rule. See
Smart, 52 Kan. App. 2d at 496; see also Conroy v. Vilsack, 707 F.3d 1163, 1168 (10th
Cir. 2013); Fed. R. Evid. 702 advisory committee's note to 2000 amendments. In Smart,
this court found that Kumho Tire "teaches that Daubert is not talismanic; it simply means
that prior to admitting expert testimony, the court must ensure the testimony "'is not only
relevant, but reliable."'" Smart, 52 Kan. App. 2d at 493 (quoting Kumho Tire, 526 U.S. at
147). "'The objective of that requirement . . . is to make certain that an expert, whether
basing testimony upon professional studies or personal experience, employs in the
courtroom the same level of intellectual rigor that characterizes the practice of an expert
in the relevant field.'" Smart, 52 Kan. App. 2d at 496.
In this case, after being retained by the Tonn Family, Wright travelled to the ranch
to perform a visual inspection. In his opinion, several of the roofs on the ranch—
including both of the clay tile roofs—showed signs of hail damage. We pause to note that
one of Western Ag's expert witnesses agreed that the roofs of the bunkhouses had been
damaged by hail and that the cedar shingles on the horse barn also showed signs of hail
damage. Following his inspection of the structures at the ranch, Wright prepared a report
setting forth his opinions.
In his report, he identified various factors that he considered when inspecting the
clay tiles and in determining the cause of damage. In addition, Wright explained in his
deposition that in forming his opinions, he examined "the roof slopes, the orientation of
the roof slopes, [and] the condition of the various materials." He further explained in a
supporting affidavit filed in response to Western Ag's motion to strike that he also
considered the material properties of the clay tiles, the installation method of the tiles, the
decking material used to support the tiles, the material used to fasten the tile to the
decking, and the historical exposure to the elements based on weather reports.
16
At trial, Wright testified consistent with the opinions expressed in his report, in his
deposition, and in his supporting affidavit. He also explained that he was unable to
answer the hypotheticals posed to him by counsel for Western Ag because he believed he
had not been supplied with "all of the pertinent . . . evidence to form an opinion on." It
was then left to the jury to determine the weight to give to Wright's testimony as well as
to the testimony of Western Ag's expert witnesses.
It does not appear that Western Ag is challenging Wright's education, professional
credentials, or experience. Even if it were, we note from a review of the record that
Wright is a well-qualified civil engineer and is licensed as a professional engineer in
Kansas as well as in several surrounding states. Moreover, it is undisputed that he visited
the Tonn Family's ranch and personally inspected the damage on the clay tiles of the
roofs prior to providing his opinion as to causation.
Based on our review of the record, we find that the district court appropriately
applied the law and performed its gatekeeping duty as required by K.S.A. 2020 Supp. 60-
456(b). We also find that the district court's conclusions regarding its pretrial ruling are
supported by substantial competent evidence in the record. In addition to the information
gleaned by Wright in performing an inspection of the roofs, his opinions were also
supported by weather reports as well as testimony regarding his professional experience.
At trial, Wright testified that the method he employed to determine the nature and
extent of the damage to the roofing materials was to perform an up-close visual
inspection. In turn, Wright explained that he used his education as a civil engineer and
experience in materials research as well as forensic investigations to render his opinions.
In particular, Wright testified that he considered the material properties of the clay tiles
and accounted for various factors such as the style of the clay tile, the original
installation, the decking material, the fastener type, the age of the roofs, and the location
of impact damage observed on each tile. He also testified that he considered the historical
17
weather exposure as well as weather reports for the dates on which the hail damage
allegedly occurred.
We do not find that Wright's methodology was outside the realm of the reliability
required by K.S.A. 2020 Supp. 60-456(b) for an expert to be allowed to render opinion
testimony at trial. Rather, we find the methodology used by Wright to be similar—if not
identical—to that used by other experts in cases involving hail damage. See, e.g., Bureau
v. State Farm Fire and Cas. Co., 129 Fed. Appx. 972, 974-77 (6th Cir. 2005)
(unpublished opinion) (rejecting insurer's Daubert challenge based on argument that the
expert's "visual inspection of the roof was insufficient to allow him to testify as an expert
on structural engineering issues"); Royale Green Condo Ass'n, Inc. v. Aspen Spec. Ins.
Co., No. 07-21404-CIV, 2008 WL 2397623, at *2 (S.D. Fla. 2008) (unpublished opinion)
(denying insurer's Daubert motion where expert had visually inspected roof).
The record reflects that Wright used his professional training and experience to
evaluate what he personally observed during his visual inspection of the roofs. The only
significant difference between the methodology used by Wright and Western Ag's
featured expert is that Goode relied on a study conducted by Haag Engineering, who is
his employer. Heffernan also testified that he was familiar with the Haag Engineering
study. However, the methodology described by all three experts was similar. Consistent
with Wright's explained methodology, both Goode and Heffernan explained that they
essentially relied on the totality of their observations in determining whether a clay tile
had been damaged by hail. Although we take no position on the accuracy of the study
conducted by Haag Engineering, we do note that one might question the objectivity of
relying on such a report under these circumstances. At the very least, Wright was under
no obligation to concur with the Haag study.
According to the Haag Engineering study, clay tiles can only be fractured by hail
that is approximately 1.5 inches or larger in diameter and of a sufficient density. The
18
study contains a number of photographs illustrating what was referred to in this case as
"radial," "emanating," or "starburst" fractures to clay tiles.
Relying on the study—as well as upon his own professional training and
experience—Goode rendered the opinion at trial that hail damage on clay tiles is
evidenced by "radial" fractures while the damage he observed on the roofs at the Tonn
Family's ranch appeared to be mostly "linear" or "horizontal" in nature. As a result,
Goode opined that the damage on the roofs at the ranch was caused by "foot traffic" and
not by hail. Interestingly, Goode admitted during cross-examination that a photograph he
produced that purportedly showed an example of a clay tile roof damaged by hail actually
depicted "lateral" factures and not "radial" fractures. In fact, Goode agreed that there
were "linear factures all over that photo."
On the other hand, Wright explained in his deposition—and again at trial—that he
did not agree with the opinion stated in the Haag Engineering article because the testing
performed did not replicate actual field conditions. He also opined that the Haag
Engineering study was not performed in accordance with ASTM International—formerly
known as the American Society for Testing and Materials—standards. In contrast to
Goode, Wright rendered the opinion that the shape of the clay tile on the roofs at the
Tonn Family ranch—as well as the points of impact of the hail during the storm—caused
the resulting fracture. In addition, Wright opined that there is no such thing as "generic
hail damage to any roofing material due to the variables in size, shape, and density of the
impacting hail stones."
We do not find Wright's reluctance to rely on the Haag Engineering study to
disqualify him from testifying as an expert at trial. Wright testified that in his
professional opinion the study did not accurately reflect field conditions and was not
conducted in accordance with industry standards. We note that Western Ag's other
expert, Heffernan, testified that "it's not just about the fracture pattern of the tile, itself.
19
You need to look at the frequency of those fractures and how they're occurring as a
pattern across the whole roof." Similarly, Goode himself testified that his methodology
included letting "the building tell the entire story" and considering how the entire roof
system could have been affected by a storm event.
Likewise, we do not find that the questions raised by Western Ag undermine the
district court's decision to allow Wright to testify as an expert but rather show potential
areas for cross-examination. See Cummings v. Standard Register Co., 265 F.3d 56, 64-65
(1st Cir. 2001) ("shortcomings" in an expert's calculations affected weight and
credibility); United States v. 0.161 Acres of Land, 837 F.2d 1036, 1040-41 (11th Cir.
1988) (deficiencies in the methodology used by an expert as the basis for the expert's
opinion affected the weight and not the admissibility of the expert's opinion); Simmerman
v. Ace Bayou Corp., No. 5:14-382-DCR, 2016 WL 540873, at *8 (E.D. Ky. 2016)
(unpublished opinion) (plaintiffs demonstrated potential areas for cross-examination but
did not demonstrate that the expert's methods were unreliable).
In Lundeen v. Lentell, No. 114,494, 2017 WL 2833984, at *10 (Kan. App. 2017)
(unpublished opinion), a panel of this court rejected the defendant's attempt to exclude
the expert opinion of the plaintiff's expert, Dr. Eric Colton. In doing so, this court found:
"Much of Dr. Lentell's argument on this issue consists of attacks on the specific
testimony given by Dr. Colton rather than showing how the trial court erred in applying
the Daubert principles in this case. Lundeen does not need to prove that Dr. Colton was
indisputably correct or even that his theory is 'generally accepted' by his scientific
community. She merely needed to show that Dr. Colton's method used in reaching his
opinions was scientifically sound and that his opinions were based on the facts of the
case. See Mitchell v. Gencorp Inc., 165 F.3d 778, 781-82 (10th Cir. 1999). Even though
Daubert requires the trial court to act as a gatekeeper to expert testimony, it is not meant
to replace '[v]igorous cross-examination, presentation of contrary evidence, and careful
instruction on the burden of proof' as the traditional means of attacking evidence.
[Daubert,] 509 U.S. at 596." 2017 WL 2833984, at *10.
20
Here, Western Ag was allowed to vigorously cross-examine Wright, argue against
the weight of his opinions, and present contrary opinions in support of its defense.
Moreover, a review of the record reveals that the jury was properly instructed regarding
the Tonn's Family burden of proof at trial. As counsel for Western Ag recognized during
closing arguments to the jury:
"[Y]ou can compare how a witness testifies on the stand. Who gave you more
confidence? Mr. Goode, who is from Haag; who answered the questions 'yes' or 'no;' said
he found small hail . . . which maybe is not a big deal? What's more important is how he
testifies and what he knows versus Mr. Wright who didn't know very much. That's for
your decision."
Indeed, it was ultimately the jury's decision to determine which expert witness and
opinions it should give more weight to based on the evidence admitted at trial.
In summary, "The purpose of the reliability determination is not to decide whether
the expert's conclusions are correct but whether the analysis used to reach them is
reliable." Smart, 52 Kan. App. 2d at 495. The law grants a district court broad latitude
when it decides how to determine reliability. 52 Kan. App. 2d at 496. It is the district
court's duty to ensure that an expert witness—whether basing his or her opinions on
professional studies or personal experience—uses the type of intellectual rigor that
characterizes the practice of the expert's field of study. Kumho Tire, 526 U.S. at 152.
Here, we find the record on appeal shows that the district court considered the
appropriate factors and acted within its discretion to allow Wright to testify as an expert
witness at trial. Consequently, we conclude that the district court did not err in ruling that
he was qualified as an expert under K.S.A. 2020 Supp. 60-456(b).
21
Amount of Recoverable Damages
Next, Western Ag contends that a provision in the insurance policy it issued to the
Tonn Family limits the amount of recoverable damages to the amount actually spent for
repairs. In response, the Tonn Family contends that Western Ag did not preserve this
defense in the agreed pretrial order or otherwise preserve it at trial. Moreover, the Tonn
Family asserts that it contracted with Western Ag for the replacement value of the
historic clay tiles "with material of like kind and quality" and that the insurance carrier
should not be able to use its own breach of contract in an attempt to reduce its liability.
On appeal, we exercise unlimited review over the interpretation and legal effect of
written instruments including insurance policies. Miller v. Westport Insurance Corp., 288
Kan. 27, Syl. ¶ 2, 200 P.3d 419 (2009). Moreover, "[A] presumption of validity attaches
to a judgment of the district court until the contrary is shown." First Nat'l Bank & Trust
Co. v. Lygrisse, 231 Kan. 595, 602, 647 P.2d 1268 (1982). As such, we are not to set
aside a judgment unless it is "affirmatively made to appear that such judgment is
erroneous." Lygrisse, 231 Kan. at 602.
At the outset, we find it significant that Western Ag did not assert this issue during
discovery, it did not preserve it in the agreed pretrial order, and it did not raise it during
the trial. Instead, even though Western Ag knew the damages that the Tonn Family was
seeking well in advance of trial, it waited until after the jury's verdict to bring this issue to
the district court's attention for the first time.
The record shows that the parties submitted an agreed pretrial order that was
entered by the district court on March 8, 2018. In the agreed pretrial order, the Tonn
Family asserted a claim to replace the "historical tiles" in the amount of $452,436. In
addition, the Tonn Family asserted that it "only selected the 'modern' version of the tiles
due to the uncertainty of litigation." In its contentions, Western Ag asserted that the roofs
22
at the ranch were not damaged by wind or hail and, as such, were not covered by the
terms of the insurance policy. Likewise, Western Ag identified only two questions of law
in the agreed pretrial order—one relating to whether the Tonn Family's expert should be
stricken and the other relating to whether the Tonn Family could recover on its
negligence claim.
Throughout this case, the Tonn Family consistently claimed that it was entitled to
replacement cost of the value of the historic version of the clay tiles. However, at no
point prior to the jury's verdict being rendered did Western Ag assert that the damages—
if any—to be awarded should be capped at $216,000. Even at trial, Western Ag did not
object to the jury instruction stating that the Tonn Family was seeking $452,000 in
damages to replace the roofs on the main dwelling and Ty's house. As indicated above, it
was only after the jury had awarded the Tonn Family the full replacement cost that
Western Ag raised this issue for the first time in its motion to alter or amend.
We conclude that the district court did not err in denying Western's Ag's motion to
alter or amend the judgment based in part on Western Ag's failure to raise this issue until
after the jury verdict. Consistent with K.S.A. 2020 Supp. 60-216(d), the agreed pretrial
order entered by the district court stated that it "supersedes all pleadings and shall control
the trial of this matter." It is well-settled that "a trial court should not entertain an issue or
claim that is omitted from the pretrial order." Bussman v. Safeco Insurance Co. of
America, 298 Kan. 700, 708, 317 P.3d 70 (2014). The purpose of this rule is to eliminate
surprise at trial by fully disclosing to all parties the anticipated evidence and legal issues.
298 Kan. at 708. In other words, failure to include a defense in the pretrial order—unless
modified by agreement of the parties or by subsequent order of the district court—
precludes its consideration later in the proceedings. See Smith v. Oliver Heights, 49 Kan.
App. 2d 384, 391-92, 311 P.3d 1139 (2013); see also Parlett v. Bradford, No. 111,564,
2015 WL 717905, at *4 (Kan. App. 2015) (unpublished opinion).
23
Furthermore, "[I]t is proper for a district court to deny a motion to alter or amend
if the movant could have—with reasonable diligence—presented the argument or
evidence before the entry of the final order." Ross-Williams v. Bennett, 55 Kan. App. 2d
524, 564, 419 P.3d 608 (2018).
We do not find the cases cited by Western Ag in an attempt to avoid the
consequences of its failure to raise this issue until after the jury trial to be persuasive. We
note that unlike this case, Estes v. State Farm Fire & Casualty Co., 358 N.W.2d 123
(Minn. App. 1984), involved a trial to the court on stipulated facts and that the alleged
limitation on the amount of the award was an issue presented at trial. Moreover, in State
Farm Fire & Casualty Co. v. Patrick, 647 So. 2d 983 (Fla. App. 1994), the replacement
cost issue was raised in a motion for summary judgment filed prior to trial.
Similarly, in Huggins v. Hanover Ins. Co., 423 So. 2d 147 (Ala. 1982), the issue of
whether the terms of the insurance policy limited the amount of recovery was presented
at trial. Also, in Weidman v. Erie Ins. Group, 745 N.E.2d 292 (Ind. App. 2001), the issue
of damages that could be recovered under the terms of an insurance policy was raised by
the insurance company prior to trial. Likewise, in Parks v. Safeco Insurance Company,
160 Idaho 556, 376 P.3d 760 (2016), the limits of the policy were brought up in a motion
for summary judgment.
In this case, Western Ag could have easily presented this issue by way of a
summary judgment motion or a motion for determination of a question of law prior to
trial. It also could have preserved this issue by raising it in the agreed pretrial order as an
alternative defense or as a question of law to be determined by the district court. Even at
trial, Western Ag could have requested that the district court amend the agreed pretrial
order to allow it to assert its defense. However, Western Ag did none of these things.
Instead, it decided to defend this case on the theory that the historic clay tiles were
24
damaged by foot traffic on the roofs that occurred over a long period of time rather than
by hail.
Even if we were to address the merits of Western Ag's argument, we do not find
the policy language in question to provide the relief that the insurance company has
belatedly requested. In particular, we note that Western Ag points us to the following
language in the "Farm Property—Farm Dwellings" section of the insurance policy issued
to the Tonn Family:
"LOSS, CONDITION—VALUATION:
"1. Property
....
"b. If the Limit of insurance on the damaged structure is at least 80% of its full
replacement cost as of the time of loss, we will settle the loss based on the smallest of the
following amounts:
"(1) The cost to replace the damaged part of the structure with material of like
kind and quality and for like use;
"(2) The amount actually and necessarily spent to repair or replace the structure;
or
"(3) The actual limit of insurance." (Emphasis added.)
Of course, Western Ag did not "settle the loss" that the Tonn Family claimed was
caused by the hailstorm in April 2015. Instead, it denied the claim and the Tonn Family
filed this lawsuit for breach of the insurance contract. The types of damages recoverable
in a breach of contract action include all of the consequential damages that arise from the
breach of contract, and those damages may exceed policy limits if the insured can show
"the excess judgment is traceable to the insurer's conduct." Gruber v. Estate of Marshall,
59 Kan. App. 2d ___, 2021 WL 219229, at *11 (Kan. App. 2021); see Neighbors
Construction Co. v. Woodland Park at Soldier Creek, 48 Kan. App. 2d 33, 55, 284 P.3d
1057 (2012). In Kansas, "[F]undamental fairness" requires that those who fail to perform
25
under an obligation agreed upon by the parties "'cannot take advantage of the failure.'"
Davis v. Key Gas Corp., 34 Kan. App. 2d 728, 739, 124 P.3d 96 (2005).
We also find guidance in the case Dupre v. Allstate Ins. Co., 62 P.3d 1024, 1032
(Col. App. 2002), in which the Colorado Court of Appeals held that an "actually and
necessarily spent" limitation in an insurance policy similar to the one relied on by
Western Ag in this case could not be used by an insurer to reduce its liability after
denying a claim. The Colorado court found that the case did not present a situation
"where plaintiff elected to spend less than the amount offered by the insurer." 62 P.3d at
1032. Instead, it was the insurance carrier's breach of contract that caused the plaintiff to
make the necessary repairs to her property. Appropriately, the Colorado court concluded
it was improper to allow the insurance carrier to "rely on circumstances resulting from its
own actions to deny coverage." 62 P.3d at 1032. For the same reason, we find that
Western Ag should not be able to take advange of its own breach of contract in order to
avoid otherwise recoverable damages for breach of contract.
In summary, we find that Western Ag failed to raise this issue by way of a pretrial
motion, in the agreed pretrial order, or during the course of the jury trial. Because it
waited to raise the issue until after the jury returned its verdict, we conclude that the
district court properly denied the motion to alter or amend the judgment on this basis.
Furthermore, we conclude that even if Western Ag had properly raised this issue prior to
the verdict, the policy language on which it relies is not applicable on its face because the
insurance carrier chose not to settle this matter and it should not be allowed to benefit
from its breach of the insurance contract.
Claim for Personal Property Loss
Western Ag also contends that the district court erred by not setting aside the jury's
verdict awarding damages to the Tonn Family for personal property loss in the amount of
26
$25,000. In particular, it argues that the Tonn Family failed to give "prompt notice" of its
claim for personal property loss or damages. To the extent this issue involves an
interpretation of Western Ag's insurance policy, our review is unlimited. Miller, 288 Kan.
27, Syl. ¶ 2. However, whether an insurer has been prejudiced from the failure to provide
timely notice is a question of fact unless the relevant facts are undisputed. Geer v. Eby,
309 Kan. 182, 195, 432 P.3d 1001 (2019).
Once again, Western Ag waited to raise this policy defense until after the jury had
rendered its verdict. Specifically, Western Ag raised the issue for the first time in its
posttrial motion to alter or amend the judgment under K.S.A. 2020 Supp. 60-259(f). By
waiting until after the trial to raise this issue, the Tonn Family was not afforded the
opportunity to counter this defense. Moreover, the jury was not given the opportunity to
make that determination.
In support of its position, Western Ag cites us to our Supreme Court's case of
Geer. However, in contrast to this case, the notice defense was asserted by the insurance
carrier in Geer prior to trial. Furthermore, the issue was presented to the district court at a
bench trial based on stipulated facts. 309 Kan. at 187. As such, we find Geer to be
distinguishable from the present case.
In Kansas, "The assertion of a condition as a reason to avoid liability under an
insurance policy is an affirmative defense upon which [the insurer] bears the burden of
proof." Evergreen Recycle, L.L.C. v. Indiana Lumbermens Mut. Ins. Co., 51 Kan. App. 2d
459, 473, 350 P.3d 1091 (2015). As the parties are aware, K.S.A. 2020 Supp. 60-208(c)
requires that all affirmative defenses be raised in an answer or other responsive pleading.
"A defendant failing to assert an affirmative defense waives it." In re Estate of Beldon v.
Brown County, 46 Kan. App. 2d 247, 262, 261 P.3d 943 (2011); Diversified Financial
Planners, Inc. v. Maderak, 248 Kan. 946, Syl. ¶ 4, 811 P.2d 1237 (1991). As discussed
27
above, the same is true for defenses not raised in the pretrial order. Bussman, 298 Kan. at
708.
Here, a review of the record reveals that Western Ag was aware of the Tonn
Family's personal property claim from its answers to written discovery and questioned
Tiya about it during her deposition. Despite having knowledge of the claim, Western Ag
did not seek to amend its answer to include this policy defense. Likewise, although the
Tonn Family included their property loss claim in the amount of $25,000 in the agreed
pretrial order, Western Ag failed to include this policy defense. At the very least, Western
Ag should be bound by the defenses and issues preserved in the agreed pretrial order. As
we stated previously, "[I]t is proper for a district court to deny a motion to alter or amend
if the movant could have—with reasonable diligence—presented the argument or
evidence before the entry of the final order." Ross-Williams, 55 Kan. App. 2d at 564.
Thus, we conclude that Western Ag has waived this policy defense by failing to raise it
until after the jury had returned its verdict. We find the district court did not err in
denying Western Ag's motion to alter or amend the judgment on this basis.
Award of Prejudgment Interest
Next, Western Ag contends that the district court erred in awarding prejudgment
interest under K.S.A. 16-201 because the amount of damage was not liquidated. The
standard of review for the district court's decision to award prejudugment interest is abuse
of discretion. Blair Constr., Inc. v. McBeth, 273 Kan. 679, 689, 44 P.3d 1244 (2002).
However, to the extent that this issue requires us to interpret K.S.A. 16-201, our review is
unlimited. Nauheim v. City of Topeka, 309 Kan. 145, 149, 432 P.3d 647 (2019). Although
a determination of whether to award prejudgment interest is a matter left to the sound
discretion of the district court, it must first have the legal authority to do so.
28
In Kansas, K.S.A. 16-201 grants a district court the authority to grant prejudgment
interest under certain circumstances. This statute provides in pertinent part:
"Creditors shall be allowed to receive interest at the rate of ten percent per
annum, when no other rate of interest is agreed upon, for any money after it becomes due;
for money lent or money due on settlement of account, from the day of liquidating the
account and ascertaining the balance."
In other words, the general rule is that prejudgment interest may be awarded on
liquidated claims. Owen Lumber Co. v. Chartrand, 283 Kan. 911, 925, 157 P.3d 1109
(2007). A claim becomes liquidated when both the amount due and the date on which
such amount is due are fixed and certain or when the amount due is definitely
ascertainable by mathematical computation. Kilner v. State Farm Mut. Auto. Ins. Co., 252
Kan. 675, 686-87, 847 P.2d 1292 (1993); Lindsey Masonry Co. v. Murray & Sons
Construction Co., 53 Kan. App. 2d 505, 523, 390 P.3d 56 (2017). Accordingly, if a claim
is not liquidated or fixed, there is no legal authority for a district court to award
prejudgment interest.
A review of the record—including the agreed pretrial order and the trial
transcript—reveal that the Tonn Family's claim was never liquidated, fixed, certain, or
definite. Rather, several estimates for repair of the clay tile roofs were introduced by the
parties. By definition, the term "estimate" is "a rough or approximate calulation" and is
not a fixed amount. Merriam-Webster's Collegiate Dictionary 396 (10th ed. 2001); see
Nevada Restaurant Services, Inc. v. Clark County, 981 F. Supp. 2d 947, 957 (D. Nev.
2013); see also Rental Equip., Inc. v. McDaniel Builders, Inc., 91 Cal. App. 4th 445, 449,
109 Cal. Rptr. 2d 922 (2001) ("[t]he dictionary definition of 'estimate' is 'an approximate
computation of the probable cost of a piece of work made by a person undertaking to do
the work'"); Kruse Concepts, Inc. v. Shelter Mut. Ins., 16 S.W.3d 734, 738 (Mo. App.
E.D. 2000) (an estimate is not a statement of fact).
29
We find nothing in the record on appeal to indicate that Western Ag ever
stipulated to a specific amount that it owed the Tonn Family for the damage to the clay
tiles. Similarly, we find nothing in the record to suggest that Western Ag made any
settlement offers that were accepted by the Tonn Family. Instead, a review of the record
confirms that the parties did not reach an agreement on the nature and extent of damages
sustained by the Tonn Family nor did they even agree as to the cause of the damage to the
clay tile roofs. Each of these issues remained for trial.
In this case, the district court relied on an estimate submitted by Eaton Roofing to
Western Ag early in the claim process in the amount of $468,453.72. As discussed above,
by its very nature an estimate is a mere approximation and is not liquidated, fixed, or
certain. Moreover, there is no evidence in the record that Western Ag ever agreed to this
estimate nor is there evidence that the insurance carrier ever agreed to pay the Tonn
Family this sum of money. Thus, we conclude that the district court did not have the legal
authority under K.S.A. 16-201 to award prejudgment interest under the circumstances
presented.
In an attempt to sidestep the statutory requirments, the Tonn Family argues that
the district court had the authority to award prejudgment interest under equitable
principles. In Kansas, an equitable exception has been recognized to the general rule that
prejudgment interest is allowable only for liquidated claims under K.S.A. 16-201.
However, it is important to recognize that this exception is available only when a
defendant retains and makes actual use of a plaintiff's money. Lightcap v. Mobil Oil
Corp., 221 Kan. 448, Syl. ¶ 12, 562 P.2d 1 (1977) ("Where a party retains and makes
actual use of money belonging to another, equitable principles require that it pay interest
on the money so retained and used."); see Farmers State Bank v. Production Credit
Assoc. of St. Cloud, 243 Kan. 87, 102-03, 755 P.2d 518 (1988).
30
In Lightcap, which involved a claim for royalties under natural gas leases, the
Kansas Supreme Court—in the context of an oil and gas lease—affirmed an equitable
award of prejudgment interest where the defendant "made active use of plaintiffs' money,
and plaintiffs were deprived of that use." 221 Kan. at 469. Specifically, the defendant was
paying the plaintiffs on the basis of an old contractual royalty rate while collecting an
increased rate from producers. In turn, the defendant kept and made active use of the
additional money owed to the plaintiffs and deprived them of the use of that money. As a
result, our Supreme Court understandably concluded that it was appropriate for the
district court to award interest the plaintiff's money "impounded" by the defendant. 221
Kan. at 469.
As such, we find that an equitable award of prejudgment interest is not applicable
in a case that "does not involve a party's retention of money rightfully belonging to
another." Equity Investors, Inc. v. Academy Ins. Group, Inc., 229 Kan. 456, 460, 625 P.2d
466 (1981); see Hochman v. American Family Ins. Co., 9 Kan. App. 2d 151, 152, 673
P.2d 1200 (1984) (Kansas cases allowing an equitable award of prejudgment interest
"have all involved claims for interest allegedly due as compensation for the detention of
money."); Argora Properties, L.P. v. Foulston & Siefkin, L.L.P., 70 Fed. Appx. 989, 998
(10th Cir. 2003) (unpublished opinion) ("The equitable remedy rests upon a theory of
restitution. It depends on the withholding of a known sum of money belonging to
another."). As such, we find that an equitable award of prejudgment interest is
appropriate only in unusual and limited circumstances—like those that occurred in
Lightcap and Farmers State Bank—in which the defendant keeps and makes actual use of
money that belongs to the plaintiff. It is only in that unusual and limited situation that
equitable principles permit a district court—in its discretion—to award prejudgment
interest on unliquidated claims.
Here, there is no evidence in the record on appeal to support a finding that
Western Ag somehow "impounded" or "made active use" of money it knew belonged to
31
the Tonn Family. In contrast, there was a legitimate dispute in this c ase as to whether the
Tonn Family was entitled to recovery on its hail damage claim and, if so, as to the
amount owed by Western Ag to satisfy its obligations under the insurance contract.
Western Ag did not use or hold the Tonn Family's money by refusing to settle an
insurance claim that was disputed both as to liability and as to the amount of damages.
Furthermore, the Tonn Family did not make a claim in this case that Western Ag acted in
bad faith in the way that it handled its claim.
The amount of damages—if any—to be awarded in this case was a contested
question of fact for the jury. Indeed, as discussed above, the opinions expressed at trial by
the expert witnesses regarding causation varied greatly. Likewise, the evidence presented
regarding the cost to repair the clay tile roofs was wide-ranging. Because the amount was
not liqudated or fixed, the district court had no authority to award prejudment interest
under K.S.A. 16-201. Although it is unfortunate that the Tonn Family had to borrow
money to make repairs due to the uncertainties of litigation, this is not a case in which
Western Ag impounded or made use of the ranch's money.
Because there is no evidence in the record that Western Ag "impounded" or "made
active use" of the Tonn Family's money, we conclude that this is not one of the
exceptional cases which could justify an equitable award of prejudgment interest under
Kansas law. Moreover, we find that an award of prejudgment interest is not supported by
either the law or the facts. Accordingly, we conclude that the district court abused its
discretion. Therefore, we reverse the district court's award of prejudment interest in this
case.
Attorney Fees Awarded by District Court
The last issue presented by Western Ag is whether the district court's award of
attorney fees was excessive. Where the district court has authority to grant attorney fees,
32
its decision whether to award fees is reviewed under the abuse of discretion standard.
Consolver v. Hotze, 306 Kan. 561, 568, 395 P.3d 405 (2017). The district court has wide
discretion to determine the amount and recipient of attorney fees. In re Marriage of
Strieby, 45 Kan. App. 2d 953, 973, 255 P.3d 34 (2011). When reviewing an award of
attorney fees, we do not reweigh the testimony or the evidence presented or reassess the
credibility of witnesses. Rather, we are to examine the record to determine if the district
court's decision was supported by substantial competent evidence. Westar Energy, Inc. v.
Wittig, 44 Kan. App. 2d 182, 203-04, 235 P.3d 515 (2010).
In deciding the reasonableness of an attorney fee, the eight factors set forth in Rule
1.5(a) (2020 Kan. S. Ct. R. 297) of the Kansas Rules of Professional Conduct should be
considered. See Snider v. American Family Mut. Ins. Co., 297 Kan. 157, 169, 298 P.3d
1120 (2013). The district court is an expert in the area of attorney fees and can draw on
its own knowledge as well as expertise in determining the value of services rendered.
Although an appellate court is also an expert on the reasonableness of attorney fees, we
are not to substitute our judgment for that of the district court on the amount of the
attorney fees awarded unless it is required in the interest of justice. Johnson v. Westhoff
Sand Co., 281 Kan. 930, 940, 135 P.3d 1127 (2006); State ex rel. Schmidt v. Nye, 56 Kan.
App. 2d 883, 896, 440 P.3d 585 (2019).
The parties do not dispute that the district court had the authority under K.S.A. 40-
908 to award attorney fees in favor of the Tonn Family because it was successful in
bringing this action to enforce the terms of an insurance policy covering loss by fire,
tornado, lightning, or hail. Rather, Western Ag argues that the amount awarded was
excessive. Although it does not appear to challenge that a 40% contingency fee is
reasonable, Western Ag suggests that the amount should be based on a lower judgment
amount in light of the arguments asserted on appeal. Also, it suggests that the district
court acted unreasonably in ordering an additional amount for handling the posttrial
motions.
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Because we have set aside the award for prejudgment interest, we find that the
appropriate remedy would be to remand this matter to the district court to reconsider the
amount of attorney fees to be awarded on the reduced judgment. Under the circumstances
presented, we will yield to the district court's discretion regarding whether to apply the
40% contingency fee on the reduced judgment or to order some other reasonable amount
based on a lodestar computation. Regardless of which method is chosen by the district
court, the fees must be reasonable based on the factors set forth in Rule 1.5(a).
Notwithstanding the above, we find that the method used by the district court in
calculating an award of fees for the handling of posttrial matters was not appropriate.
Although the district court may find an award for the additional work performed by the
Tonn Family's counsel to be justified, any attorney fees awarded for posttrial services
should be determined on an hourly or lodestar basis because there was no additional
recovery. See Burlington v. Dague, 505 U.S. 557, 562, 112 S. Ct. 2638, 120 L. Ed. 2d
449 (1992) (lodestar presumptively yields reasonable and appropriate fee); see also
Richardson v. Murray, No. 120,680, 2020 WL 4723097, at *9-14 (Kan. App. 2020)
(unpublished opinion) (Atcheson, J., concurring) (explaining lodestar approach in
concurring opinion). Accordingly, we remand the issue of attorney fees to the district
court for reconsideration in light of this opinion.
Failure to Award Litigation Expenses
In its cross-appeal, the Tonn Family claims the district court erred when it denied
its request for litigation expenses as part of the award of fees and costs. In response,
Western Ag points out that K.S.A. 40-908 does not grant the district court the authority to
award expert fees or litigation expenses in excess of those that are normally allowable
under K.S.A. 2020 Supp. 60-2003. Again, this issue involves a mixed standard of review.
The standard of review regarding the amount of reimbursement for attorney fees and
costs is abuse of discretion. See Wendt v. University of Kansas Medical Center, 274 Kan.
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966, 982, 59 P.2d 325 (2002). However, to the extent that the resolution of this issue
requires us to interpret statutory authority, our review is unlimited. Nauheim, 309 Kan. at
149.
The Tonn Family sought reimbursement of litigation expenses in the amount of
$17,395.52. The bulk of these expenses were for the fees and expenses charged by the
Tonn Family's expert witnesses. The request also included expenses for items such as
court reporting services for transcripts not otherwise recoverable as costs, travel
expenses, and expenses related to exhibits. We find that the district court appropriately
denied the Tonn Family's request for litigation expenses.
On its face, K.S.A. 40-908 is limited to an award of "a reasonable sum as an
attorney's fee for services" in an action against an insurance carrier arising out of a policy
providing coverage "against loss by fire, tornado, lightning or hail." Nothing in the statute
authorizes reimbursement of litigation expenses such as expert witness fees. Rather,
K.S.A. 2020 Supp. 60-2003 defines the "costs" that may be awarded by the district court.
Although certain litigation expenses are included, K.S.A. 2020 Supp. 60-2003 does not
include the reimbursement of the fees and expenses paid by a party to an expert witness.
In denying the Tonn Family's request for litigation expenses, the district court
determined:
"The Court finds when the Kansas Legislature intends to vest a judge or
administrative tribunal with discretion to award expert witness fees to a party, the
legislature made an explicit authorization of authority. The Court finds Higgins v. Abilene
Machine, Inc., 288 Kan. 359[, 204 P.3d 1156] (2009), is controlling law, where the
Kansas Supreme Court found expert witness fees have never been included in the
definition of items allowable as costs under K.S.A. 60-2003. Therefore, the Court does
not allow Plaintiff her expert witness fees allowed as costs of the action."
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We agree with the district court's analysis of this issue. Under the circumstances
presented, the district court did not have the authority to order Western Ag to reimburse
the Tonn Family for expert witness fees or other litigation expenses that are not specified
in K.S.A. 2020 Supp. 60-2003. As a result, the district court did not abuse its discretion in
denying this request.
Appellate Attorney Fees
Finally, we must decide whether the Tonn Family should recover attorney fees on
appeal and, if so, in what amount. We note that the Tonn Family filed a timely motion for
attorney fees and an affidavit in support of its motion pursuant to Kansas Supreme Court
Rule 7.07(b) (2020 Kan. S. Ct. R. 50). Western Ag did not file a response.
Kansas Supreme Court Rule 7.07(b)(1) (2020 Kan. S. Ct. R. 50) grants appellate
courts the authority to exercise the discretion to "award attorney fees for services on
appeal in a case in which the district court had authority to award attorney fees." Here, it
is undisputed that the district court had the authority to award reasonable attorney fees
under K.S.A. 40-908. As a result, we also have authority to award reasonable attorney
fees on appeal.
In support of its motion, the Tonn Family has provided this court with an itemized
statement of the professional services it has rendered on appeal. Based on an hourly rate,
the total amount of attorney fees for the services performed for the appeal and cross-
appeal are in the amount of $41,742.50. The Tonn Family also attached a contingency fee
agreement to its motion that states, in part, that its counsel's "share upon recovery from an
appeal . . . would be a maximum of 45%." Moreover, the agreement provides that any
expenses advanced by counsel "will be deducted from the amount recovered before the
contingent fee is calculated."
36
In considering an award of attorney fees, Kansas courts are to consider each of the
eight reasonableness factors listed in KRPC 1.5(a). Our Supreme Court has held that no
one factor should dominate over the other factors. Westhoff Sand Co., 281 Kan. at 951.
The eight factors set forth in KRPC 1.5(a) are:
"(1) the time and labor required, the novelty and difficulty of the questions involved, and
the skill requisite to perform the legal service properly;
"(2) the likelihood, if apparent to the client, that the acceptance of the particular
employment will preclude other employment by the lawyer;
"(3) the fee customarily charged in the locality for similar legal services;
"(4) the amount involved and the results obtained;
"(5) the time limitations imposed by the client or by the circumstances;
"(6) the nature and length of the professional relationship with the client;
"(7) the experience, reputation, and ability of the lawyer or lawyers performing the
services; and
"(8) whether the fee is fixed or contingent." (2020 Kan. S. Ct. R. 297).
Reviewing these factors in the context of this appeal, we find:
First, although the nature of this case was not particularly complex, several of the
issues presented at trial and on appeal were difficult and required a significant amount of
legal skill to address them properly. As a result, this appeal required a significant amount
of time and labor by counsel.
Second, the legal work performed by the Tonn Family's attorneys over the past
four-and-a-half years would have likely precluded them from working on other matters
while they were working on this case.
Third, the hourly rates charged by the attorneys for the type of legal services
performed are reasonable and consistent with the fees customarily charged in Kansas for
similar legal services.
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Fourth, this case involved a significant claim for property loss. On appeal, the
results obtained are mixed. On the one hand, we are affirming the jury's verdict in the
amount of $514,780. On the other hand, the Tonn Family did not prevail on the appellate
jurisdiction issue or on the prejudgment interest issue. Likewise, the Tonn Family did not
prevail on the litigation expense issue presented in the cross-appeal.
Fifth, although the Tonn Family's attorneys were required to meet certain court-
established deadlines, time was of the essence due to the nature of the Tonn Family's
claim.
Sixth, this is the first legal matter that the Fleeson, Gooing law firm has handled
for the Tonn Family.
Seventh, the attorneys retained by the Tonn Family are experienced, have excellent
professional reputations, and possess a high degree of legal ability.
Eighth, as discussed above, the Tonn Family entered into a contingency fee
agreement with the Fleeson, Gooing law firm to handle all matters relating to the
proceedings before the district court as well as before this court.
Based on the factors set forth in KRPC 1.5(a), we find that the hours billed by the
Fleeson, Gooing law firm on appeal are reasonable. We also find that the hourly rates
reflected in the firm's statement of professional services are reasonable. However, in
reviewing the statement, we find that approximately $3,500 of the time billed was spent
on those issues on which the Tonn Family did not prevail on appeal.
In light of the mixed results on appeal, we find that it is appropriate for us to
exercise our discretion to grant the Tonn Family's motion for appellate fees on a lodestar
basis without application of a multiplier. A lodestar calculation applies a reasonable
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hourly rate for legal work in a particular locality to a reasonable number of hours for the
litigation to arrive at a presumptively reasonable statutory award. See Burlington, 505
U.S. at 562 (lodestar presumptively yields reasonable and appropriate fee). In applying
this calculation in this case, we conclude that $38,250 is a reasonable amount of attorney
fees to be awarded on appeal.
CONCLUSION
In conclusion, we find that the district court properly applied the law and exercised
its discretion in ruling that the Tonn Family's expert was qualified under K.S.A. 2020
Supp. 60-456(b) to render his professional opinions regarding causation. In particular, we
find that Western Ag's arguments go to the weight to be given to the causation opinions
offered by the Tonn Family's expert rather than to the admissibility of his testimony.
We also reject Western Ag's challenge to the amount of recoverable damages for
breach of the insurance contract. Similarly, we reject its argument regarding the Tonn
Family's personal property claim. In each instance, we find that Western Ag failed to
raise the defense either in the agreed pretrial order or at trial. Instead, Western Ag waited
to raise these defenses in a posttrial motion to alter and amend the judgment.
Next, we find in Western Ag's favor on its contention that the district court erred
in awarding prejudgment interest under K.S.A. 16-201 because the amount of damages in
this case were not liquidated, fixed, certain, or definite. As a result, we reverse the award
of prejudgment interest and remand the issue of attorney fees on the reduced judgment to
the district court. In addition, we find that the method used by the district court in
awarding additional attorney fees for posttrial work was erroneous and we also remand
this issue to the district court.
39
In considering the sole issue raised in the cross-appeal, we reject the Tonn
Family's claim that the district court failed to award the requested litigation expenses. In
particular, we find that these are not expenses specified in K.S.A. 2020 Supp. 60-2003.
Finally, after considering the factors set forth in Rule 1.5(a), we award the Tonn Family
$38,250 in appellate attorney fees.
Affirmed in part, reversed in part, and remanded with directions.
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