Ohlmeier v. Jones

• Decision Date: 16 October 2015
• Docket Number: No. 111,801.,111,801.
• Citation: 51 Kan.App.2d 1014,360 P.3d 447
• Parties: Josh OHLMEIER and Sarah Ohlmeier, Appellees, v. Whitney JONES, Appellant.
• Court: Kansas Court of Appeals

51 Kan.App.2d 1014

360 P.3d 447

Josh OHLMEIER and Sarah Ohlmeier, Appellees,

v.Whitney JONES, Appellant.

No. 111,801.

Court of Appeals of Kansas.

Oct. 16, 2015.

J. Franklin Hummer, of Shawnee Mission, for appellant.

N. Russell Hazlewoodand Jacob S. Graybill, of Graybill & Hazlewood L.L.C., of Wichita, and A. Scott Waddell, of Waddell Law Firm LLC, of Kansas City, Missouri, for appellees.

Opinion

SCHROEDER, J.

Josh and Sarah Ohlmeier obtained a judgment against Whitney Jones for the diminished value loss to their 2011 Chevrolet Traverse (Traverse) as a result of an automobile accident in the amount of $4,185 plus a judgment for their attorney fees in the amount of $15,440 pursuant to K.S.A.2014 Supp. 60–2006. Jones appeals.

We affirm the judgment for diminished value loss but find we must reverse the judgment for attorney fees pursuant to K.S.A.2014 Supp. 60–2006as diminished value loss does not qualify as “property damages only” under the statute to sustain the award of attorney fees. We affirm in part and reverse in part.

Facts

This matter was tried to the district court. As the trial began, both parties stipulated to the admission of the Ohlmeiers' exhibits, including Mike Orton's expert report, Jones' exhibits, and the following facts:

“1. The subject 2011 Chevrolet Traverse (‘Traverse’) was initially purchased as a rental on April 29, 2010.

“2. The Traverse was sold to Superior Chevrolet at auction with 27,801 miles on October 24, 2011.

“3. Plaintiffs purchased the Traverse as a certified pre-owned vehicle from Superior Chevrolet on November 17, 2011.

“4. On March 12, 2012, Plaintiffs' Traverse was struck by Defendant and/or a vehicle driven by Defendant (a 1995 Buick LeSabre) at the intersection of 67th Street and southbound I–35 in Johnson County, Kansas.

“5. At the time of the collision, the Traverse had 36,138 miles on it.

“6. Plaintiffs' Traverse was repaired by Superior Chevrolet, a repair facility authorized by General Motors.

“7. The repairs to the Traverse were initially paid by Plaintiffs' insurer Farmers Insurance.

“8. On April 20, 2012, Farmers submitted to Defendant's insurer, Key Insurance Company, its reimbursement request for repairs to Plaintiffs' vehicle ($7,192.01) and for a rental vehicle for Plaintiffs ($849.92).

“9. On April 25, 2012, Key Insurance Company made payment to Farmers Insurance for the Traverse's repairs and for the car rental.

“10. On May 9, 2012, Plaintiff Sarah Ohlmeier sent a demand for diminished value to Key in the amount of $6,400.00.

“11. On October 12, 2012, Plaintiffs[ ] sent a certified demand through their attorney A. Scott Waddell to Defendant for diminished value in the amount of $4,185.00 and faxed a copy of the same to Key.

“12. On October 17, 2012, Defendant responded to Plaintiffs' counsel that she received the October 12, 2012 demand.

“13. On October 25, 2012, Key acknowledged receipt of the October 12, 2012 demand, made no offer, but requested supporting documentation to support the claim for $4,185.00 in diminished value.

“14. On October 25, 2012, Plaintiffs' counsel forwarded supporting documentation to Key per Key's October 25, 2012 request.

“15. On November 7, 2012, Key made an offer of $750.00 to settle Plaintiffs' claim for diminished value.

“16. On January 14, 2013, Plaintiffs' Petition for Damages against Defendant was filed.

“17. On February 7, 2013, Key made a settlement offer pursuant to K.S.A. 60–2006to settle all of Plaintiffs' claimed property damages in the amount of $2,092.50.

“18. On the date of trial, March 25, 2014, Defendant admitted liability and withdrew the defense of insufficient service of process as Defendant stopped communicating with her counsel and did not appear at trial to offer testimony regarding those issues.”

The Ohlmeiers based their case on the testimony and exhibits from their expert witness, Mike Orton. Prior to his testimony, Jones objected to Orton's qualifications as an expert witness and asked the district court for an opportunity to voir dire Orton on his qualifications. The district court denied Jones' request and instead offered her the opportunity to cross-examine Orton. The district court stated it could and would make its determination on whether Orton was an expert following cross-examination. The district court allowed Jones a standing objection as to foundation.

Orton testified he operated a collision repair business and consulted on diminished value. According to Orton, diminished value is the sudden and immediate loss of value due to the vehicle being in an accident. It is calculated by determining “[t]he value of the vehicle immediately before the accident, less the value of the vehicle immediately after the accident, unless repairs are contemplated, which restore a portion in that value. The remaining residual loss is the diminution of value.” Orton testified that even if fully repaired, the Traverse's diminished value loss as a result of the March 12, 2012, accident equaled $5,239. Despite Orton's testimony, both parties agreed that if the Ohlmeiers were entitled to diminished value loss, they were limited to the amount requested in the pretrial order of $4,185.

Under cross-examination, Orton admitted he did not know the Traverse had previously been a rental vehicle and thus did not take into account what effect that would have on the value of the Traverse in calculating the current amount claimed for the diminished value loss. Orton admitted he did not have any formal education in the psychology of car buying, how to interpret statistics, or how to survey the buying public. During Orton's cross-examination, Jones introduced into evidence a Carfax report showing a diminished value loss of $140. Following Orton's testimony, the district court found Jones' objections went to the weight of Orton's testimony and not its admissibility. The district court ruled Orton qualified as an expert, and his testimony was admissible.

Sarah testified she arrived at her $4,185 demand by getting trade-in values from three different sources and subtracting the trade-in value from the Kelley Blue Book value which she assumed was the market value before the accident. Leonard Gregson, Vice President of claims with Key, testified for the defense. While he admitted there was a stigma attached to vehicles that have been in an accident, he testified to an alternative means of calculating the diminished value loss, the Rule 17c test, which sets the diminished value loss at 10% of the preaccident value.

At the conclusion of the trial, the district court asked Jones to submit a memorandum setting out her value for the diminished value loss suffered by the Traverse. In her memorandum, Jones argues the district court should use either the Carfax report which “took into account the prior history of our accident, the mileage and the prior ownership by a California rental agency and came up with a reduction of $140 ... based on millions of transactions, and [its] approach has withstood the scrutiny of millions of potential used car buyers successfully,” or the district court should use the Rule 17c test which was developed by State Farm in a Georgia class action case to deal with diminished value loss. The 17c test gave a diminished value loss of $1,273.20.

On April 7, 2014, the district court filed its journal entry in which it awarded $4,185 in diminished value loss and determined the Ohlmeiers were entitled to attorney fees. Over Jones' objection, the district court found that diminished value loss was “property damage” and the Ohlmeiers were entitled to attorney fees under K.S.A.2013 Supp. 60–2006. The district court ordered the Ohlmeiers to file a motion for attorney fees with the court. Jones timely filed a motion to alter or amend the judgment. The district court denied Jones' motion on May 1, 2014. Jones filed a notice of appeal of the April 7, 2014, journal entry and all subsequent adverse rulings on May 2, 2014. A journal entry was filed on May 9, 2014, in which the district court awarded the Ohlmeiers $15,440 in attorney fees.

Analysis

Sufficiency of the Evidence

Was Orton qualified as an expert?

On appeal, Jones argues the evidence was insufficient to support the verdict because the district court erred when it qualified Orton as an expert witness. Jones argues the district court erred in qualifying Orton as an expert because Orton did not have any “ ‘special knowledge, skill, experience [,] or training’ in the field of determining [the] amount of diminished value.” Orton was also an admitted consumer advocate for increasing the awareness of diminished value loss.

An appellate court must apply the statutory law on evidence as it was at the time of the challenged evidentiary ruling. State v. Hart,297 Kan. 494, 510, 301 P.3d 1279 (2013). Multiple inquiries are involved when the admission or exclusion of evidence is challenged on appeal.

At the time of the trial, the admission of expert witness testimony was controlled by K.S.A. 60–456(b)which stated:

“If the witness is testifying as an expert, testimony of the witness in the form of opinions or inferences is limited to such opinions as the judge finds are (1) based on facts or data perceived by or personally known or made known to the witness at the hearing and (2) within the scope of the special knowledge, skill, experience or training possessed by the witness.”

An appellate court reviews the admission or exclusion of expert testimony under K.S.A. 60–456for an abuse of discretion. See Manhattan Ice & Cold Storage v. City of Manhattan,294 Kan. 60, 70, 274 P.3d 609 (2012). A judicial action constitutes an abuse of discretion if the action (1) is arbitrary, fanciful, or unreasonable; (2) is based on an error of law; or (3) is based on an error of fact. Northern Natural Gas Co. v. ONEOK Field Services Co.,296 Kan. 906, 935, 296 P.3d 1106 (2013). To testify as an expert, the witness must be skilled or experienced in the profession to which the subject of his or her testimony relates. State v. Gaona,293 Kan. 930,...