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Scottsdale Ins. Co. v. Deere & Co.

United States District Court, D. Kansas

July 14, 2015

SCOTTSDALE INSURANCE CO., A/S/O Chris Chereny and Karly Chereny, Plaintiff,
DEERE & COMPANY, Defendant

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[Copyrighted Material Omitted]

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For Scottsdale Insurance Company other Kris Cherney other Karly Cherney, Plaintiff: Chad Michael Neuens, LEAD ATTORNEY, PRO HAC VICE, Neuens Mitchell PLLC, Tulsa, OK; Derek S. Casey, Triplett, Woolf & Garretson, LLC - Wichita, Wichita, KS.

For Deere & Company, Defendant: Emily R. Davis, LEAD ATTORNEY, Lathrop & Gage, LLP, Overland Park, KS; Peter F. Daniel, LEAD ATTORNEY, Lathrop & Gage, LLP - KC, Kansas City, MO.

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This case arises out of a fire that destroyed a combine manufactured by defendant Deere & Company (" Deere" ) and insured by plaintiff Scottsdale Insurance Co. (" Scottsdale" ). Scottsdale, as subrogee of the insured combine owners, brought this action for breach of express warranty and breach of implied warranty of merchantability, alleging that a defect in the combine's Emissions Control System (" ECS" ) caused the fire. This matter is before the court on Deere's motion for summary judgment (Dkt. 49). Deere seeks summary judgment on Scottsdale's express and implied warranty claims, and further seeks exclusion of expert testimony by Raymond Thompson. As discussed below, the motion is granted in part and denied in part.

I. Uncontroverted Facts

A. Background Facts

Chris and Karly Chereny (" the insureds" ) operate a custom harvesting business.

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They have a combined 55 years of experience operating harvesting machines. On March 25, 2013, the insureds purchased two used 2012 model year John Deere S670 combines from a Kansas John Deere dealer. The dealer informed the insureds that the combines came with a warranty. They received a copy of the front page of their purchase order, which includes a section of text stating in all capital letters that the purchase excludes an implied warranty of merchantability.

The insureds allege they never received a copy of the Deere express warranty regarding the combines. Deere's standard express warranty (" the Deere warranty" ) states that it will repair or replace any covered part that is found to be defective in material or workmanship during the warranty term. The Deere warranty covers the combine's non-wear[1] components for a 12-month period from the date of purchase.

B. The S670 Emissions Control System

The S670 combine's ECS removes particulate matter from its engine exhaust. The system employs sensors and oxidizers, monitored and controlled by a computer, and a two-phase physical filtration system within the combine's exhaust system. Exhaust gas passes through the Diesel Oxidation Catalyst (" DOC" ), which reduces carbon monoxide, hydrocarbons, and some particulate matter. Downstream of the DOC, exhaust gas is forced through porous channel walls of a Diesel Particulate Filter (" DPF" ), trapping particulate matter therein. Particulate matter trapped in the DPF is oxidized through a continuous cleaning process called Passive Regeneration. Passive Regeneration does not create more heat than normal engine operations.

A computer controlling the ECS supplements Passive Regeneration with an automated Active Regeneration process on an as-needed basis. The need for Active Regeneration is determined through an analysis of exhaust temperature and pressure data collected by sensors. The computer alerts the driver that Active Regeneration is required. The operator can, under some circumstances, override the computer to delay the Active Regeneration process through the combine's Touch Screen Display. If the operator continues to override the Active Regeneration process, the computer will eventually force a Parked Regeneration process if it senses that the DPF is incapable of performing its function on a passive or automatic basis. Once the computer forces a Parked Regeneration, it limits the engine's output such that the combine is incapable of conducting harvesting functions.

C. The Combine Fire

During harvest operations on June 2, 2013, a fire occurred on or in one of the combines, destroying it. Mrs. Chereny was driving behind the combine at the time. She testifies that she observed flames shooting from the combine's exhaust before it caught fire.

II. Expert Opinion Testimony

Scottsdale proffers the testimony of Raymond Thompson in the form of expert opinion testimony under Fed.R.Evid. 702. Deere argues that Thompson's opinion testimony should be excluded because his report violates the disclosure requirements of Rule 26, or, alternatively, that Thompson is not qualified to testify as to alleged defects in the combine's emissions system. As explained below, Thompson is qualified to testify about the origin of the fire, but not about a defect in the combine.

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A. Portions of Thompson's testimony are inadmissible under FRE 702.

The judge must determine at the outset whether the expert testimony is admissible pursuant to Fed.R.Evid. 104(a); Daubert v. Merrell Dow Pharms., 509 U.S. 579, 592, 113 S.Ct. 2786, 125 L.Ed.2d 469 (1993). " Federal Rule of Evidence 702 requires a district court to assess proffered expert testimony to ensure it is both relevant and reliable." United States v. Avitia-Guillen, 680 F.3d 1253, 1256 (10th Cir. 2012). The court must determine whether the expert is qualified to testify, then " whether the opinion is reliable by assessing the underlying ...

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