BY THE COURT
Discovery orders will not be disturbed on appeal in the
absence of a clear abuse of discretion.
Evidentiary privileges in the law are not favored because
they operate to deny the fact-finder access to relevant
Evidentiary privileges are to be strictly construed.
Parties objecting to discovery on the basis of an evidentiary
privilege bear the burden of establishing that it applies.
work-product privilege only applies to documents and tangible
things. K.S.A. 2018 Supp. 60-226(b)(4)(A).
non-testifying expert privilege in K.S.A. 2018 Supp.
60-226(b)(5)(D) applies to an in-house expert who has been
specially employed in anticipation of litigation or to
prepare for trial and who is not expected to be called as a
witness at trial.
party claiming waiver of an evidentiary privilege bears the
burden of proof to establish the waiver.
Waiver is the intentional relinquishment of a known right.
Intention may be inferred from conduct.
the case of a corporation, the power to claim or waive a
privilege generally rests with corporate management. A
corporate employee cannot waive the corporation's
from Saline District Court; Paul J. Hickman, judge.
Cynthia J. Sheppeard and N. Larry Bork, of Goodell, Stratton,
Edmonds & Palmer LLP, of Topeka, for appellant.
Patrick A. Edwards, of Stinson Leonard Street LLP, of
Wichita, and D. Christopher Robinson, pro hac vice, of Frost
Brown Todd LLC, of Louisville, Kentucky, for appellee.
Arnold-Burger, C.J., Hill, J., and Stutzman, S.J.
Edward Flaherty brought claims for breach of express and
implied warranty against CNH Industrial America, LLC (CNH)
after his 2014 Case IH Patriot 2240 Sprayer (Sprayer),
manufactured by CNH, caught fire. The district court granted
summary judgment to CNH, finding that Flaherty failed to
prove that the Sprayer had a defect which caused the fire.
makes two arguments on appeal.
Flaherty argues that the district court erred in refusing to
allow him to depose CNH's in-house expert and employee,
Robert Hawken. A party ordinarily may not "discover
facts known or opinions held by an expert who has been
retained or specially employed by another party in
anticipation of litigation or to prepare for trial and who is
not expected to be called as a witness at trial." K.S.A.
2018 Supp. 60-226(b)(5)(D). Whether an in-house expert like
Hawken is "retained or specially employed" is an
issue of first impression in Kansas. Because Hawken only
inspected the Sprayer at the request of CNH's legal
department in anticipation of litigation, we find that CNH
specially employed him for the purposes of the privilege. And
we find that Flaherty has failed to prove that CNH waived the
privilege at any time.
Flaherty argues that he did not have to show specific
evidence of a defect in the Sprayer to survive a summary
judgment motion and, even if he did, there was enough
circumstantial evidence to prove the existence of a defect.
We disagree. To prevail on his claims, Flaherty had to show
that the Sprayer had a defect. Moreover, while a party may
use circumstantial evidence to show a defect, Flaherty does
not have enough circumstantial evidence here to prove a
the district court's grant of summary judgment to CNH is
and Procedural History
bought the Sprayer from Straub International, Inc. (Straub)
in February 2014. CNH manufactured the Sprayer. Straub is an
authorized dealer of CNH products. Prior to making the
purchase, Flaherty reviewed materials about the Sprayer on
CNH's website. He also discussed the Sprayer with Straub
sales representative Eric Everhart who told Flaherty
"that the Sprayer was a good product that would do what
[Flaherty] needed it to do and that Straub would stand behind
its product." The Sprayer came with a Warranty and
Limitation of Liability Agreement (Warranty Agreement) which
provided: "If a defect in material or workmanship is
found in a unit and reported during the Warranty Period,
[CNH] will pay parts and labor costs to repair the defect if
the services are performed by an authorized [CNH] dealer at
the dealer's location." A limitations and exclusions
provision in the Warranty Agreement stated that the Warranty
Agreement contained the entire warranty, and that CNH made no
other express or implied warranties.
September 11, 2014, Flaherty brought the Sprayer to Straub
for scheduled maintenance and a spray hose adjustment
intended to reinforce the Sprayer's boom supports.
Several months earlier, Straub had received a general Product
Improvement Program (PIP) bulletin to inspect the routing of
2014 Case IH Patriot 2240 Sprayers, particularly the
right-hand side hydrostatic drive hoses at the engine starter
to make sure they do not come in contact with the battery
terminal on the engine starter. Flaherty left the Sprayer at
Straub with the door unlocked and the keys in the ignition. A
Straub mechanic was present and aware that the keys were in
the Sprayer when Flaherty left. The Sprayer had a full tank
of diesel fuel and a full tank of diesel exhaust fluid. The
mechanic told Flaherty that he would move the Sprayer into
the shop when he was ready to work on it.
days later, at 2 a.m. on September 14, 2014, a passerby saw
the Sprayer engulfed in flames and reported the fire to the
Saline County Sheriff's Office. No one from Straub had
interacted with the Sprayer from the time Flaherty dropped it
Jeremiah Hays investigated the scene of the fire that night
and prepared an incident report. He reported: "At this
time, the cause of the fire is unknown. There is no evidence
of an arson at this time. It is possible the fire started due
to a faulty electrical system."
Jim Hughes went to the scene of the fire the following
morning to try to determine the cause of the fire. He
reviewed surveillance video from Straub. While there were
several cameras, none were directed at the scene of the fire.
Hughes observed no foot or vehicle traffic in the two hours
preceding the fire. Troy Long, a fire investigator with the
Salina Fire Department, accompanied Hughes because Hughes had
no fire expertise. But Long was not there in an official
capacity and conducted no formal investigation. After
inspecting the Sprayer, Long told Hughes that the battery box
on the rear left side of the Sprayer was the origin of the
fire and he "suspected some type of electrical issue was
more than likely the cause."
had two experts inspect the Sprayer. David Higday, a
certified fire investigator, examined the Sprayer on
September 17, 2014. In his report, he opined that the fire
originated in the cab of the Sprayer. He could not determine
the cause of the fire. He stated: "It is possible there
was an electrical short within the cab, although it is a
remote possibility. It is also possible that someone
intentionally set the cab of the sprayer on fire." He
noted that because the cameras were not facing the Sprayer,
"[a] person on foot could have gained access to the
sprayer without being detected by the security cameras."
He discovered that Straub installed the cameras because there
had been several incidents of theft on the property. Because
of a disability, Higday was unable to continue working on the
case. Kent Grier, President and Chief Investigator at Kent
Grier Fire Investigations, Inc., reviewed and adopted
Higday's opinions. During a deposition, Grier was clear
that he was not offering an opinion that a defect in the
design or manufacture of the Sprayer caused the fire. He had
no evidence to suggest that a defect caused or contributed to
Bitar investigated the scene of the fire on September 22,
2014, on behalf of Flaherty's insurance company. Bitar is
a senior technical consultant with Independent Forensic
Investigations Corporation. After examining the Sprayer,
Bitar concluded that the cause of the fire in the cab was
undetermined. He believed it would not be possible to
conclusively determine the cause of the fire because of the
extent of the damages.
Hawken, a product safety specialist for CNH, investigated the
Sprayer over a month later. In an affidavit, Hawken stated
that he inspected the Sprayer at the request of CNH's
legal department and in anticipation of litigation against
sued CNH and Straub. The suit listed several causes of
action, including negligence, strict liability, breach of
express warranty, breach of implied warranty of
merchantability, failure to warn, violations of the Kansas
Consumer Protection Act (KCPA), and negligent
misrepresentation. Flaherty designated Grier and Bitar as his
expert witnesses. During discovery, Flaherty filed a notice
of deposition duces tecum informing the other
parties of his intention to depose Hawken. CNH replied with a
motion to quash and asked the court for a protective order
prohibiting Flaherty's discovery of documents and
information related to Hawken's inspection of the Sprayer
based on two statutory privileges. The district court granted
CNH's motion and did not allow Flaherty to depose Hawken.
This will be addressed in more detail later.
subsequently moved for summary judgment, mainly arguing that
Flaherty failed to prove that a defect in the Sprayer caused
the fire. Flaherty settled with Straub while the motion for
summary judgment was pending.
district court granted CNH's motion for summary judgment.
The court first held that Flaherty's product liability
and implied warranty claims failed because Flaherty could not
show that a defect in the Sprayer caused the fire. In doing
so, the court noted that the Kansas Product Liability Act
(KPLA) governed the claims. The purpose of the KPLA, the
court held, was "to consolidate all product liability
actions into one theory of legal liability." This
included Flaherty's claims for negligence, strict
liability, implied warranty, and failure to warn. In order
for Flaherty to succeed on his defective product claims, he
had to prove that the Sprayer was defective. The existence of
a defect could not be inferred from the mere fact that the
Sprayer was involved in a fire. The court held that Flaherty
failed to prove that there was a defect in the Sprayer
because Flaherty's experts "were unable to reach a
conclusion as to the origin or the cause of the
Fire, and neither expert could offer testimony that the
Sprayer was defective in any way."
district court also relied on the economic loss doctrine to
reject Flaherty's tort claims. The court explained that
this "doctrine precludes buyers of allegedly defective
goods from suing under negligence or strict liability
theories where the only injury consists of damage to the
goods themselves." When a claim is purely for economic
loss, the damages are the same as they would be in a contract
action. Thus, the court found that "when the actual
damages that could be recovered under a tort claim are the
same as those that could be recovered for breach of contract,
the economic loss doctrine precludes the tort claim."
district court also rejected Flaherty's express warranty
claim. Flaherty argued that express warranties were created
by the Warranty Agreement, claims on CNH's website, and
statements by a Straub sales representative. But the district
court noted that the Warranty Agreement stated that it
contained the entire warranty, and that CNH made no other
representations or warranties, express or implied. The
district court held that the Warranty Agreement controlled,
and "where an express warranty provides that a product
is free of defect in material and workmanship, the claimant
must identify evidence of a defect in the material or
workmanship to overcome a motion for summary judgment."
As with the previous issue, Flaherty failed to demonstrate
that a defect in the material or workmanship of the Sprayer
caused the fire.
the district court rejected Flaherty's claim that CNH
violated the KCPA in its Warranty Agreement by excluding,
modifying, or limiting the implied warranty of
merchantability or fitness. The limitations and exclusions
clause did state that it "SPECIFICALLY EXCLUDES THE
IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR
PARTICULAR PURPOSE." That said, it then acknowledged
that some states may not allow such a limitation, and that
the stated limitation would not apply if applicable state law
did not allow such limitations. Because CNH's implied
warranty disclaimer only applied if state law permitted it,
and Kansas law does not permit it, the district court held
that CNH did not violate the KCPA.
are three primary issues in this appeal: whether the district
court erred in granting summary judgment to CNH on
Flaherty's express warranty claims; whether the district
court erred in granting summary judgment to CNH on
Flaherty's implied warranty claims; and whether the
district court erred in prohibiting discovery on Hawken's
inspection of the sprayer. Because the discovery issue
impacts whether summary judgment was premature here, we will
begin with it.
The district court did not err in granting CNH's motion
to quash the notice of depositions duces tecum and
request for protective order.
We examine the facts giving rise to this claim of error.
a product safety specialist for CNH, examined the Sprayer
over a month after the fire and after Flaherty's experts
had already inspected it. In an affidavit, Hawken stated that
he inspected the Sprayer at the request of CNH's legal
department and in anticipation of litigation against CNH. He
also said that he only reported his findings to CNH's
legal department and outside counsel. However, in
Straub's answer to CNH's interrogatory, Straub stated
that "[d]uring the post-fire inspection of the Sprayer
performed by CNH's representative, CNH's
representative told Straub General Manager Bruce Spidle that
it was his opinion that the fire started in the starter area,
based on what he saw from the pattern of the burn and the
damage to the machine."
filed a notice of deposition duces tecum informing
the other parties of his intention to depose Hawken. CNH
replied with a motion to quash and asked the court for a
protective order prohibiting Flaherty's discovery of
documents and information related to Hawken's inspection
of the Sprayer. CNH claimed that this information was
protected from discovery for two reasons. First, K.S.A. 2018
Supp. 60-226(b)(5)(D) protected information gathered by
Hawken because he is a non-testifying expert who prepared his
mental impressions and opinions in anticipation of
litigation. Second, Hawken's materials and opinions were
protected by the work-product doctrine codified at K.S.A.
2018 Supp. 60-226(b)(4)(A) because Hawken inspected the
Sprayer at the direction of CNH's in-house counsel and
only reported his findings to members of CNH's legal
department. Flaherty replied that CNH waived any work-product
privilege related to Hawken's inspection and report
because Hawken disclosed his opinions to Spidle. Flaherty
added that CNH had waived any consulting expert privilege
under K.S.A. 2018 Supp. 60-226(b)(5) in two ways: First,
Hawken's disclosure of his opinions to Spidle, and
second, by having Hawken sign its interrogatory answers.
After a telephonic hearing in which the parties presented
oral argument, the district court granted CNH's motion
for the reasons provided in CNH's motion (work-product
privilege and non-testifying witness privilege) and did not
allow Flaherty to depose Hawken, nor serve him with a
subpoena duces tecum.
challenges both grounds of the order. If we find the district
court erred in prohibiting discovery, then summary judgment
would be premature, and we would need to remand the case for
further discovery. So we begin with this claim of error.
Our standard of review for discovery error is abuse of
trial court is vested with broad discretion in supervising
the course and scope of discovery." Miller v.
Johnson, 295 Kan. 636, 688, 289 P.3d 1098 (2012).
"[O]rders concerning discovery will not be disturbed on
appeal in the absence of a clear abuse of discretion."
In re Tax Appeal of City of Wichita, 277 Kan. 487,
513, 86 P.3d 513 (2004). A judicial action constitutes an
abuse of discretion if (1) no reasonable person would take
the view adopted by the trial court; (2) it is based on an
error of law; or (3) it is based on an error of fact.
Wiles v. American Family Life Assurance Co., 302
Kan. 66, 74, 350 P.3d 1071 (2015).
Privileges in the law must be strictly construed.
in the law are not favored because they operate to deny the
factfinder access to relevant information." Adams v.
St. Francis Regional Med. Center, 264 Kan. 144, Syl.
¶ 3, 955 P.2d 1169 (1998). "Because they are
exceptions to the general rule that parties may obtain
discovery regarding any matter that is relevant to a
party's claim or defense, evidentiary privileges are to
be strictly construed." Rockhill Pain Specialists v.
Hancock, 55 Kan.App.2d 161, Syl. ¶ 7, 412 P.3d 1008
(2017). But as Justice Powell wrote in United States v.
Nobles, 422 U.S. 225, 237, 95 S.Ct. 2160, 45 L.Ed.2d 141
"In performing his various duties, however, it is
essential that a lawyer work with a certain degree of
privacy, free from unnecessary intrusion by opposing parties
and their counsel. Proper preparation of a client's case
demands that he assemble information, sift what he considers
to be the relevant from the irrelevant facts, prepare his
legal theories and plan his strategy without undue and
on to point out that "attorneys often must rely on the
assistance of investigators and other agents in the
compilation of materials in preparation for trial." 422
U.S. at 238. Thus, we have two statutory privileges in Kansas
that seek to protect this information from disclosure so that
an attorney can properly represent his or her client: the
work-product privilege and the non-testifying expert
privilege. Parties objecting to discovery based on an
evidentiary privilege bear the burden of establishing that it
applies. Cypress Media, Inc. v. City of Overland
Park, 268 Kan. 407, 425, 997 P.2d 681 (2000).
explain the application of each in turn.
The work-product privilege protected the disclosure of any
documents or tangible things Hawken produced in anticipation
work-product privilege protects "documents and tangible
things that are prepared in anticipation of litigation or for
trial by or for another party or its representative,
including the other party's attorney, consultant, surety,
indemnitor, insurer or agent." K.S.A. 2018 Supp.
60-226(b)(4)(A). There is an exception when a "party
shows that it has substantial need for the materials to
prepare its case and cannot, without undue hardship, obtain
their substantial equivalent by other means." K.S.A.
2018 Supp. 60-226(b)(4)(A)(ii). But Flaherty does not assert
that this exception applies.
work-product privilege only applies to "documents and
tangible things." K.S.A. 2018 Supp. 60-226(b)(4)(A).
Thus, as Flaherty notes, it would not "apply to
testimony about [Hawken's] inspection, what he told
Spidle, the basis for what he said, or whether the statements
Spidle attributes to him are correct." To the extent the
district court relied on the work-product privilege to
prohibit Hawken's statements about his investigation,
this was error. But the privilege clearly extends to any
documents or tangible things that would have been the subject
of the requested subpoena duces tecum.
Flaherty argues that the privilege does not apply to any
documents or tangible things prepared by Hawken because
CNH's legal department did not supervise their
preparation in anticipation of litigation. But Hawken
submitted an affidavit stating that he inspected the Sprayer
in anticipation of litigation. We find that it was not an
abuse of discretion for the district court to accept this
testimony. As CNH notes, Flaherty had already had two of his