Opinion
No. 108,029.
2013-02-22
Steve J. JONES, Appellee, v. TANKS PLUS, L.L.C., et al., (Stafford Pump and Supply, Inc.), Appellant.
Appeal from Stafford District Court; Ron L. Svaty, Judge. Timothy J. Finnerty and Bradley J. Rample, of Wallace, Saunders, Austin, Brown & Enochs, Chartered, of Wichita, for appellant. Derek S. Casey, of Triplett Woolf & Garretson LLC, of Wichita, for appellee.
Appeal from Stafford District Court; Ron L. Svaty, Judge.
Timothy J. Finnerty and Bradley J. Rample, of Wallace, Saunders, Austin, Brown & Enochs, Chartered, of Wichita, for appellant. Derek S. Casey, of Triplett Woolf & Garretson LLC, of Wichita, for appellee.
Before MALONE, C.J., HILL and BRUNS, JJ.
MEMORANDUM OPINION
PER CURIAM.
After being injured when a catwalk attached to a salt water storage tank at an oilfield collapsed, Steve Jones filed a product liability suit against the manufacturer and multiple parties in the tank's distribution chain. Stafford Pump and Supply, Inc. (Stafford Pump), which sold the tank to the ultimate purchaser, was the sole remaining defendant at trial. Prior to trial, and again following the trial, Stafford Pump unsuccessfully attempted to assert the intermediate seller defense under the Kansas Product Liability Act, K.S.A. 60–3301 et. seq. Ultimately, the jury awarded Jones $412,000 in damages and found Stafford Pump to be 30 percent at fault. On appeal, Stafford Pump contends that the district court erred (1) in finding that the intermediate seller defense did not apply and (2) by refusing to give it credit for the amount Jones received in settling with the manufacturer of the defective product. Because we find no reversible error, we affirm the judgment of the district court.
Facts
On August 1, 2007, Jones was working as a self-employed pumper at an oilfield in Stafford County. While standing on a catwalk attached to a salt water storage tank, the mounting brackets attaching the catwalk to the tank failed. When the catwalk collapsed, Jones fell to the ground suffering significant injuries.
Tanks Plus, L.L.C. (Tanks Plus), manufactured the salt water storage tank. At the time of manufacturing, S & T Investments, Inc. (S & T), and The Bowen Family Trust (Bowen Trust) owned Tanks Plus. Prior to the catwalk collapse, Tanks Plus ceased doing business and sold its assets to D.B.P., Inc. (D.B.P.), and Tanks Plus' liability insurance expired.
Tanks Plus sold the salt water storage tank to a distributor, M & R Enterprises (M & R). In turn, M & R sold the tank to a retail supplier, Stafford Pump. Without altering the tank, Stafford Pump resold it to Gra Ex, L.L.C. (Gra Ex), the lease owner of the oilfield. Gra Ex then hired Abe's Oilfield Service, L.L.C. (Abe's), to install the tank at the oilfield, to attach a stairway to the tank, and to connect a catwalk to the tank.
Jones filed a petition in Stafford County District Court on June 22, 2007, asserting a product liability claim against Tanks Plus, S & T, Bowen Trust, D.B.P., Stafford Pump, Gra Ex, and Abe's. In the petition, Jones alleged that S & T and Bowen Trust were the alter egos of Tanks Plus. Furthermore, he alleged that D.B.P. was a successor to Tanks Plus. In addition, Jones claimed that Stafford Pump was liable as a product seller, that Abe's negligently installed the tank, and that Gra Ex was liable under a premises liability theory. Before trial, Jones settled with or dismissed his claims against all of the defendants except Stafford Pump. Specifically, Jones received $65,000 to settle his claims against Tanks Plus, S & T, and Bowen Trust. In addition, Jones received $20,000 to settle his claims against D.B.P.
Although Stafford Pump admitted that the salt water storage tank was defective, it asserted the intermediate seller defense found in K.S.A. 60–3306 in both an amendment to the pretrial order and by way of a summary judgment motion. In his response to the summary judgment motion, Jones argued that it was not reasonably certain that a judgment against the manufacturer of the tank could be satisfied because Tanks Plus ceased operating and no longer had liability insurance. In reply, Stafford Pump argued that the $65,000 Jones received in settlement from Tanks Plus, S & T, and Bowen Trust could satisfy any judgment entered against the manufacturer.
The district court denied Stafford Pump's motion for summary judgment, concluding that “any judgment by Mr. Jones against Tanks Plus would not be reasonably certain of being satisfied because Tanks Plus is insolvent and its liability insurance lapsed in May 2007 prior to Mr. Jones' injury in August 2007.” The district court also found that “the release of Tanks Plus in the settlement which included Tanks Plus' members does not operate as a release of Stafford Pump” and that Stafford Pump was not entitled to the intermediate seller defense as a matter of law.
The case proceeded to a jury trial commencing on December 13, 2011. At the conclusion of the evidence, the district court instructed the jury that it was Jones' contention that “the sale of the tank by defendant Stafford Pump & Supply, Inc., breached its implied warranty of merchantability.” The district court also instructed the jury that Stafford Pump “admits this contention,” and that “[a] seller who breaches this warranty is liable to any person who may reasonably be expected to use, consume, or be affected by the goods and who is injured as a result.” In addition, Stafford Pump sought to compare the fault of Abe's for failing to notice that the brackets on the tank “were not strong enough to support the weight of the catwalk” and “[f]or failing to tighten a bolt in the catwalk structure to eliminate sway....”
On December 15, 2011, the jury returned its verdict. On the issue of comparative fault, the jury found Abe's to be 70 percent at fault and Stafford Pump to be 30 percent at fault. The jury awarded Jones $412,000 in damages. Accordingly, the district court reduced the entered judgment against Stafford Pump to the amount of $123,600.
Stafford Pump filed a posttrial motion to alter or amend the judgment on February 2, 2012. In the motion, Stafford Pump once again requested that the district court find that it was not subject to liability in light of the intermediate seller defense set forth in K.S.A. 60–3306. Stafford Pump argued that Jones' alter ego allegations against S & T and Bowen Trust, as well as his allegations of successor liability against D.B.P. constituted admissions against interest. In the alternative, Stafford Pump requested a credit against the judgment in the amount of $85,000, which represented the $65,000 in settlement proceeds paid to Jones by S & T and Bowen Trust as well as the $20,000 in settlement proceeds paid to Jones by D.B.P.
The district court held a hearing on the motion to alter or amend the judgment on March 13, 2012. After taking the matter under advisement, on April 4, 2012, the district court entered an order denying the motion to alter or amend the judgment. In the order, the district court “adopt[ed] the positions and arguments of the plaintiff as set forth in plaintiff's opposition memorandum and as discussed during oral arguments.” Thereafter, Stafford Pump timely appealed.
Analysis
Overview of Kansas Product Liability Act
In Kansas, there are three primary theories of recovery in a product liability case: (1) negligence; (2) breach of express or implied warranty; and (3) strict liability. The provisions of the Kansas Product Liability Act (KPLA), K.S.A. 60–3301 et seq. , apply to “any claim or action brought for harm caused by the manufacture, production, making, construction, fabrication, design formula, preparation, assembly, installation, testing, warnings, instructions, marketing, packaging, storage or labeling of [a] product.” K.S.A. 60–3302(c). Comparative fault applies to all product liability claims regardless of the theory of recovery. See K.S.A. 60–258(a); Forsythe v. Coats Co., 230 Kan. 553, Syl. ¶ 1, 639 P.2d 43 (1982); Kennedy v. City of Sawyer, 228 Kan. 439, 450, 618 P.2d 788 (1980).
The KPLA governs the liability of a “product seller,” which is defined to include “any person or entity that is engaged in the business of selling products, whether the sale is for resale, or for use or consumption.” K.S.A. 60–3302(a). Accordingly, “product sellers” include manufacturers, wholesalers, distributors, and retailers. K.S.A. 60–3302(a). Due to the adoption of comparative fault, contribution between joint tortfeasors is no longer recognized. See Kennedy, 228 Kan. at 451. But the KPLA does not limit or restrict the right of a product seller “to seek and obtain indemnity from any other person who is responsible for harm which gave rise to the product liability claim.” K.S.A. 60–3303(b)(2)(C).
Here, Stafford Pump—a retailer—was found liable for breaching its implied warranty of merchantability when it sold the defective salt water storage tank. In fact, this was the only theory of recovery against Stafford Pump presented to the jury. Because Stafford Pump admitted that it had breached its implied warranty of merchantability, there was no dispute regarding whether the tank was defective at the time it left Stafford Pump's control. See Elite Professionals, Inc. v. Carrier Corp., 16 Kan.App.2d 625, 626, 827 P.2d 1195 (1992). Intermediate Seller Defense
On appeal, Stafford Pump contends that the district court erred in refusing to apply the intermediate seller defense set forth in K.S.A. 60–3306. Stafford Pump initially raised this issue in its pretrial motion for summary judgment and again in its posttrial motion to alter or amend the judgment. Although both motions were substantially similar, the summary judgment motion focused on the argument that S & T and Bowen Trust were alter egos of Tanks Plus while the posttrial motion alleged, in addition, successor liability on the part of D.B.P. The district court denied both motions, concluding that Stafford Pump had failed to establish that a judgment against the manufacturer, Tanks Plus, was reasonably certain of being satisfied, as required to invoke the intermediate seller defense. See K.S.A. 60–3306(e).
Summary judgment is appropriate when the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. Summary judgment is not appropriate if reasonable minds could differ as to the conclusions drawn from the evidence. On appeal, we apply the same rules as the district court. See O'Brien v. Leegin Creative Leather Products, Inc., 294 Kan. 318, 330, 277 P.3d 1062 (2012).
Regarding appellate review of the motion to alter or amend the judgment, the Kansas Supreme Court has held:
“The decision to grant [or deny] a motion to alter or amend a judgment pursuant to K.S.A.2011 Supp. 60–259(f) is within the district court's sound discretion and will not be disturbed on appeal unless there is an abuse of that discretion. [Citations omitted.] Judicial discretion is abused if judicial action is: (1) arbitrary, fanciful, or unreasonable, i.e., if no reasonable person would have taken the view adopted by the trial court; (2) based on an error of law, i.e., if the discretion is guided by an erroneous legal conclusion; or (3) based on an error of fact, i.e., if substantial competent evidence does not support a factual finding on which a prerequisite conclusion of law or the exercise of discretion is based. [Citations-omitted.]” Miller v. Johnson, 295 Kan. 636, 677, 289 P.3d 1098 (2012).
Stafford Pump argues that the district court's pretrial and posttrial decisions regarding the intermediate seller defense were erroneous as a matter of law. Therefore, we deem the issue presented on appeal to be whether the district court erred as a matter of law in concluding that the intermediate seller defense does not insulate Stafford Pump from liability for the defective salt water storage tank.
The intermediate seller defense is found in K.S.A. 60–3306, which states:
“A product seller shall not be subject to liability in a product liability claim arising from an alleged defect in a product, if the product seller establishes that: “(a) Such seller had no knowledge of the defect;
“(b) such seller in the performance of any duties the seller performed, or was required to perform, could not have discovered the defect while exercising reasonable care;
“(c) the seller was not a manufacturer of the defective product or product component;
“(d) the manufacturer of the defective product or product component is subject to service of process either under the laws of the state of Kansas or the domicile of the person making the product liability claim; and
“(e) any judgment against the manufacturer obtained by the person making the product liability claim would be reasonably certain of being satisfied.” (Emphasis added.)
“In other words, when the seller of the product in question was not the manufacturer and could not have discovered the defect in the product, it is immune from liability when ... any judgment against the manufacturer would be reasonably certain of being satisfied.” Jackson v. Thomas, 28 Kan.App.2d 734, 738, 21 P.3d 1007 rev. denied 271 Kan. 1036 (2001).
In the present case, neither party disputes that Stafford Pump established the first four factors of K.S.A. 60–3306. Likewise, it is undisputed that no judgment has been entered against Tanks Plus—the manufacturer of the salt water storage tank. Instead, the parties dispute whether it is reasonably certain that Tanks Plus could satisfy Jones' judgment against it. If satisfaction is reasonably certain, then Stafford Pump is immune from liability on Jones' claim under K.S.A. 60–3306. But in finding that Stafford Pump was not immune from liability prior to trial, the district court found that the manufacturer, Tanks Plus, “ceased operations in January 2007 and sold all of its assets in April 2007 before Mr. Jones was injured.”
The district court also made the following finding of fact in denying Stafford Pump's summary judgment motion:
“[Jones] accepted $65,000 to fully settle his claims against Tanks Plus. Tanks Plus has been completely insolvent since April 2007. Tanks Plus had no insurance coverage for Mr. Jones' claim. Tanks Plus was included in the settlement as consideration for [Jones'] settlement with and release of Tanks Plus' Members, S & T Investments, Inc., and The Bowen Family Trust. Tanks Plus, being insolvent, had no assets with which it could have satisfied a judgment against it in this litigation. For this reason, the settlement was paid by S & T Investments and the Bowen Family Trust.”
In its brief, Stafford Pump asserts that “[a]lthough a factual dispute may have existed regarding Tanks Plus' ability to satisfy a judgment against it at the time of summary judgment, the underlying facts on that issue had been conclusively established by the time Stafford Pump's motion to alter or amend the judgment was submitted.” According to Stafford Pump, at the point the posttrial motion was asserted, the district court “only needed to reach a legal conclusion regarding whether it was reasonably certain that a judgment against Tanks Plus would have been satisfied.” Based on our review of the record, we agree that there was a factual dispute that prevented the entry of summary judgment. We do not, however, agree that the ability of Tanks Plus to satisfy a judgment was “conclusively established” or reasonably certain at the time the posttrial motion was filed.
Relying on the doctrines of judicial admissions and judicial estoppel, Stafford Pump argues that the allegations in Jones' petition were sufficient to establish that S & T and Bowen Trust would be liable for a judgment against Tanks Plus. Similarly, Stafford Pump argues that the allegations in the petition were judicial admissions sufficient to establish successor liability on D .B.P.
Specifically, Jones asserted in his petition:
“Defendant S & T Investments formed, owned, and managed defendant Tanks Plus. Defendant S & T Investments is liable for any damages, debts, or other obligations of defendant Tanks Plus because, as a founder, owner, and manager, defendant S & T Investments:
• Failed to maintain accurate corporate records,
• Failed to maintain arm's length relationships with related entities,
• Failed to observe corporate formalities in terms of behavior and documentation,
• Failed to pay dividends,
• Intermingled assets of defendant Tanks Plus and defendant S & T Investments,
• Manipulated assets and liabilities to concentrate the assets and liabilities,
• Failed to maintain separately functioning corporate officers and/or directors,
• Significantly undercapitalized defendant Tanks Plus,
• Siphoned defendant Tanks Plus' funds,
• Treated defendant Tanks Plus' assets as its own,
• Used defendant Tanks Plus as a façade for its own dealings and transactions,
• Used defendant Tanks Plus to defeat the public policy of protecting persons from unreasonably dangerous products,
• Failed to secure and maintain liability insurance for defendant Tanks Plus, or
• Terminated defendant Tanks Plus' business activities to avoid responsibility for its unreasonably dangerous products.
“Defendant S & T Investments sold Tanks Plus to defendant D.B.P ., Inc., in April 2007.”
To the contrary, however, Jones argued in response to Stafford Pump's summary judgment motion and motion to alter or amend judgment that S & T and Bowen Trust were not liable for the financial obligations of Tanks Plus. Likewise, Jones argued in his response to the motion to alter or amend judgment that D.B.P. does not have successor liability for Tanks Plus' financial obligations. Thus, we must determine whether the allegations asserted in Jones' petition prevented him from subsequently changing his position.
In support of its argument that the allegations in Jones' petition constitute judicial admissions, Stafford Pump cites two Kansas cases—City of Wichita v. Sealpak Co., 279 Kan. 799, 800–01, 112 P.3d 125 (2005), and Every v. Rains, 84 Kan. 560, 564–65, 115 Pac. 114 (1911). In both cases, the alleged “admissions” were statements made regarding a party's own legal status. In Sealpak, which stemmed from a disagreement with the City of Wichita over the appraisal of real property in a condemnation action, Sealpak's owner sought to exclude his own statement made during a prior tax appeal regarding the value of the property. Similarly, the defendants in Every argued that they were not partners in a mining business even though they had alleged in a prior lawsuit that they were partners in the business. Because the purported admissions in Jones' petition did not involve his own legal status, we find Sealpak and Every to be distinguishable from the present case.
As the Kansas Supreme Court has held:
“ ‘The modern equivalent of the common law system is the use of alternative and hypothetical forms of statement of claims and defenses, regardless of consistency. It can readily be appreciated that pleadings of this nature are directed primarily to giving notice and lack the essential character of an admission. To allow them to operate as admissions would render their use ineffective and frustrate their underlying purpose. Hence the decisions with seeming unanimity deny them status as judicial admissions, and generally disallow them as evidential admissions.’ “ Lytle v. Stearns, 250 Kan. 783, 798–99, 830 P.2d 1197 (1992) (quoting McCormick on Evidence § 265, p. 781 [3d ed.1984] ).
See Hess v. St. Francis Regional Med. Center, 254 Kan. 715, 725, 869 P.2d 598 (1994).
We do not find the claims and contentions asserted by Jones in his petition against S & T, Bowen Trust, and D.B.P. to be judicial admissions. We also pause to note that Stafford Pump has failed to provide convincing legal authority in support of its position that the allegations made in Jones' petition should be construed to be judicial admissions. See State v. McCaslin, 291 Kan. 697, 709, 245 P.3d 1030 (2011) (stating that an issue not briefed by the appellant is deemed waived and abandoned); State v. Berriozabal, 291 Kan. 568, 594, 243 P.3d 352 (2010) (stating that failure to support a point with pertinent authority or show why it is sound despite a lack of supporting authority or in the face of contrary authority is akin to failing to brief the issue).
Regarding the doctrine of judicial estoppel, this court has held:
“Judicial estoppel precludes a party from taking one position in a case to induce the court to act in a certain way and then taking a contrary or conflicting position in a related proceeding involving the same opposing parties. [Citations omitted.] The United States Supreme Court described the doctrine this way: ‘ “[W]here a party assumes a certain position in a legal proceeding, and succeeds in maintaining that position, he may not thereafter, simply because his interests have changed, assume a contrary position, especially if it be to the prejudice of the party who has acquiesced in the position formerly taken by him.” ‘ [Citations omitted.] Thus, judicial estoppel ‘ “generally prevents a party from prevailing in one phase of a case on an argument and then relying on a contradictory argument to prevail in another phase.” ‘ [Citations omitted.]” Estate of Belden v. Brown County, 46 Kan.App.2d 247, 262–63, 261 P.3d 943 (2011).
Once again, we note that Stafford Pump cites to no evidence in the record to establish that Jones prevailed on his claims against S & T, Bowen Trust, and D.B.P. Certainly, the mere fact of settlement does not prove that Jones prevailed on an alter ego theory against S & T and Bowen Trust. Likewise, the mere fact of settlement does not prove that Jones prevailed on a successor liability claim against D.B.P.
In Griffith v. Stout Remodeling, Inc., 219 Kan. 408, 412–13, 548 P.2d 1238 (1976), the Kansas Supreme Court found:
“[C]onsistency of claims is not important at the pleading stage, the practical effect of which is to diminish the doctrine of election of remedies as it was applied under our former procedural code.' ... The spirit of the new rules [of civil procedure] would appear to permit the pleader to shift the theory of his case as the facts develop so long as he has fairly informed his opponent of the transaction or “aggregate of operative facts” involved in the litigation' [citation omitted].”
See Golden v. Den–Mat Corporation, 47 Kan.App. 450, 463, 276 P.3d 773 (2012).
As a general rule, “ ‘parties to an action are bound by their pleadings and judicial declarations and are estopped to deny or contradict them where the other parties to the action relied thereon and changed their position by reason thereof.’ “ Dimension Graphics, Inc. v. Liebowitz, 26 Kan.App.2d 722, 727, 994 P.2d 658 (1999) (quoting Arrowhead Constr. Co. v. Essex Corp., 233 Kan. 241, 247, 662 P.2d 1195 [1983] ). But to prevail under the doctrine of judicial estoppel, a party must satisfy the following elements:
“A party can only assert judicial estoppel when all four elements are satisfied: ‘(1) a position taken must contradict a declaration in a prior judicial action; (2) the two actions must involve the same parties; (3) the party asserting the theory must have changed its position; and (4) the changed position must have been in reliance on the prior statement.’ [Citations omitted.]” In re Marriage of Hudson, 39 Kan.App.2d 417, 425, 182 P.3d 25,rev. denied 286 Kan. 1178 (2008).
Although Stafford Pump cites to numerous out-of-state cases applying judicial estoppel, these cases are unpersuasive in light of the Kansas caselaw that is directly on point. See Chism v. Protective Life Ins. Co., 290 Kan. 645, 661–62, 234 P.3d 780 (2010). Stafford Pump also cites a workers compensation case, Marley v. M. Bruenger & Co., Inc., 27 Kan.App.2d 501, 6 P.3d 421,rev. denied 269 Kan. 933 (2000), in support of its argument. Based on our review of the Marley decision, however, we do not find it to be analogous to the present case.
In Marley, the question presented was whether an injured over-the-road truck driver was an independent contractor or an employee of the respondent. At the time the trucker started driving for the respondent, he signed an agreement stating that he would be an independent contractor. In addition, the trucker took out an insurance policy that declared him to be an independent contractor. But after receiving approximately $40,000 in benefits from the insurance policy, the trucker claimed that he was actually an employee in order to obtain workers compensation benefits. On appeal, a panel of this court held that the trucker was “estopped to deny he was an independent contractor at the time of his injury and, as a result, he [was] not entitled to workers compensation benefits.” 27 Kan.App.2d at 505.
Unlike Marley, in which the truck driver had consistently taken the position that he was an independent contractor prior to filing a workers compensation claim, the allegation in Jones' petition that Tanks Plus was an alter ego of its owners did not involve his own legal status. Rather, Jones' petition alleged unproven contentions regarding the relationship between Tanks Plus, S & T, Bowen Trust, and/or D.B.P. Moreover, Stafford Pump does not argue that it detrimentally relied upon Jones' allegations regarding S & T's and Bowen Trust's status as an alter ego of Tanks Plus or regarding D.B.P.'s status as a successor to Tanks Plus. Accordingly, we conclude that judicial estoppel is not applicable in this case.
Ultimately, the district court was required to decide whether Stafford Pump had met its burden of establishing that it was “reasonably certain” that Tanks Plus could satisfy any judgment entered against it for the defect in the salt water storage tank. Although it is questionable whether the district court should have granted partial summary judgment to Jones, Stafford Pump had an adequate opportunity to present the issue to the district in its posttrial motion. Moreover, the court held a hearing on the motion to alter or amend the judgment prior to issuing its final decision.
For the reasons set forth above, we do not find the allegations in Jones' petition to conclusively establish that Tanks Plus was the alter ego of S & T and Bowen Trust. See Mr. Cinnamon of Kansas, Inc. v. Hall, 41 Kan.App.2d 457, 463, 202 P.3d 734 (2009) (“[A] court's power to pierce the corporate veil is to be exercised reluctantly and cautiously.”). Similarly, we do not find that the allegations in Jones' petition to conclusively establish successor liability on D.B.P. for the product liability claim asserted in this case. See Stratton v. Garvey Interna'l, Inc., 9 Kan.App.2d 254, 264–65, 676 P.2d 1290 (1984) (“Kansas adheres to the traditional majority rule of successor nonliability ....”); see also Comstock v. Great Lakes Distributing Co., 209 Kan. 306, 310, 496 P.2d 1308 (1972) (setting forth the exceptions to the general rule of nonliability of a successor for the debts of a tortfeasor).
Based on our review of the record, we find that Stafford Pump did not meet its burden of establishing that it was protected by the intermediate seller defense. Specifically, we find that Stafford Pump has not established that “any judgment against the manufacturer obtained by the person making the product liability claim would be reasonably certain of being satisfied.” K.S.A. 60–3306(e). Of course, there has been no judgment entered against Tanks Plus in this case. Likewise, it is undisputed by the parties—and the evidence in the record reveals—that Tanks Plus had been insolvent since April 2007 and that it had no insurance coverage for Jones's product liability claim.
As noted above, the KPLA does not limit or restrict any right Stafford Pump may have “to seek and obtain indemnity from any other person who is responsible for the harm which gave rise to the product liability claim,” K.S.A. 60–3303(b)(2)(C). Moreover, as this court previously held in Westar Energy, Inc. v. Wittig, 44 Kan.App.2d 182, 215, 235 P.3d 515 (2010), “[i]ndemnity can only be determined after the final nonappealable action is taken in the underlying legal action or investigation.” At this point, Stafford Pump may still be able to prove that it is entitled to indemnification from S & T and/or Bowen Trust under an alter ego theory. Similarly, Stafford Pump may still be able to prove that it is entitled to indemnification from D.B.P. Based on the evidence in the record in this case, however, we cannot determine as a matter of law that Tanks Plus was the alter ego of S & T or Bowen Trust, nor can we determine as a matter of law that D.B.P. has successor liability for Tanks Plus' financial obligations.
We, therefore, conclude that Stafford Pump failed to establish all of the factors of the intermediate seller defense as set forth in K.S.A. 60–3306(a)–(e). Credit for Settlement
Stafford Pump also contends that it is entitled to a pro tanto reduction of the judgment against it equal to the settlement amounts paid on behalf of Tanks Plus. In support of this contention, Stafford Pump claims that the credit is necessary to prevent Jones from receiving a windfall. Further, Stafford Pump argues that its liability was solely as a surrogate of Tanks Plus, which manufactured the defective salt water storage tank.
The issue of whether Stafford Pump is entitled to a settlement credit involves the correct measure of damages. Hence, this issue involves a question of law over which our review is unlimited. See Burgess v. Shampooch Pet Industries, Inc., 35 Kan.App.2d 458, 460–61, 131 P.3d 1248 (2006).
Stafford Pump relies upon the Kansas Supreme Court's decision in York v. Intrust Bank, N.A., 265 Kan. 271, 962 P.2d 405 (1998) in support of its argument. Undoubtedly, one of the many issues presented in York was whether the defendant should receive a pro tanto credit for the settlement amounts paid to the plaintiffs. But York was not a product liability case, and it did not involve comparative fault. See 265 Kan. at 310–11. Accordingly, we do not find the York decision to be applicable to the present case. Similarly, we do not find Wright v. Bachmurski, 29 Kan.App.2d 595, 29 P.3d 979,rev. denied 272 Kan. 1423 (2001)—which involved a defamation claim—to be applicable to this case.
Similarly, we do not find Glenn v. Fleming, 240 Kan. 724, 732 P.2d 750 (1987), to be controlling in this case. We recognize that Glenn is one of several cases from the Kansas Supreme Court that stand for the proposition that there is no right of contribution between joint tortfeasors in a negligence case because of the adoption of comparative fault. 240 Kan. at 731; see Brown v. Kiell, 224 Kan. 195, Syl. ¶ 5, 580 P.2d 867 (1978). But it is not a product liability case, nor does it involve a claim for breach of implied warranty.
On the other hand, we find Kennedy v. Sawyer, 228 Kan. 439, 618 P.2d 788 (1980) to be applicable to the present case. In Kennedy, the Kansas Supreme Court extended the doctrine of comparative fault to “strict liability claims and to those claims based on implied warranty in products liability cases.” 228 Kan. 439, Syl. ¶ 4. As such, our Supreme Court concluded that contribution between joint tortfeasors no longer applies in product liability cases, regardless of the theory of recovery. See 228 Kan. at 451. On the other hand, our Supreme Court found contractual indemnification to still be valid notwithstanding the adoption of comparative fault. 228 Kan. at 455 (“A contract of indemnity may be implied when one is compelled to pay what another party ought to pay.”). But, until the underlying case is finally resolved, a claim for indemnification is not ripe. See Wittig, 44 Kan.App.2d at 215.
Because Stafford Pump has failed to cite to any relevant case or statute that would permit a settlement credit in a product liability action, we conclude that the district court had no authority to reduce the verdict by the amount Jones received in settlement on behalf of Tanks Plus.
Affirmed.