Persons involved in car accidents in Indiana due to no fault of their own have numerous claims for damages that they can pursue against the at-fault parties that caused the collisions. Claimants can pursue claims for wrongful death, physical and permanent injuries, medical costs and other expenses, lost wages, lost time, loss of enjoyment of life, emotional distress, mental anguish, loss of services, support and consortium of a spouse, and property damage. In the recent case of Shield Glob. Partners-G1, LLC v. Forster, the Indiana Court of Appeals addressed the availability of one of those items of damage, diminished value of a vehicle as part of a property damage claim.
The case arose out of an automobile collision between Lindsay Forster and Lance Ingersoll in Bloomington, Indiana. Forster rear-ended Ingersoll, and as a result of the collision, Ingersoll’s Chevy Silverado pickup truck was damaged. The truck was repaired for a cost of $6,852.55. Shield Global Partners-G1, LLC (“Shield”), which held an assignment of any claims for any diminished value, sought reimbursement for the diminished value of the truck, despite the repairs that had been satisfactorily performed. Shield presented an in-house appraisal that the truck had a fair market value of $36,550 before the collision, according to the National Automobile Dealers Association, and that after the collision, despite the repairs, its fair market value was $32,529.50, for a diminished value of $4,020.45. Shield also presented a second appraisal from an auto appraiser who estimated that the diminished value of the truck amounted to $7,400.00.
Shield filed suit against Forster for the diminished value of the truck. A bench trial was held. The trial court denied Shield’s claim for the diminished value of the truck. The trial court found that Shield’s diminished value claim amounted to a claim for “stigma of defect” damage, which per the trial court, Indiana law does not per se recognize without permanent damage. The trial court also found that Shield had failed to present sufficient evidence to support its claim of diminished value. The trial court, therefore, found the repair costs to be an adequate measure of damages.
On appeal, the Indiana Court of Appeals analyzed the applicable law in situations where there is an item of personal property that is damaged, but not destroyed. Under Indiana law, the measure of damages is the reduction in fair market value caused by the negligence of the at-fault party. Such can be proved in three ways: 1) evidence of fair market value before and after the causative event, 2) evidence of the cost of repair where the repair will restore the property to its fair market value before the causative event, and 3) a combination of evidence of the cost of repair and evidence of the fair market value before the event and after the repair when the repair alone does not restore the property to its fair market value before the event.
The Indiana Court of Appeals agreed with Shield’s argument that, based upon applicable law, damages for the diminished value of the property are recoverable whenever property has a decreased fair market value despite adequate repairs and despite there being no permanent damage. As noted by the Court, the cost of repairs to property is only an adequate measure of damages when the repairs restore the property to its fair market value before the damage. In so holding, the Court noted the economic reality that property that has been damaged and repaired often has less value than similar property that has never been damaged. The Court further held that the trial court erred when it concluded that Shield had failed to prove that the repairs to the truck did not restore it to its fair market value before the accident.
You can read the full opinion here.