Sometimes personal property is partially damaged and sometimes it is completely destroyed. For reasons not altogether clear, the rule in Texas had been that a claimant could only recover loss-of-use damages when his property was partially damaged (capable of repair). A Texas claimant could not recover loss-of-use damages if his property were a total loss. This dichotomy caused a Texas lawyer to argue in 1932 that, “It’s cheaper to kill a mare in Texas than it is to cripple her.”1 However, in one the better written opinions this blogger has ever read,2 Justice Willett of the Texas Supreme Court delivered an opinion that held that loss-of-use damages are equally available to claimants with total loss personal property as those with partially damaged personal property.3
Robert Davis was the sole owner of J & D Towing out of Huntsville, Texas. He owned one tow truck, a 2002 Dodge 3500. In December 2011 Davis was involved in a collision with Cassandra Brueland, which totaled Davis’ tow truck. There was no dispute that Brueland was 100% at fault. Davis asserted that his truck was worth about $20,000 and Brueland’s carrier paid Davis the property damage policy limit of $25,000. Davis then filed a claim with his own carrier American Alternative Insurance (AAI) under his underinsured motorist provision alleging that, in addition to the pre-loss fair market value of his totaled truck, he had between $27,000 and $29,000 in loss-of-use damages for the approximate two-month period he was without his sole tow truck. AAI denied the claim because several Texas appellate courts had previously held that loss-of-use damages are not available to a claimant whose personal property is a total loss, even though loss-of-use damages are available to claimants whose personal property is partially damaged.
Davis sued AAI and the trial court allowed the loss-of-use issue to go to a jury. The jury awarded Davis $28,000 in loss-of-use damages. AAI appealed and the appellate court reversed the trial court holding that Texas law does not permit loss-of-use damages in total destruction cases. Davis appealed to the Texas Supreme Court arguing that fairness and common sense dictates that loss-of-use damages should be available to all claimants, regardless of whether their personal property is totally destroyed or only partially so.
What I like about Justice Willett’s opinion is that he begins and ends the opinion with a very important maxim, “The basic reason underlying rules for the ascertainment of damages for any tortious act is a fair, reasonable, and proper compensation for the injury inflicted as a proximate result of the wrongful act complained of…The thing to be kept in view is that the party shall be compensated for the injury done.” Justice Willett pointed out that this issue had never been put squarely before the Texas Supreme Court, but some Texas appellate courts held there was no loss-of-use damages in total destruction cases. Some appellate courts reasoned that loss-of-use damages are included as part of the award for total loss so permitting loss-of-use damages would amount to a double recovery. Other appellate courts assumed that the property could be replaced immediately so the claimant did not suffer loss-of-use damages. Neither of these reasons make much sense or take into account real world realities.
Justice Willett begins his discussion remembering the great, and sometimes dark, history of Texas. He cites an 1852 case (decided just sixteen years after Texas gained independence from Mexico), involving the value of the loss of use of a slave. Tracing a fascinating4 history of American jurisprudence up to the present, with cases involving slaves, horses, livestock, and automobiles, Justice Willett pointed out at present a majority of jurisdictions allow loss-of-use damages no matter whether the property is partially or totally destroyed. Justice Willett held:
We agree with this modern trend, and we now hold that the owner of personal property that has been totally destroyed may recover loss-of-use damages in addition to the fair market value of the property immediately before the injury.
As I said, I really enjoyed this opinion. It is long, but lawyers and non-lawyers alike will find it an extremely interesting read. It is refreshing to see such scholarship in our courts. My hat is off to Justice Willett.
1 City of Canadian v. Guthrie, 87 S.W.2d 316, 318 (Tex.Civ.App. – Amarillo 1932, no writ).
2 The opinion has some humor, which is always nice. However, anyone who is interested in law, Texas history, and the history of American jurisprudence should read this opinion. Justice Willett does a wonderful job laying out the history of the law in Texas (and elsewhere) to arrive at his opinion. He delves into the inception of the Republic of Texas, slavery in Texas, and the archaic action of trover from English Common Law.
3 J & D Towing, LLC v. Alternative American Insurance, — S.W.3d — (2016); No. 14-0574, 2016 WL 91201 (Tex. Sup. Ct., January 8, 2016).
4 My use of the word “fascinating” is not meant to be superlative. Justice Willett points out the inanity of the antebellum cases involving slaves because in those cases the slaves were viewed no different than horses or other livestock. The lack of humanity in those cases is deafening. Sometimes things can be fascinating because of how ridiculous they are. Justice Willett also traced the history of the action of trover, which began in the late fifteenth century, and that explanation was fascinating and interesting because it shows the birth of a cause of action in the law and what was going on in the society that created it.