Personal Injury: What do I do about the Damage to my Car?

Several times a week I sit down with a client or a member of the community who wants to know what do they do about the damage to their automobile?  What can they recover for and does the insurance company have to put them back in a similar vehicle?  The other question asked most often is whether they can have a rental vehicle and for how long? The answers to these questions are best examined by the jury instructions given when you try a case like this to a jury. PROPERTY DAMAGES–DIMINUTION IN MARKET VALUE. The plaintiff’s actual property damages are equal to the difference between the fair market value of the property immediately before it was damaged and its fair market value immediately after it was damaged.  The fair market value of any property is the amount which would be agreed upon as a fair price by an owner who wishes to sell, but is not compelled to do so, and a buyer who wishes to buy, but is not compelled to do so. (If evidence is introduced regarding the actual or estimated cost of repair, the following paragraph should be used:  Evidence of [estimates of the cost to repair] (and) [the actual cost of repairing] the damage to the plaintiff’s property may be considered by you in determining the difference in fair market value immediately before and immediately after the damage occurred.  )   The first jury instruction discusses the loss in value of a vehicle due to the damage.  The jury is instructed as to the definition of market value and told how to consider repairs and told they can consider the repairs when determining the amount of loss in value.  The jury is also told to consider not that the victim should be given the value of the vehicle to them, or how many payments they made, but instead what two people would negotiate the value to be if they were not forced to negotiate. PROPERTY DAMAGES NO MARKET VALUE–COST OF REPLACEMENT OR REPAIR. NOTE WELL:  Use this instruction where there is no market by which the degree of damage to the property can be measured.  1Where repair or replacement does not provide a realistic measure of the plaintiff’s loss (such as where the property cannot be repaired or replaced, or where it has primarily or exclusively intrinsic value), use N.  C.  P.  I.  –Civil 106.  66. The plaintiff’s actual property damages are equal to the amount reasonably needed to [repair the damage to the property]2 [replace the property damaged]3, less [the salvage value of the [property] [parts replaced]] [the accumulated depreciation4 on the property replaced].   PROPERTY DAMAGES–NO MARKET VALUE, REPAIR OR REPLACEMENT–RECOVERY OF INTRINSIC ACTUAL VALUE. NOTE WELL:  Use this instruction where damages measured by market value would not adequately compensate the plaintiff and repair or replacement would be impossible (as where items such as a family portrait are destroyed) or economically wasteful (as where obsolete property is damaged beyond economically feasible repair).  1 The plaintiff is entitled to recover the actual value of his property immediately before it was damaged (less the salvage value, if any, that it had after its damage).  The actual value of any property is its intrinsic value; that is, its reasonable value to its owner.  2In determining the actual value of the plaintiff’s property, you may consider: [the original cost of (labor and materials used in producing) the (specify property)] [the age of the (specify property)] [the degree to which the (specify property) has been used] [the condition of the (specify property) just before it was damaged] [the uniqueness of the (specify property)] [the practicability of [repairing] [reconstructing] the (specify property)] [the cost of replacing the (specify property) (taking into account its depreciation; that is, the degree to which it had been used up or worn out with age)] [the insured value of the property]3 [the opinion of the plaintiff as to its value] [the opinion of any experts as to its value] [state other appropriate factors supported by the evidence4]. You will not consider any fanciful, irrational or purely emotional value that (specify property) may have had.   The last sentence is my favorite.  You should not consider the emotional value of property… Although people often become very attached it items, such as family heirlooms, our courts are very clear that we are not to consider the emotional attachment to property.   PROPERTY DAMAGES–LOSS OF USE OF VEHICLE.  1 The (state number) issue reads: “What amount is the plaintiff entitled to recover for loss of use of his (describe vehicle)?” The plaintiff’s actual property damages may also include compensation for the loss of use of his vehicle.  (Here give the applicable alternative statement (give only one:  ) [Repairs possible at reasonable cost in reasonable time.  When a vehicle, damaged by the negligence of another, can be repaired at a reasonable cost and within a reasonable time, the owner may recover for the loss of its use.  The measure of such damages is the cost of renting a similar vehicle during a reasonable period for repairs (whether or not the owner actually rented such a similar vehicle). [Total destruction or repairs improvident.  When a vehicle, by the negligence of another, is totally destroyed as a conveyance (or if for some reason repairs would be so long delayed as to be improvident), the owner may recover for loss of use only if a substitute vehicle is not immediately obtainable.  If a substitute is not immediately obtainable, the owner may recover for loss of use during the period reasonably necessary to acquire a substitute.  The measure of such damages is the cost of renting a similar vehicle during such period (whether or not the owner actually rented such a similar vehicle)]. [Owner elects to replace repairable vehicle.  When a vehicle, damaged by the negligence of another, can be repaired at a reasonable cost and within a reasonable time, but the owner elects to replace it by acquiring a substitute vehicle, the owner may recover for loss of use during the time reasonably required to make repairs or to acquire the substitute, whichever is shorter.  The measure of such damages is the cost of renting a similar vehicle during such period]. (Do not use the following paragraph unless the evidence justifies.  ) (In such a situation, if the owner proves that he made a reasonable effort to obtain a substitute vehicle but was unable to do so within the area reasonably related to his business, and further proves with reasonable certainty the profits he lost through inability to use the vehicle, he may recover, in place of the cost of rental, such profits lost during a reasonable period within which to [make repairs] [obtain a substitute not immediately obtainable].  )   The last instruction is often the one that people are most confused about… can you get a rental car?  Yes, but only if the repairs and the amount of time to repair the vehicle is reasonable.  You cannot keep a rental beyond a reasonable amount of time to repair your car.  What is a reasonable time?  The courts leave that for the jury to determine.   What, if anything, should we get out of these instructions to be given the jury by the judge with regard to use of a vehicle?  Well, first, market value of your vehicle is all that is important.  Therefore, you cannot allow yourself to make a bad deal purchasing a vehicle or your pain could make you become a victim twice. The other way to become a victim twice is by allowing yourself to have to report the damage to your vehicle without obtaining the diminution in value. N.C.G.S. 20 71.4. Failure to disclose damage to a vehicle shall be a misdemeanor: (a) It shall be unlawful for any transferor of a motor vehicle to do any of the following: (1) Transfer a motor vehicle up to and including five model years old when the transferor has knowledge that the vehicle has been involved in a collision or other occurrence to the extent that the cost of repairing that vehicle, excluding the cost to replace the air bag restraint system, exceeds twenty five percent (25%) of its fair market retail value at the time of the collision or other occurrence, without disclosing that fact in writing to the transferee prior to the transfer of the vehicle. (2) Transfer a motor vehicle when the transferor has knowledge that the vehicle is, or was, a flood vehicle, a reconstructed vehicle, or a salvage motor vehicle, without disclosing that fact in writing to the transferee prior to the transfer of the vehicle. (a1) For purposes of this section, the term “five model years” shall be calculated by counting the model year of the vehicle’s manufacture as the first model year and the current calendar year as the final model year. Failure to disclose any of the information required under subsection (a) of this section that is within the knowledge of the transferor will also result in civil liability under G.S. 20 348. The Commissioner may prepare forms to carry out the provisions of this section. (b) It shall be unlawful for any person to remove the title or supporting documents to any motor vehicle from the State of North Carolina with the intent to conceal damage (or damage which has been repaired) occurring as a result of a collision or other occurrence. (c) It shall be unlawful for any person to remove, tamper with, alter, or conceal the “TOTAL LOSS CLAIM VEHICLE” tamperproof permanent marker that is affixed to the doorjamb of any total loss claim vehicle. It shall be unlawful for any person to reconstruct a total loss claim vehicle and not include or affix a “TOTAL LOSS CLAIM VEHICLE” tamperproof permanent marker to the doorjamb of the rebuilt vehicle. Violation of this subsection shall constitute a Class I felony, punishable by a fine of not less than five thousand dollars ($5,000) for each offense. (d) Violation of subsections (a) and (b) of this section shall constitute a Class 2 misdemeanor. (e) The provisions of this section shall not apply to a State agency that assists the United States Department of Defense with purchasing, transferring, or titling a vehicle to another State agency, a unit of local government, a volunteer fire department, or a volunteer rescue squad. The Mandatory Disclosure Statute requires reporting either to a retail buyer or to a dealership.  Where significant damage must be disclosed by law this reduces the value of the repaired vehicle in a very real way. The court must allow the introduction of repair costs or estimates to repair into evidence to help prove this loss in value.  This issue was first addressed in U. S. Fid. & Guar. Co. v. P. & F. Motor Express, 220 N.C. 721, 18 S.E.2d 116, 117 (1942)  where the court determined whether evidence of an estimate of the cost of repairing an injured automobile competent upon the issue of the measure of damage? “In determining the depreciation in value of a motor vehicle as the result of an injury, the jury may take into consideration the reasonable cost of the repairs made necessary thereby, and the reasonable market value of the vehicle as repaired.  In excluding the evidence indicated there was error for which there must be a new trial.” U. S. Fid. & Guar. Co. v. P. & F. Motor Express, 220 N.C. 721, 18 S.E.2d 116 (1942). This issue was most recently addressed again in Smith v. White, 712 S.E.2d 717 (N.C. Ct. App. 2011).  In Smith Plaintiff claimed that his motorcycle suffered a diminution in value due to the accident, despite repairs to the motorcycle. Upon defendant’s objection the trial court excluded evidence of the actual cost to repair plaintiff’s motorcycle. After hearing post-trial motions by plaintiff and defendant the trial court, citing U.S. Fidelity & Guaranty Co. v. P. & F. Motor Express, Inc., 220 N.C. 721, 18 S.E.2d 116 (1942), concluded that evidence regarding the cost of repairs should not have been excluded and granted plaintiff a new trial on the issue of diminution in value.  Smith v. White, 712 S.E.2d 717, 719 (N.C. Ct. App. 2011).  The Defendant appealed. The Court in Smith compared the evidence of damage to the Plaintiff’s motorcycle in Smith to that of the damage to the car in the Fidelity case.  The issue for the Court was whether evidence of estimated cost of repair, as opposed to actual cost of repair already paid, should be admitted. Citing Fidelity, the Court held “[a]s to that issue, the Court stated even though ‘evidence of such an estimate of the cost of repairs might not be as convincing as evidence of the cost of the actual repairs, we think this difference relates to the weight thereof rather than to its competency.’ Id. at 723, 18 S.E.2d at 117. The Court made clear that where repairs have been made and paid for, such evidence is admissible to show the measure of damages.”  Smith v. White, 712 S.E.2d 717 (N.C. Ct. App. 2011).