One basic principle in Texas law is that if personal property is totally destroyed, the proper measure of damages is the difference in the property’s market value immediately before and immediately after the injury. City of Tyler v. Likes, 962 S.W.2d 489 (Tex. 1997). If the marked value cannot be determined, then other methods of valuation may be used by the claimant, including replacement value, actual value, and sentimental value. Bueckner v. Hamel, 886 S.W.2d 368 (Tex. App. – Houston [1st] 1994, writ denied).
Marked value is defined as the difference in the value of the item immediately before and after injury to the property at the place where the damage occurred. Thomas v. Oldham, 895 S.W.2d 252 (Tex. 1995). In the case of an automobile that is totally destroyed, the measure of damges was its marked value immediately before the accident, less any salvage value. Bass v. McClung Roofing Company, 575 S.W.2d 342 (Tex. App. – Fort Worth 1978, no writ).
In addition, the market valuation must be determined in the place where the damages occurred, usually in the county in Texas where the property was located. Peter Salt Peter Energy Company v. Crystal Oil Company, 524 S.W.2d 383 (Tex. App. – Corpus Christ 1975, writ refused, n.r.e.). In addition, the admission of market value evidence should be of similar sales within five years of the date of injury. Holiday Inns v. State, 931 S.W.2d 614 (Tex. App. – Amarillo 1996, writ denied).
Sometimes certain types of property that is destroyed does not have any market value. If this is the case, the claimant may recover the replacement value or the cost of reproducing the destroyed property. Pringle v. Nowlin, 629 S.W.2d 154 (Tex. App. – Ft. Worth 1982, writ refused, n.r.e.). Replacement value is defined as the cost of replacing or reproducing the property, less any offset for enhancement of value. Shawtank Cleaning Company v. Texas Pipeline Company, 442 S.W.2d 851 ) Tex. App. – Amarillo 1969, writ refused n.r.e.).
If the property in question that has been destroyed has no marked or replacement value, the injured party may claim actual or intrinsic value of an item. Moran Corp v. Murray, 381 S.W.2d 324 (Tex. App. – Texarkana 1964, no writ). Examples of items for which intrinsic value may be available as a measure of damages include household furniture, family records, clothing, and personal effects. Gulf States Utilities Company v. Low, 79 S.W.3d 561 (Tex. 2002).
Intrinsic value is defined as the value of the property to the owner in the condition the property was in when it was damaged, excluding any fanciful or sentimental consideration. The claimant must also prove that the property in question had no market or replacement value American Transfer and Storage Company v. Brown, 584 S.W.2d 284 (Tex. App. – Dallas 1979).
Actual value must be distinguished from sentimental value. The general rule is that there cannot be a sentimental value for personal property such as clothing and household goods. However, for items that have their primary value in sentiment, such as birth records, wedding pictures, etc., an owner should be entitled to recover sentimental value Brown v. Frontier Theaters, 369 S.W.2d 299 (Tex. 1963). To prove sentimental value, a claimant must establish that the property in question had special value as a family heirloom.
Certain damages are not recoverable by an owner when personal property is totally destroyed. First, when personal property, such as an automobile, is totally destroyed and cannot be repaired, the owner may not recover loss of use damages under Texas law. Hanna v. Lott, 888 S.W.2d 132 (Tex. App. – Tyler 1994, nor writ). This also applies to the owner’s claims for loss of earning capacity related to totally destroyed personal property.
Personal property, however, is sometimes salvageable. In circumstances where personal property is damaged but not totally destroyed, Texas law allows a claimant to choose between valuation damages and repair damages. Central Freight Lines v. Naztec Inc. 790 S.W. 2d 733 (Tex. App. – El Paso 1990, no writ). If the claimant chooses valuation damages, then the measure of damages would be the market value of the personal property immediately before and immediately after the injury in the place where the injury occurred. If the claimant chooses cost of repairs valuation, then the measure of damages is the reasonable cost necessary to restore the property to its condition immediately before the damage. Pasadena State Bank v. Isaac, 228 S.W.2d 127 (Tex. 1950).
An insurance company may not force a claimant to accept repair damages instead of market value in a third-party situation. Southwestern Motor Transportation v. Valley Weather Makers, 427 S.W.2d 597 (Tex. 1968). A claimant cannot recover both cost of repair damage and market value damages if doing so would result in double recover.
To prove cost of repairs, the claimant must offer evidence of costs or of parts and replacement and the reasonable and necessary costs of labor. The claimant must prove that the cost of repair was both reasonable and necessary. Evidence of what the claimant paid for repairs, without evidence that the charges were reasonable, is insufficient. Barr v. Triple A Techs, LLC, 167 S.W.3d 32 (Tex. App. – Waco 2005, no Pet).
Williams, McClure & Parmelee is dedicated to high quality legal representation of businesses and insurance companies in a variety of matters. We are experienced Texas civil litigation attorneys based in Fort Worth who know Texas courts and Texas law. For more information, please contact the law firm at 817-335-8800. The firm’s new office location is 5601 Bridge Street, Suite 300, Fort Worth, Texas 76112.