straightforward case where plaintiffs allege that sales tax and mandatory title transfer fees are part of the actual cash value of their vehicle which suffered a total loss claim this interpretation of the insuring collision and comprehensive coverage is provided by the policies reasonable plaintiff's offer a reasonable way to measure fair market value in the context of an actual cash value policy and as such plaintiff's interpretation must be adopted under texas ganders for interpretation of insurance policies we start of course as we must with the with the plain language of the policy the policy promises to pay for loss losses to find this essentially damage to a vehicle that loss then is measured as the cost to repair the damage cost to repair or replace the damage to the vehicle so you get the fender bender and a repair facility has to fix some dents and scratches they might have to replace and taillights or bumper the cost to do so is what is promised by the policy or that cost reaches a certain threshold at some point where it's no longer economically feasible to pay the cost to repair or replace the damage policy and this case explains that when that cost exceeds the actual cash value look at policy it's now what's considered a total loss this is a pretty standard although policy  throughout all jurisdictions of the state of texas at that point then the insurer is not obligated to pay the cost to repair or replace the damage rather they pay the actual cash value of the vehicle courses makes sense why pay a higher cost to repair damage to a vehicle could just get the same vehicle for a lesser amount maybe recover your salvage or whatever the case may be if you didn't share very sensible so then the question then becomes how do we measure that which is the measure of the actual cash value texas law is that actual cash value registration of the taxes they'd go to the state i would get to keep the taxes where you want it but you're not selling this vehicle you're having to replace a vehicle you lost it so the fair market value can be measured as if the replacement cost less depreciation as income capitally she's a market value and i agree with the willing buyer and willing seller you know out the bottom that hide it i'm going to present you evidence right i've got to show you i've got to give you a way of measuring that and so texas law provides ways of measuring that income capitalization which is irrelevant right because we're talking about private passenger vehicles there's no they say well the the way that you measure it is replacement cost less depreciation other cases say it's at least a consideration for a jury to consider replacement cost of original cost all these all these various factors the lowery opinion says that in a well functioning just why limits of liability for a covered auto is the lowest of one actual cash value to the amount necessary to replace the stolen or damaged property reduced by salvage value so why doesn't that indicate th actual cash value does not include replacing replacing the vehicle that is a great question there are two answers to that st then if you continue to look lower down in the policy it talks about when it's determining the cost to replace it's of like kind and quality they don't have to use original manufactured parts they can use non original manufacturing parts so say say they owe the actual cash saved by two thousand and sixteen to a the camry i get and accept the actual cash value of the component parts of the vehicle a door they got to replace it or the actual cash value of that door that original manufacturer door is going to be x and the replacement cost the policy allows them they don't have to use original manufacturer part that can be a lower they're allowed to use a three year old door but it doesn't have to be original manufactured so the replacement cost is going to be less than actual cash value and that in sense and then the nd as i would give is that this this formulation actual cash value cost to replace cost to repair stated value that's every auto policy right and so couches appleman the schaefer case the siegel case  they explain that repair or replace it with like kind of quality that's for partial losses that's in a political in the context of total loss because it doesn't really have anything to do with monetary value you're trying to replace the functionality that's why they can use it on a regional manufactured parts because it's just we need to get this car back to how it functions that's to replace the actual cash value is talking about market value it's talking about a monetary value as opposed to repair or replace it and all auto policies are structured that way that repair or replace applies to partial losses under shape siegel couches out and so whereas actual cash are you st with total loss so the question is does this policy change texas law does this policy say something does this policy give a way of measuring fair market value that is different than texas law it dust it just court case says you at least have to consider it brings point says the same thing there's a triple as properties said if the policy doesn't give the way of measuring fair market value how could how could we say that replacement cost depreciation is a way under texas law you can measure fair market value except that it's an undue simple way of measuring fair market value there would be an inconsistency there especially in light of lowry saying that in a well functioning market these are the same thinks there's little i mean how that circle can't really be squared right it can't be both that replaced cost less to prescience in a market value there is little to no difference between them except there is a difference because you're not allowed to consider replacement cost less depreciation in a well functioning market those two things are inconsistent the kicker though is that technically this court need not reach that issue than the minimalist way of warranting reversal is not to say well this is happening this is how the policy must be interpreted if it means market determined that the pre x of that market value of a total loss vehicle included sales tax and fees all of these cases were not decided on the motion to dismiss because they're an issue of fact and chris says what a jury should consider is all of these different factors including replacement cost there's simply no way if market value is the measure of damages there is no way that can be to determined on a one hundred and twenty six dollars motion to dismiss so even if this court isn't inclined to give its interpretation this is how we say it should be interpreted at the very minimum if this is market value which the lower court found even if we isolate it from a cd even if we write you see the out of the policy and the only thing we have to consider is just from a blank slate market value that's an issue of fact and will go in front of a jury and we try to prove our case there's all these websites now if you're buying a car you can go look in the say what the average price for that car is and in houston or whatever location and that to me that's the market price is trying to say we think this is the market price for the vehicle that doesn't include taxes that list price yes so even under comparable so you know what i'm going to list price and i'll just i mean in general usage the market price i told someone i sold my car for ten thousand dollars i don't say that doesn't include the you know seven hundred dollars of taxes that the person had ahead and so you go and you're trying to purchase a car from a dealer or whoever and they say you can walk out of here you can walk out of here eleven thousand dollars and then you say i can so that includes taxes and fees and everything i don't worry about it eleven thousand dollars does that include gas mains you're not sure it does i don't know that it does so i ask you and the guy says don't worry about it maybe it doesn't maybe does it you'll find out later but do we have a deal can we shake hands of course it's a factor i would consider in deciding whether i'm going to make that deal i want to just be like sure i'll find out does it or does it not you will find that no i need to know what that what that price it's a factor that goes into my consideration and again maybe you disagree and maybe if you what is your best case that says market value this this price are willing buyers are going to pay a willing seller  typically includes the tax not just the money to exchange between the bought because again the tax goes to the government it doesn't go to the seller right but it's a but it's a cost that i pay and i'm trying to replace the vehicle in order to replace the vehicle i have but i don't think i regional manufacturing parts as the as the limitation of liability goes on that's referring to a partial loss the actual cash value the fair market value of an original manufactured component part is going to be higher than the cost of replacing the same replacement parts and equipment which may be new or reconditioned remanufactured or used including but not limited to non original manufactured parts or equipment that's why it's that we cited this and are in our brief but that's why schaefer siegel catches appleman say i'll explain this provision actual cash value or replace or repair replace or repair is referring to the component parts it's referring to a partial loss it's not or it's always going to be less or it's always going to be greater than actual cash value if it's a total loss and it's always going to be lesser than actual cash value if it's a partial loss so the repair replace is referring to is going to be less or if it's a partial loss that's where it's a political if it's a total loss it's actual cash value in the parties not dispute that what's owed here is the actual cash value actual cash value as determined by market value how do we measure market value texas law is clear that replacement cost less depreciation is a reasonable way of measuring market value and that in minimum is something that a jury should consider and determining the actual question of the amount of market and your point is replacement cost is where the taxes and title fees come in three dollars she added replacement cost if that sales tax yes is where is where that would come in as a as a reasonable way under texas law to measure fair market value under low damages in terms of market value into a replacement cost policy and we know that that is not proper under texas law policy language recent present in the form shaffer and long standing cross on the texas plain of start to get there by and there briefing him with a kind of an approach towards interpretation of insurance and taxes that blends ambiguity and bland liberal construction but the rules in texas are very clear the court has to apply the plain ordinary meaning of the policy and schaefer dressing very similar language this the court found that the this language typed language is not ambiguous and in fact if the court starts  cash value with replacement costs which plaintiffs are really trying to do here then your reading out the lesser of provision in the policy in the limits a liability provision which is part of the covering provision in this type of policy it circumscribes the insurers obligations if the replacement cost is conflated with the actual cash value and market value in this case then the court is improperly applying texas law and properly following the rules of construction because they would be reading out that lesser of language that appears in the limits liability provision plaintiff's times flirt with an end to any argument but i really haven't heard a clear articulation of what the ambiguity is but it's clear they really can't make one common law will look at that to make sure we understand you to mean and the court said that is not ambiguous they referred to this court's opinion in the murray case what we cite in our supplemental submission in response to their supplementals admission that you look to the state to determine what these terms mean in actual cash value the plaintiffs been go into to try to further this confusion about what's actual cash value means plaintiffs are citing and they didn't do it in their argument today but this concept of pure and in the d n a c v has some kind of broad concept and that's really a misconstruction because in shafer the court made it very clear and in carlton that schaefer relied upon text screen point made it very clear that in addressing actual cash right policy terms you look policy terms of the contract that circumscribes the obligation we're not looking at some kind of general loss or court damage here we're actually looking at payment provisions and plain s a push that in part trying to create some sort of ambiguity of think that they're never really clear where they get that from the the other thing the plaintiffs try to do in pushing their point other than spirit in the concept is that they start misapplying they see the concept and i want to break that down a little bit what i mean by that there's a long history in texas law went up through the state for opinion and later as to what how we approach actual cash value on how the courts are the approach actual cash value and you go back to the crisp decisions tax for imports in from one thousand nine hundred and sixty three that they cite and chris makes it very clear actual cash value is not replacement cost and if you have a methodology of determining actual cash value that is based on replacement costs you are giving the insurer something they are not entitled to under the contract and in that case the sick texas supreme court was dealing home goods that cash value not replacement cost much appreciation let me get to that in the total i'll use the toll our case that's a case i handled and i understand the facts of it but i can i can address it from the  a partial damage house you don't go out and find like the paul the site's what the values are you have to use some other methodology to come up with actual cash value because under those policies those are actually replacement cost policies that that down and plaintiffs have asserted in their petition it's we really have to look at what they're seeking in this case they're saying that they want six point two five percent or more depending on what the sales tax is over and above the cash value that elephant paid on these claims they're not saying they want to part of that or some revised actual cash value calculation it is very clear in this case filed a new class action fairness act that  the court below was dealing with a very clear request for a full payment of sales tax and transfer fees they then go in so they go in and they find total r and they find the case all it talks about homeowners type cases and in those cases the court the court said that you do include sales tax in the replacement cost when you depreciate it when you have a home because there is no market value out there trying to get that actual cas that is totally inconsistent with what they're asking here because in total are what the court actually said was you didn't know the full sales tax or the full replacement cost until the other conditions were met as part of the a c v payment so they're actually their argument is actually inconsistent with the total our opinion because total are a sane only zero actual cash value until looks replaced under that homeowners policy totally different type of coverage and we can't use market value because there's a market value out there readily available for a house with a damaged roof that's too cumbersome we're not going to do that we have a different methodology the course in texas recognize for homeowners cases i've never seen one auto case and state of texas said precision minus replacement cost minus depreciation is the methodology often times in their pleading planeswalker just kind of slip into saying well we're we're tired of replacement costs plus this tax they are conflating that term they can't use they should not be permitted to use the homeowner standard when the texas courts of so strongly said market value if the approach when you're dealing with a personal property is personal property like that in fact the court that they rely on lauer they rely on lowery specifically said that's the preferred method when there's a market available for that and then the course discussion about well well functioning markets that really had to deal with real estate cases real estate property and so they misapply those cases that are happening in the real estate context to the auto but just as importantly those cases don't allow full recovery of actual of the taxes or fees when they do go that process either so in the court below the court was addressing the pleadings that they had which was a request for full sales tax full transfer fees on top of the costs the clearly the texas supreme court in shafer has made it very clear we're not going to be looking at general concepts of damage w addressing these auto policies we're going to look at three steps the pay the lesser of actual cash value the cost to repair or replace or the limits of the policy and that's the obligation the insurer ha to include a replacement standard but if you want to address those cases from outside texas i could do it very briefly your honor i think that for most of all texas is so clear it's one of those i always find it texas has such a strong body of long these issues that that all we have to do is look at dawson and the cases that say that you apply the market value in this context and then understanding what total hours really sane in the context of what it's so what but it's ordering all cross the border and in these kind of circumstances so there's a lot of different circumstances and in of the bashing case in florida really focused on some of the statutory issues we're not bad in fact in texas we pointed this out in the motion dismissed below but sales tax is always above on top of the purchase price and in the motor vehicle code the the value of the vehicle actual cash value vehicles market value and what about the department of insurance which they cite they that is that language specifically says you have to look at your policy that's what's going to govern and that's an interesting point because the rules in texas are you don't look at intrinsic extrinsic evidence when you're determining of policies ambiguous or a pot with policy meaning as in total are shafer and other cases like that they all had an opportunity to address different opinions of the department of insurance or comments made and they said we don't have to do that we're looking at the policy language that's the proper approach here so not only is it not proper to look at extensive evidence at this point but that the actual drop in the actual doctor there for and he says but look at your policy language because that's  controls and that's what shaffer recognize that's what toll are recognize and other cases that's what is your policy language fairly typical of the industry yes now some policies don't have the market that you reference when it says actual cash value will be determined by market value i think actually i think that's icing on the cake because i think ask the law of actual cash value in texas is it in this personal property context it's it's market value i just believe goes head and says  question basically is just a problem that this tax question is a problem that really just affects allophone or it's a fact a lot of other insurers a lot of us there's a lot of these lawsuits out there should we sort of fire this to the texas supreme court i don't think it's necessary because i think really this is so close to schaefer i think that it's addressed by shaper i think they're so off on how they apply total are to get to this point of replacement cost minus depreciation i think the law is clear i certification what the plaintiff us we also think it's clear it's certainly not for a while to get to your prior question regarding these forms these are form policies these are adopted by the insurance service organizations who are used throughout the country these are iowa so forms there are no shortage of cases involving actual cash value speaking of these being foreign policies are you familiar with i think just two months ago federal court in wisconsin a case involving progressive the thomson case exact ors in this case yes there are the cases also what's wrong with it what's wrong with thompson i think it's wrong to rely on what we realize on singleton and and it's like singleton st distinguishes all the cases from florida which we believe are correct and saying that it why should that we're talking about language here we're talking about the words actual cash value why is it different when you apply it to a home than to a vehicle you're still measuring the out of pocket loss from the insured and that's replacement prescience and all reasonable costs which would be incurred in replacing the property that is a universal accepted proposition interpretation of the actual cash value and you can count on one the cases from around the country i think there may be one from california which say under an a c v policy you don't get replacement cost minus depreciation they're very very few they have certainly not cited to any of the shaper case is not a total loss case it deals with whether you can recover diminished value on your part two of the standard policy and there's a hole in my gosh there is there's hundreds of cases on whether you can recover diminished value the majority view is you can't recover diminished value and the minority view is you can when you're replacing a part or your repairing a vehicle that's not what we're dealing with we're dealing with the total loss of the insured property familiar with any policies that expressly confront the the the term market value reduced what is recoverable on the actual cash value now this court held in lowery and it held in the i u versus chubb case that they're the same synonymous and in a well functioning market as what we're dealing with here the sale of automobiles replacement cost minus the prescience of the functional equivalent of market value that's the law and the court was interpret in applying texas law so market value equals apple actual cash value how do you how can the the judgment of the district court that more on the market the language market value reduces actual cash value it does it just doesn't make any sense whatsoever it doesn't reduce actual cash value and actual cash value has it well accepted meaning that crossed the insurance industry and keeping in mind this is an indemnity policy this is to make the insured  whole and if you drive off the lot you drop it you have a brand new vehicle you drive down the block and your head broadside so you can't replace should be able to their interpretation you can't you can't pay the taxes