Opinion ID: 894487
Heading Depth: 1
Heading Rank: 3

Heading: payment of loss

Text: We may pay for loss in money or repair or replace the damaged or stolen property. In October 1995, Schaefer's vehicle was involved in an accident. It was inspected by an AMM adjuster, and the insurance company elected to repair the vehicle. Schaefer does not dispute the quality or adequacy of the repairs. Instead, he maintains that its value decreased $2,600 due to market perceptions that a damaged and subsequently repaired vehicle is worth less than one that has never been damaged. Schaefer claims that the policy obligates AMM to compensate him for that diminished value. Schaefer filed this class action against AMM and several other insurance companies that issue policies containing the same standard language. [2] He claims that AMM's refusal to compensate him for his vehicle's diminished market value violated the Texas Insurance Code and breached the insurance contract. Before any class was certified, Schaefer filed a motion for partial summary judgment arguing that AMM was liable for his vehicle's diminished value as a matter of law. AMM responded and filed a cross-motion for summary judgment on the same issue. The trial court granted AMM's motion and denied Schaefer's. The court of appeals reversed the trial court's summary judgment in AMM's favor, holding that Schaefer could seek diminished-value damages under the policy and that the jury should determine if the repairs did or could restore the vehicle to substantially the same condition and value it had prior to the accident. 65 S.W.3d 806, 810. The court expressly declined to follow a recent decision from the Fourteenth Court of Appeals, Carlton v. Trinity Universal Ins. Co., 32 S.W.3d 454 (Tex. App.-Houston [14th Dist.] 2000, pet. denied), which held that the same policy language did not obligate an insurer to pay diminished-value damages for a vehicle that was adequately repaired. Two other courts of appeals have also declined to follow Carlton. See State & County Mut. Fire Ins. Co. v. Macias, 83 S.W.3d 304 (Tex.App.-Corpus Christi 2002, pet. filed); Bailey v. Progressive County Mut. Ins. Co., 78 S.W.3d 708 (Tex.App.-Dallas 2002, pet. filed). Courts in other states have similarly split over this issue. We granted AMM's petition to resolve the conflict among our courts of appeals.