Opinion ID: 1405799
Heading Depth: 2
Heading Rank: 4

Heading: Should this Court, Independent of the Restatement of Torts, Allow the Cost of Restoration as the Measure of Damage when a Homestead is Completely Destroyed by Tort?

Text: The question narrows down to whether the proper measure of damages is the diminution in value or the cost of repair and restoration. When the property in question is not completely destroyed by the tort, the diminution in value is measured by the difference in the before and after value of the property. When the property is completely destroyed and no value remains, then it is unnecessary to go through the artificial before and after subtraction and the diminution equals the pre-tort value of the property. We have not been cited, nor have we been able to find a case from any jurisdiction that allows the cost of restoration as the measure of damages when a homestead or personal residence has been completely destroyed by tort. As far as we can determine, other jurisdictions treat a homestead that has been completely destroyed by blasting, fire or other tort the same as any other building. [9] In Ore. Mutual Fire Ins. Co. v. Mathis, supra , this court quoted from McCormick, Damages, supra at 482: In the case of injury to some structure or improvement upon the land, such as buildings, fences, or wells, there are several methods of measurement available. First, if the improvement is destroyed, and may readily be treated as a unit in itself apart from the land, as in case of a house or other building, the value of the improvement itself at the time of its destruction is usually taken as the basis of compensation, and, in ascertaining this value, the original cost or the cost of replacement, with allowance for depreciation, may be considered. Second, if the improvement is merely damaged and not destroyed, damages are usually measured by the reasonable cost of repair or restoration to the condition before the injury, together with compensation for the loss of the use of the property during the period of repair. This formula works well enough if the injured building or improvement was a reasonably new one, though even then the jury should be warned to make a deduction from the cost of repair for the fact that the repaired part would be newer and better than the corresponding part before the injury, but, if the building is ancient and dilapidated, or not susceptible of repair, the courts are apt to prefer a different standard of recovery; that is, the amount of the lessening in value of the structure or other improvement, produced by the injury. If from the evidence the jury could ascertain both the cost of restoration, and the diminution in value due to the injury, then seemingly they should be instructed to allow damages on the basis of the reasonable cost of restoration, not to exceed the amount of the decrease in value due to the injury. Third and finally, if the improvement which has been injured or destroyed is one which does not lend itself to separate valuation, or even in the case of buildings, according to a few decisions, the general standard of the diminution in value of the land as a whole, resulting from the loss or injury of the improvement, may be adopted. (Footnotes omitted; first emphasis added, second emphasis in original.) This case fits within the first McCormick rule. The Barneses have treated their house as a unit in itself, apart from the land. We hold that the value of the house at the time of its destruction is the proper measure of damages. This case also fits with the most recent authority that we can find on the subject. That authority is Speiser, Krause & Gans, The American Law of Torts (1985). At Section 8.36, pp. 735-39, it states: Value of buildings and structures. A number of courts measure the damages for injury to a building either by the difference between the market value of the land before and after the injury or by the difference between the market (or actual) value of the building  considered apart from the land  before and after the injury.    Permanent or continuing injuries. The measure of damages, where real property is either damaged or destroyed, varies. In event of a mere injury or damage of a permanent nature to real property, the proper measure of damages is the diminution in the market value of the property by reason of that injury, or in other words, the difference between the value of the land before the injury and its value after the injury. If real property is taken or the value thereof totally destroyed, the owner is entitled to recover the actual cash value of the property at the time of the taking or destruction with legal interest thereon to the time of trial. (Footnotes omitted.) The result here is exactly the same as that reached by this court in Olds v. Von der Hellen, supra . It is the only other case we have in which the building was totally destroyed. There we held that the measure of damages was the value of the building at the time of the fire. 127 Or. at 289, 263 P. 907, 270 P. 497.