Court Opinion

ID: 9622691
Source: CourtListenerOpinion
Date Created: 2023-08-22 06:22:13.571078+00
Date Added: 2024-06-11T17:35:03.705073
License: Public Domain

LINDE, J.,
dissenting.
The court’s opinion in this case likely will not be the final word on the measure of damages for the tortious destruction of a building, particularly of an owner-occupied residence. The case is too obfuscated by problems of procedure and evidence to lend itself easily to a straightforward and clearcut analysis of that substantive issue. Some of the majority’s steps on the way to its holding, however, are sufficiently doubtful to deserve separate comment.
First, the sources quoted by the majority themselves suggest that there is no settled general rule for all cases of the partial destruction of buildings. The writers content themselves with reporting what courts “usually” do, hardly an endorsement of a single analysis. For instance, the majority (306 Or at 125) underlines, in the passage from McCormick on Damages quoted in Ore. Mutual Fire Ins. Co. v. Mathis, 215 Or 218, 225, 334 P2d 186 (1959), the sentence that “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 *128compensation.” “Usually” does not mean “always” or “properly.”1 Similarly, citing 4 Sutherland, Damages, the Mathis court stated that “there is no universal test for determining the value of property injured or destroyed and that the mode and amount of proof must be adapted to the facts of each case.” Id. And the quotation from Speiser, Krause and Gans, The American Law of Torts, merely reports that “[a] number of courts measure the damages for injury to a building” against the prior market value.
Second, the majority says (306 Or at 121 n 7) that if the Barneses “desired to plead and prove a cause of action under the Restatement [of Torts] they should have considered” section 927, which allows recovery for destruction of property of the “value of the subject matter,” and section 911 defines value to mean either exchange value “or the value to the owner if this is greater than the exchange value.” It is misleading to speak of pleading a cause of action “under” Restatement section 927, as if it were an old common law form of action. If these sections are correct statements of the law, it cannot matter whether any party cites them. I agree with the Restatement that value for purposes of tort damages to an owner may not be identical with and is not limited to “exchange” or market value. When the Barneses’ cross-claim alleged damages of $228,000 for the replacement of their residence, they adequately alleged a “value to the owner * * * greater than the exchange value,” whether or not the entire, unmodified replacement cost was the correct measure.
Tort damages ordinarily are designed to compensate the injured party for the loss caused by the defendant’s tortious conduct as determined by the factfinder upon the evidence in the particular case. A rigid formula measuring the owner’s damages by what a buyer would have paid him for the property at the time of its destruction may not compensate for the loss, for two reasons. One who occupies his or her own home cannot be assumed to be in the housing market, willing to sell at a price that reflects the home’s market value, nor can (or does) the tortfeasor purport to force acceptance of that price by eminent domain.
*129Moreover, the market price at the time of the injury will not compensate the injured owner who wants to reconstruct the building if construction costs have risen, a contingency that is the rule more often than an exception. It can by no means be taken for granted that a house that had a market price of $100,000 (plus the value of its site), if rebuilt without major change at a cost of $150,000, will thereafter be saleable at $150,000. It might or might not be, depending for instance on the price at which one could buy similar houses in the neighborhood that were not destroyed and did not need to be rebuilt at the higher current cost. A house on the same site rebuilt as it was before the destructive event might bring some premium for being newer but not as much as the reconstruction costs. The risk of reasonable restoration costs beyond prior market value and not reflected in an increased new market value should not fall on the innocent owner.
It therefore is not unreasonable for an owner to demand the cost of rebuilding what he has lost, and to entitle the defendant to a reduction in this measure of damages for any amount in which the reconstruction increases the value of the property over what it was before the injury. Such an increase would be the “enrichment” of which the court spoke in Ore. Mutual Fire Ins. Co. v. Mathis, supra, and in Hanset v. General Construction Company, 285 Or 101, 104, 589 P2d 1117 (1979), and which should not be charged to the defendant’s account. Also, to leave the ultimate test of value to the fact-finder would not contradict Olds v. Von der Hellen, 127 Or 276, 263 P 907, 270 P 497 (1928), quoted by the majority. The building in that case was a business investment, not a home. More important, the Olds court said only that the trial court erred when it adopted a rigid measure of replacement cost reduced by some percentage for “depreciation” and “failed to consider other factors which should have entered into the determination of its value.” 127 Or at 288. It did not hold that market or rental value or any other single measure was conclusive as a matter of law. The opinion said only that “these circumstances should have been considered in determining the question of value.” Id.
I am not sure that, in trying to draw a line between “temporary” and “permanent” damage to real property, the court has adequately distinguished between land and buildings. Permanent destruction of land that ‘cannot be restored *130might be, for example, the slide of a hillside or the crumbling of a coastal bluff or riverbank; but there is no such clear distinction with respect to buildings that can be rebuilt. In the case of buildings, “temporary” and “permanent” are readily confused with “partial” and “total.” The majority seems to hold that if plaintiffs claimed damages for a total loss, the destruction also must have been “permanent.” But it seems artificial to make the legal formula for measuring the owner’s loss shift with characterizing as “temporary” or “permanent” the harm, for instance, to a burned-out home whose foundation and brick walls are standing. If a temporal test were literally applied to buildings, repair of a heavily damaged house might well take longer (that is to say, be less “temporary”) than to rebuild on the site.
One can conjure up hypothetical examples of unreasonable efforts to duplicate old materials or construction techniques that are not currently available and require inordinate expense. But whether such expenditures are reasonably chargeable as damages does not logically depend on characterizing the extent of the destruction, though as a practical matter a factfinder may consider it more reasonable to match expensive original parts of a partially destroyed building and unreasonable to replicate them in a reconstructed one. The point is that all these are questions of fact in determining reasonable compensation for what the owner has lost while not charging a defendant for any increased value resulting from restoration of the owner’s property.
If the foregoing views are correct (and it is not wholly clear how far the majority disagrees with them, though it obviously reaches a different measure of damages), the issue reduces itself to one of burdens of going forward with evidence and of persuasion. The injured party may plead that the financial loss caused by the defendant is the cost of being restored to the pre-injury position. (The court holds that the present plaintiffs’ pleading was adequate.) The plaintiff must show that cost. Evidence that reconstruction costs will not result in a more valuable house must be introduced by plaintiffs only if “the nonexistence” of this result is “essential to the claim for relief’; defendants must produce this evidence if the existence of an increased value is a defense. OEC 305, 307. It should be left to the defendant to claim and to introduce evidence that the claimed expenditures left (or would leave) the plaintiffs *131with a more valuable property than it was worth at the time of the injury. The plaintiffs should not have to negate this argument in advance, but they retain the burden of persuasion on the ultimate issue of damages.
In the present case, the majority holds that plaintiffs failed to introduce evidence of the pre-injury market value of their home. I agree that they did not introduce such evidence, and if it is their burden to do so in every case, the majority is correct. But I would hold that pre-injury market value is relevant only when a defendant claims that the restored house has (or would have) a materially higher value than it had before the injury. This is not an essential part of plaintiffs’ case in chief. The trial court therefore should not have directed a verdict against the Barneses at that stage of the trial. The case should be remanded for a new trial.
Lent, J., joins in this dissenting opinion.

 The quoted sentence continues: “* * * and, in ascertaining this value, the original cost or the cost of replacement, with allowance for depreciation, may be considered.” Id. Under the full sentence, direct testimony about market value is not indispensable.