Court Opinion

ID: 4508503
Source: CourtListenerOpinion
Date Created: 2020-02-19 17:03:43.907507+00
Date Added: 2024-06-11T09:37:32.558562
License: Public Domain

FILED
                                                                          Feb 19 2020, 9:08 am

                                                                                  CLERK
                                                                              Indiana Supreme Court
                                                                                 Court of Appeals
                                                                                   and Tax Court

      ATTORNEYS FOR APPELLANT                                    ATTORNEY FOR APPELLEE
      James D. Johnson                                           Theodore G. Hammond
      Nathan A. Dewan                                            Law Office of Progressive Group
      Jackson Kelly PLLC                                         of Insurance Companies
      Evansville, Indiana                                        Indianapolis, Indiana

                                                  IN THE
          COURT OF APPEALS OF INDIANA

      Shield Global Partners-G1, LLC,                            February 19, 2020
      Appellant-Plaintiff,                                       Court of Appeals Case No.
                                                                 19A-CC-1100
              v.                                                 Appeal from the Monroe Circuit
                                                                 Court
      Lindsay Forster,                                           The Honorable Holly M. Harvey,
      Appellee-Defendant.                                        Judge
                                                                 Trial Court Cause No.
                                                                 53C06-1712-CC-2559

      Mathias, Judge.

[1]   Shield Global Partners-G1, LLC (“Shield”) appeals the judgment of the

      Monroe Circuit Court in favor of Lindsay Forster (“Forster”) in Shield’s

      negligence action against Forster seeking damages for the inherent diminished

      value of a motor vehicle damaged in an accident that was Forster’s fault. Shield

      presents two issues for review, which we restate as: (1) whether the trial court

      Court of Appeals of Indiana | Opinion 19A-CC-1100 | February 19, 2020                           Page 1 of 9
      erred as a matter of law by concluding that Indiana does not recognize damages

      for inherent diminished value; and (2) whether the trial court clearly erred by

      concluding that Shield did not present evidence sufficient to support its claim

      for diminished value damages.

[2]   We reverse and remand.

                                  Facts and Procedural History
[3]   The historical facts underlying this case are essentially undisputed. On June 15,

      2017, Forster was driving a car in Bloomington, Indiana, when she rear-ended a

      Chevy Silverado pickup truck (“the Truck”) driven by Lance Ingersoll

      (“Ingersoll”). Forster admitted fault for the accident.

[4]   The Truck is registered in Ingersoll’s name. Ingersoll originally leased the Truck

      from Hubler Chevrolet. Under the terms of the lease agreement, Ingersoll was

      to lease the Truck from December 5, 2015 to March 4, 2019. Hubler later

      assigned the lease to ACAR Leasing LTD (“ACAR”), who holds title to the

      vehicle. After the accident, GM Financial, who held a security interest in the

      Truck, assigned to Shield any claims for diminished market value of the Truck

      as a result of the accident.

[5]   Prior to the accident, the Truck was appraised with a fair market value of

      $36,550, according to the National Automobile Dealers Association (“NADA”)

      Used Car Guide. The Truck was satisfactorily repaired for a cost of $6,852.55.

      After the accident, Shield, using in-house personnel, appraised the Truck with a

      fair market value of $32,529.50, again using the NADA Used Car Guide, for a
      Court of Appeals of Indiana | Opinion 19A-CC-1100 | February 19, 2020     Page 2 of 9
      diminished value of $4,020.45. Shield then sought a second appraisal from

      Stuart Raskin (“Raskin”) of South Florida Auto Appraisers, who estimated an

      inherent diminished value of $7,400.

[6]   On December 14, 2017, Shield filed a negligence complaint against Forster

      seeking damages for the diminished value of the Truck. A bench trial was held

      on February 21, 2019. The trial court entered findings of fact and conclusions of

      law on May 14, 2019, denying Shield’s claim for diminished value of the Truck.

      In relevant part, the trial court concluded:

              20.      Plaintiff’s claim for “inherent diminished value, lost value
                       and/or accelerated depreciation of the vehicle based on
                       damage history” alone amounts to a claim for “stigma of
                       defect” damage (as confirmed by Plaintiff’s demand
                       packet). Indiana law does not recognize per se “stigma of
                       defect” damages to personal property which is not
                       permanently damaged.

              21.      The Plaintiff has not presented sufficient evidence to
                       support a conclusion that the repairs to the vehicle did not
                       restore the vehicle to its fair market value before the
                       causative event. The Court is not persuaded by the
                       Plaintiff’s expert, who did not inspect the vehicle, review
                       photos of the vehicle, or in any way assess the actual
                       condition of the vehicle as a result of the accident.

              22.      In the absence of evidence to determine the fair market
                       value after repairs, and therefore determine whether the
                       repairs were sufficient to restore the fair market value of
                       the vehicle before the accident, the Court concludes that
                       the cost of repairs to the vehicle in this case is an adequate
                       measure of damages.

      Court of Appeals of Indiana | Opinion 19A-CC-1100 | February 19, 2020             Page 3 of 9
              23.      The Court concludes that the Plaintiff is not entitled to an
                       additional award of damages and orders that Plaintiff take
                       nothing by way of its Complaint.

      Appellant’s App. pp. 12. Shield now appeals.

                                          Standard of Review
[7]   Our well-settled standard of review in cases where the trial court enters findings

      of fact and conclusions of law was set forth by this court in Koch Development

      Corp. v. Koch as follows:

              When a trial court enters findings and conclusions, we apply a
              two-tiered standard of review: we first determine whether the
              evidence supports the findings; we then determine whether the
              findings support the judgment. In deference to the trial court's
              proximity to the issues, we disturb the judgment only where there
              is no evidence supporting the findings or the findings fail to
              support the judgment. We do not reweigh the evidence, and we
              consider only the evidence favorable to the trial court’s judgment.
              We also will not reassess witness credibility. The party appealing
              the trial court’s judgment must establish that the findings are
              clearly erroneous. Findings are clearly erroneous when a review
              of the record leaves us firmly convinced that a mistake has been
              made. We do not defer to conclusions of law, which are
              evaluated de novo.

      996 N.E.2d 358, 369 (Ind. Ct. App. 2013) (citations and internal quotation

      marks omitted), trans. denied.

      Court of Appeals of Indiana | Opinion 19A-CC-1100 | February 19, 2020           Page 4 of 9
                                      I. Damages for Diminished Value

[8]   Shield first argues that the trial court erred as a matter of law by concluding that

      Indiana does not permit the recovery of inherent diminished value of personal

      property, what the trial court referred to as “stigma” damages. The parties agree

      that the applicable law was set forth in the case relied on by the trial court,

      Wiese-GMC, Inc. v. Wells, which summarized the law of damages as follows:

              [T]he fundamental measure of damages in a situation where an
              item of personal property is damaged, but not destroyed, is the
              reduction in fair market value caused by the negligence of the tort
              feasor. This reduction in fair market value may be proved in any
              of three ways, depending on the circumstances. First, it may be
              proved by evidence of the fair market value before and the fair
              market value after the causative event. Secondly, it may be
              proved by evidence of the cost of repair where repair will restore the
              personal property to its fair market value before the causative event.
              Third, the reduction in fair market value may be proved by a
              combination of evidence of the cost of repair and evidence of the
              fair market value before the causative event and the fair market
              value after repair, where repair will not restore the item of personal
              property to its fair market value before the causative event.

      626 N.E.2d 595, 599 (Ind. Ct. App. 1993) (emphases added), trans. denied.

      Although the parties agree that this language controls, they disagree on the

      precise meaning of this language and how it applies in the present case. This, of

      course, is a question of law that we review de novo. See Koch, 996 N.E.2d at

      369.

[9]   Shield argues that, under Wells, damages for diminished value are recoverable

      whenever an item of property suffers a decrease in fair market value despite

      Court of Appeals of Indiana | Opinion 19A-CC-1100 | February 19, 2020        Page 5 of 9
       being fully repaired. Forster argues that there is no diminished value when the

       property is fully repaired. The trial court concluded that Shield’s claim for

       inherent diminished value, what it referred to as “stigma of defect” damages, is

       not recognized in Indiana law for property which is not permanently damaged.

       We believe this misreads Wells.

[10]   The Wells court did not hold that diminished value damages are recoverable

       only when the property is permanently damaged. Instead, it held that

       diminished value damages are recoverable when “repair will not restore the

       item of personal property to its fair market value before the causative event.”

       Wells, 626 N.E.2d at 599. We read this to mean that, even if the repair restores

       the property to its previous condition, damages may still be recovered if there is

       a resulting loss of fair market value to the property as a result of it having been

       damaged and then repaired.

[11]   Our reading of Wells comports with the economic reality that property that has

       been damaged and repaired often has a lesser fair market value than property

       that was never damaged in the first place. This is especially true in the case of

       automobiles, where numerous online services, including Carfax, allow anyone

       to easily check to see if an automobile has been involved in an accident.

       Automobiles that have been involved in accidents, even if they have been

       successfully and fully repaired, usually have a diminished value. Indeed, all

       other things being equal, few if any would prefer a car that has been in an

       accident, even if fully repaired, to one that has never been in an accident, unless

       the repaired car was available at a lower price.

       Court of Appeals of Indiana | Opinion 19A-CC-1100 | February 19, 2020       Page 6 of 9
[12]   As stated in Wells, “the fundamental measure of damages in a situation where

       an item of personal property is damaged, but not destroyed, is the reduction in

       fair market value caused by the negligence of the tort feasor.” Id. The cost of

       repair is an adequate measure of damages only when the repair restores the

       property to its fair market value before the damage. Id. In cases where the repair

       will not restore the property to its pre-accident value, the reduction in value

       may be proved by a combination of evidence of the cost of repair and the

       difference between the fair market value of the property before and after the

       accident. Id.

[13]   Because the trial court erred regarding the applicable law, we could reverse on

       this ground alone, as the court viewed the evidence from in incorrect legal

       perspective. But the trial court, in our opinion, also clearly erred with regard to

       the evidence of damages submitted by Shield.

                                         II. Proof of Diminished Value

[14]   Shield also argues that the trial court clearly erred by concluding that Shield

       failed to prove that the repairs to the Truck did not restore the vehicle to its fair

       market value before the causative event. We agree.

[15]   First, the trial court clearly erred when it found that Raskin, Shield’s third-party

       appraiser, “did not inspect the vehicle, review photos of the vehicle, or in any

       way assess the actual condition of the vehicle.” Appellant’s App. p. 12. Raskin’s

       uncontradicted and unchallenged testimony shows that he reviewed several

       photos of the Truck. He also assessed the condition of the Truck by referring to

       Court of Appeals of Indiana | Opinion 19A-CC-1100 | February 19, 2020        Page 7 of 9
       the insurance company’s repair estimate and two different vehicle history

       reports, one of which included the Truck’s service history and odometer

       readings. Thus, Raskin based his appraisal of the Truck’s fair market value on

       the vehicle’s maintenance records, mileage, repair estimates, and photographs

       of the Truck.

[16]   It is notable that the trial court did not find Raskin’s testimony to be

       uncreditworthy. It instead concluded that Raskin’s testimony was not

       persuasive because he did not personally “inspect the vehicle, review photos of

       the vehicle, or in any way assess the actual condition of the vehicle as a result of

       the accident.” Id. The trial court’s conclusion that Raskin did not review photos

       of the vehicle is clearly erroneous. Nor do we with think that Raskin was

       required to personally inspect the Truck in order to appraise it. As noted,

       Raskin reviewed several documents and reports regarding the vehicle in coming

       to his appraisal conclusion.

[17]   Even if the trial court was not persuaded by Raskin’s testimony regarding the

       diminished value of the Truck, its conclusion that there was no evidence

       regarding the diminished value of the Truck is contrary to its own finding that

       Shield’s in-house appraisal concluded that the Truck had a diminished value of

       $4,020.50. We therefore conclude that the trial court’s factual findings

       regarding Raskin’s appraisal are not supported by the evidence. And the trial

       court’s conclusion that Shield presented no evidence to support its claim of

       diminished value is unsupported by the trial court’s factual findings.

       Court of Appeals of Indiana | Opinion 19A-CC-1100 | February 19, 2020      Page 8 of 9
                                                   Conclusion
[18]   The trial court erred by concluding that Shield could not recover damages for

       diminished value because the Truck had been successfully repaired. It then

       compounded this error by ignoring the uncontroverted evidence that the Truck

       had a diminished value as a result of being involved in an accident and being

       repaired. We therefore reverse the judgment of the trial court and remand for

       proceedings consistent with this opinion.

       Kirsch, J., and Bailey, J., concur.

       Court of Appeals of Indiana | Opinion 19A-CC-1100 | February 19, 2020   Page 9 of 9