Market Value In Insurance Cases

Fort Worth insurance lawyers need to read this case. The style of the case is, Texas Farm Bureau Mutual Insurance Company v. Joseph Wilde. The opinion was issued by the El Paso Court of Appeals.
Texas Farm appeals from a judgment awarding Wilde damages, lost profits, and attorney’s fees resulting from a jury verdict that Texas Farm committed unfair or deceptive settlement practices under Texas Insurance Code Section 541.060. This court reversed a judgment in favor or Wilde and rendered a take-nothing judgment.
Wilde had a policy of insurance with Texas Farm which insured Wilde’s 1999 John Deere 7455 cotton stripper for a maximum value of $90,000. Wilde filed a claim on the policy after the cotton stripper caught fire on December 16, 2005, and was “completely destroyed.” After Texas Farm denied Wilde’s claim, Wilde filed suit for breach of contract, breach of duty of good faith and fair dealing, and unfair settlement practices, and sought to recover damages for the market value of the cotton stripper, lost profits, attorney’s fees, and treble damages.
The jury returned a verdict in favor of Wilde, found that Texas Farm knowingly engaged in an unfair or deceptive act or practice that caused damage to Wilde, and found market-value damages in the amount of $75,000, lost profits in the amount of $60,000, and attorney’s fees in the amount of $30,000.
Texas Farm complains that the trial court erred in awarding market-value damages because no evidence of the market value of the cotton stripper immediately after the fire was presented at trial. This court agreed.
When seeking to recover damages for the loss or reduction of personal property’s value, market value is the typical method of valuation. “Market value is defined as the price property would bring when it is offered for sale by one who desires, but is not obligated to sell, and is bought by one who is under no necessity of buying it.” The market value of damaged or destroyed personal property is the difference in the property’s market value immediately before and immediately after the injury at the place where the damage occurred. An owner may testify about the market value, rather than the intrinsic value, of the property if his testimony shows that he is familiar with the market value of the property and his opinion is based upon that market value. In establishing market value, a plaintiff is not permitted to rely upon the purchase price of the property.
In his pleadings, Wilde contended that the cotton stripper was totally destroyed by fire. Texas Farm asserts that the evidence at trial showed the cotton stripper was a total loss and Wilde was required, but failed, to prove the cotton stripper’s post-loss value in the form of its salvage value. Although evidence at trial showed the cotton stripper’s purchase price, its low “hours” of use, a lack of damage to the engine, and that the cotton stripper had salvage value in general, Wilde presented no evidence of the cotton stripper’s immediate post-fire market value in Reagan County. Because Texas Farm has shown the complete absence of a vital fact at trial essential to the determination of market value, its legal-sufficiency challenge must be sustained. Because no evidence existed to support the submission of an award of market-value damages to the jury, the trial court erred in overruling Texas Farm’s objections to the jury charge on market value, its motion for judgment notwithstanding the verdict, and awarding market-value damages.
Texas Farm contends that because Wilde sought to recover the market value of the destroyed cotton stripper, Wilde was not entitled to also recover the loss of its use or lost profits.
Typically, when personal property has been damaged, an injured plaintiff can recover the market value of the property. When the personal property has not been totally destroyed, an injured plaintiff may elect to recover either the market-value damages or the reasonable cost of repairs. A plaintiff may also be entitled to recover loss-of-use damages in the form of lost profits if he loses the opportunity to accrue earnings from the use of the damaged equipment. However, this election of remedies is not available to a plaintiff whose property is totally destroyed and he is limited to seeking the proper measure of market-value damages.
Consequently, a plaintiff whose property has not been totally destroyed may recover either (1) the market value measured by the difference in the immediate pre-injury value of the property and the immediate post-injury value before repairs, or (2) the cost-of-repair and loss-of-use damages, including lost profits, but the recovery of both remedies constitutes a double recovery. Similarly, a plaintiff who has no election of remedies and is limited to the recovery of market-value damages for his totally-destroyed property may not also recover lost-profit damages as this would constitute an impermissible double recovery of damages in favor of the plaintiff.
Wilde sought to recover and was awarded both market-value damages for the cotton stripper as well as lost profits. Because Wilde was limited to seeking only market-value damages for his burned cotton stripper, the award of lost-profit damages constitutes an impermissible double recovery.
Because Wilde lost on the two above issues he was not allowed to recover attorney fees. Thus, Wilde lost the entire case.
An experienced insurance law attorney would have likely obtained more favorable results.