S&M, LLC v. Burchel (Ex parte S&M, LLC)

• Decision Date: 07 December 2012
• Docket Number: 1111210.
• Citation: 120 So.3d 509
• Court: Alabama Supreme Court
• Parties: Ex parte S & M, LLC, d/b/a Huntsville Cab Company. (In re S & M, LLC, d/b/a Huntsville Cab Company v. Kevin Burchel, as personal representative of the estate of Roy William Burchel).

120 So.3d 509

Ex parte S & M, LLC, d/b/a Huntsville Cab Company.(In re S & M, LLC, d/b/a Huntsville Cab Company

v.Kevin Burchel, as personal representative of the estate of Roy William Burchel).

1111210.

Supreme Court of Alabama.

Dec. 7, 2012.

L. Thompson McMurtrie and Mary Ena J. Heath of L. Thompson McMurtrie, L.L.C., Huntsville, for petitioner.

Gary K. Grace and Jennifer M. Matthews of Grace, Matthews & Debro, LLC, Huntsville, for respondent.

WOODALL, Justice.

S & M, LLC, d/b/a Huntsville Cab Company (“Huntsville Cab”), petitioned this Court for certiorari review of the decision of the Court of Civil Appeals affirming a judgment in favor of Kevin Burchel, as personal representative of the estate of Roy William Burchel (“the estate”), on Huntsville Cab's claim against the estate seeking damages for loss of use of a commercial vehicle. This Court granted Huntsville Cab's petition for certiorari review to consider whether the measure-of-damages rule set forth in Hunt v. Ward, 262 Ala. 379, 79 So.2d 20 (1955), on which the Court of Civil Appeals relied, is consistent with the purpose of compensatory damages, which is “ ‘to make the plaintiff whole by reimbursing him or her for the loss or harm suffered.’ ” Ex parte Goldsen, 783 So.2d 53, 56 (Ala.2000) (quoting Ex parte Moebes, 709 So.2d 477, 478 (Ala.1997)). Because we conclude that the rule stated in Hunt is not consistent with this purpose, we modify the rule, reverse the Court of Civil Appeals' judgment, and remand the case for further proceedings consistent with this opinion.

Facts and Procedural History

Huntsville Cab owns and maintains a fleet of taxicabs it leases to drivers for 12–hour or 24–hour shifts at a rate of $100 per 12–hour shift and $200 per 24–hour shift. In April 2008, a taxicab owned by Huntsville Cab was damaged in a collision with an automobile driven by Roy Burchel. Becausethe cost to repair the taxicab exceeded its fair market value, Huntsville Cab decided to replace the vehicle. Roy Burchel reimbursed Huntsville Cab for the costs of replacing the vehicle and of outfitting the new vehicle for use as a taxicab.

In April 2009, Huntsville Cab sued Roy Burchel in the district court, seeking damages for the loss of use of the taxicab during the time required to purchase and prepare a replacement vehicle. Roy Burchel died while the action was pending, and the estate was substituted as the defendant. The district court entered a judgment in favor of the estate. Huntsville Cab appealed that judgment to the circuit court for a trial de novo.

The estate moved the circuit court for a summary judgment, arguing that Alabama law prohibits recovery of loss-of-use damages with regard to a vehicle that is a total loss. The circuit judge, Glenn Thompson, denied the motion, stating, in pertinent part:

“The purpose of compensatory damages is to make the injured party whole. Although [Huntsville Cab] did receive compensation for the total loss of its taxicab, it did not receive compensation for the expenses or losses arising from its inability to fully carry out its business during the period of time it took to procure a replacement taxicab. Thus, applying the law as written in Fuller[ v. Martin, 41 Ala.App. 160, 125 So.2d 4 (1960),] not only makes it impossible for [Huntsville Cab] to be made whole, but also ignores the very purpose underlying the law of damages.”

After a bench trial, Judge Steven Haddock, to whom the case had been transferred, found that, pursuant to Fuller v. Martin, 41 Ala.App. 160, 125 So.2d 4 (1960), and Lary v. Valiant Insurance Co., 864 So.2d 1105 (Ala.Civ.App.2002), “a party cannot recover damages for both the total loss of a vehicle and the loss of use of that same vehicle.” For that reason, the circuit court entered a judgment in favor of the estate.

The Court of Civil Appeals unanimously affirmed the circuit court's judgment. S & M, LLC v. Burchel, 120 So.3d 505 (Ala.Civ.App.2012). In doing so, it applied the rule established in Hunt and followed in subsequent cases—that the owner of a vehicle that is a total loss is entitled only to “[the fair market] value [of the car] at the time of the accident (less its junk value, if any).” Hunt, 262 Ala. at 385, 79 So.2d at 26. Under Hunt, loss-of-use damages are available where “the owner sees fit to repair [the vehicle] and while doing so he is deprived of its use and incurs other expense in that connection.” Id.

The Court of Civil Appeals concluded:

“[T]he supreme court established the existing rule in Hunt v. Ward, and this court is bound by supreme court precedent.... Therefore, we must apply the existing rule in the present case. Because Huntsville Cab's taxicab was a total loss and Huntsville Cab had been compensated for the total loss of the taxicab, the circuit court properly determined that Huntsville Cab was not entitled to recover damages for loss of use of the taxicab. Accordingly, we affirm the judgment of the circuit court.”

S & M, LLC, 120 So.3d at 509.

Presiding Judge Thompson concurred specially with the Court of Civil Appeals' opinion, stating:

“Because this court is bound by our supreme court's decision in Hunt v. Ward ..., I concur fully in the main opinion. I write specially to indicate my disagreement with the holding in Hunt that loss-of-use damages are limited to damaged but repairable commercial vehiclesand not available in the case of a damaged commercial vehicle that cannot be repaired. I agree, instead, with the Supreme Court of Oklahoma, which, as to this issue, has written:

“ ‘ “[T]his Court fails to see any logical or practical reason for a distinction between repairable and unrepairable damage to a commercial vehicle which would justify loss of use for the former and not for the latter even though the owner suffers loss because he cannot immediately replace the vehicle. In both instances the owner has lost the same thing, the use of his vehicle, and he should be able to recover this loss of use in either case.” ’

“DTS Tank Serv., Inc. v. Vanderveen, 683 P.2d 1345, 1347 (Okla.1984) (quoting Dennis v. Ford Motor Co., 471 F.2d 733, 736 (3d Cir.1973)). See also Long v. McAllister, 319 N.W.2d 256, 259–61 (Iowa 1982). I urge our supreme court to reconsider its holding in Hunt and to adopt what, in my opinion, is the more rational approach to fully compensating an injured party for the total loss of its commercial vehicle by allowing that injured party to recover damages for the loss of use of that vehicle during the time it seeks a replacement vehicle.”

S & M, LLC, 120 So.3d at 509 (Thompson, P.J., concurring specially).

Huntsville Cab petitioned this Court for certiorari review, arguing, pursuant to Rule 39(a)(1)(E), Ala. R.App. P., that this Court's decision in Hunt should be overruled and a “more rational approach” adopted for compensating an injured party for the total loss of its commercial vehicle, as urged by Presiding Judge Thompson. We granted certiorari review.

Analysis

As the Court of Civil Appeals noted in its decision below:

“In Hunt v. Ward ..., the supreme court addressed the measure of damages for an automobile damaged in a collision. In pertinent part, the supreme court stated:

“ ‘The primary rule is generally stated to be that the damage is embraced in the formula that it is the difference in the value of the [automobile] before and after the accident, caused by the accident. If it is so damaged as not to be repairable and has no value after the accident, it would be simply its value at the time of the accident (less its junk value, if any). On this amount interest should be allowed. If it is repairable and the owner sees fit to repair it and while doing so he is deprived of its use and incurs other expense in that connection, he may have the reasonable cost of the parts and labor in making the repairs together with the reasonable cost of transporting it and other incidental cost, if any, and the reasonable value of its use or hire during that time, on the theory that he could have hired one for use during that period: also interest on the total as indicated above.’

“262 Ala. at 384–85, 79 So.2d at 25–26 (emphasis added).

“Citing Hunt v. Ward, among other authorities, the court of appeals stated in Fuller v. Martin, 41 Ala.App. 160, 164, 125 So.2d 4, 7 (Ala.Ct.App.1960):

“ ‘The general rule is that if the automobile is injured so that it cannot be repaired the measure of damages is its value immediately before the accident, less its wreckage value, if any. Recovery cannot be had for both total loss of an automobile and loss of use of the same vehicle.’

“(Emphasis added.) Likewise, in Lary v. Valiant Insurance Co., 864 So.2d 1105, 1110 (Ala.Civ.App.2002), this court stated: ‘Our supreme court has previously held that “[r]ecovery cannot be had for both total loss of an automobile and loss of use of the same vehicle.” ’ ”

S & M, LLC, 120 So.3d at 506–07.

Huntsville Cab argues that as a result of the accident with Roy Burchel, it suffered, among other things, the loss of use of the damaged taxicab during the time it took to procure a replacement vehicle. It goes on to argue that, under the current rule expressed in Hunt,Fuller, and Lary, it cannot recover for the loss of its use of the taxicab and that, therefore, it has been prevented from receiving full compensation for its losses, which result, it says, is contrary to the purpose of compensatory damages, i.e., “to make the plaintiff whole by reimbursing him or her for the loss or harm suffered.” Ex parte Goldsen, 783 So.2d at 56. Huntsville Cab also argues that the Hunt rule is inequitable, because it allows an element of damages for a damaged commercial vehicle that is repairable that it does not allow for a damaged commercial vehicle that is a total loss.

As did Presiding Judge Thompson, Huntsville Cab cites the following cases as examples of jurisdictions that have allowed recovery for loss of use during a reasonable time in which the owner seeks a replacement for the...