American Service Center Assocs. v. Helton

• Decision Date: 03 February 2005
• Docket Number: No. 03-CV-768.,03-CV-768.
• Parties: AMERICAN SERVICE CENTER ASSOCIATES, Appellant, v. Kelly A. HELTON, Appellee.
• Court: D.C. Court of Appeals

867 A.2d 235

AMERICAN SERVICE CENTER ASSOCIATES, Appellant, v. Kelly A. HELTON, Appellee.

No. 03-CV-768.

District of Columbia Court of Appeals.

Argued May 4, 2004.

Decided February 3, 2005.

Peter A. Chapin, Washington, DC, for appellant.

Andrew Butz, with whom D'Ana E. Johnson, Washington, DC, was on the brief for appellee.

Before RUIZ, GLICKMAN, and Washington, Associate Judges.

RUIZ, Associate Judge:

We granted this application for allowance of an appeal in order to consider an issue of first impression: whether our jurisprudence on remedies for injury to personal property embraces residual diminution in value after repair. We conclude that the law does indeed furnish this remedy. Because the grant of summary judgment dismissing the claim was based on a different understanding of the law, we reverse the judgment and remand the case for further proceedings.

I.

On Friday, September 15, 2000, Kelly Helton was driving an Avis rental car in the District of Columbia when she collided with another motorist test driving a 1998 Mercedes-Benz E 320 owned by American Service Center Associates ("ASCA" or "dealership"), a franchised Mercedes dealer located in Arlington, Virginia. As a result of the collision, the Mercedes required $5,901.85 in physical repair, the cost of which was paid by Avis's insurance carrier on February 16, 2001.¹

Apparently unaware of the insurance payment, ASCA filed an action on February 20, 2001, in the Civil Division of the Superior Court seeking to recover the cost of repair as well as $4,500 for the residual diminution in the Mercedes's worth after repair. The Superior Court dismissed the complaint because the fully remitted insurance payment ended the controversy over the cost of repair and the remaining claim for $4,500 was insufficient to sustain the court's jurisdiction. See D.C.Code § 11-1321 (2001) (conferring exclusive jurisdiction on the Small Claims and Conciliation Branch over any action for money damages where the amount in controversy does not exceed $5,000).

ASCA accordingly re-filed its action on May 10, 2002 in the Small Claims and Conciliation Branch seeking $4,500 as compensation for the residual diminution in the value of the Mercedes after repair. Helton responded by filing a motion for summary judgment, arguing that under Gamble v. Smith, 386 A.2d 692 (D.C.1978), there are two mutually exclusive measures of recovery for injuries to personal property: "`the reasonable cost of repairs to restore the damaged property to its former condition,'" or "the diminution in value of the property immediately before and after the injury." Id. at 694 (quoting Smith v. Brooks, 337 A.2d 493, 494 (D.C.1975)). Since ASCA already had received compensation for the cost of repair, argued Helton, any further award for the car's diminished value would unjustly confer on ASCA a "double recovery." ASCA opposed summary judgment with an affidavit sworn by its general manager claiming that the payment of the cost of repair had not made ASCA "whole."

In an extensive memorandum opinion Magistrate Judge Goodbread granted Helton's motion for summary judgment compelled by his understanding that longstanding D.C. law does not permit damages for residual diminution in value where the complainant already has recovered the reasonable cost of repair. The judge determined that the issue was controlled by Knox v. Akowskey, in which we stated,

The basic rule for measure of damages for partial destruction of or injury to a chattel is the difference in value of the chattel immediately before and after the injury. An alternative measure is the reasonable cost of repairs necessary to restore it to its former condition.

116 A.2d 406, 408 (D.C.1955) (citing Wright v. Capital Transit Co., 35 A.2d 183, 184 (D.C.1943) ("Where damages to an automobile are such that they may reasonably be repaired, restoring the vehicle to substantially its condition prior to the injury, the measure of damages is the fair and reasonable cost of the necessary repairs.")). On this authority, the magistrate judge concluded that ASCA was "require[d] ... to elect between either (a) the difference in value before and after the accident or (b) the amount of the repairs, but not both." These remedies, said the judge, are "two alternate standards — which, significantly, are set forth as non-cumulative options...." Given that the insurer had paid the repair cost, ASCA was thus entitled to no further relief. The magistrate judge took great pains, however, to explain "the compelling [contrary] rationales of literally all surrounding jurisdictions which allow for [residual] diminution in value for damaged vehicles" in conjunction with the reasonable repair cost, and urged ASCA to seek appellate review.

The dealership heeded the advice and pressed its claim on intermediate review by an associate judge of the Superior Court. See Super. Ct. Civ. R. 73(b) ("Judicial review of a final order or judgment entered upon direction of a hearing commissioner [now magistrate judge] is available (1) on motion of a party to the Superior Court judge designated by the Chief Judge to conduct such reviews or (2) on the initiative of the judge so designated."). The judge affirmed the order granting summary judgment because "[i]n the District of Columbia, there are two, alternative standards under which a Plaintiff can recover for damages to a chattel," and ASCA had been compensated under one to the exclusion of the other.² We granted ASCA's application for allowance of an appeal in order to review the judgment and to consider specifically whether a complainant may recover residual diminution in worth resulting from injury to personal property after already having been compensated for the reasonable cost of repair. See D.C.Code § 11-721(c) (2001) (providing that appeals to this court from the Small Claims and Conciliation Branch may be taken by application).

II.

Until now, we have not been presented with the argument that, despite "full repair," there should be further compensation when repair alone does not restore injured property (here, an automobile) to its pre-injury value. The argument is based on a distinction, recognized by the magistrate judge, between compensation for repair costs in order to restore the car's physical appearance and function and damages to compensate for loss of market value even after such repairs have been made. A chronological survey of our cases reveals that past plaintiffs have almost always sought at trial the reasonable cost of repair, and that, in each instance, the issue on appeal was the sufficiency of the evidence supporting the amount of damages for repair. See Wright, 35 A.2d at 185 (holding that the trial court erred in directing the verdict against the plaintiff because a "receipted itemized bill," supported by testimony showing that the repairs were necessitated by the collision, is sufficient prima facie evidence of the amount of damages); Hemminger v. Scott, 111 A.2d 619, 620 (D.C.1955) (affirming an award of the reasonable cost of repair because, despite the defendant's contrary assertion, there is no practical evidentiary distinction between the bill in Wright and the instant plaintiff's prospective repair estimate); Knox, 116 A.2d at 408 (reversing an award of the estimated cost of repair because the plaintiff did not prove that it was "reasonable," i.e., that the award "would not exceed the difference in value of his vehicle before and after the collision"); Brooks v. Capital Fleets, Inc., 123 A.2d 916, 917 (D.C.1956) (affirming an award of repair cost because the record did not support the defendants' argument that the receipted bill and estimate work sheet establishing the plaintiff's damages were somehow suspicious or untrustworthy); Solomon v. Easterly, 160 A.2d 621, 623 (D.C.1960) (remanding for a new trial because the plaintiff's seemingly identical damage estimates for two purportedly separate cars suggested that the award of repair cost rested on a "spurious claim"); Brewer v. Drain, 192 A.2d 532, 534 (D.C.1963) (holding that the evidence was sufficient to prove a causal connection between the injury and the necessity of repair, as well as the reasonableness of the cost of repair); Smith, 337 A.2d at 494 (reversing for a new trial on the issue of damages because the plaintiff did not present sufficient evidence to establish that the cost of repair "neither exceeded the diminution in value caused by the injury nor the value of the car prior to injury");³Gamble, 386 A.2d at 694 (reversing an award of repair costs that "clearly exceeded both the car's diminution in value and its total value prior to injury").⁴ Our jurisprudence concerning the measure of damages for injury to an automobile thus has had a de facto focus on the reasonable cost of repair.⁵ There is no dispute in this case about the proof or reasonableness of the cost of the Mercedes's repair because Avis's insurance carrier remitted payment for that purpose to the apparent satisfaction of all the parties before this action was instituted in the Small Claims and Conciliation Branch. Rather, the present controversy is whether the pre-litigation payment of the reasonable cost of repair extinguished ASCA's damages claim for residual diminution in worth as a matter of law.

Neither Knox nor any of our other decisions answers the question posed in this appeal. We do not restrictively interpret our prior decisions — which as noted dealt with the reasonableness of the cost of repair — as announcing an exclusive cost-of-repair standard in all cases concerning partial destruction to an automobile. In Knox, we summarized the state of the law as follows:

The basic rule for measure of damages for partial destruction of or injury to a chattel is the difference in value of the chattel immediately before and after the injury. An alternative measure is the reasonable cost of repairs necessary to restore it to its former condition. This court has on

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