Morrison v. Campbell, 02–13–00174–CV.

• Decision Date: 08 May 2014
• Docket Number: No. 02–13–00174–CV.,02–13–00174–CV.
• Citation: 431 S.W.3d 611
• Parties: James Bradley MORRISON, Appellant v. James CAMPBELL, Appellee.
• Court: Texas Court of Appeals

431 S.W.3d 611

James Bradley MORRISON, Appellant

v.James CAMPBELL, Appellee.

No. 02–13–00174–CV.

Court of Appeals of Texas, Fort Worth.

Jan. 16, 2014.

Rehearing Overruled May 8, 2014.

Malcolm G. Renwick, Renwick & Associates, P.C., Carrollton, TX, for Appellant.

Adam R. Hardison, Hardison Law Firm, Dallas, TX, for Appellee.

Panel: DAUPHINOT, WALKER, and McCOY, JJ.

OPINION

LEE ANN DAUPHINOT, Justice.

In this agreed interlocutory appeal, James Bradley Morrison appeals from the trial court's denial of his motion for summary judgment on the claim for loss of use damages brought against him by James Campbell.¹ Morrison's vehicle struck Campbell's motorcycle in an accident, and the motorcycle was damaged. Morrison argues that loss of use damages are not available to Campbell because his motorcycle was declared a total loss. Because we hold that damages for loss of use are available in total loss cases when the insurer unreasonably delays payment of a claim, we affirm the trial court's denial of the motion for summary judgment.

Facts and Procedural History

The accident that gave rise to this suit occurred on October 23, 2009. On June 22, 2010, Morrison's insurance carrier (Insurer) sent a letter to Campbell's attorney denying Campbell's claim based on its determination that Campbell was at fault for the accident because of “faulty evasive action & following too closely.” The record does not contain any more communications between Insurer and Campbell's attorney in 2010. On January 19, 2011, Insurer sent the attorney a letter offering $100,000.00 to settle Campbell's personal injury claims arising out of the accident. That same month, Insurer sent Campbell a check for that amount.

The next month, Campbell's attorney sent Insurer a letter regarding Campbell's claims for damages to his motorcycle and other personal property. He stated that the damage to the motorcycle “rendered it inoperable. In addition to the property damage to his motorcycle, [Campbell] has lost the use of his motorcycle from the date of the collision to the present.” He asserted that the proper measure of loss of use damages is the reasonable rental value of a substitute vehicle and that “[t]he cost of renting a replacement motorcycle during this time is $125.00 per day.”

As for the repair and replacement costs, the attorney stated that he was authorized to accept the amounts listed in the letter “in full settlement of [Cambpell's] property damage claim.” He listed the following items and amounts:

$1,664.70: helmet, leather chaps[,] and pants, see attached receipt

$1,095.11: accessories, see attached receipt

$24,605.29: cost of repair, see attached receipt

$61,625.00: loss of use from October 23, 2009 through February 28, 2011, 493 days x $125.00 per day

$88,990.10

The record does not, however, include any receipts that may have been attached to this letter.

On April 20, 2011, Insurer sent Campbell's attorney an offer of $53,125.00 for the motorcycle, clear title, and salvage, plus $1,884.70 for the clothing damaged in the accident. Alternatively, it offered that if Campbell wanted to keep the salvage, Insurer would pay $42,825.00 for the motorcycle.

The attorney responded the next day with a letter accepting the offer of $42,825.00 plus the salvage. He also accepted the offer of $1,884.70 for the clothing items and demanded additional damages for Campbell's damaged GPS system. He agreed to accept a total of $3,383.70 for the GPS and clothing items. He confirmed his understanding that as to Campbell'sloss of use claim, “[Insurer] rejected this claim, [and] that it is not included as part of this settlement.” A check from Insurer dated May 3, 2011 was made out to Campbell in the amount of $46,208.70.

On June 13, 2011, Campbell filed suit against Morrison for loss of use damages. In response to requests for admissions, Campbell admitted that the motorcycle was a total loss following the collision and that he accepted $42,825.00 as fair compensation for the fair market value of the motorcycle, “excluding [Campbell's] claim for loss of use damages.”

Morrison filed a motion for summary judgment on the ground that as a matter of law, loss of use damages are available only for property that is repairable and are not available for property that has been declared a total loss. Campbell responded that the rule relied on by Morrison does not apply when the insurer delays paying a claim. He attached to his response his own affidavit in which he stated that because of the collision, his motorcycle had been damaged to the point that it could not be driven, that he was financially unable to replace the motorcycle until he had been paid the fair market value, and that Insurer “delayed paying [him] the fair market value of this motorcycle for a period exceeding eighteen months.” He also attached the police report of the accident, Insurer's letter denying the claim, Insurer's January 2011 letter offering to settle the personal injury claim, the February 2011 letter from his attorney demanding damages for the motorcycle and other personal property, the April 2011 offer from Insurer; the April 2011 letter from Campbell's attorney accepting the offer and asking for damages for the GPS, and a copy of the May 2011 check from Insurer.

The trial court denied the summary judgment motion without specifying the basis of the ruling. The trial court approved Morrison's application for an agreed interlocutory appeal on this question of law: “whether [Campbell] can recover loss of use damages where [Campbell's] motorcycle was determined to be a total loss and where [Morrison] (through his insurer) substantially delayed compensating [Campbell] for its fair market value.” The court noted that it had denied the summary judgment motion on the merits, and it stated that “if the appellate court determines [Campbell] can recover loss of use damages under these circumstances, the case would likely resolve at mediation. Similarly, if the appellate court determines [Campbell] cannot recover loss of use damages under these circumstances, the case would likely be resolved.”

Standard of Review

We review a summary judgment de novo.² We consider the evidence presented in the light most favorable to the nonmovant, crediting evidence favorable to the nonmovant if reasonable jurors could, and disregarding evidence contrary to the nonmovant unless reasonable jurors could not. ³ We indulge every reasonable inference and resolve any doubts in the nonmovant's favor.⁴ A defendant who conclusively negates at least one essential element of a cause of action is entitled to summary judgment on that claim.⁵

We must accept as true the uncontroverted evidence of the nonmovant. ⁶ If the uncontroverted evidence is from an interested witness, it does nothing more than raise a fact issue unless it is clear, positive and direct, otherwise credible and free from contradictions and inconsistencies, and could have been readily controverted.⁷

Analysis

Morrison argues in one issue that the trial court erred by denying his motion for summary judgment because under the law, loss of use damages are not available to Campbell because his motorcycle was declared a total loss and he was paid the fair market value for it.

The Rule in Texas

Texas law distinguishes between property that was damaged to the point of being totally destroyed and damaged property that can be repaired. In a suit for damages for personal property that has been totally destroyed, the proper measure of damages is the fair market value of the property at the time it was destroyed.⁸ Texas courts have consistently held that if personal property such as a vehicle is damaged but is repairable, the owner may recover the cost of repairs and damages for loss of the use of the vehicle, but if the property is totally destroyed, the owner can recover only the market value of the property and not loss of use damages.⁹ Campbell argues that the rule against recovering loss of use damages for totally destroyed property is the “the general rule,” as though the law has provided some exceptions. But we have found no case on this issue that declined to follow the rule or that created any exception, even when equity might weigh in favor of one. For example, the law has made no exception for when the owner cannot secure financing and is therefore unable to replace the property.¹⁰ In that case, the law still prohibits the recovery of loss of use damages.

But even long-standing rules should be re-examined periodically to determine whether they retain their validity in light of changed circumstances and standards.¹¹ We therefore will consider the purpose of the rule and whether the rule continues to serve that purpose.

In Texas, the rule's application has been justified on the basis of two assumptions: (1) that loss of use damages are included in an award of the market value of the property and therefore the rule prevents a double recovery for the plaintiff and (2) that when property is totally destroyed, it can be replaced immediately with no loss of use.¹²

The Supreme Court of Texas discussed the rule in King v. McGuff in the context of whether the plaintiffs could recover rental value for a house damaged by fire.¹³ The fire had caused the house to lose 9/10 of its market value, a level of damage that the court equated with total destruction. ¹⁴ The jury awarded the owners compensation for loss of use or rental value of the house while it was being restored, and it also awarded the difference between the reasonable market value of the house just before and just after the fire.¹⁵

In its analysis, the court noted that Texas case law was “surprisingly meager” on the question of whether a person whose house had been totally destroyed by fire could be awarded both the lost market value of the house and also interest on the market value from the date of the loss to the date of trial.¹⁶ It concluded that there was “no suggestion” in any of the cases it had found that...