QUINCY, MA, September 26, 2017 – A Massachusetts court granted Chartwell Law’s motion for summary judgment in a case concerning recovery for diminution of value in a third-party negligence motor vehicle accident case. Chartwell Law attorneys David A. Brosnihan and Jamie R. Spiller were defense counsel on behalf of their client U-Haul’s lessee Charles Clifford in Resale Recovery, LLC as assignee of Jennifer Hoginski-Reif v. Charles Clifford. The decision, handed down by Justice Mark S. Coven, Quincy District Court, was notable because the issue of whether “Diminution of Value” property damages are recoverable by a third-party in the context of a motor vehicle accident is a matter of first impression in Massachusetts.
A motor vehicle accident involving the named parties occurred involving Jennifer Hoginski-Reif’s personal vehicle and Charles Clifford, who was driving a truck he rented from U-Haul. Following the accident, Hoginski-Rief’s insurance company, paid $27,535.67 to repair her vehicle. Hoginski-Rief then assigned her rights for so-called “Diminution of Value” damages to Resale Recovery, LLC. In doing so, she assigned them the right, title, and interest in the property damage negligence claim for any amount owed to her above what her insurance company paid to her with regard to property damage to her motor vehicle. As her insurance company, paid for the repairs to Hoginski-Rief’s vehicle, the sole measure of damages being sought by Resale Recovery was for the diminished value of the vehicle from a resale perspective. Resale Recovery alleged that Clifford’s negligence caused severe property damage to Hoginski-Rief’s car, including decreasing the vehicle’s value by $18,000. At the request of Resale Recovery, an auto valuation expert provided an opinion which stated that the value of Hoginski-Rief’s vehicle, at the time of the accident, was $59,500, and that after the vehicle was repaired, its value was $41,500 at best.
In Massachusetts, the courts have found that a plaintiff does not have a direct first party claim against his or her insurance company for the “inherent diminished value” of the vehicle pursuant to a motor vehicle crash. The issue of diminished value, however, had never been ruled upon in the context of a third-party claim based on a negligence theory of liability. Brosnihan argued that in the context of real property, Massachusetts courts have held that the measure of damages as the “cost the expense of repairs where an injury is reasonably curable by repairs.” Therefore, in the context of a motor vehicle property damage claim, the same theory of damages should be applied.
Brosnihan furthered argued that the standard Massachusetts motor vehicle liability policy does not provide coverage for diminished value, making this theory of recovery and uninsured risk not contemplated by the state legislature in adopting the standard policy form required in this jurisdiction. He stressed to the Court that allowing such a recovery would open a Pandora’s Box of future uninsured claims.
Had the Court found in favor of the plaintiff, U-Haul’s lessee Charles Clifford, who only had the minimum amount of insurance coverage, he would have been personally responsible for paying excessive damages that would have far exceeded his coverage.
David A. Brosnihan defends insurance carriers and large self-insured companies in a wide variety of tort claims, first-party property claims, insurance coverage matters, and workers’ compensation disputes. Mr. Brosnihan is a partner in Chartwell Law’s Boston and Rhode Island Offices. He can be reached at firstname.lastname@example.org or (617) 426-2400.
Jamie R. Spiller focuses her practice on workers’ compensation defense and general liability matters. She resides in Chartwell Law’s Boston Office. She can be reached at email@example.com or (617) 426-2400.