B. Physical Injury to or Loss to Chattels

• Library: South Carolina Damages (SCBar) (2009 Ed.)

B. Physical Injury to or Loss to Chattels ³³

1. Introduction

This section deals with the measure of damages applicable when the plaintiff's chattel has been damaged, destroyed, or lost as a result of the defendant's tortious conduct. It covers damages to chattel that has a fair market value, as well as to chattel that does not have such a value. This chapter also covers loss of use. Furthermore, this chapter will focus on the tort of conversion in South Carolina, its elements, remedy, and distinguishing characteristics as it pertains to use. This chapter does not discuss such items as punitive damages, loss of profits, or mental distress, as those items are covered extensively in other chapters.

2. General Damages—Chattel Has a Fair Market Value

a. General Principles

As a basic principle in the law of damages there must first be some calculation of the value of the chattel, or personal property, before a calculation may be made as to the value of that chattel after it is injured. The measure of damages depends on the type of property, its intended use, whether it can be repaired, and any value remaining after the injury. "In order to recover, the plaintiff must show that the property was injured, what the property was worth before the injury, and the amount of pecuniary loss."³⁴ In the area of injury to personal property the value of the personal property is calculated by giving the chattel a fair market value. The fair market value is what the chattel would be sold for in the ordinary course of a voluntary sale by a leisurely seller to a willing buyer.³⁵ As a general rule, the measure of damages for injury to personal property is the difference between the market value immediately before and its value immediately after the injury.³⁶ This approach is referred to as diminution in value. However, in order for this rule to apply a market must exist for the property. In such cases where there is no market, the courts use the cost of repairs or replacement value of the property.³⁷ It must be remembered that in South Carolina the owner of the property injured by the negligence of another has a duty to mitigate, or minimize, damages.³⁸

Cases discussing the proper measure of property damage often speak in terms of "permanent" versus "temporary" injury. In this respect, cases involving damage to real property are sometimes helpful by analogy in analyzing the proper measure of damages to be applied in cases dealing with injury to chattel. In using the terms "permanent" or "temporary" damage in this sense, an injury need not last forever to be classified as permanent. Permanent injury merely describes the kind of injury for which an award of damages measured by the resulting diminution in value of the property is appropriate. Temporary injury is damage that reasonably may be repaired and justifies damages measured by the loss of use or rental value during the period of injury, the cost of restoration, or both, depending on the surrounding circumstances. As one case states:

The general rule is that in case of an injury of a permanent nature, . ..the proper measure of damages is the diminution of market value by reason of that injury, or in other words, the difference between the value of the land before the injury and its value after the injury. Where the .pollution results in a temporary or nonpermanent injury to real property, the injured landowner can recover the depreciation in the rental value or usable value of the property caused by the pollution.³⁹

The determination of the fair market value of a chattel is a question of fact.⁴⁰

b. Application of Rule

The purpose for allowing damages is to award compensation without enrichment. Generally, actual damages in either tort or contract are designed to return the injured party to his or her pre-injury state, or to give the injured party an amount of money that will compensate adequately for not being able to return to a pre-injury state.⁴¹ As stated above, the general rule for injury or loss of property is the difference between the fair market value before and after the injury causing the incident.⁴² In Painter v. Forest Acres,⁴³the South Carolina Supreme Court stated, "the substantial value of property lies in its use."⁴⁴Therefore, anything that restricts the use, enjoyment, or disposal of property may be said to destroy the property itself.⁴⁵

Because the value of property is a question of fact, the fair market value is to be decided by the trier of fact. In property damage cases, the jury will not be permitted to give more or less than the value of the property and must measure the damages by the legal rate of interest.⁴⁶ The next question that naturally arises from this discussion is: Who may testify or give evidence as to the value of the property?

The value of the property is typically established by opinion evidence from a witness familiar with the selling price of similar property.⁴⁷ In many instances expert testimony may be required depending on the property involved and complexity of valuation. In such cases, to be competent as an expert a witness must have acquired by reason of study or experience, or both, such knowledge and skill in the relevant business, profession, or science that makes him or her better qualified than the jury to form an opinion on the particular subject of his testimony.⁴⁸ However, evidence of fair market values need not be given by experts.

Ordinarily, a property owner who is familiar with his property and its value may give his estimate of its value or the damage inflicted upon it even though he is not an expert. . . . Unless the property owner's lack of knowledge of the value of his property is so complete as to render it worthless, it is for a jury to assess the probative value of his testimony.⁴⁹

c. Repair Costs as Proof of Diminution in Value

(1) Repairs Actually Made

Generally, an owner of property injured by the negligence of another must use reasonable means to minimize the damages, but this rule is not imposed in all cases, and it applies to damages which one can prevent and not to damages already accrued.⁵⁰ If the property can be repaired, damages include the cost of repairs plus the value of the use of the property during a reasonable time.⁵¹ An example of this situation is when someone's car has been hit and injured by the negligence of another. The repair costs would be admissible as to the damages the car sustained and admissible as an accurate valuation of the diminution in value between the pre-injury and post-injury worth. The cost of repairs is presumptively equal to the diminution in value. The time spent repairing the car would also be added as an appropriate valuation of loss of use. However, in this example the car would be worth less even after being put back to pre-injury condition by the mere fact of being in a wreck. In a recent South Carolina Supreme Court decision, the Court ruled that insurance companies whose policy obligations limit post-accident coverage to either the cost of repair or actual cash value, whichever is lower, do not have to pay the always present diminution in value that occurs when a car is in a wreck.⁵² If the property cannot be repaired and returned to its pre-injury state, repair costs are not an adequate measure of damages.⁵³

As the measure of damages is the diminution in fair market value or the difference in value between pre and post-injury property, it must be noted that either party can rebut the presumption raised by the evidence of the repair costs. The defendant can rebut the presumption by showing that the repair cost exceeds the actual diminution in value. Also, because the plaintiff may be compensated for loss of use, he may rebut the repair damages as inadequate.

(2) Repairs Not Made

Even if repairs are feasible, failure to make repairs does not prevent the owner of the damaged chattel from securing the estimated cost of repairs as damages.⁵⁴ In such cases, repair estimates are relevant evidence in determining damages. In Newman v. Brown,⁵⁵the plaintiff brought an action for damage to the plaintiff's car as a result of the defendant's negligence.⁵⁶ After the accident, the plaintiff did not have the car repaired.⁵⁷ The Plaintiff prevailed in the trial court.⁵⁸ The Court held that estimates of both cost of repair and the salvage value of the car were relevant, even though the car had not been repaired.⁵⁹

(3) Who May Make Repairs

The plaintiff is entitled to select the repair facility of his or her own choice as long as the costs for repairs are reasonable.

The defendant bears the risk of the success of the repairs. If the repairs are reasonable but unsuccessful, the plaintiff may still recover the difference between the fair market value of the chattel before the accident and after the repairs have been made, together with the cost of the repairs, even though the total amount exceeds the fair market value of the chattel immediately before the loss.⁶⁰

d. Owner's Opinion on Value of Chattel

An owner is qualified by fact of ownership to give his or her estimate of the value of damaged real and personal property.⁶¹ However, there is no presumption that a witness is competent to give an opinion as to value of real property, and thus, competency must be shown.⁶² South Carolina case law allows owners of real and personal property to give opinion evidence as to valuation. In Seabrook Coast Line Railroad v. Harrelson,⁶³the South Carolina Supreme Court concluded that unless the owner's lack of qualification is so complete that his testimony is entirely worthless, it is for the jury to assess the weight to be accorded to his opinion.⁶⁴ Therefore, although owners may estimate the value of their property, the weight given this evidence will be decided by the trier of fact. Accordingly, "[t]he owner of an article, whether he...