Given the intricacies in almost all legislationspassed, the devil is in the details. Before we can understand why certain lawsmay seem senseless now but may have made sense decades early, we must take alook at the history and specifics of the laws and why they were passed. In thecase of J & D Towing, LLC v. American AlternativeInsurance Corporation (14-0574) questions Texas law that allows compensation for loss-of-use damages forpartial destruction of personal property but not for total destruction ofproperty.
While in both cases the owner of the property may lose profits due todamage to the property weather completely or partially destroyed. Why is theresuch nuances in the law? The Texas Supreme court held the common-sense verdictthat, Texas law permits loss-of-use damages in total-destruction cases. Dating as early as the late 1800’s numerous caseshinged on the idea of partial of complete destruction of personal property. Onesuch case involved a plaintiff who “engaged in the business of carryingpassengers for hire in its motor coaches or vehicles” (Colonial Motor Corp.). Atrain struck the plaintiffs motorcade resulting in complete destruction of thepassenger car. The plaintiff sued for loss-of-damages from being unable tocarry passengers and was denied. The court concluded that, “where an injuredvehicle may be repaired, then the cost of repairs, together with the loss ofuse, would be proper elements of damages; but, where the vehicle has beentotally destroyed, there should be no allowance of damages for loss of use”(Colonial Motor Corp.
).In hindsight these jurisdiction may have madesense decades ago, but the question remains, why the law differs when it comesto complete VS. Partial destruction of personal property, in the case of J& D Towing, LLC v. American Alternative Insurance Corporation challenges the long held notion that the twodiffer in terms of loss-of use damages. J Towing, LLC lost its only tow truck when a negligent motoristcollided with the truck and rendered it a total loss. Due to the loss, theowner could no longer resume business as usually. The owner Robert Davis, hadpurchased the 2002 Dodge 3500 in April 2011 for $18,500 which was struck bynegligent motorist Cassandra Brueland, who took responsibility of the accident.
Davis then began to negotiate a settlement withthe Bruelands’ insures, arguing for the compensation of the market-value of thetruck which was between $19,000 and $20,000 plus loss-of use damages. Theinsurer “offered to settle J&D’s property-damage claim for $10,299.12 ifJ retained the truck or $16,715.61 if the insurer retained the truck”(Willet). J&D refused to accept theinitial settlement offer but about a month and half later, Brueland’s insurersettled with J&D for $25,000, which he used to buy a new truck.
Davis still hadn’t re-cooped his full lossesincluding loss of use of truck while the settlement was in negotiation whichspanned from December 29, 2011 to March 8, 2012. In order to recoup his lossfor the period mentioned, Davis sued his own insurance provider claiming that “thefunds from the settlement with Brueland’s insurer were insufficient to compensatehim for these damages” (Willet) citing the AAIC’s underinsured-motorist policy.AAIC’s underinsured-motorist policy promises topay for damages which an “insured” is legally entitled to recover includingbodily injury or property damage (Willet).
The key word here is “legal” andunder Texas law recovery of loss-of-use damages in total-destruction case isnot permitted. Legally speaking AAIC was in the green, they cited statues thatallowed for them to dismiss compensation in total destruction of personalproperty cases. To anyone who lives by the book, AAIC would have been the clearwinner, they cited credible sources for the decision but their decision did notset well with the jury. They jury voted in favor of the plaintiff the amount of$22,500 plus interest and court costs.
While the trial court’s decision mayhave been a sweeping victory for J & D towing, the case was once againappealed by AAIC where it reached the court of appeals. In the court of appeals, AAIC appealed thepreviously held decision from the trial courts, this time though with adifferent framework. They questioned, “Whether Texas law on total-destructioncases permitted the trial court to submit the loss-of-use-damages question tothe jury” (Willet), legality of laws is not something the jury has jurisdictionover, and it’s the legislators who sign bills into laws, giving the jury toamend Texas law, might come off as unconstitutional. Secondly, AAIC arguedthat, “whether the trial court correctly denied AAIC’s JNOV motion” (Willet) ,you see the JNOV could have reversed the judgment in favor is AAIC given thelegal statues and lastly, mentioned that , “whether J could recover underthe policy “where its legally recoverable damages do not exceed the limits ofBrueland’s liability coverage(Willet).Finally the court of appeals, agreed with AAIC,it was an abuse of power to allow the jury to vote on total loss of damage and denythe JNOV motion, therefore the court of appeals rendered judgment in favor ofAAIC. It may seems like the final verdict of J & D Towing,LLC v.
AAIC, sided withAAIC, but wait there’s more. J & D appeals the previous decision in favorfor AAIC, arguing not on the legality of the case but rather on the logicalpremise of the law. “Texas law permits loss-of-use damages inpartial-destruction cases, and the same should be true in total-destructioncases” (Willet). J & D claims the law is illogical and “against the greatweight of jurisdictions that have eliminated that archaic distinction” (Willet).
AAIC countered with the same legal jargon and finally the court of appealsvoted in favor for the plaintiff J & D. The Court of Appeals cited that the inquiryis based on the nature of deprivation. Based onprevious similar rulings, the plaintiff is to be compensated for loss incurredduring the period of depravation, which is defined as, “a period reasonablynecessary to obtain replacement property— that the principle of full and faircompensation is satisfied” (Willet). Under this criteria the plaintiff can becompensated for loss-of-use damages in total-destruction cases.
It also upheldthe trial courts, motion in submitting the loss-of-use-damages question to thejury and correctly denying AAIC’s JNOV motion. Despite the long back and forth between AAIC and J & D, there lies asilver lining in this decision, it confirms that while corporations may sightnonsensical archaic laws in support of their case, and given the law is ontheir side, J & D had something more profound. J & D final argumentcame down to logical and sound reasoning. Despite the growing corruption ingovernment, a court decision that over-rules nonsensical laws gives assurance that there is hope in humanity