Shield Global Partners-G1, LLC v. Lindsay Forster ( 2020 )

FILED
Feb 19 2020, 9:08 am
CLERK
Indiana Supreme Court
Court of Appeals
and Tax Court
ATTORNEYS FOR APPELLANT ATTORNEY FOR APPELLEE
James D. Johnson Theodore G. Hammond
Nathan A. Dewan Law Office of Progressive Group
Jackson Kelly PLLC of Insurance Companies
Evansville, Indiana Indianapolis, Indiana
IN THE
COURT OF APPEALS OF INDIANA
Shield Global Partners-G1, LLC, February 19, 2020
Appellant-Plaintiff, Court of Appeals Case No.
19A-CC-1100
v. Appeal from the Monroe Circuit
Court
Lindsay Forster, The Honorable Holly M. Harvey,
Appellee-Defendant. Judge
Trial Court Cause No.
53C06-1712-CC-2559
Mathias, Judge.
[1] Shield Global Partners-G1, LLC (“Shield”) appeals the judgment of the
Monroe Circuit Court in favor of Lindsay Forster (“Forster”) in Shield’s
negligence action against Forster seeking damages for the inherent diminished
value of a motor vehicle damaged in an accident that was Forster’s fault. Shield
presents two issues for review, which we restate as: (1) whether the trial court
Court of Appeals of Indiana | Opinion 19A-CC-1100 | February 19, 2020 Page 1 of 9
erred as a matter of law by concluding that Indiana does not recognize damages
for inherent diminished value; and (2) whether the trial court clearly erred by
concluding that Shield did not present evidence sufficient to support its claim
for diminished value damages.
[2] We reverse and remand.
Facts and Procedural History
[3] The historical facts underlying this case are essentially undisputed. On June 15,
2017, Forster was driving a car in Bloomington, Indiana, when she rear-ended a
Chevy Silverado pickup truck (“the Truck”) driven by Lance Ingersoll
(“Ingersoll”). Forster admitted fault for the accident.
[4] The Truck is registered in Ingersoll’s name. Ingersoll originally leased the Truck
from Hubler Chevrolet. Under the terms of the lease agreement, Ingersoll was
to lease the Truck from December 5, 2015 to March 4, 2019. Hubler later
assigned the lease to ACAR Leasing LTD (“ACAR”), who holds title to the
vehicle. After the accident, GM Financial, who held a security interest in the
Truck, assigned to Shield any claims for diminished market value of the Truck
as a result of the accident.
[5] Prior to the accident, the Truck was appraised with a fair market value of
$36,550, according to the National Automobile Dealers Association (“NADA”)
Used Car Guide. The Truck was satisfactorily repaired for a cost of $6,852.55.
After the accident, Shield, using in-house personnel, appraised the Truck with a
fair market value of $32,529.50, again using the NADA Used Car Guide, for a
Court of Appeals of Indiana | Opinion 19A-CC-1100 | February 19, 2020 Page 2 of 9
diminished value of $4,020.45. Shield then sought a second appraisal from
Stuart Raskin (“Raskin”) of South Florida Auto Appraisers, who estimated an
inherent diminished value of $7,400.
[6] On December 14, 2017, Shield filed a negligence complaint against Forster
seeking damages for the diminished value of the Truck. A bench trial was held
on February 21, 2019. The trial court entered findings of fact and conclusions of
law on May 14, 2019, denying Shield’s claim for diminished value of the Truck.
In relevant part, the trial court concluded:
20. Plaintiff’s claim for “inherent diminished value, lost value
and/or accelerated depreciation of the vehicle based on
damage history” alone amounts to a claim for “stigma of
defect” damage (as confirmed by Plaintiff’s demand
packet). Indiana law does not recognize per se “stigma of
defect” damages to personal property which is not
permanently damaged.
21. The Plaintiff has not presented sufficient evidence to
support a conclusion that the repairs to the vehicle did not
restore the vehicle to its fair market value before the
causative event. The Court is not persuaded by the
Plaintiff’s expert, who did not inspect the vehicle, review
photos of the vehicle, or in any way assess the actual
condition of the vehicle as a result of the accident.
22. In the absence of evidence to determine the fair market
value after repairs, and therefore determine whether the
repairs were sufficient to restore the fair market value of
the vehicle before the accident, the Court concludes that
the cost of repairs to the vehicle in this case is an adequate
measure of damages.
Court of Appeals of Indiana | Opinion 19A-CC-1100 | February 19, 2020 Page 3 of 9
23. The Court concludes that the Plaintiff is not entitled to an
additional award of damages and orders that Plaintiff take
nothing by way of its Complaint.
Appellant’s App. pp. 12. Shield now appeals.
Standard of Review
[7] Our well-settled standard of review in cases where the trial court enters findings
of fact and conclusions of law was set forth by this court in Koch Development
Corp. v. Koch as follows:
When a trial court enters findings and conclusions, we apply a
two-tiered standard of review: we first determine whether the
evidence supports the findings; we then determine whether the
findings support the judgment. In deference to the trial court's
proximity to the issues, we disturb the judgment only where there
is no evidence supporting the findings or the findings fail to
support the judgment. We do not reweigh the evidence, and we
consider only the evidence favorable to the trial court’s judgment.
We also will not reassess witness credibility. The party appealing
the trial court’s judgment must establish that the findings are
clearly erroneous. Findings are clearly erroneous when a review
of the record leaves us firmly convinced that a mistake has been
made. We do not defer to conclusions of law, which are
evaluated de novo.
996 N.E.2d 358, 369 (Ind. Ct. App. 2013) (citations and internal quotation
marks omitted), trans. denied.
Court of Appeals of Indiana | Opinion 19A-CC-1100 | February 19, 2020 Page 4 of 9
I. Damages for Diminished Value
[8] Shield first argues that the trial court erred as a matter of law by concluding that
Indiana does not permit the recovery of inherent diminished value of personal
property, what the trial court referred to as “stigma” damages. The parties agree
that the applicable law was set forth in the case relied on by the trial court,
Wiese-GMC, Inc. v. Wells, which summarized the law of damages as follows:
[T]he fundamental measure of damages in a situation where an
item of personal property is damaged, but not destroyed, is the
reduction in fair market value caused by the negligence of the tort
feasor. This reduction in fair market value may be proved in any
of three ways, depending on the circumstances. First, it may be
proved by evidence of the fair market value before and the fair
market value after the causative event. Secondly, it may be
proved by evidence of the cost of repair where repair will restore the
personal property to its fair market value before the causative event.
Third, the reduction in fair market value may be proved by a
combination of evidence of the cost of repair and evidence of the
fair market value before the causative event and the fair market
value after repair, where repair will not restore the item of personal
property to its fair market value before the causative event.
626 N.E.2d 595, 599 (Ind. Ct. App. 1993) (emphases added), trans. denied.
Although the parties agree that this language controls, they disagree on the
precise meaning of this language and how it applies in the present case. This, of
course, is a question of law that we review de novo. See Koch, 996 N.E.2d at
369.
[9] Shield argues that, under Wells, damages for diminished value are recoverable
whenever an item of property suffers a decrease in fair market value despite
Court of Appeals of Indiana | Opinion 19A-CC-1100 | February 19, 2020 Page 5 of 9
being fully repaired. Forster argues that there is no diminished value when the
property is fully repaired. The trial court concluded that Shield’s claim for
inherent diminished value, what it referred to as “stigma of defect” damages, is
not recognized in Indiana law for property which is not permanently damaged.
We believe this misreads Wells.
[10] The Wells court did not hold that diminished value damages are recoverable
only when the property is permanently damaged. Instead, it held that
diminished value damages are recoverable when “repair will not restore the
item of personal property to its fair market value before the causative event.”
Wells, 626 N.E.2d at 599. We read this to mean that, even if the repair restores
the property to its previous condition, damages may still be recovered if there is
a resulting loss of fair market value to the property as a result of it having been
damaged and then repaired.
[11] Our reading of Wells comports with the economic reality that property that has
been damaged and repaired often has a lesser fair market value than property
that was never damaged in the first place. This is especially true in the case of
automobiles, where numerous online services, including Carfax, allow anyone
to easily check to see if an automobile has been involved in an accident.
Automobiles that have been involved in accidents, even if they have been
successfully and fully repaired, usually have a diminished value. Indeed, all
other things being equal, few if any would prefer a car that has been in an
accident, even if fully repaired, to one that has never been in an accident, unless
the repaired car was available at a lower price.
Court of Appeals of Indiana | Opinion 19A-CC-1100 | February 19, 2020 Page 6 of 9
[12] As stated in Wells, “the fundamental measure of damages in a situation where
an item of personal property is damaged, but not destroyed, is the reduction in
fair market value caused by the negligence of the tort feasor.” Id. The cost of
repair is an adequate measure of damages only when the repair restores the
property to its fair market value before the damage. Id. In cases where the repair
will not restore the property to its pre-accident value, the reduction in value
may be proved by a combination of evidence of the cost of repair and the
difference between the fair market value of the property before and after the
accident. Id.
[13] Because the trial court erred regarding the applicable law, we could reverse on
this ground alone, as the court viewed the evidence from in incorrect legal
perspective. But the trial court, in our opinion, also clearly erred with regard to
the evidence of damages submitted by Shield.
II. Proof of Diminished Value
[14] Shield also argues that the trial court clearly erred by concluding that Shield
failed to prove that the repairs to the Truck did not restore the vehicle to its fair
market value before the causative event. We agree.
[15] First, the trial court clearly erred when it found that Raskin, Shield’s third-party
appraiser, “did not inspect the vehicle, review photos of the vehicle, or in any
way assess the actual condition of the vehicle.” Appellant’s App. p. 12. Raskin’s
uncontradicted and unchallenged testimony shows that he reviewed several
photos of the Truck. He also assessed the condition of the Truck by referring to
Court of Appeals of Indiana | Opinion 19A-CC-1100 | February 19, 2020 Page 7 of 9
the insurance company’s repair estimate and two different vehicle history
reports, one of which included the Truck’s service history and odometer
readings. Thus, Raskin based his appraisal of the Truck’s fair market value on
the vehicle’s maintenance records, mileage, repair estimates, and photographs
of the Truck.
[16] It is notable that the trial court did not find Raskin’s testimony to be
uncreditworthy. It instead concluded that Raskin’s testimony was not
persuasive because he did not personally “inspect the vehicle, review photos of
the vehicle, or in any way assess the actual condition of the vehicle as a result of
the accident.” Id. The trial court’s conclusion that Raskin did not review photos
of the vehicle is clearly erroneous. Nor do we with think that Raskin was
required to personally inspect the Truck in order to appraise it. As noted,
Raskin reviewed several documents and reports regarding the vehicle in coming
to his appraisal conclusion.
[17] Even if the trial court was not persuaded by Raskin’s testimony regarding the
diminished value of the Truck, its conclusion that there was no evidence
regarding the diminished value of the Truck is contrary to its own finding that
Shield’s in-house appraisal concluded that the Truck had a diminished value of
$4,020.50. We therefore conclude that the trial court’s factual findings
regarding Raskin’s appraisal are not supported by the evidence. And the trial
court’s conclusion that Shield presented no evidence to support its claim of
diminished value is unsupported by the trial court’s factual findings.
Court of Appeals of Indiana | Opinion 19A-CC-1100 | February 19, 2020 Page 8 of 9
Conclusion
[18] The trial court erred by concluding that Shield could not recover damages for
diminished value because the Truck had been successfully repaired. It then
compounded this error by ignoring the uncontroverted evidence that the Truck
had a diminished value as a result of being involved in an accident and being
repaired. We therefore reverse the judgment of the trial court and remand for
proceedings consistent with this opinion.
Kirsch, J., and Bailey, J., concur.
Court of Appeals of Indiana | Opinion 19A-CC-1100 | February 19, 2020 Page 9 of 9