In American Alternative Insurance Corporation v. Robert Davis and J & D Towing, LLC, No. 10-13-00275-CV (Tex.App.- Waco June 12, 2014), the crux of the case concerned whether a chattel owner should be compensated for loss of use damages suffered when a wrecker is rendered a total loss in a motor vehicle accident.  The owner of the wrecker was unable to continue operations for about four months.  He claimed he could not replace the wrecker because the at fault driver’s insurance carrier had “low balled” him on the value of the wrecker. After finally settling with that carrier, the owner made a loss of use claim under his under-insured motorist policy.  The claim was denied and suit followed.

The Waco Court of Appeals recognized the long standing rule in Texas that 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. However, an owner can recover both the repair cost and loss of use damages if the vehicle is repairable.  In this case, it was undisputed that the wrecker was unrepairable.

The Waco Court of Appeals declined to follow precedent from another Texas court holding loss of use damages were recoverable in total loss cases when an insurance company unreasonably delays in paying a claim.  However, the Waco Court of Appeals recognized, 1) the owner did not submit a jury question on whether any insurance carrier unreasonably delayed paying a claim, and 2) such a change in long standing Texas law is best handled by the Texas Legislature or the Texas Supreme Court.  Thus, it was held that the trial court abused its discretion in submitting a jury question authorizing loss of use damages in a total loss case.

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