Oliver v. Henry – 7/28/2011

August 15, 2011

Arizona Court of Appeals Division One Holds That A Plaintiff Need Not Sell or Transfer a Damaged Vehicle to Establish a Claim for Diminution in Value or to Prove the Amount of Loss in Value.

In October 2008, Oliver bought a 2008 Jeep Wrangler for $23,296.  Two months later, Oliver and Henry were involved in a car accident.  Henry admitted that his negligence caused the accident, and his insurer paid $15,535 to repair the Wrangler to industry standards.  In March 2009, an expert appraiser retained by Oliver opined that the Wrangler had suffered a diminution in value of $8,975, even though it had been repaired.  A salesman at a car dealership also told Oliver that the Wrangler’s trade-in value was $10,000.  Oliver did not plan to sell, transfer, or otherwise dispose of the Wrangler.

In September 2009, Oliver sued Henry, seeking compensation for the Wrangler’s diminished value.  Henry moved for summary judgment, claiming that Oliver could not prove the Wrangler’s diminished value because he had never tried to sell it or trade it in.  The superior court denied the motion, agreeing with Oliver that the residual loss in fair market value of a vehicle following repairs should be measured by the difference in the value immediately before and immediately after the loss.  An arbitrator then awarded Oliver $8,975 for the diminished value of the Wrangler plus costs.  The superior court confirmed the arbitration award.

On appeal, the Court of Appeals agreed with the trial court and with Oliver that a sale or transfer is not necessary to establish the diminished value of a vehicle.  Like the trial court, the Court of Appeals relied on Farmers Insurance Co. of Arizona v. R.L.B. Investment Co., 138 Ariz. 562, 675 P.2d 1381 (1983), in reaching this conclusion.  The Court noted that Farmers and other authorities support the proposition that diminished value may be established by means other than transfer or sale, including expert appraisals and estimates.  Henry, on the other hand, cited no authority that supported his position that sale or transfer is required.

Judge Winthrop authored the opinion; Judges Portley and Timmer concurred.