Indiana Recognizes Damages for Diminished Value; Shield Global Partners-G1, LLC v. Forster

What damages are available is a driving factor behind many lawsuits. After all, if there is not much damage, then someone may decide that a lawsuit is not worth the effort. This case supports an argument for a broader interpretation of what damages are available in property damage cases in particular, and in all cases more generally.

Forster was driving in Bloomington when she rear-ended a truck driven by Ingersoll. Forster admitted fault. The Truck was leased, and Shield had a security interest in the vehicle.

Before the accident, the Truck had a Blue Book value of $36,550. It was repaired for $6,852.55 and had a post-repair Blue Book value of $32,529.50. An appraiser found that the Truck suffered an inherent diminished value of $7,400.00.

Shield filed suit against Forster for the diminished value of the Truck. But the trial court found that this form of damages was unrecoverable. Shield appealed.

On appeal, Forster defended the trial court’s decision by arguing that diminished value is not a recognized form of damages if damaged property is fully repaired. The court disagreed.

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.

The Court concluded that this “comports with economic reality” because not all repairs
result in a return to full fair market value.

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.

When reaching its conclusion, the Court did not make any sweeping statements about “full” or “complete” compensation. But you can expect that litigators will work this case into their arsenal when dealing with issues regarding the scope of damages in other proceedings, too.

Lesson:
Even if damaged property has been fully repaired, a plaintiff is entitled to pursue
damages for diminished value of the repaired property.

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