REYNOLDS v. BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION

Reset A A Font size: Print

District Court of Appeal, First District, Division 1, California.

Wesley REYNOLDS, Plaintiff, Respondent and Cross-Appellant, v. BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as Executor of the Last Will and Testament of Robert Donald Duncan, deceased, Defendant, Appellant and Cross-Respondent.*

Civ. 17966.

Decided: February 26, 1959

Nagle & Vale, San Mateo, for cross appellant Reynolds. Dodd McRae, San Francisco, Kirkbride, Wilson, Harzfield & Wallace, San Mateo, for cross respondent Bank of America.

Wesley Reynolds, the owner of a Supercustom Apache airplane rented it to Robert Duncan. Duncan ditched the plane in the ocean, and it was a total loss. Duncan and two of his passengers were killed. One passenger survived. This action was brought by Reynolds against the administrator of Duncan's estate to recover for the loss of the plane. The complaint is in two counts, one for breach of the bailment agreement, and one for negligent operation of the airplane, both or either having resulted in the loss of the plane. The complaint alleged damages for the loss of the plane, that is, its value at the time of the accident, as being $32,835, and also alleged, as special damages, $5,000 for the loss of use of the plane until it could be replaced. At the trial the court ruled that the only recoverable item of damage was the value of the plane at the day of the accident, and ruled that no damages could be recovered for loss of use. The jury brought in a verdict of $30,000 in favor of the plaintiff. The defendant appealed from the judgment entered on that verdict, and the plaintiff cross-appealed, limiting such cross-appeal to ‘that part of the judgment * * * which denies to plaintiff the recovery of the loss of business profits which he suffered as the result of the destruction of the aircraft.’ Defendant subsequently dismissed its appeal without prejudice to plaintiff's cross-appeal. Thus the sole point presented is the correctness of the trial court's rulings that, because the plane was totally destroyed, loss of business profits, as a matter of law, were not recoverable.

This problem arose during the trial under the following circumstances: After the plaintiff had proved that the plane was totally destroyed, and the value of the plane at that time, he attempted to prove the fair market value of the use of the plane at the time of the accident. Defendant objected on the ground, among others, that this was not a proper element of damages. In the course of a lengthy argument over this issue plaintiff offered to prove that the destroyed plane was of a type not readily replaceable; that no duplicate of it was available on the open market; that on the date of the accident it would take a minimum of four to five months to secure a replacement; that the reasonable rental value of such a plane was $1,200 per month; that the earning value of the plane to the plaintiff in his rental business was about $1,500 a month; that because of his inability to replace the plane, plaintiff had in fact lost $5,000 in profits. The trial court sustained the objection to the question and refused to permit the introduction of the proffered testimony. Plaintiff submitted instructions on this element of damage. These the trial court refused to give.

This problem of the proper measure of damages that may be recovered for the wrongful destruction of personal property is not a simple one. The basic tort measure of damages, set forth in section 3333 of the Civil Code, is ‘the amount which will compensate for all the detriment proximately caused thereby, whether it could have been anticipated or not.’

In applying this code section the courts have held generally that the plaintiff is entitled to an amount representing the difference in the value of the property before the injury, and the value after the injury. Konda v. Frumpkin, 90 Cal.App. 384, 265 P. 955; Crain v. Sumida, 59 Cal.App. 590, 211 P. 479; Bryne v. Western Pipe & Steel Co., 81 Cal.App. 270, 253 P. 776; Valencia v. Shell Oil Co., 23 Cal.2d 840, 147 P.2d 558. When the personal property is totally destroyed, obviously, since the value of the property after the accident is zero, the plaintiff is entitled to recover the total reasonable value of the property as of the time of its destruction. Lane v. Spurgeon, 100 Cal.App.2d 460, 223 P.2d 889; Shook v. Beals, 96 Cal.App.2d 963, 217 P.2d 56, 18 A.L.R.2d 919; Tatone v. Chin Bing, 12 Cal.App.2d 543, 55 P.2d 933.

These generalizations, however, are not decisive of the question as to whether loss of use is also included, in a proper case, within the phrase such ‘amount which will compensate for all the detriment’ caused by the wrongful act ‘whether it could have been anticipated or not.’

There can be no doubt at all that, when personal property by a wrongful act, is damaged but repairable, the plaintiff may recover, under section 3333, first the cost of the repairs. Such cost, at least prima facie, is an acceptable method of computing the diminution of value caused by the injury. Tremeroli v. Austin Trailer Equip. Co., 102 Cal.App.2d 464, 227 P.2d 923; Hancock v. George R. Curtis Paving Co., 114 Cal.App. 624, 300 P. 65; Konda v. Frumpkin, 90 Cal.App. 384, 265 P. 955. But cost of repair is not the only item of recoverable damage. It is universally recognized that, in a proper case, the plaintiff is also entitled, as an additional item of damage, to recover the value of the loss of use of the property during the period reasonably necessary for its repair. Pfingsten v. Westenhaver, 39 Cal.2d 12, 244 P.2d 395; Johnson v. Central Aviation Corp., 103 Cal.App.2d 102, 229 P.2d 114; Lyle v. Seller, 70 Cal.App. 300, 233 P. 345; Tremeroli v. Austin Trailer Equip. Co., 102 Cal.App.2d 464, 227 P.2d 923. In such event the value of loss of use is calculated either by the amount of profits which have been lost during the repair period (Caso v. Heboin, 55 Cal.App. 601, 203 P. 1025), or the reasonable rental value of similar property for such period (Bedell v. Mashburn, 87 Cal.App.2d 417, 197 P.2d 98; Crain v. Sumida, 59 Cal.App. 590, 211 P. 479). Of course, recovery for both rental value and loss of profits is not allowed for the obvious reason that if similar property is rented there would be no loss of profits. Tremeroli v. Austin Trailer Equip. Co., 102 Cal.App.2d 464, 227 P.2d 923; see also for a limitation on this generality, Johnson v. Central Aviation Corp., 103 Cal.App.2d 102, 229 P.2d 114.

But, for reasons not readily apparent, and none was suggested by counsel for respondent at oral argument, some states, where the matter has arisen, have denied any recovery for loss of use during the period reasonably required to replace the destroyed property, although such states will permit such recovery where the property is damaged but not destroyed. Thus, Iowa will not permit recovery for loss of use where the personal property is totally destroyed. Kohl v. Arp, 236 Iowa 31, 17 N.W.2d 824, 169 A.L.R. 1067. The law is to the same effect in Texas (Cogbill v. Martin, Tex.Civ.App., 308 S.W.2d 269; Kansas City Southern Railway Co. v. Frederick, Tex.Civ.App., 276 S.W.2d 332); in Oklahoma (Chambers v. Cunningham, 153 Okl. 129, 5 P.2d 378, 78 A.L.R. 905; Marland Refining Co. v. Duffy, 94 Okl. 16, 220 P. 846, 35 A.L.R. 52; Magnolia Petroleum Co. v. Harrell, D.C.Okl., 66 F.Supp. 559); in Nebraska (Helin v. Egger, 121 Neb. 727, 238 N.W. 364); and in Louisiana (Adam v. English, La.App., 21 So.2d 633.)

Other states apply the same rule whether the property is damaged or destroyed. These states, therefore, in a proper case, allow recovery for loss of use during the period required to replace totally destroyed property. Kentucky is such a state, (Louisville & I. R. Co. v. Schuester, 183 Ky. 209, 209 S.W. 542, 4 A.L.R. 1344; Louisville & N. R. Co. v. Blanton, 304 Ky. 127, 200 S.W.2d 133); as is Utah (Park v. Moorman Mfg. Co., Utah, 241 P.2d 914); and Kansas (Anderson v. Rexroad, 180 Kan. 505, 306 P.2d 137); and Delaware (Adams v. Hazel, 9 Terry (48 Del.) 301, 102 A.2d 919.) (See annotations on this general subject, 169 A.L.R. 1074, 1080; 169 A.L.R. 1100, 1107.) It should also be mentioned that the Restatement of Torts, in section 927, declares that damages for loss of use may be recovered where the personal property is totally destroyed. It is also relevant that, in case of destruction of a building on real property, recovery for deprivation of use for the period required to restore the building is permitted. Higgins v. L. A. Gas & Electric Co., 159 Cal. 651, 115 P. 313, 34 L.R.A.,N.S., 717.

On the specific problem here presented as to recovery for loss of use for totally destroyed personal property, California has no definitive case. The problem was discussed in Pfingsten v. Westenhaver, 39 Cal.2d 12, 22, 244 P.2d 395, 401, where the Supreme Court stated: ‘Pfingsten does not dispute the general legal proposition that there cannot be recovery for both total loss of automotive equipment and loss of use of the same equipment.’ But this statement was made in reference to the law of Iowa which was there involved. This is made crystal clear by the fact that, just prior to making the above statement, the court stated the problem involved as follows (39 Cal.2d at page 21, 244 P.2d at page 401): ‘Westenhaver argues that evidence of loss of use of the tractor was improperly admitted because, under the law of Iowa, [there involved] a plaintiff may not recover for loss of use of property totally destroyed.’ This, as seen from the cases cited supra was a correct statement of Iowa law. The actual holding of the case was that the personal property had not been totally destroyed, so that loss of use was recoverable under Iowa law, so that what was said about loss of use under the Iowa law where the property is totally destroyed was dicta.

Thus California is in the position of being able to adopt whichever rule appears to be sound. From the standpoints of logic and common sense, if section 3333 of the Civil Code allows recovery for loss of use in the case of personal property that can be repaired, it would seem proper to allow recovery for loss of use of personal property where it is totally destroyed and cannot be immediately replaced. The basic measure of damages is the same in each case, that is, ‘the amount which will compensate for all the detriment proximately caused thereby, whether it could have been anticipated or not.’ It is the value of the article to the plaintiff that is the relevant fact. Certainly, if the replacement cost of the airplane was $30,000, as the jury has found, and if it be the fact that such plane could not be replaced for several months, the plaintiff, by reason of the acts of decedent, has lost the income he would have earned in that period. That is a separate item of special damage. In no other way can the plaintiff be compensated for the ‘detriment proximately caused’ by the acts of decedent. We therefore adopt as the most enlightened rule the rule that, in a proper case, where personal property is destroyed, the plaintiff may recover for loss of its use during the period necessary to replace the property.

For these reasons the judgment must be reversed. Since the defendant has dismissed its appeal, there is no necessity of retrying the issue of liability or the issue of the replacement value of the plane, fixed by the jury at $30,000. The trial court should be instructed to retry only the issues as to whether the plane was readily replaceable, and, if it is found that it was not, to fix the value of the loss of use for the period reasonably required to replace it. If an amount is awarded for this item of damage it should be added to the $30,000 and judgment entered accordingly. It is so ordered.

PETERS, Presiding Justice.

BRAY and FRED B. WOOD, JJ., concur. Hearing granted; PETERS, J., not participating.

Copied to clipboard