New Orleans Bar Association, May 20, 2020, Blog Post; Reposted with Permission.
https://www.neworleansbar.org/news/committees/diminished-value-claims-in-louisiana
Introduction
The bread and butter of many plaintiff and defense attorneys in Louisiana is composed of motor vehicle crash cases. Most of these attorneys routinely address special and general damages related to personal injury as well as property damage claims. Interestingly, one area of recovery is often omitted from these claims: diminished value of a vehicle.
Louisiana Revised Statute 9:2800.17
Louisiana Revised Statute 9:2800.17 addresses liability for the diminution in the value of a damaged vehicle. If a motor vehicle is damaged, but not destroyed, by a negligent third-party, the owner of the vehicle can recover for diminished value if he can show that—even if the vehicle were repaired to its pre-loss conditions, its fair market value would be less than its value before it was damaged. Under those circumstances, the owner of the vehicle “shall be entitled to recover as additional damages” the amount of the diminished value. La. R.S. 9:2800.17 (emphasis added). In other words, the vehicle owner can recover the diminished value and the cost to repair the vehicle. To recover under this statute, the owner needs to prove diminished value by a preponderance of the evidence. However, the owners cannot recover more than the fair market value of the vehicle prior to the damage.
One additional note is that the amount paid for diminished value must be considered when determining if the vehicle is a total loss under La. R.S. 32:702, which defines total loss for the purpose of a vehicle’s Certificate of Title. In particular, La. R.S. 32:702(14) define total loss as “a motor vehicle which has sustained damages equivalent to seventy-five percent or more of the market value as determined by the most current National Automobile Dealers Association Handbook. . . .” [1]
A Word of Caution
The effective date of the diminished value law of La. R.S. 9:2800.17 is August 15, 2010. However, the same statute number previously designated a law relating to immunity from civil liability for state and political subdivisions performing to operational activities related to Hurricanes Katrina and Rita. If you are dealing with this issue in a case, be sure to look at the date of any cases you cite and make sure any cases citing the statute are referring to its current form (diminished value) and not dealing with the immunity provisions of the prior law. Most of the case law that comes up for “La. R.S. 9:2800.17” is for the old immunity law, not for diminished value.
Conclusion
Although recovery for diminished value has been available for almost a decade, it remains an underutilized avenue of recovery for many plaintiff attorneys. The plaintiff bar can, in many cases, bring these claims. Defense attorneys challenging diminished value claims can emphasize that it is the plaintiff’s burden to prove diminished value by a preponderance of the evidence.
[1] The statute further specifies the following in the definition of “total loss”: “However, a motor vehicle that sustains cosmetic damages caused by hail equivalent to seventy-five percent or more of its market value as a result of costs for repairs to items such as windshields, windows, and rear glass, exterior paint and paint materials, and body damage such as dents shall not be deemed a ‘total loss’ and salvaged; however, such vehicles shall be issued a branded title indicating the vehicle has sustained hail damage.”
By Jason M. Baer