Fred Frederick Motors, Inc. v. Krause

Thompson, J., delivered the opinion of the Court. In this appeal, the questions concern the proper determination of damages for accidental injury to a motor vehicle. The general rule on tort damages, including motor vehicle torts, is easily stated: the damages should compensate the injured person for the wrong which has been done him. Weishaar v. Canestrale, 241 Md. 676 , 217 A. 2d 525 , citing with approval Guido v. Hudson Transit Lines, 178 F. 2d 740 (3d Cir., 1950).

As to damage to motor vehicles, the Court of Appeals has formulated a rule in Taylor v. King, 241 Md. 50 , 213 A. 2d 504 , wherein the Court reviewed earlier Maryland cases before stating at 507: “. . . the rule in Maryland with respect to the measure of damages for injury to a motor vehicle, which has not been entirely destroyed, is the reasonable cost of the repairs necessary to restore it to substantially the same condition that it was in before the injury, provided the cost of repairs is less than the diminution in market value due to the injury. And when the cost of restoring a motor vehicle to substantially the same condition is greater than the diminution in market value, the measure of damages is the difference between its market value immediately before and immediately after the injury. In addition, the measure of damages may include a reasonable allowance for loss of use of the vehicle.” It must be noted that the Court in Taylor v. King, supra, indicated in its opinion it was making no attempt to formulate an all-inclusive rule for measuring damages ⁶⁴ to motor vehicles. Also, while Taylor requires that the repairs “restore it [the motor vehicle] to substantially the same condition that it was in before the injury,” there is neither definition nor description of that condition.

Two different definitions are possible. First, the condition before the injury could refer only to the physical appearance and mechanical function of the vehicle, meaning if the vehicle, after repairs, looks and operates substantially the same as it did before the injury, then the injured party has been adequately compensated. Second, the condition before the injury could refer to the market value of the vehicle. Under this second definition, if the vehicle looked and operated substantially the same after the accident but its market value had been diminished by the fact of being in an accident, then to be adequately compensated, the injured party must receive, in addition to the cost of repairs, the diminution in market value stemming from the injury.

Of course, the two together cannot exceed the diminution in value prior to the repairs. The increased internal consistency that would result in the Taylor rule by the use of the second definition supports its adoption. Inherent in that rule, a recovery of the full market value is allowed if the vehicle is completely destroyed. Although the measure is different, the position to which the injured party should be restored is the same, i.e., complete compensation for the injury.

If the vehicle is completely destroyed, the plaintiff receives the market value. To be consistent, the plaintiff should be put in the same position when his injured vehicle is repairable; he should have a vehicle of the same market value. If the repaired vehicle does not have the same market value, the plaintiff should receive additional damages. To do otherwise would put the plaintiff in a different position depending on whether the vehicle was partially or completely destroyed.

If the vehicle were partially destroyed, plaintiff would receive a repaired vehicle that looked and operated the same but was worth less. If the car were completely destroyed, plaintiff would ⁶⁵ receive the market value. This disparity is removed by putting the plaintiff in the same position whether the car is completely or partially destroyed. To do otherwise would violate the basic principle that the injured party should, insofar as possible, be restored to his original position before the accident.

A review of the authorities also indicates that the second definition describes the condition to which the damaged motor vehicle must be returned. In Taylor v. King, supra, the Court of Appeals cited an article by Fleming James, Jr., “Damages in Accident Cases”, 41 Cornell Law Quarterly 593 wherein James discusses the exact rule adopted in Taylor and concludes the rule is: “. . . subject to correction either way if the value of the repaired article is greater or less than the value before the injury. . . .” 41 Cornell Law Quarterly at 594. Other authorities have concluded that the Taylor measure of damages must be based on restoring to the plaintiff a vehicle with the same market value including additional compensation if the proof indicates that the repairs alone do not restore the vehicle to its pre-accident market value. 26 Md.L.Rev. 284. Most authorities, when faced with this problem, have concluded that the injured party may recover not only the cost of repairs but also may recover any diminution of the chattel’s market value which results from the chattel having been injured.

McCormick, Law of Damages (1935 Edition) § 124 states the rule as follows: “(b) But if the damaged property is reasonably susceptible of repair, the owner may recover the reasonable cost of repair, plus the difference between the value