Texas has long clung to a peculiar distinction about when loss-of-use damages are available in suits for damage to personal property. Resolving a split among the courts of appeals, the Texas Supreme Court recently ruled in J&D Towing, LLC v. American Alternative Insurance Corp.1 that damages for loss of use of damaged property should always be recoverable.
Until now, if damaged property was reparable, the injured party could recover the cost of repairs plus damages for the loss of use of the property while the repairs were being made. But if the property was totally destroyed, the injured party could recover only the pre-destruction value of the property. The owner of the destroyed property could not recover damages for loss of use, even though it may have taken time to obtain a replacement. This led to the quip that it's "cheaper to kill a mare in Texas than it is to cripple her."2
Texas courts of appeals were split on the issue of whether loss-of-use damages are recoverable in cases where the property is totally destroyed. The Supreme Court's opinion reviews the history of Texas law on the subject, including its origins in cases dealing with injury to slaves, and surveys the law in other states. In the end, the Court returned to the guiding principal of Texas tort law: "The thing to be kept in view is that the party shall be compensated for the injury done." When a party is injured by deprivation of property, the party is entitled to recover compensation for that injury, even if the property is totally destroyed. That compensation is, however, limited to damages for a period of time reasonably necessary to obtain replacement property.
Footnotes
1 No. 14-0574, 59 Tex. Sup. J. 214, 2016 Tex. LEXIS 4 (Tex. Jan. 8, 2016).
2 City of Canadian v. Guthrie, 87 S.W.2d 316, 318 (Tex. Civ. App.—Amarillo 1932, no writ).
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