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Diminished Value Claim denied citing NYS Court case precedent

Discussion in 'Auto Accidents, Injuries' started by HaimBond, Feb 27, 2020.

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  1. HaimBond

    HaimBond Law Topic Starter New Member

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    My wife's car was rear-ended recently. We inquired about the Diminished Value Claim with Geico, the insurance company of the driver at fault, and were told they will review it once the repairs are completed. We obtained quotes, per initial GEICO request, of the car's value prior and after the accident, which show around $2,000 value loss. The repairs are complete and the car was re-inspected by Geico, however, the claim was denied citing a precedent court case: Franklin Corp.. v. Prahler, which deals with DV loss of an appreciating collector's vehicle. Does this case really apply to depreciating personal vehicles? Does small claims review cases like these and applies the precedent? Also, the driver has a Florida address, but the owner of the vehicle lives locally. If I had to sue, would I use the driver's Florida address, or the owner?
     
  2. Tax Counsel

    Tax Counsel Well-Known Member

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    It does. The fact that the vehicle involved was appreciating in value did not alter the reasoning the court applied in deciding the case. And at the end of the opinion the court specifically states how it applies to depreciating assets:

    In our view, PJI 2:311 was intended to cover the situation in Gass, 264 N.Y. at 143–144, 190 N.E. 323, where personal property has depreciated from its original market value and is then damaged by the negligence of the defendant. The plaintiff in such a case will be entitled to recover the costs of repairs or the diminution in value, whichever is less.

    Franklin Corp. v. Prahler, 91 A.D.3d 49, 57, 932 N.Y.S.2d 610, 616 (2011). So, for example, suppose your car was worth $10,000 immediately before the crash, and immediately after is worth $7,000 before any repairs are done. Let's further suppose that it would cost your $3,500 for repairs to return the car to the condition it was before the wreck. After the repairs are done, the car is worth $9,000. Under this rule, you would recover only the $3,000 loss in value, not the $3,500 in repairs and not anything extra for the $1,000 drop in value after the repairs are done. Why? Because had you sold the car without doing the repairs for $7,000 that check for $3,000 to cover the loss in value gets you $10,000 total — which is all that the car was worth right before the accident. In other words. That's a fair outcome as you shouldn't come out of this with more than you had before the accident.

    So, what was your car worth right before the accident, what was it worth after the accident before repairs, and what are the costs to repair the car back to its former condition? And what offer has the insurer made to you?


    It must apply the case law from the appellate courts above it.

    You would sue the driver, not the owner of the car (unless there is some reason to believe the owner of the car was negligent in letting the driver drive his car, e.g. knew the driver was drunk, was a terrible driver, etc at the time he let the driver have the car, in which case you would sue both of them). You may sue the driver either in NY or in FL. But because the accident occurred in NY it will be NY law on damages that will apply, not the FL law regardless of whether you sue in NY or FL. So there is likely no benefit to you in suing in FL, and doing that would increase your costs to litigate it, so you'd likely come out worse off by suing in FL.
     
    HaimBond likes this.
  3. HaimBond

    HaimBond Law Topic Starter New Member

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    The insurance company paid out $2200 for the repairs, however, the value of the vehicle still took additional $2000 hit based on my post repair estimates. It seems like diminished value and the cost of repairs are one and the same before the vehicle is repaired, therefore, it may be even worth selling it as is and get the repair check from the insurance company.
     
  4. army judge

    army judge Super Moderator

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    Before you do anything else, I suggest you do more research on "diminished value claims for auto collisions" in NY state.

    Here are a couple sites to jumpstart your efforts:

    Are you entitled to Diminished Value in New York? NY Insurance Secrets


    Diminished Value and Insurance: How to Get Full Value In a Claim


    New York Diminished Value Claim


    ZB Negotiations - Diminished Value - Vehicle Owners Lose Again - By John Walczuk
     
  5. adjusterjack

    adjusterjack Super Moderator

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    From where?

    It's common for people to present "pie in the sky" DV quotes from questionable sources.

    And you provided no information on the year, make, model, mileage of your car on which to provide any kind of opinion.
     
  6. HaimBond

    HaimBond Law Topic Starter New Member

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    I got a quote from Carvana, Vroom and Carmax, which I consider reputable. First quote the car had clean record, for second quote I left all details the same, only changed the "involved in accident" option. 2015 Kia Soul, 15k miles.
     
  7. HaimBond

    HaimBond Law Topic Starter New Member

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    I've Googled these or similar sites, which appear to contradict each other, supply general information, or don't seem reputable, which prompted me to create this thread.
     
  8. Zigner

    Zigner Well-Known Member

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    I've never dealt with Carvana or Vroom, but I HAVE dealt with Carmax on several occasions. Their quotes are consistently lower than what the cars I've inquired about can actually be sold or traded for. If Carvana or Vroom are anything like Carmax, then those values can't be relied upon.
     
  9. HaimBond

    HaimBond Law Topic Starter New Member

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    I am looking at the quote difference, not necessarily trying to get the top dollar. However, Carvana and Vroom offers are way higher than dealer's trade-in. For example, another vehicle of mine currently pending with Carvana I was offered $13k by the dealer, but $15.5 with Carvana, which is close to retail if not more, but without all the hassle.
     
  10. Zigner

    Zigner Well-Known Member

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    Dealers low-ball. Really.
     
  11. army judge

    army judge Super Moderator

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    Pursuing a diminished value claim on a "middle class car" will often not achieve what a person seeks.

    Diminished value claims are often successfully litigated for "EXPENSIVE luxury" vehicles (Think Bentley, Rolls, Bugatti, Ferrari, antique vehicles, etc...).

    I wish you well, as I wish failure on no one.

    It might, however, be best to temper your expectations.
     
    Highwayman likes this.

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