Your insured negligently totals the claimant’s auto.What’s the measure of plaintiff’s damages in New York?
“Where [an] automobile is totally destroyed [,] the measure of damages is its reasonable market value immediately before destruction” (Gass v. Agate Ice Cream, Inc., 264 N.Y. 141, 144 ; see also Aurnou v. Craig, 184 A.D.2d 1048, 1049 [4th Dept.1992]; Babbitt v. Maraia, 157 A.D.2d 691 [2nd Dept. 1990]; Owens v. State of New York, 96 A.D.2d 630, 631 [3rd Dept. 1983]; Senatore v. Wellington, 47 Misc.3d 145[A], 2015 N.Y. Slip Op 50700 [U] [App Term, 2d Dept, 9th & 10th Jud Dists 2015]).
What if the claimant’s auto was overfinanced (i.e., the loan payoff exceeds its fair market value)?
Can the claimant recover the difference between the loan payoff amount and the vehicle’s pre-loss FMV?
No. Not under New York law, even in small claims court where the standard is substantial justice between the parties according to the rules and principles of substantive law. See:
Senatore v. Wellington, 47 Misc.3d 145[A], 2015 N.Y. Slip Op 50700 [U] (App Term, 2d Dept, 9th & 10th Jud Dists 2015)(“Defendant could not reasonably have been expected to foresee, however, that plaintiff’s car loan exceeded the value of [plaintiff’s] car”); and Rowan v. Skorobahaty, 2017 NY Slip Op 50489(U) (App Term, 2d Dept, 9th & 10th Jud Dists 2017)(“Contrary to plaintiff’s contention, the outstanding balance on her car loan is not an actual, reasonable and proximate result of defendant’s negligence”).
Dropping this caselaw here for the next time we get one of these claims to defend.