This article was originally published in the Subrogator, a publication by the National Association of Subrogation Professionals, Fall 2006, Page 49. © Copyright 2006 by NASP. All rights reserved. Republished by Butler with permission from NASP.
“My grandfather’s law diploma means the world to me. It was framed and given to me after his death by my family, as I was the only child to become an attorney as well.”[FN1] These self professed statements of value are heard over and over by subrogation attorneys throughout the United States during painstaking conferences with the insured to determine the value of his or her uninsured losses after a catastrophic loss. Quite simply, attorneys often attempt to assess the “value” of a certain personal items of the insured, when actually, no realistic fair market value exists. Such items are considered “irreplaceable” by the insured, and consist of photographs, family heirlooms, wedding memorabilia, and family documents such as marriage licences. While many people would find it difficult to value such property, courts throughout the Country are placed in the unique position, of being forced to deal such valuation problems. The result has brought about several court opinions throughout our Union, wherein each court has placed a unique spin on valuating items which essentially have no market value. This article attempts to provide a review of how different courts in the United States tackle the daunting task of valuing one’s personal property when it has little or no market value.
As a general principle, most courts throughout the United States hold that the proper measure of damages for lost or destroyed personal property is its market value, the theory being that the injured party should be made whole, by being able to buy items to replace the others in the current marketplace.[FN2] However, many courts have recognized the inequities that arise when the market value of the item is inadequate to fully compensate the owner of the property. Thus, courts developed alternative mechanisms by which to compensate an injury party for items that the owner considers valuable, over an above any market value.
That being said, however, many state courts expressly state in decisions that the measure of damages for the loss or destruction of personal property should generally not include the sentimental or fanciful value of the property attached by the owner, including New York, Arizona, Georgia, Louisiana, Mississippi, Missouri, Wisconsin and Texas.[FN3]
New York courts, for instance, firmly hold that sentimental value should not be considered in assessing the value of a lost or converted item and that an “owner should be allowed to recover the value to him based upon his actual money loss, all the circumstances and conditions considered, resulting from his being deprived of the property, not including, however, any sentimental or fanciful value he may for any reason place upon it.”[FN4] In another decision involving an action against a bailee for the loss of a family photograph, a New York court reversed a judgment which awarded a plaintiff $100 for the photograph, holding that the proper measure of damages was the value of the photograph itself, and not its sentimental value.[FN5] However, the court did allow for the consideration of the probability (or lack thereof) of replacing the photo as a measure of evaluating the property for its value.[FN6]
While certain courts seem to discount the use of “sentimental value” when assessing damages awards, several courts throughout the United States will allow an award of damages based upon evidence of an item’s actual value to a particular owner, including Alabama, Arizona, California, Florida, Georgia, Massachusetts, Minnesota, Mississippi, Missouri, New Mexico, New York, Ohio, Oregon, Tennessee, Louisiana, Illinois, Oklahoma, Connecticut, Texas and Wisconsin, Idaho, Illinois, Nebraska, and Arkansas.[FN7] In addition, courts consider various factors such as the original cost of the item, as well as the item’s reproduction or replacement cost (including the probability, practicability or difficulty of replacement) when determining such “actual” value.[FN8]
As an example, in the Georgia decision of Cherry v. McCutchen,[FN9] a defendant storage company appealed a trial court’s decision to admit testimony of an owner plaintiff regarding a lost oil painting, which was created by his deceased mother. The owner’s testimony described what the he planned to do with the painting in connection with a home he was building at the time he discovered it missing, including the facts that plans were specifically drawn for a mantel and fireplace for the placement of the painting, and draperies were ordered for the home to match the painting.[FN10] Although the Georgia court did not discuss the owner’s testimony related to his mother particularly, the court did find that the law of the case was properly laid down by trial court, stating that the suitable measure of damages was “the actual value of the picture to the owner, and anything properly going to show the actual value to the owner was admissible.”[FN11] The McCutchen court also found that it was appropriate that the owner testified as to his personal value of $2,500 for the painting, which he stated was based upon “no sentiment whatsoever.”[FN12]
Tennessee courts also follow the more elastic doctrine of “value to the owner” when determining the value of lost or damaged personal property. While not mentioning the word “sentimental,” one such court surmised its view of the doctrine:
The doctrine […] is most frequently and conveniently resorted to in cases of loss of, or damage to, articles which the plaintiff has acquired for personal or domestic use and not for business purposes, such as household goods, clothing, pictures, books and the like. While usually these things have some slight value for sale at secondhand, this market value would be a very inadequate compensation to the plaintiff who acquired them for use, not for sale. The fact that the property was of this character, that is, used clothing or household goods intended for the owner’s use, is a sufficient showing that market value as secondhand goods is an inappropriate standard, and casual holdings that proof must be made that there is no market value can hardly be supported.[FN13]
In addition, the recent Louisiana appellate court decision of National Union Fire Ins. Co. of Louisiana v. Harrington[FN14] is most instructive regarding the current state of Louisiana’s recognition of the owner’s actual or personal value when evaluating damages. In Harrington, a homeowner and her insurer filed an action against a vehicle manufacturer, owner, operator and their insurers to recover damages for destruction of a home which occurred when a rented vehicle started a fire in the home’s carport. After the jury awarded general damages in the amount of $161,000.00, the defendants appealed on the ground that the award was excessive, as it did not factor in depreciation. The court held that the general rule of damages for valuation of tortiously damaged property without market value is the actual or intrinsic value of the property to the owner.[FN15] In affirming the jury’s award, the court espoused that, while monetarily the homeowner’s items had depreciated, for her, the value of such personal property actually appreciated as time progressed. The court noted that such items like “family photographs, her family Bible, the rosary she received when she made her first Communion, a teacup collection, and items that her husband had given her or built for her” were irreplaceable.”[FN16]
South Carolina also follows the “value to the owner” doctrine when valuing personal property in such circumstances. In T.M. Nelson v. Coleman Co.,[FN17] the Supreme Court of South Carolina affirmed a jury award based upon a homeowner’s own testimony as to the value of the contents of his home lost in a fire resulting from an oil-burning fuel furnace failure, despite the appellant’s contention that the damages were not based upon competent evidence. The court explained that an owner’s belongings are often more personal to the owner, and that another item of equal age, quality and condition is not interchangeable with the item that was destroyed. Moreover, the court agreed that certainly an owner may testify as to his estimate of the reasonable value of his personal property, or the property’s “special value to him.”[FN18]
Florida courts, as with many other jurisdictions discussed herein, generally hold that the proper measure of damages for loss of personal property is its market value on the date of the loss.[FN19] However, Florida courts do follow the trend of the majority to allow recovery above the objective diminution in market value for such items in certain circumstances.[FN20] Specifically, Florida courts have stated in dicta: “[i]f the item has no market value, such as heirlooms, etc., of necessity other sources must be used to determine value.”[FN21]
The plaintiffs in Florida Public Utilities Co. v. Webster,[FN22] brought suit in their own name (also in the name of their fire insurance companies as subrogees) to recover damages for the value of their property destroyed by fire, including china, furniture, photos and a piano, on the theory that the utility company failed to furnish water sufficient to properly attend to the blaze. On appeal, the utility company stated that the evidence to sustain the plaintiff’s award for damages for such items was insufficient, and speculative. However, the court, when discussing the proof of damages issue, found that although the evidence regarding the value of the property was largely opinion evidence [of the owners], it did not discredit such testimony or remove it from the province of the jury on which to predicate a verdict.[FN23]
The court further explained that the personal property of the owners, many of which were heirlooms inherited from their parents, were shown to be of great value. Thus, “[i]t is often impossible to place what is a current market value on such articles, but the law does not contemplate that this be done with mathematical exactness. The law guarantees every person a remedy when he has been wronged.”[FN24] In conclusion, the Court found that when such wrong is demonstrated, it becomes the duty of the court and jury to apply a test that will reasonably compensate the person wronged rather than one that makes it impossible to do so.[FN25]
One recent Florida case focused particularly on the issue of an award of damages for the sentimental value of jewelry in light of its established fair market value. In Carye v. Boca Raton Hotel and Club Ltd. P’ship,[FN26] the plaintiff lost jewelry acquired by herself and her husband throughout their 48 year marriage, and sought damages for the sentimental value of the jewelry after it was stolen from a hotel safe.
The Court found that indeed the jewelry had sentimental value, having been collected by the plaintiff for over a period of several years. However, the court noted that because the jewelry also had a significant market value, it would not be “manifestly unfair,” for the jury to consider its market value alone. The court stated that as the burden of damages rests with the plaintiffs: “[W]e conclude that in a situation where the lost property has both a market value and sentimental value, as is the case here, the burden again rests with the plaintiff to prove that the market valuation would be manifestly unfair.”[FN27]
Moreover, as we are aware, personal property is not limited to just tangible possessions, and includes those creatures dear to our hearts: their pets. In Florida, courts have allowed evidence as to an owner’s mental suffering associated with the malicious killing of her dog to be submitted to the jury for its consideration in assessing damages,[FN28] however, such testimony cannot be considered when only negligence is alleged.[FN29]
It does appear that North Carolina Courts, if given the opportunity, would consider personal factors in the valuation of lost or damaged personal property. Recently, a North Carolina appeals court reversed a trial court’s decision awarding a plaintiff its replacement cost of certain trees lost as a result of a defendant developer’s construction of a road, finding that damage to real property is valued as the difference between the market value of the property before and after the injury.[FN30] However, the court did note that when such property is used for a purpose which is personal to the owner, the replacement cost is an acceptable measure of damages.[FN31]
Of course, the admissibility and relevance of an insured’s testimony must always be considered when evaluating what elements of proof should be offered to prove an insured’s uninsured losses. To that end, it has frequently been held that an owner’s testimony is allowed to establish the worth of a particular to him.[FN32]
In conclusion, when evaluating the value of certain nostalgic property of an insured, be mindful that such “sentimental” property may have an intrinsic market value despite its nostalgic qualities. Therefore, attempt to determine whether a personal property item holds some unique historical, cultural or personal value independent of its sentiment in an effort to assist courts and juries to evaluate the item based upon its actual or intrinsic value.
FN1.This diploma belongs to the first author of this article.
FN2.W.E. Shipley, Annotation, Measure of Damages for conversion or loss of, or damage to, personal property having no market value, 12 A.L.R. 902, § 1(a)(1950).
FN3.Id. at § 7; But see Brown v. Frontier Theaters, Inc., 369 S.W.2d 299 (Tex. 1963)(held that although generally recovery for sentimental value for personal property cannot be had in a suit for loss of property for personal use such as wearing apparel and household goods, such a rule does not deny recovery for sentimental value in a suit for loss of heirlooms or in a suit to recover for loss of items which has their primary value in sentiment).
FN4.Twerskey v. Pennsylvania R. Co., 152 Misc 300, 301 (N.Y. App. Div. 1934)(quoting Lake v. Dye, 232 N.Y. 209).
FN5.Ottavio Valentino v. Nasio Studio, Inc., 136 Misc. 826, 826 (N.Y. App. Div. 1930).
FN7.W.E. Shipley, Annotation, Measure of Damages for conversion or loss of, or damage to, personal property having no market value, 12 A.L.R. 902, § 3(a)-(b)(1950).
FN8.Id. at §§ 4-5.
FN9.23 S.E.2d 587 (Ga. App. 1942).
FN10.Id. at 594.
FN11.Id. (emphasis added).
FN13.R. Clift v. Fulton Fire Ins. Co., 44 Tenn. App. 483(1958)(quoting McCormick on Damages(1935)170-71).
FN14.854 So. 2d 880 (La. App. 3rd Cir. 2003).
FN15.Id. at 896—97.
FN17.155 S.E.2d 917 (S.C. 1967).
FN19.McDonald Air Conditioning, Inc. v. John Brown, Inc., 285 So. 2d 697 (Fla. 4th DCA 1973).
FN20.Reis, John W., Measure of Damages in Property Loss Cases, 76 OCT Fla. B.J. 32 (2002).
FN21.John Brown, Inc. at 698.
FN22.150 Fla. 378 (1942).
FN23.Id. at 381.
FN24.Id. at 381.
FN25.Id. at 382.
FN26.676 So. 2d 1020 (Fla. 4th DCA 1996).
FN27.Id. (emphasis added).
FN28.La Porte v. Associated Independents, Inc., 163 So. 2d 267 (Fla. 1964.
FN29.See Kennedy v. Byas, 867 So. 2d 1195 (Fla. 1st DCA 2004).
FN30.Huberth v. Holly, 462 S.E.2d 239 (N.C. App. 1995).
FN32.W.E. Shipley, Annotation, Measure of Damages for conversion or loss of, or damage to, personal property having no market value, 12 A.L.R. 902, § 1(a)(1950).