“It is cheaper to kill a mare than it is to cripple her.”  This was considered the law in Texas until the recent Texas Supreme Court decision of J & D Towing, LLC v. Am. Alternative Ins. Corp., 478 S.W.3d 649, 652 (Tex. 2016) involving the question of first impression before the Texas Supreme Court of whether the owner of personal property totally destroyed by another’s negligence is entitled to recover loss of use damages in addition to the fair market value of the destroyed property.

In an effort to explain the history of the right to recover loss of use damages and to make a dry subject interesting, the court begins its analysis by discussing a 1932 Amarillo case in which the owner of a horse that was killed sued the party at fault to recover not only the value of the horse but also the loss of use of the horse since it was used in the owner’s hauling business. That Court held there was no right to recover loss of use damages when property is totally destroyed. See City of Canadian v. Guthrie, 87 S.W.2d 316 (Tex. Civ. App.–Amarillo 1932, no writ). After the Guthrie case, many other Texas courts of appeals followed this rule that, although loss of use damages were recoverable when property was partially damaged, these damages were not recoverable when property was totally destroyed.

The Texas Supreme Court finally settled this issue once and for all. In the J & D Towing case cited above, the plaintiff’s tow truck was destroyed in an accident caused by the negligence of the defendant. The issue of first impression before the court was whether the owner of property destroyed by another’s negligence was entitled to recover loss of use damages from the party at faulty.    The Court recognized that under our tort system when a plaintiff sustains damages due to a defendant’s wrongful conduct, i.e. negligence, the plaintiff is entitled to be fully compensated for the damages incurred. Thus, the Court held that the plaintiff was not only entitled to recover damages for the fair market value of the tow truck but also for loss of use of the truck.

The court stated  that the owner of property totally destroyed is entitled to recover loss of use damages for the reasonable period the owner is deprived of the vehicle. The court indicated that in these types of cases that, depending upon the circumstances, loss of use damages could be measured by lost profits, the cost to rent replacement property, or the reasonable rental value of the property destroyed.

Thus, if you find yourself haggling with an insurance adjuster over whether loss of use damages are recoverable when your personal property has been totally destroyed, let the adjuster know that in Texas it is no longer cheaper to kill a horse than to maim it.