On February 28, 2019, a panel of the New Jersey Appellate Division unanimously upheld four trial court decisions, finding for plaintiffs in “diminished value” of automobile claims. The Appellate Division consolidated four actions for purposes of appeal: Fin Servs. Vehicle Trust v. Panter, Nissan Infiniti LT v. Fratto, Santander Consumer USA v. El, and Fin. Servs. Vehicle Trust v. Moore. Because the monetary value of each claim was below $3,000, the matters were cognizable in the “Small Claims Section” of New Jersey’s Law Division, and were decided at bench trials. This venue is subject of some relaxed evidentiary rules, but “critical facts must [still] be proved and not merely assumed” in this venue, regardless. Triffin v. Quality Urban Hous. Partners, 352 N.J. Super. 538, 543 (App. Div. 2002).
The central issue in each case on appeal was that a vehicle had been involved in an accident and suffered physical damages in each accident. The repair costs were not at issue. Rather, the vehicle’s (purported) owners claimed that the vehicles, even following repair, were worth less value at re-sale due to the “stigma” of having been involved in a motor vehicle accident.
As a matter of law, the court held that these claims were recoverable, but “susceptible to proof,” meaning that plaintiffs would have to offer “competent and admissible evidence that the vehicle’s value has been decreased by this stigma.” Perhaps most significantly, the appellate decision upheld the trial court’s admission of expert testimony to support these claims. The court noted that “[i]n each case, the expert testified about the particular vehicle in question. He considered its make, model, age, and accident history and opined about its value with and without the stigma imposed by its accident history; all this came from his own considerable experience in the industry and the quite logical assumption that the accident history renders a vehicle less desirable on the open market than a vehicle without such a history.” The expert admittedly did not know the precise mileage of each car, and had not seen or inspected the vehicles at issue. Nevertheless, this did not render the experts’ opinions inadmissible.
Lastly, the court discussed what proofs were necessary to establish ownership of the vehicle, and entitlement to damages. The court noted that title ownership might not even be necessary to pursue a claim for diminished value, but that that issue was not before the court. As evidence of ownership, the plaintiffs here had produced certificates of title and, in some instances, lease agreements, to show that on the date of damages the plaintiffs had owned the vehicles and leased them to drivers involved in the accident. The court noted that, in most circumstances, certificates of title could be self-authenticating. However, where ownership was disputed, or where the documents themselves raised questions about ownership, the defendants were entitled to present contrary evidence, including cross-examination of plaintiffs’ representatives, which had not occurred despite subpoenas and notices for same in these cases. As such, on the issue of ownership only, the court remanded three of the four claims.
Given the ubiquity of vehicle leases, and the customarily prompt adjustment of property damage claims, motor vehicle liability insurers should take note of this decision, and plan accordingly. If you’d like more information on this issue, please contact McGivney, Kluger & Cook’s Tom Emalaat email@example.com.