J & D Towing, LLC, Petitioner vs American Alternative Insurance Corporation, Respondent
This is a case that was appealed by J & D Towing company as the petitioner against a ruling made by the same court that did not work out in its favor. The ruling brought to a stop a long court battle between the Towing company and American Alternative Insurance Corporation, the respondent regarding the application of loss-of-use damage in case of total damage to property. The final ruling was made at Supreme Court of Texas on January 8th, 2016, after a series of decisions by other lower courts on the same issue. The Supreme Court is responsible for making decision and interpretation of the law; additionally, the rulings made by the Supreme courts are used as benchmarks upon which other cases are based. In this particular instance, it is a case involving an issuance company and a towing company after the only truck belonging to the company is involved in an accident, and compensation is required. However, the legality of whether to pay loss-of-use damages arises since the towing vehicle is rendered totally damaged.
Facts About the Case
J & D Towing company was called on December 29th, 2015, to respond a vehicle that required towing services; however, as it travels along Highway 75, it is involved in an accident. Both parties involved in the crash agree that it is due to the reckless driving of Cassandra Brueland, the driver who run into the towing truck. The towing vehicle is evaluated, and it is rendered total damage; therefore, requiring the intervention of Brueland’s insurance company to compensate J & D Towing company. American Alternative Insurance Corporation, the company in question, assesses the damages and decides that it will pay $ 10299.12 if the company keeps the vehicle or $ 16715.16 if it surrenders the truck. J & D Towing rejected this offer since it had valued its truck at higher than that. In February, the insurance company resolved to compensate the company $ 25000, which is the top value for total damage. However, J & D Towing demanded a lose-for-use cost as a result of the lost period that the towing truck was not on duty, and this gives rise to a court battle. Lose-to-use damages are an equivalent amount of money that an insurance company pays to individuals due to the loss they incur during awaiting compensation of damaged property (Pryor 97).
Main Issues that the Court is Handling
The court is seeking to make a ruling on whether the loss-to-use damage compensation will be applied taking into consideration the condition of the property, which has been declared totally destroyed. At the lower courts, it was ruled that the insurance should compensate both the value of the truck and the lose-for-use damages to the towing company. The insurance company appealed this decision on three issues. First, the insurance company argued that the Texas law does not guarantee lose-to-use damage in case the property is declared total damage; secondly, it seeks clarification if the trial court has ruled against the law by compelling it to pay lose-to-use damage (Keeton 67). Finally, the insurance company argued that both the company and it had no objection that the truck was declared total damage; hence, lose-to-use damage does not apply. The court overturned the decision of the trial court and ruled that lose-to-use damage compensation was not applicable due to the logicality of the issue. In turn, J & D Towing appealed in the same court arguing that if the Texas law permits the recovery of lose-to-use damage on partially damaged properties, then the same should be applied to totally damaged properties (Feldman 76). At the end of the long court process, J & D Towing wins the case and is compensated lose-to-use damage that it had incurred.
Feldman, Heidi Li. “Harm and Money: Against the Insurance Theory of Tort Compensation.” Tex. L. Rev. 75 (1996): 1567.
Keeton, Robert E. “Insurance Law Rights at Variance with Policy Provisions.” Harvard Law Review (1970): 961-985.
Pryor, Ellen Smith. “The Tort Law Debate, Efficiency, and the Kingdom of the Ill: A Critique of the Insurance Theory of Compensation.” Virginia Law Review (1993): 91-152.