Property Damage Cases in Small Claims Court
Learn the rules about bringing a claim and how to calculate your damages
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One significant category of small claims disputes involves property damage cases. Usually, these cases involve claims that the defendant negligently (carelessly) caused damage to the plaintiff's property. Less often, the plaintiff may claim that the defendant acted intentionally in causing damage to the plaintiff’s property.
A technical definition of negligence could–and does–fill entire law texts. Like good taste or bad wine, negligence seems to be easy to recognize but hard to define. So let's breeze right past the "ifs," "ands," and "wherefores" and focus on a plain English definition of negligence. If your property is harmed as a result of another person's conduct, and that person didn't act with reasonable care under the circumstances, you have a valid legal claim based on that person's negligence.
EXAMPLE: Jake knows the brakes on his ancient Saab are in serious need of repair but does nothing about it. One night, when the car is parked on a hill, the brakes fail and the car rolls across the street and destroys Keija's persimmon tree. Keija sues Jake for $225, the reasonable value of the tree. Jake will lose because he did not act with reasonable care under the circumstances.
Negligence can also occur when a person with a duty or responsibility to act fails to do so. For example, an electrician who promises and then fails to check the wiring in a room where you tell him you saw some frightening sparks would be negligent.
Another obvious situation involving negligence would be one where a car or bus swerves into your traffic lane and sideswipes your fender. The driver of the offending vehicle has a duty to operate the car in such a way as not to damage other cars. By swerving into your lane, it is extremely likely that he has failed to do so. On the other hand, a situation in which negligence could be difficult to show would involve your neighbor's tree that falls on your car while it is properly parked in your driveway. Here you have to be ready to prove that the tree was in a weakened condition for some reason (such as age, disease, or a bad root system), and the neighbor knew about it but was negligent in failing to do something about it. If the tree looked to be in good health, your neighbor probably wasn't negligent, and had no reason to remove it or prop it up.
Here are some additional examples in which a person or business failed to act with reasonable care and as a result was negligent:
- While playing with his kids in his small backyard, Kevin hits a ball over the fence, smashing a neighbor's window.
- While upgrading Eddie's computer, Bill carelessly installs the wrong chip, which crashes Eddie's hard drive and ruins the computer.
- RapidMail Inc., a local courier service, loses several time-sensitive messages and fails to notify the sender of the problem.
Compound negligence exists where more than one person is responsible for the damages you suffer–for example, if two coworkers borrow a priceless Ming vase from your office and break it into smithereens while playing keepaway. When dealing with a situation in which more than one person may have contributed to your loss, Rule Number One is to sue them all.
Negligence concepts are tricky: Don't try to be a judge. There is often no foolproof way to determine in advance whether someone will be judged to be negligent. In fact, when it comes to accidents, it's often so close a question that lawyers regularly fail to predict the outcome. So if you have suffered a real loss and think someone else caused it, bring your case, present as much evidence supporting your point of view as possible, and let the judge decide.
To help you determine whether you have a good case based on someone else's negligence, answer the following questions:
- Did the person whose act (or failure to act) damaged your property behave in a reasonable way? Or to put it another way, would you have behaved differently if you were in that person's shoes?
- Was your own conduct a significant cause of the injury?
If the person who damaged your property behaved in an unreasonable way (ran a red light when drunk) and you were acting sensibly (driving at 30 mph in the proper lane), you probably have a good case. If you were a little at fault (slightly negligent) but the other fellow was much more at fault (very negligent), you can probably still recover most of your losses, because most courts follow a legal doctrine called comparative negligence. This involves subtracting the percentage of your negligence from 100% to find out how legally responsible the other party is. Thus, if a judge finds that one person (drunk and speeding) was 80% at fault, and the other (slightly inattentive) was 20% at fault, the slightly inattentive party can recover 80% of his or her loss.
Not all injuries to property are accidents. You also have the right to recover money damages if someone intentionally damages your personal property.
EXAMPLE: Basil and Shirley are neighbors who can't stand the sight of each other, despite, or perhaps because of, the fact that both are prize-winning rose growers. When Basil took first place in the local exotic rose contest, Shirley was angry, frustrated, and jealous. She left her hose running on purpose and drowned Basil's roses. By bringing a small claims case, Basil should be able to recover the value of his rose bushes from Shirley. He might even get some money for emotional distress.
In theory, at least, it may be possible to recover punitive damages–money given to you solely for the purpose of punishing the other person–if your property is damaged by the malicious conduct of someone else. However, in part because public sentiment is running strongly against punitive damage awards, they are seldom awarded in small claims court.
Calculating Your Damages
Calculating damages in a property damage case can be fairly straightforward: When your property has been damaged by the negligent or intentional act of someone else, in most instances you have the right to recover the amount of money it would take to fix the damaged item. However, no one knows exactly how much any piece of used property is worth. Recognizing that reasonable minds can differ, it makes sense to place a fairly aggressive value on property that has been destroyed. But don't demand a ridiculous amount, or you'll likely offend the judge and perhaps even weaken your case.
EXAMPLE: John Quickstop plows into Melissa Caretaker's new BMW, smashing the left rear fender. How much can Melissa recover? Melissa is entitled to recover the amount it would cost to fix, or if necessary, replace, the damaged part of her car if John won't pay voluntarily. Melissa should get several estimates from responsible body and fender shops and sue for the amount of the lowest one.
However, when the cost of fixing the item exceeds its total value, you are not entitled to a new or better object than the one that was damaged–only to have your loss made good. Had Melissa been driving a ten-year-old car, the cost to fix the fender might have exceeded the value of the entire car. In this situation, she would be entitled to the value of the car, not what it would cost to repair it. In short, the most you can recover is the fair market value of a damaged item (the amount you could have sold it for) figured one minute before the damage occurred. From this amount, you have to subtract the item's scrap value, if any.
EXAMPLE: Let's return to Melissa from our last example, assuming now that her BMW is ten years old. If several used car price guides indicated the car was worth $2,800 and it would cost $3,000 to repair the fender, she would be limited to $2,800 compensation, minus what the car could be sold for in its damaged state. If she could only sell the car for $800 for scrap, she would be entitled to $2,000. However, if Melissa had installed an expensive rebuilt engine a few weeks before the accident, she might legitimately argue that the car was worth $3,800. Assuming the judge agreed, Melissa would legally be entitled to recover the entire $3,000 to replace the fender, because the car is worth more than replacing the fender.
Unfortunately, knowing what something is worth and proving it are quite different. A car that you are sure is worth $4,000 may look like it's only worth $3,000 to someone else. In court, you will want to be prepared to show that your piece of property is worth every bit of the $4,000. The best way to do this is to get some estimates (opinions) from experts in the field (like a used car dealer if your car was totaled). One way to present this type of evidence is to have the expert come to court and testify, but in small claims court you can also have the expert prepare a written estimate, which you then present to the judge. Depending on the type of property involved, you may also want to check newspaper ads and the Internet for the prices asked for comparable goods and submit these to the judge. And of course, there may be other creative ways to establish the dollar amount of the damage you have suffered.
Many people insist on believing they can recover the cost of getting a replacement object when theirs has been totaled. As you should now understand, this isn't necessarily true. If Melissa's $1,200 car was totaled and she claimed she simply couldn't get another decent car for less than $2,000, she would still be limited to recovering $1,200.
Insurance and Damage to Land or Buildings
If you own real property (land and structures) that has been damaged by another person or by a force of nature, chances are that you won't turn first to small claims court to cover your loss. That's because virtually all landowners have property insurance, primarily because most owners have a mortgage or a loan secured by the land. Mortgagors and lenders will not finance a purchase of real property or make a loan secured by land unless the borrower obtains and maintains sufficient property insurance. Even those owners whose land is unencumbered by mortgages or loans have property insurance–it's the obvious, smart way to protect their investment.
Property insurance comes in three basic types: basic coverage, covering just a few perils, or causes; broad coverage, which covers more perils, and all-risk coverage, which covers all perils except specified ones. All three types exclude damage from nuclear hazards, earthquakes, and floods, though you can sometimes buy separate policies to cover some excluded perils. All property insurance comes with a deductible–the higher your deductible, the lower your premium. And all policies include a policy limit–the most that the insurance company will pay for a loss.
Even though you have property insurance that will cover the damage your property has suffered, you may still have small claims court in your future. Here's how that can happen: Suppose your commercial building is damaged when your neighbor's sewer line ruptures, sending water down the hill and into your first floor. Most property policies will cover in this situation–they won't consider this a flood, which is, in insurance lingo, the result of a "sudden inundation" of water from the sky. Let's say your property insurance covers the $10,000 worth of damage to the walls, floors, and basement, but you've had cover $1,500 worth of the damage, because that's your deductible.
Your insurance company has the right to go after the neighbor to recoup the money it's paid you. With a large claim, they'll do just that–and happily for you, they will also demand the deductible that you had to cover. If they collect, they will write a check to you, reimbursing you for the deductible you were stuck with.
But not all claims are worth pursuing. Naturally, the smaller the claim, the less inclined the insurance company will be to spend the time and money to go after the responsible party. Suppose the damage in this example amounted to only $2,500. Your company would be out-of-pocket (they'd pay you) only $1,000 ($2,500 minus your $1,500 deductible). It may not be worth their time to pursue your neighbor over such a small sum. You, however, would like that $1,500, so you can apply it to repairs. And this is where small claims court comes in.
To recover from your neighbor, you'd have to convince the judge that the neighbor acted carelessly, or negligently, when it came to maintaining his sewer pipes. Did he know that they were already leaking (great news for you)? Did he know that they were ancient and at risk of breaking at any time (again, information in your favor). Or were they new, or almost-new, and failed because they were installed improperly–in other words, there was no reason for the neighbor to suspect they'd break? The more you can show that your neighbor knew, or should have known, that this was an accident waiting to happen, the more likely it would be that you'd prevail.