Car Property Damage: Understanding Stigma Damages

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The word “stigma” is defined in the dictionary as a mark of shame or discredit. Normally we
associate this word with people, but property can suffer from a similar stain. It seems like
common knowledge that when you are involved in a motor vehicle collision and your car is
damaged, that even when it is fixed, it no longer has the same value. Once you disclose
that it has been involved in an accident, it is worth less to a buyer due to the simple fact that
it was previously damaged. This is referred to as stigma damage associated with a
previous accident. Stigma damages differ from diminished value of a vehicle. Diminished
value refers to physical damage, for example frame damage, to a vehicle that prevents the
vehicle from ever being repaired to its pre-loss condition.

Stigma damages are recoverable in tort. In other words, if an accident was not your fault
and your car was wrecked, you are entitled to recover from the person that hit you (if they
were uninsured/underinsured, then your own uninsured/underinsured motorist coverage if
available and not specifically excluded in your policy) the difference between the value of
your vehicle immediately before the accident and the value of your vehicle immediately after
it was fixed.

Defense attorneys like to refer to the case of Moeller v. Farmers to argue that Washington
courts disfavor awarding damages for stigma. Moeller, however, does not stand for the
proposition that stigma damages are disfavored outside of the context of interpreting
insurance contracts.  In Moeller, the court was interpreting an insurance contract and
reading coverage into an ambiguity. Within Moeller, the court refers to a New Mexico case
that in turn cites additional cases similarly interpreting insurance contracts and determining
whether to super-impose stigma damages into the contracts’ promises to “repair and
replace.” It’s not surprising that courts would be reluctant to do so in such a context (i.e.,
negotiated contract).   

When pursuing a claim against the person that hit you, all applicable damages should be
explored. Stigma damages are capable of calculation and should be awarded with
sufficient proof. This has long been the case in Washington with respect to all kinds of
property damage: “The primary principles to be applied in awarding damages for negligent
injuries to property is that the owner shall have actual monetary compensation for the loss
sustained. If the property is a total loss the measure of damages is the value of the property
destroyed or damaged. This is its market value, if it has a market value. If the property is
damaged but not destroyed, the measure of damages is the difference between the market
value of the property before the injury and its market value after the injury.” McCurdy v.
Union PAc. RR, 68 Wn.2d 457, 467 (1966). 

Recently, the court in Ibrahim had an opportunity to discuss the issue: “…’loss of value’ and
‘diminished value.’ The two are not synonymous. ‘Diminished value’ is a term of art,
apposite only when a vehicle cannot be restored to its preloss physical condition. It is
undisputed that Ibrahim’s vehicle was restored to its pre-loss physical condition…..Ibrahim
does have a viable claim for stigma damages against the underinsured
motorist. When a plaintiff’s personal property is harmed but not destroyed, the measure of
damages may be calculated as the loss in the market value of the property following the
harm…. Ibrahim’s vehicle was harmed but not destroyed, and the market value lost is
coextensive with the stigma damages incurred. Accordingly, Ibrahim is ‘legally entitled
to recover’ stigma damages from the underinsured motorist as a matter of tort
law.” Ibrahim v. AIU, 312 P.3d 998 (2013).  Unfortunately, he was pursing the claim against

his insurance, not the uninsured motorist, and his policy had contracted
around stigma damage by specifically omitting such coverage.

Stigma damages are consistently awarded in various areas of damage to property:
see Mayer v. Sto Industries, 156 Wn.2d 677, 132 P.3d 115, 124 (2006) (Sto argued that the
trial court erred in awarding the Mayers “stigma damages,” damages for the home’s
diminished value. However, where the damage to real property is permanent, a plaintiff is
entitled to recover, not only for the costs of restoration and repair, but also for the property’s
stigma); See also Pugel v. Monheimer, 83 Wn.App. 688, 692, 922 P.2d 1377
(1996) (determining that withdrawal of building’s lateral support permanently damaged
marketability); see also Grant v. Leith, 67 Wn.2d 234, 237, 407 P.2d 157 (1965) (sustaining
an award for restoration and permanent depreciation. The Court of Appeals noted that “[t]he
Mayers presented unrebutted expert testimony that in addition to the repairs, they had
suffered a permanent loss because they will have to disclose that the home is sided with
EIFS, a known defective product.” 123 Wn.App. at 464, 98 P.3d 116. We affirm the Court of
Appeals on the trial court’s award of stigma damages”).

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