Charles Noteboom, Judith Noteboom, and Lindsey Noteboom v. Farmers Texas County Mutual Insurance Company
406 S.W.3d 381
Tex. App.2013Background
- On Dec. 12, 2005 Lindsay Noteboom was in a car accident; the vehicle and driver were insured under Farmers Texas County Mutual’s policy, which provided both collision and uninsured-motorist (UM) coverage.
- Farmers paid $15,931.32 to repair the car; parties stipulated repairs were complete but the car’s post-repair market value was diminished by $8,000.
- After determining the other driver was uninsured, Farmers treated the claim as UM, refunded the excess collision deductible, and paid loss-of-use but offered $2,700 (which Judith Noteboom rejected) for diminished value.
- The Notebooms sued Farmers for breach of contract (disputing diminished-value recovery); extra-contractual claims were severed and abated.
- The parties stipulated diminished value = $8,000 and limited the legal question to whether diminished value is recoverable under the policy’s UM coverage when repairs were completed.
- The trial court held diminished value not recoverable and entered a take-nothing judgment; the court of appeals reversed and rendered judgment for the Notebooms for $8,000.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether diminished post-repair market value is recoverable under the policy’s UM coverage | Notebooms: UM coverage allows recovery of diminished value even if vehicle was fully repaired; they chose UM coverage | Farmers: Payment for repairs meant insureds elected collision coverage (which bars diminished-value recovery) and awarding both repair costs and diminished value would result in impermissible double recovery | Court: UM coverage applies; insureds did not elect collision; diminished value (as stipulated post-repair) is recoverable without double recovery |
Key Cases Cited
- Tex. Farmers Ins. Co. v. Murphy, 996 S.W.2d 873 (1999) (contract interpretation principles for insurance policies)
- Kelley-Coppedge, Inc. v. Highlands Ins. Co., 980 S.W.2d 462 (1998) (policy ambiguity determined as matter of law)
- Am. Mfrs. Mut. Ins. Co. v. Schaefer, 124 S.W.3d 154 (Tex. 2003) (collision coverage generally does not allow diminished-value recovery when vehicle fully repaired)
- Franco v. Allstate Ins. Co., 505 S.W.2d 789 (Tex. 1974) (insured entitled to recover damages legally recoverable from uninsured motorist)
- Mid-Century Ins. Co. v. Barclay, 880 S.W.2d 807 (Tex. App.—Austin 1994, writ denied) (insured must establish uninsured motorist fault and damages)
- Parkway Co. v. Woodruff, 901 S.W.2d 434 (Tex. 1995) (prohibition on double recovery and when repair costs and diminished value are duplicative)
- Tex. Farm Bureau Mut. Ins. Co. v. Wilde, 385 S.W.3d 733 (Tex. App.—El Paso 2012) (measures of property-damage recovery: market-value difference or repair cost plus loss of use)