News & Events

Alabama Supreme Court Reverses Rule Of Damages On Commercial Vehicle’s Total Loss

The Alabama Supreme Court recently did an “about-face” on a longstanding principle of law related to damages recoverable for the total loss of a commercial vehicle.  Up until now, the rule has been: A commercial vehicle owner may not recover both for the total loss of the vehicle and a loss of income for the lack of use of the vehicle. This has been the law since the holding in Hunt v. Ward, 79 So.2d 20 (Ala. 1955). This is no longer the rule.  Ex parte S&M, LLC d/b/a Huntsville Cab Company.  2012 Ala. Civ. App. LEXIS 150 (Ala. Dec. 7, 2012).  In S&M, the Alabama Supreme Court granted a petition for certiorari from the Court of Civil Appeals.  The Court of Civil Appeals had affirmed a bench ruling which disallowed the plaintiff’s claim for loss of use of the vehicle after the plaintiff accepted a payment for the vehicle’s (a taxi cab’s) total loss.  The Supreme Court explicitly overturned the Hunt decision, and remanded the case for a finding of fact on that element of damages.  The Court went to great lengths to explain the rationale for overturning Hunt and aligning the Alabama case law with the “modern” view of loss of use damages.

In the “unintended consequences” category, there have already been questions raised about whether the S&M opinion is limited to commercial vehicles, or applies to all vehicles. The problem is – there is not a clear answer.  On its face, the opinion appears to limit itself to commercial vehicles.  However, neither of the cases overruled (Hunt or Lary) dealt with commercial vehicles.  In fact, both cases dealt with privately owned vehicles.  Based on this, and because of Justice Woodall’s statement on the last page — “The decisions in Hunt, Fuller and Lary are overruled to the extent that they conflict with the modified damage rule set forth in this opinion.” – an argument can be made that the new S&M opinion changes the rule for all vehicles, and that loss of use damages are now recoverable in all total loss cases.

However, that is likely an overly broad interpretation of the new opinion.  Based on a strict reading of the opinion, and its apparent limitation to commercial vehicles, the safer view is that unless and until the Supreme Court specifies all vehicles in a later opinion, owners can still not recover loss of use damages for totaled non-commercial vehicles.  The S&M opinion itself cites to cases from California and Oklahoma addressing commercial vehicles.  In addition, Justice Woodall’s language quoted above suggests the Court is carving out a commercial vehicle exception to the general rule (the general rule being that there is no loss of use for a totaled vehicle) and that the prior cases are overruled to the extent they conflict with this new opinion, dealing with commercial vehicles.

So, in summary, it appears that the S&M opinion applies only to totalled commercial vehicles where there is substantial evidence of loss of use value, but the opinion does not overrule the general rule from Hunt, Fuller and Lary with respect to private vehicles.

-A. David Fawal