ICBC Law

BC Injury Law and ICBC Claims Blog

Erik MagrakenThis Blog is authored by British Columbia ICBC injury claims lawyer Erik Magraken. Erik is a partner with the British Columbia personal injury law-firm MacIsaac & Company. He restricts his practice exclusively to plaintiff-only personal injury claims with a particular emphasis on ICBC injury claims involving orthopaedic injuries and complex soft tissue injuries. Please visit often for the latest developments in matters concerning BC personal injury claims and ICBC claims

Erik Magraken does not work for and is not affiliated in any way with the Insurance Corporation of British Columbia (ICBC). Please note that this blog is for information only and is not claim-specific legal advice.  Erik can only provide legal advice to clients. Please click here to arrange a free consultation.

Posts Tagged ‘accelerated depreciation’

$20,700 “Accelerated Depreciation” Claim Succeeds Following Vehicle Damage in Crash

June 5th, 2018

Reasons for judgement were published this week by the BC Provincial Court ordering a Defendant (insured by ICBC) to pay over $20,000 in vehicle depreciation after a crash.

In the recent case (Chiang v. Kunar) the Plaintiff purchased a Mercedes for just over $68,000.  The following year the Plaintiff was involved in a crash caused by the negligence of the Defendant.  The crash caused over $34,000 in repair costs leaving the vehicle far less valuable after repairs.  The Plaintiff sued to recover the value of this accelerated depreciation but ICBC argued that there was no loss.  In siding with the Plaintiff, who to his credit succeeded in litigation while self represented, The Honourable Judge K. Arthur-Leung provided the following reasons:

      I am satisfied that the Claimant has met the burden of proof, and that this low to mid-level luxury vehicle was indeed a customized vehicle that was in the high end of its own category of Mercedes Benz, and sustained accelerated depreciation.  The Bill of Sale shows thousands of dollars of extras that he ordered for this Vehicle.  It was a rare vehicle at the time that it was initially in the Vancouver market, and the experts both testified that it remains an in demand vehicle if it was not in an accident.

In addition, the decision of Rutter v. Adams, 2016 BCSC 554 (CanLII) at paragraph 314 relies upon Signorello v. Khan, 2010 BCSC 1448 (CanLII) to include quantification that “…such losses can include a ‘loss of use and the inconvenience of having to return the vehicle on several occasions’.”  In addition, in Cummings v. 565204 BC Ltd., 2009 BCSC 1009 (CanLII), the Court relied upon Reinders v. Wilkinson, 1994 CanLII 2527 (BC CA)1994 CanLII 2527 (BCCA) that it is not necessary for the party to sell the vehicle in order to succeed in a claim for accelerated depreciation.  The damage sustained to this Vehicle was not merely cosmetic and required significant repair, to wit it remains outstanding with ongoing operational and mechanical problems…

THEREFORE THIS COURT ORDERS JUDGMENT TO THE CLAIMANT AGAINST THE DEFENDANTS, JOINTLY AND SEVERALLY AS FOLLOWS:

a)            The amount of $20,700.00, for accelerated depreciation of the Vehicle ($18,000.00 plus 15% tax);

b)            Interest on the sum of $20,700.00 as of February 26, 2015, in accordance with the Court Order Interest Act;

c)            The amount of $1,990.08 in general damages as claimed by the Claimant;

d)            Interest on the sum of $1,990.08 as of May 9, 2016, in accordance with the Court Order Interest Act;

e)            The amount of $472.50 for the cost of the Coast Auto Appraisal Report;

f)            Court attendance fees of Mr. Sparrow of Coast Auto Appraisal in the amount of $1,155.00;

g)            Court filing fees in the amount of $156.00; and

h)            Service fees in the amount of $30.00.


Accelerated Depreciation Claim Succeeds From Crash Causing $18,000 in Vehicle Damage

March 27th, 2014

Reasons for judgement were released this week by the BC Supreme Court, Vancouver Registry, awarding a Plaintiff damages for accelerated vehicle depreciation following a significant collision.

In this week’s case (Pan v. Shihundu) the Plaintiff was involved in two collisions, the first causing significant vehicle damage resulting in over $18,000 of repair costs.  The Plaintiff was injured and sued for damages.  Among these was a claim for ‘accelerated vehicle depreciation’ arguing that the vehicle’s market value was deflated due to the Defendant’s fault.  ICBC opposed this claim however the Court sided with the Plaintiff.  In awarding damages for this loss Mr. Justice Punnett provided the following reasons:

160]     The plaintiff purchased the 2004 BMW M3 for $30,000 US in March 2008. As noted above, the vehicle required $18,421 in repairs following the First Accident. After that accident the plaintiff attempted to sell the BMW. He listed it on Craigslist for three months at an asking price of $27,000. It was his evidence that he had a few inquiries but no offers after advising prospective buyers of the damage caused by the First Accident. He made similar attempts to sell it in 2011 but received no response. As a result, he still owns and drives the vehicle.

[161]     The plaintiff provided an expert report from Carey Scarrow, who was qualified as an expert in the field of automotive appraisals and automotive collision repairs. He opined that as a result of the 2009 accident the vehicle sustained an accelerated depreciation of $4,000 due to the stigma associated with the BMW having been in the accident.

[162]     In examining the vehicle Mr. Scarrow noted uneven body panel alignment in the front of the vehicle and other minor deficiencies including flaws in the refinished body panels with inconsistent coating thickness. He commented that the overall repair quality was of acceptable industry standards for the calibre of car but not representative of its previous pre-accident factory standard.

[163]     Mr. Scarrow noted that it was mandatory for the seller to declare any damage over $2,000 to a prospective purchaser. He stated that the repaired areas will deteriorate at varying rates, making the repairs more evident as the vehicle ages.

[164]     He then provided his opinion that the collision repairs resulted in a value of $15,000, an accelerated depreciation of $4,000 when compared with an estimated value of $19,000 for a BMW of that make, age, and mileage but without the accident damage. In his report Mr. Scarrow indicated that he based this opinion on his inspection of the vehicle itself, references to the Sanford Gold Book, July 2013 edition (a used car valuation guide), as well as what he referred to as “local market comparable research.” In cross-examination he expanded somewhat on this methodology, noting that he relies on his years of experience in used car valuation and sales to determine the valuation numbers. In this case he said that he also posted the car for sale for a period of three to four days and gauged the response from potential buyers. He noted that potential buyers for vehicles of this type are particularly “fussy” about the details of previous damage and repairs.

[165]     The plaintiff relies on Signorello v. Khan, 2010 BCSC 1448, and Cummings v. 565204 B.C. LTD., 2009 BCSC 1009. Signorello stands for the proposition that a vehicle need not be sold in order to demonstrate an accelerated depreciation loss (para. 29); see also Cummings, at para. 73.

[166]     The defendants acknowledge that claims for accelerated depreciation are good in law. However, they submit there is a heavy burden on a plaintiff to adduce sufficient evidence to prove that accelerated depreciation has actually taken place. They rely on Miles v. Mendoza, 1994 CanLII 419 (B.C.S.C.), and Burrard Import Ltd. v. Budget Rent-A-Car of B.C. Ltd, 2001 BCPC 75. In Miles, the court noted that “difficulties of proof” arise where the car is not sold after the accident, as the depreciating effect of the accident declines over time. The court also said that expert evidence of that only spoke to the general “stigma” attaching to damaged vehicles was not sufficiently persuasive proof to award damages for accelerated depreciation: “it cannot be “assumed”, by virtue of the occurrence of an accident requiring extensive repairs, that a properly repaired vehicle has suffered accelerated depreciation” (para. 40).

[167]     Burrard followed Miles in finding that the evidence did not meet the necessary standard given the claimant’s expert’s opinion amounted to no more than a simple proposition and as a result was not the type of persuasive evidence contemplated by the jurisprudence.

[168]     The defendants submit that the plaintiff must prove that the accelerated depreciation actually occurred by adducing evidence that goes over and above the simple proposition that a car which has been in an accident, even though properly repaired, carries a stigma. They say that in this case the plaintiff’s evidence does not go beyond asserting the existence of such a stigma.

[169]     I cannot accept this submission, for two reasons. First, in my view, the evidentiary standard as described in Miles has not been applied quite so strictly in recent decisions. In Cummings, for example, Madam Justice Gerow awarded $7,600 in damages for accelerated depreciation. There the evidence consisted of an automobile valuation expert’s opinion that the plaintiff’s vehicle had suffered an accelerated depreciation of 20% following the accident. There is no comment in the decision as to the factual basis for this opinion and no suggestion that it went beyond the expert’s experience of the “stigma” in the marketplace. The owner had also attempted to trade the vehicle in but was informed by the dealership that they did not accept trade-ins on vehicles with more than $5,000 in damage.

[170]     In Signorello the car was an extremely rare exotic high-performance luxury sports car, manufactured by Mercedes-Benz. The valuation expert set a value based on conversations he had with various Mercedes-Benz dealers in the province. The court identified some concerns with this evidence, noting that the defendant had argued that the expert’s opinion was based on hearsay and opinion evidence itself. Justice Grauer then said at para. 25:

[25]      … the starting point for any vehicle appraisal is the Canadian Black Book, a guide to the wholesale value of used vehicles in Canada relied upon by dealers across the country. This car is so rare, however, that it does not appear in theBlack Book. Of course the figures in that book could also be described as opinion evidence … In the particular circumstances of the case, it is my conclusion that it was not an inappropriate way for Mr. Cogbill to approach the problem, although it would have been preferable had he included the specifics of his conversations. As it was, he did indicate the dealers whom he consulted, …

[171]     From this I take that the expert may rely on the Black Book or similar valuation guides in coming to an opinion as to the value of the vehicle. It also suggests that the “difficulties of proof” that may arise if the car is not sold can be overcome by an expert’s opinion.

[172]     Second, even if one accepts that the standard from Miles still applies, I am of the view that the evidence tendered here does go beyond a “bare” opinion that the car has suffered depreciation due to a “stigma.” Mr. Scarrow based his valuation on a long history of appraising cars, including BMWs. He also relied on the Gold Book, a valuation guide, and market research that he described in cross-examination. The plaintiff also provided evidence that he had attempted to sell the vehicle at a reduced price following the accident and received no offers.

[173]     I conclude that the plaintiff’s evidence is sufficient to establish accelerated depreciation in value for the BMW. I accept Mr. Scarrow’s figures and award damages of $4,000.

 


Hearsay of Reduced Vehicle Value Not Enough to Prove Accelerated Depreciation

February 28th, 2013

I have previously discussed the fact that accelerated vehicle depreciation is a recognized damage in BC.  Reasons for judgement were released this week by the BC Court of Appeal addressing such a claim noting something more than hearsay is required to prove the loss.

In this week’s case (Kapelus v. Hu) the Plaintiff was injured in a 2006 collision.  She proceeded to trial and was awarded damages for her injuries but her claim for accelerated vehicle depreciation was dismissed.  The Plaintiff presented evidence of offers that others provided her for the purchase of the vehicle.  The Court of Appeal noted that if this was the only evidence then there was no error in dismissing this aspect of her claim.  The Court provided the following reasons:

24]         Finally, I should say that the argument advanced by Mrs. Kapelus, that the judge erred in rejecting evidence of the loss in value of her vehicle, based solely on her report of offers to purchase the vehicle, is without merit.  The judge ruled that Mrs. Kapelus’ evidence, that third parties had been prepared to purchase her car at a certain price prior to the accident, was hearsay.  I accept this ruling: it is hearsay and it is not rendered admissible under the business records exception in the Evidence Act, R.S.B.C. 1996, c. 124.


Doing it Yourself – Suing for Accelerated Vehicle Depreciation in BC Small Claims Court

January 4th, 2013

As I’ve previously written, when a vehicle is involved in a crash and is then repaired it is generally worth less than it would be had it not been damaged.  The reason for this is quite simple, when a buyer is looking to purchase a used vehicle, those that have previously been damaged and repaired carry a stigma.  This stigma generally results in a lower resale value.   You can click here to watch CBC’s Marketplace investigation highlighting this reality.

Although Defendants often are reluctant to acknowledge such a loss, the law in BC recognizes this lost value.  If your vehicle was damaged due the the actions of others you can sue to recover your damages for “accelerated depreciation“.

Often times the cost of hiring a lawyer to advance an accelerated depreciation claim can outweigh the amount of the recovery making it an unrealistic option.  So what can you do?

In BC the Small Claims Court has a current limit of $25,000.   This ceiling is adequate to cover all but the most serious of accelerated depreciation claims.  If you did not suffer a personal injury in your crash and your only loss is accelerated vehicle depreciaton bringing a self represented action in Small Claims Court is a viable option.

The Provincial Court has a useful website explaining the basics of starting a lawsuit.  You can click here to access information about filing your claim.

In addition to this, here are some of the key points to be aware of before getting started:

1.  The claim needs to be against the at-fault party.  The insurance company of the at-fault driver (such as ICBC) is the wrong party to sue.  Typically the action is brought against the driver of the at-fault vehicle along with the registered owner who is ‘vicariously liable‘ for damage caused by people who operate their vehicle with their consent.

2.  The Notice of Claim must describe a ’cause of action’.  In other words you have to sue for a recognized wrong.  Typically car crash   cases deal with ‘negligence’ that is, the at fault motorist caused the crash by careless driving.

3.  The resulting harm needs to be caused by the negligent action.  The Pleadings should reflect that the accelerated depreciation was caused as a result of the at-fault driving of the Defendant.

4.  The loss needs to be proven with admissible evidence.  It is not good enough to baldly suggest that a vehicle sustained an accelerated depreciation.  Some vehicles do not sustain any loss in value following a collision.  It is a good idea to retain a qualified expert to examine the vehicle, the repairs done and to then comment on what the vehicle’s lost value is compared to its natural depreciation at the time of the collision.  The expert should be prepared to come to court to testify as to his opinion and the expert’s report needs to be served in compliance with the Rules of Court.   While it does cost money to retain an expert it is worth keeping in mind that the Small Claims Court does have the discretion to order reimbursement of reasonable disbursements if the claim is successful making such expenses a worthwhile investment.

5.  You must bring your lawsuit in time.  If you wait beyond the applicable limitation period before starting your lawsuit the claim will be dismissed.

6.  If you have personal injuries but fail to sue for these and only claim for accelerated depreciation you may be barred from bringing a personal injury action later.  It is important to claim damages for all losses resulting from the crash.

 

 


More on ICBC Claims and Accelerated Vehicle Depreciation

October 19th, 2010

As I’ve previously written, when a vehicle is involved in a crash and is then repaired it is generally worth less than it would be had it not been in the crash.  The reason for this is quite simple, when a buyer is looking to purchase a vehicle, those that have previously been damaged and repaired carry a stigma.  This stigma generally results in a lower resale value.

The law recognizes this lost value.  If your vehicle was damaged due the the actions of others you can sue to recover your damages for “accelerated depreciation“.  Reasons for judgement were released today discussing this area of law.

In today’s case (Signorello v. Khan) the Plaintiff owned at Mercedez-Benz SL65 AMG.  The vehicle cost $210,000.   On route to a business trip in 2007 he left the vehicle with a valet service.  The valet crashed the vehicle causing $26,000 of damage which was ultimately repaired.

The Plaintiff then claimed damages for accelerated depreciation.  The Defendant argued that the vehicle was repaired properly and to the highest standard therefore there was no accelerated depreciation.  Mr. Justice Grauer disagreed and found that, despite the sufficient repairs, the vehicle was now left with a reduced value and awarded the Plaintiff $16,000 for this loss.  In reaching this verdict Mr. Justice Grauer gave the following reasons:

[11]         In British Columbia, a person wishing to sell a used motor vehicle that has sustained damage in an accident costing $2,000 or more to repair must declare that to any potential buyer.  Other matters that must be declared include whether the vehicle has been leased or rented, whether it has been used as an emergency vehicle, and whether it has been registered out of province.

[12]         Since any person considering the purchase of Mr. Signorello’s Mercedes would presumably investigate further and thereby become aware of its history and the cost of its repairs, Mr. Signorello maintained that the market value of his vehicle has been reduced, a phenomenon known as accelerated depreciation.

[13]         The plaintiff’s claim under this heading was supported by expert evidence from Mr. Garry Cogbill of C/S Automotive Appraisals.  It was his conclusion that the loss amounted to 15% of the vehicle’s value at the time of the collision, varying between $12,500 and $18,000 depending upon whether one takes wholesale or retail.

[14]         The defendants’ contention that the plaintiff has suffered no loss in this regard was supported by expert evidence from Mr. Tom Cino of T.C. Consultants.  Mr. Cino expressed the view that so long as a vehicle damaged in an accident has been repaired properly, as this one clearly was, then there is no loss due to accelerated depreciation regardless of the amount of the damage.

[15]         Having read their reports and listened to the evidence of both experts, I find that I prefer the evidence of Mr. Cogbill to that of Mr. Cino…

[19]         The issue is whether, in the marketplace, people prepared to pay a six-figure sum for an exotic performance motorcar such as Mr. Signorello’s are likely to pay less for one that they learn has sustained $26,000 worth of damage, then they would for one that had never been in an accident, all else being equal.

[20]         The thrust of Mr. Cino’s opinion seems to be that a reasonable person who is as knowledgeable about motor vehicles as he most certainly is, would not think that a car that had been properly repaired is worth less than a like vehicle that has never been damaged.  That does not answer the question of what is likely to happen to this car in the marketplace, where reason does not necessarily prevail, and where few have his depth of knowledge.

[21]         Mr. Cino further based his opinion in part on the proposition that the majority of the repair work performed on Mr. Signorello’s Mercedes was to repair cosmetic damage rather than mechanical damage or damage to the frame.  He included in his description of “cosmetic damage” damage that could be repaired by the removal and replacement of the damaged part.  Mr. Cogbill, on the other hand, described most of the damage as other than cosmetic.  I prefer Mr. Cogbill’s approach.

[22]         To my mind, to be of significance in this context, cosmetic damage must mean damage that pertains only to the vehicle’s appearance, and need not be repaired in order for the vehicle to operate properly.  On that basis, I can well imagine that a potential buyer’s approach to a vehicle that had suffered $20,000 worth of cosmetic damage would be different from his approach to a vehicle that had suffered $20,000 worth of damage of a type that had to be repaired in order for the vehicle to be operable.  In this case, it is clear that the majority of the damage to the SL 65 was of the latter type, even if it consisted largely of the removal and replacement of mechanical parts.  I therefore found Mr. Cino’s approach in this regard to be less than convincing.

[23]         Finally, Mr. Cino sought to support his opinion by making a comparison to people purchasing very expensive vintage collector car, such as a 1967 Plymouth Barracuda, that has had all kinds of work put into it to restore what was a rusted hulk to like-new status.  With the greatest respect, that is not an apt comparison to a discriminating purchaser considering a near-new exotic luxury sports car….

[29] The law does not require that the plaintiff demonstrate the loss precisely by having sold the vehicle.  It is enough for him to establish, as I find that he has, a reduction in its value:  seeCummings v. 565204 B.C. Ltd., 2009 BCSC 1009.  I accept Mr. Cogbill’s conclusion in that regard, and doing the best that I can with his figures, I assess the reduction at $16,000.

Another interesting part of this judgement was the Court’s award of costs.  Usually when a Plaintiff is awarded less than $25,000 they are deprived their costs because they could have sued in Small Claims Court.  Despite this usual result, Mr. Justice Grauer awarded the Plaintiff costs finding it is reasonable to bring accelerated depreciation lawsuits in the BC Supreme Court even if the claim is worth below $25,000.  The Court provided the following useful reasons:

[52] On the matter of costs I am satisfied, in all of the circumstances of this case, that it was appropriate to commence this action in Supreme Court.  It was subject to former Rule 66, indicating an attempt to reduce expense.  It concerned an area that is not well traversed in fact or in law, particularly given the rarity and unusual nature of this motor vehicle.  Therefore, I find that the plaintiff is not limited to disbursements only, as though the action should have been brought in Provincial Court.  He is entitled to costs in the ordinary way under the Supreme Court Rules.


Vehicle Damage and the Law of "Accelerated Depreciation"

July 28th, 2009

When a vehicle is damaged in a BC car crash and subsequently repaired, the repaired vehicle may have a lower market value than it otherwise would have.  Can the owner of such a vehicle be compensated for this loss?  The answer is yes and is dealt with under a head of damage known as ‘accelerated depreciation’.  Reasons for judgment were released today by the BC Supreme Court dealing with this legal principle.

In today’s case (Cummings v. Daewoo Richmond) the Plaintiff was injured in a 2008 motor vehicle collision.  The Plaintiff purchased a used vehicle from the Defendant Daewoo.  Seven days later she lost control of her vehicle and was injured as a result of the crash.  Madam Justice Gerow found that the Defendant sold the Plaintiff a vehicle with defective tires.  The court then concluded that “the accident was caused by a loss of friction due to the wear on the rear tires of the vehicle, and that Daewoo has failed to establish that Ms. Cummings’ operation of the vehicle either caused or contributed to the accident.”

The court went on to award the Plaintiff just over $38,000 in total damages including $7,600 for ‘accelerated depreciation’ of her vehicle.  I set Madam Gerow’s discussion out of this area of the law below:

Accelerated depreciation

[70] Ms. Cummings is claiming the amount of $7,600 for accelerated depreciation of the Nissan due to the damage it sustained in the accident. For the following reasons, I have concluded that an award in that amount for accelerated depreciation is appropriate.

[71] The cost to repair the Nissan following the June 2006 motor vehicle accident was in excess of $13,000. Ms. Cummings tried to trade the Nissan in following the accident but was told by Dean Dodd, the lease manager at the Richmond Honda dealership, that the dealership is not interested in a vehicle that had sustained more than $5,000 in damage in an accident. Mr. Dodd confirmed that the dealership does not accept cars for trade that have in excess of $4,000 damage.

[72] Mr. Haffenden testified that the owner of a vehicle that has been involved in an accident where the damages exceed $2,000 must declare the damages, whether selling privately or to a dealer. In his opinion, the Nissan would have suffered a depreciation of approximately 20% or $7,600 on the date of the accident as a result of the damage it sustained.

[73] It is not necessary for a plaintiff to sell a vehicle in order to make out a claim for accelerated depreciation. The assessment of a claim for accelerated depreciation should be made on the day of the accident:  Reinders v. Wilkinson (1994), 51 B.C.A.C. 230.