ICBC Ordered To Pay Damages for Accelerated Vehicle Depreciation Following Significant Crash
As discussed numerous times on this site BC law recognizes that if property is damaged by the wrong doing of another and if that property is then worth less even after all reasonable repairs have been made the ‘accelerated depreciation’ can be recovered against the at fault party.
ICBC often refuses to recognize accelerated depreciation claims following collisions and forces crash victims to litigate these claims. Reasons for judgement were published today by BC’s Civil Resolution Tribunal with such a fact pattern.
In today’s case (Peterson v. Texmo) the Applicant’s vehicle sustained over $10,000 in damages in a crash the Respondent was at fault for. The Applicant asked ICBC to compensate him for his vehicle’s accelerated depreciation which reached several thousand dollars but the insurer refused to recognize this loss raising several arguments which missed the mark such as suggesting that if the vehicle was not sold there is no loss and that the vehicle was imported from the US which if resold there may not have a similar market loss. In rejecting these arguments and finding that the applicant was entitled to damages for accelerated depreciation Tribunal Member David Jiang provided the following reasons:
Mr. Peterson submitted a “Preliminary Accelerated Depreciation Report” from Mr. Fournier. I am satisfied that the report is expert opinion evidence under the CRT’s rules, based on his stated qualifications. He says in the report that he has provided assessments about vehicle valuations and accelerated depreciation since 2013. He has also been involved in selling and leasing motor vehicles at various times since 2000. Mr. Fournier previously testified as an expert witness in Chiang v. Kumar and Sharma, 2018 BCPC 127.
Mr. Fournier wrote that he based his report on the November 22, 2019 repair estimate, receipts for Mr. Peterson’s aftermarket truck additions, and 2 colour pictures of the truck. He said that he calculated the average natural depreciation for the truck’s make and model, then conducted research on comparable vehicles in the market. He concluded Mr. Peterson’s truck had a pre-accident market value of $30,140. He says that after the October 2019 accident and subsequent repairs, the truck had a value in the range of $27,125 to $27,730. He determined this by comparing the truck with over 630 other accelerated depreciation reports by Fournier Auto Group Ltd. Mr. Fournier concluded that the truck’s value dropped by $2,410 to $3,015 from accelerated depreciation due to the accident.
The respondents submitted a “Vehicle Valuation Report” by Mitchell. The Mitchell report’s author is unidentified, and no credentials are stated. I therefore do not accept it as expert evidence under CRT rule 8.3(2). It says the truck’s market value is $21,558.83. The report based its conclusion on the value of 4 different comparable trucks, adjusted for the condition of Mr. Peterson’s truck and pre-existing damage before the accident, aftermarket additions, and any refurbishment performed. There is nothing in the Mitchell report that indicates its author considered whether accelerated depreciation could affect truck value. I therefore find the Mitchell report does not address the issue in this dispute and so I place little weight upon it.
The respondents also provided 2 ads for what they say are comparable vehicles. The first has a list price of $27,388, with one declared accident resulting in over $2,000 of repairs. Its stated mileage is 105,894 kilometers. The second has no accident history and a list price of $18,900, but greater mileage of 363,000 kilometers.
The respondents say that the truck’s mileage, import status, condition, and age are greater determinants of its resale value. The respondents say that the 2 ads demonstrate that mileage matters much more than accident history. I note a photo shows Mr. Peterson’s truck has a mileage of 310,157 kilometers.
It is also undisputed that Mr. Peterson’s truck is a USA import vehicle. The respondents say it was likely not subject to any accident reporting requirements while it was in the USA. The respondents say that any buyers would reduce their offers to take potential undeclared accidents into account.
While I acknowledge the respondents’ submissions, they are unsupported by any expert evidence. I do not find it clear or obvious from the 2 ads alone that Mr. Peterson’s truck would be unaffected by accelerated depreciation. The ads provide a very limited set of data from which to draw any conclusions.
Mr. Fournier’s report directly addressed the issue of accelerated depreciation. He outlined his years of experience in this field, which I accept as accurate. He also outlined what evidence he used, and the assumptions he made in writing his report. These included assuming Mr. Peterson’s truck was in average condition and the repairs brought the truck back to factory specification. Mr. Fournier also used the correct truck mileage figure of 310,157 kilometers in his report.
Mr. Fournier did not directly address the fact that Mr. Peterson imported his truck. He instead noted he assumed the truck had no previous damage that cumulatively exceeded $2,000 to repair. On balance, I find his overall approach reasonable. There is no expert evidence contradicting Mr. Fournier’s opinion and so I place significant weight on it.
Given the above, I accept Mr. Fournier’s opinion. I find it more likely than not that Ms. Texmo’s negligence caused Mr. Peterson’s truck to depreciate beyond its natural rate by $2,410 to $3,015. There is no evidence the higher end of the range is warranted, so I find that Ms. Texmo must pay Mr. Peterson $2,410 in damages.