McConchie v . Samsung Electronics CV-99-040-JD 07/18/00
UNITED STATES DISTRICT COURT FOR THE
DISTRICT OF NEW HAMPSHIRE
Donald and Susan McConchie
v. Civil N o . 99-40-JD
Opinion N o . 2000 DNH 155
Samsung Electronics America, Inc.
and Samsung Electronics Co., Ltd.
O R D E R
The plaintiffs, Donald and Susan McConchie, brought suit
against the manufacturer and distributor of Samsung microwave
ovens, alleging that a defect in their Samsung oven caused a fire
that damaged their home and property. The defendants move for a
ruling in limine that the plaintiffs’ damages must be measured by
either the fair market value or the depreciated value methods,
but not by the replacement value method. The plaintiffs argue
that they should be allowed to prove their damages through
evidence of the replacement values for their property.
The plaintiffs claim damages in the amount of $380,214.79
for their losses in the fire. That amount includes $245,656.04
for the loss of their personal property including clothing,
furniture, and other household items such as televisions and
computers. The $245,656.04 amount is based on the replacement
values assigned to an inventory of the plaintiffs’ belongings
lost in the fire.
The parties agree that New Hampshire law applies in this
case, and they begin with the rule of compensation in New
Hampshire tort law that “the person wronged receive a sum of
money that will restore him as nearly as possible to the position
he would have been in if the wrong had not been committed.”
Smith v . Cote, 128 N.H. 231, 243 (1986). The defendants cite no
New Hampshire rule as to the proper measure of damages for the
destruction of personal property, but argue that the replacement
value of the lost property would amount to a windfall. The
plaintiffs, relying on Copadis v . Haymond,
94 N.H. 103, 106
(1946), state that “the typical measure of personal property
damages caused by the negligence of another is ‘fair market
value’ of the property at the time of its loss or destruction.”1
Pls. Mem. at 2 .
The plaintiffs argue, however, that the fair market value
method would not adequately compensate them because their
1
In fact, in Copadis the supreme court addressed the measure
of damages for a car that was damaged in a collision and then
repaired, not property that was destroyed. See id. at 106. The
court relied on the valuation method in the Restatement (Second)
of Torts, § 928, pertaining to damages for “Harm to Chattels,”
and held that the plaintiff was entitled to the cost of repairs,
the cost of a rental car, and the difference between the value of
the car before and after the accident. Instead, Restatement
(Second) of Torts § 927 and § 911 appear to be more pertinent to
damages for destruction of property.
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household goods and used clothing would typically have little or
no market value but had considerable value to the plaintiffs.
The plaintiffs point to the court’s reasoning in Pinet v . New
Hampshire Fire Ins. Co., 100 N.H. 346 (1956), for a more flexible
view of the proper measure of damages in this case. In Pinet,
the supreme court interpreted a clause in an insurance policy
that limited the insured’s recovery to “the actual cash value” of
the plaintiff’s property to permit “[e]vidence of both market
value and replacement cost with depreciation.”
Id. at 349. In
making that determination the court noted that it had not
previously committed to either valuation method and held, “[b]oth
fair market value and replacement cost are permissible standards
for determining fire losses but they are standards and not
shackles.”
Id. More recently the New Hampshire Supreme Court
has said, “where the law furnishes no precise legal measure for
the recovery of damages, the amount to be awarded is largely
discretionary.” Miami Subs Corp. v . Murray Family Trust,
142
N.H. 501, 517 (1997) (quotation omitted).
While fair market value is the usual standard for assessing
damages for loss of property, courts generally use a more
flexible approach when no market exists for the lost property or
when that value would not provide reasonable compensation. See,
e.g., Carye v . Boca Raton Hotel and Club Ltd. Partnership, 676
3
S o . 2d 1020, 1021-22 (Fla. Dist. C t . App. 1996); Moseman Constr.
Co. v . Rhode Island Dep’t of Transp., 608 A.2d 3 4 , 38 (R.I.
1992); Trinity Church v . John Hancock Mut. Life Ins. Co.,
502
N.E.2d 532, 536 (Mass. 1987); Restatement (Second) of Torts § 911
cmt. e & § 927 cmt. c. For example, under Texas law, neither the
fair market value of used household goods nor the replacement
costs for such articles is considered a fair measure of damage,
and instead, “‘[t]he measure of damage that should be applied in
case of destruction of this kind of property is the actual worth
or value of the articles to the owner for use in the condition in
which they were at the time of the fire excluding any fanciful or
sentimental considerations.’” Bond v . A.H. Belo,
602 S.W.2d 105,
108 (Tex. App. 1980) (quoting Crisp v . Security Nat’l Ins. Co.,
369 S.W.2d 326, 328 (Tex. 1963)); see also, e.g., Maryland Cas.
Co. v . Therm-O-Disc, Inc.,
137 F.3d 780, 786 (4th Cir. 1998)
(Maryland l a w ) ; Miller v . Newsweek, Inc.,
675 F. Supp. 8 7 2 , 876
(D. Del. 1987) (Delaware l a w ) ; Zochert v . National Framers Union
Property & Cas. Co.,
576 N.W.2d 5 3 1 , 534 (S.D. 1998); Landers v .
Anchorage,
915 P.2d 614, 618 (Alas. 1996); Roman Catholic Church
v . Louisiana Gas Serv. Co., 618 S o . 2d 8 7 4 , 878 (La. 1993);
Merritt v . Nationwide Warehouse Co., Ltd.,
605 S.W.2d 2 5 0 , 256
(Tenn. App. 1980).
In this case, the plaintiffs have prepared a list of the
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replacement costs for their destroyed property without reference
to the age, condition, or original cost of the destroyed items.
The plaintiffs argue that the new replacement cost for their
property is the only fair measure of their loss because to the
extent any market exists for used household goods, the values
represented in such a market would be unfairly low. They also
contend that they are not likely to be able to replace the
destroyed items in such a market. The defendants contend that
replacement costs, without regard to the value of the items lost,
would amount to a windfall to the plaintiffs.
Since New Hampshire law does not provide a precise measure
of damages in the circumstances of this case, the method of
proving damages is subject to the court’s discretion. See Miami
Subs Corp., 142 N.H. at 517. The market value or exchange value
of the plaintiffs’ destroyed household items and clothing would
generally not provide “a sum of money that will restore them as
nearly as possible to the position they would have been in if the
wrong had not been committed.” Smith,
128 N.H. at 243; see also
Restatement (Second) of Torts § 911 cmt. e. On the other hand,
the new replacement costs of the destroyed items, which were not
new when they were destroyed, could result in a windfall to the
plaintiffs.
Therefore, to permit the plaintiffs a full and fair recovery
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for their losses without a windfall, the plaintiffs will be
allowed to prove their damages by showing the value of their lost
property to them through a method that best fits the
circumstances of the case.2 The value of the property to the
plaintiffs may be shown by evidence of the original cost and the
condition of the destroyed property at the time of the fire, the
fair market value for each item, or the new replacement cost
reduced by depreciation as to each item.3 Because the reduced
values recoverable by those methods will require the plaintiffs
to spend considerable time and effort to find replacement
property at used markets or in bargain sales, the plaintiffs are
entitled to be compensated for that time and effort. The
plaintiffs are also entitled to compensation for other
inconveniences caused by the loss of their property including the
loss of use of the property. In the alternative, the plaintiffs
2
The parties have not indicated that there is any claim for
the costs of repair or restoration of damaged property.
3
The plaintiffs have not argued that they lost items that
have value only to the owner, such as photograph albums or family
heirlooms, and therefore, the court will not consider any
particular measure of damages for such items. See, e.g., Webster
v . Boone, 992 P.2d 1183, 1186-87 (Colo. C t . App. 2000); Seminole
Pipeline C o . v . Broad Leaf Partners, Inc.,
979 S.W.2d 7 3 0 , 755
(Tex. App. 1998); Ladeas v . Carter,
845 S.W.2d 4 5 , 53-54 (Mo. C t .
App. 1992).
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may claim new replacement costs for their destroyed property,
without depreciation, if the plaintiffs show that the replacement
amount, in total, is more likely than not to be less than the
compensation they would recover based on reduced values.
Conclusion
For the foregoing reasons, the defendants’ motion in limine
(document n o . 18) is granted in part and denied in part as is
more fully explained in this order.
SO ORDERED.
Joseph A . DiClerico, Jr.
District Judge
July 1 8 , 2000
cc: James C . Wheat, Esquire
Robert D. Lietz, Esquire
Andrew D. Dunn, Esquire
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