The Superior Court of the State of California has ruled that James Scott and Patricia Scott are entitled to diminished value from Mercury Insurance Company, notwithstanding that their vehicle had been repaired. Judgment was entered, and no appeal was filed within 60 days as permitted by California law. Thus, the judgment was made final.
What distinguishes this case from all others, says Montie Day, attorney for the plaintiffs, is that it’s an “unlimited jurisdiction case,” meaning that it has sufficient legal effect, or “collateral estoppel,” on future litigation or claims made by Mercury.
“Thus, for future claims against Mercury Insurance Company, the doctrine of collateral estoppel should bar Mercury from alleging that a claimant is not entitled to consideration for diminished value in California,” says Day. “Furthermore, the denial of such claims on the basis that Californians are not entitled to claim diminished value against Mercury would be subject to a violation of the California Insurance Code and should be reported to the state’s insurance commissioner.”
For years, Day claims that Mercury has denied in California that it or its insureds are liable for diminished value based upon California law.
“This, among other practices, including suggesting that the victim-claimant can avoid the damages from diminished value by simply selling the vehicle to an individual without disclosing that the vehicle was in an accident, has resulted in Mercury avoiding such liability on a massive scale in that the average consumer/insured does not have the ability to litigate against such insurance giants,” says Day.
“If Mercury continues its current practices, the California state insurance commissioner may bring an action against them, which he has failed to do for years. Furthermore, it would appear that attorneys, including personal injury attorneys who have principally ignored this issue, are now obligated to seek such relief on behalf of the clients and the public against Mercury and other insurance companies. With respect to Mercury, such attorneys may use a ‘certified’ copy of the judgment and jury verdict with the collateral estoppel argument to defeat Mercury’s claim that a claimant-victim is not entitled to diminished value if the vehicle was repaired.
“This should be a wake-up call on this issue. An attorney has an ethical duty to represent the claim of the clients for diminished value and not attempt to limit their professional duties and their liability for malpractice only to personal injury damages.”
Day cited a 1994 study by the Florida Attorney General that estimated that, in Florida, insurers were underpaying claims by $1 billion per year. Based on that data, Day believes the figure in California could be as much as $3 to $4 billion.