Damages for Property Loss in Texas

Property and real estate lawyers in Houston and Texas can sometimes recover mental anguish damages for property loss, according to City of Tyler v. Likes, 962 SW 2d 489 – Tex: Supreme Court 1997.  Call Hector Chavana Jr. at 713-979-2941 for a consultation.

This post discusses the following types of damages available for injury to property in Texas

• Types of Claims That Can Lead to Property Loss
• Mental Anguish and Sentimental Value
• Diminished Value and Repair Value and When Both May Be Available
• The Property Owner Rule, and its lack of application to reasonable cost of repair
• Rule specific to Real Property Claims
• Breach of Contract to Sell
• Conversion Damages vs. DTPA Damages
• Loss of Use Damages
• Partial Destruction Claims

Types of Claims That Can Lead To Property Loss

Damages From Negligence

Negligence can lead to property loss.  The measure of damages are As a rule, this is measured by the property’s [diminished] market value or the cost of repairing it (including the reasonable and necessary cost of parts and labor). See Pasadena State Bank v. Isaac, 149 Tex. 47, 228 S.W.2d 127, 128-29 (1950).  This post shows that a property owner can testify to the value of his own property, if his testimony is based on property value.  However, that rule does not appear to apply to the cost of repairs in all cases.  The unofficial rules seems to be that the more intricate and costly the repairs, the more likely an expert will be required. Where damages for permanent injury to land is claimed, the amount thereof is determined by the decrease in market value as measured by the difference in market value just prior to the time the improvements were constructed and the market value immediately subsequent to such construction. Ansley v. Tarrant Cnty. Water Control & Imp. Dist. No. One, 498 S.W.2d 469, 474 (Tex. App.—Tyler 1973, writ ref’d n.r.e.).

As early as 1889, we stated that “[i]f land is temporarily but not permanently injured by the negligence or wrongful act of another, the owner would be entitled to recover the amount necessary to repair the injury, and put the land in the condition it was at the time immediately preceding the injury, with interest thereon to the time of the trial.”

Gilbert Wheeler, Inc. v. Enbridge Pipelines (E. Tex.), L.P., 449 S.W.3d 474, 478 (Tex. 2014)

Construction Claims

Construction claims sometimes lead to what is called the cost of completion damage measure.  If a general contractor fails to perform, an owner can complete the project, and its damages are calculated by the reasonable and necessary cost of completing the job less the unpaid balance under the contract.  McKnight v. Renfro, 371 SW 2d 740, 745 (Tex. Civ. App. Dallas 1963), writ refused n.r.e. (Jan 22, 1964). A general contractor may recover from a defaulting sub the reasonable and necessary costs of completion above the sub contract balance.  Freeman v. Shannon Const., Inc., 560 SW 2d 732, 735-736, 23 U.C.C. Rep Serv.

If there has been no substantial performance, and if the contractor is terminated for cause, the measure of the owner’s damages is the difference between the value of the improvements as constructed and its value had it been constructed in accordance with the contract.  Hutson v. Chambless, 157 Tex. 193, 300 SW 2d 943 (1957); Turner, Collue & Braden, Inc. v. Brookhollow, Inc., 642 S.W. 2d 160, 164 (Tex. 1982).

These construction damages are listed in Texas Construction Law Manual by Joe F. Canterbury, Jr. and Robert Shapiro, 2015-16 edition, § 8:26.  If the contract has been substantially performed, the owner is allowed to recover the cost of completing or correcting the work. Id.  

The damage measure for a claim by a subcontractor is not the simple expectation measure, however. S. Builders, Inc. v. Brown, 449 S.W.2d 542, 545 (Tex. Civ. App.—Eastland 1969, writ ref’d n.r.e.).  Citing a secondary source, the court said:

‘Performance partly completed according to contract. Where performance has been entered on, plaintiff is entitled to the contract price for the work done under and according to the contract and to damages for being prevented from completing the contract; or, as the rule has been otherwise stated, where there has been part performance of the contract, the just claims of the party employed to do the labor or service are satisfied when he is recompensed for the part performed and is indemnified for his loss with respect to the part which is unexecuted. Where performance under the contract has advanced to a point where it may be determined from the contract what payment plaintiff is entitled to for the work already done, his measure of recovery is properly the contract price for the part of the contract which has been performed together with the profits which he has lost from being prevented from performing the remainder of the contract. * * *

Fraud and Misrepresentation Damages (Partition Claims As Well)

Misrepresentation of the condition of a property can lead to damages.  Rescission is an acceptable remedy in a lease context.  Italian Cowboy Partners, Ltd. v. Prudential Ins. Co. of America, 341 SW 3d 323 – Tex.  That same court awarded actual damages. “For its actual damages calculation, the trial court added the amount of capital Italian Cowboy’s investors contributed, including interest (“interest carry”) that the investors would have earned on that investment, as well as the debt Italian Cowboy incurred, then subtracted the value of the remaining assets that Italian Cowboy acquired, to reach a sum of $600,070.40.”  Prudential claimed that was an award of un-pleaded special damages, but they had not filed a special exception, and it was tried by consent.

A side note on the rescission award including the investments amounts, per the opinion. “Rescission is an equitable remedy and, as a general rule, the measure of damage is the return of the consideration paid, together with such further special damage or expense as may have been reasonably incurred by the party wronged on account of the contract…Thus, by electing rescission, Italian Cowboy did not need to prove that its damages were caused by the latent defect; it needed only to prove what amount would restore it to its original position. Italian Cowboy offered detailed expert testimony as to the amount required to make it whole.”

Time and effort of the plaintiff are available as damages.  Id.

Unexcused debts as a consequence of the fraud are recoverable, because “where damages are proper in order to retire debt that would not have otherwise existed, we conclude that the burden is properly on Prudential to demonstrate that any such debts have been excused.”  Id.

What about improvements placed on the property after a fraudulently induced purchase.

The principle is well established in equity that a person who in good faith makes improvements upon property owned by another is entitled to compensation therefor.The measure of compensation to the claimant is not the original cost of the improvements, but the enhancement in value of the land by reason of the improvements. Dakan v. Dakan, 125 Tex. 305, 83 S.W.2d 620 (1935); Tashnek v. Hefner, 282 S.W.2d 298 (Tex.Civ.App.—Galveston 1955, writ ref’d n.r.e.); Annot., 24 A.L.R.2d 11, 31; 42 C.J.S. Improvements s 11, at 446—49.

It is also obvious that many of the expenditures were made in improvements to the property, but a cotenant who improves *641 property without the consent of his cotenant cannot recover the actual amounts expended. It is well settled that the amount of the recovery for such improvements is limited to the value of the enhancement of the property at the time of the partition. Burton v. Williams, 195 S.W.2d 245 (Tex.Civ.App.—ref. n.r.e.).

Williams v. Shamburger, 638 S.W.2d 639, 640–41 (Tex. App.—Waco 1982, writ ref’d n.r.e.). “[I]n case of reimbursement for improvements, the amount of recovery is limited to the amount of enhancement of the property at the time of partition by virtue of the improvements placed thereon.  Dakan v. Dakan, 125 Tex. 305, 320, 83 S.W.2d 620, 628 (1935).

Here is a case specifically discussing fraudulent inducement damages:

There are two measures of direct damages in a fraud case: out-of-pocket and benefit-of-the-bargain. Formosa Plastics Corp. USA v. Presidio Eng’rs & Contractors, Inc., 960 S.W.2d 41, 49 (Tex.1998) (citing Arthur Andersen & Co. v. Perry Equip. Corp., 945 S.W.2d 812, 817 (Tex.1997)). Out-of-pocket damages measure the difference between the amount the buyer paid and the value of the property the buyer received. Leyendecker & Assocs., Inc. v. Wechter, 683 S.W.2d 369, 373 (Tex.1984). Benefit-of-the-bargain damages measure the difference between the value of the property as represented and *395 the actual value of the property. Id. Both measures are determined at the time of the sale induced by the fraud. Id.; Arthur Andersen, 945 S.W.2d at 817; Woodyard v. Hunt, 695 S.W.2d 730, 733 (Tex.App.-Houston [1st Dist.] 1985, no writ); Highland Capital Mgmt., L.P. v. Ryder Scott Co., 402 S.W.3d 719, 728–30, 2012 WL 6082713, at *7–8 (Tex.App.-Houston [1st Dist.] 2012, no pet. h.)

Fazio v. Cypress/GR Houston I, L.P., 403 S.W.3d 390, 394–95 (Tex. App.—Houston [1st Dist.] 2013, pet. denied).  Under the DTPA, courts can look past traditional measures of damages.  Actual damages under the DTPA have been defined as “the total loss sustained [by the consumer] as the result of the deceptive trade practice.” Henry S. Miller Co., 836 S.W.2d at 162 (citing Kish v. Van Note, 692 S.W.2d 463, 466 (Tex.1985); Smith v. Baldwin, 611 S.W.2d 611, 617 (Tex.1980)) (alteration in original). Consequential damages have been allowed in DTPA cases for a variety of losses. See Henry S. Miller Co., 836 S.W.2d at 163 (loss of capital improvements); Kish, 692 S.W.2d at 468 (related and reasonable necessary expenses); White, 651 S.W.2d at 263 (loss of profits); *460 Kold–Serve Corp. v. Ward, 736 S.W.2d 750, 755 (Tex.App.-Corpus Christi 1987) (interest on indebtedness), writ dism’d, 748 S.W.2d 227 (Tex.1988); Village Mobile Homes, Inc. v. Porter, 716 S.W.2d 543, 550 (Tex.App.-Austin 1986, writ ref’d n.r.e.) (loss of improvements). Although the foreseeability requirement for consequential damages does not apply under the DTPA, such additional damages must be proved with reasonable certainty and are not recoverable if they are too remote, too uncertain, or purely conjectural. Arthur Andersen, 945 S.W.2d at 816. Consequential damages must be specially pled. Henry S. Miller Co., 836 S.W.2d at 164.

Mental Anguish Damages and Sentimental Value

Texas does not recognize a general legal duty to avoid negligently inflicting mental anguish. See Boyles v. Kerr, 855 S.W.2d 593, 597 (Tex.1993). While negligently inflicted anguish may be an element of recoverable damages when the defendant violates some other duty to the plaintiff, this depends on both the nature of the duty breached and the quality of proof offered by the plaintiff. For many breaches of legal duties, even tortious ones, the law affords no right to recover for resulting mental anguish. See, e.g., id. at 598 (noting that mental anguish is not recoverable in an action for negligent misrepresentation). Likes alleges that the City caused her mental anguish by negligently flooding her house and causing “the loss of many personal and irreplaceable items.” The first question in this case, then, is whether the law imposes mental anguish damages for a breach of the duty to exercise ordinary care so as not to negligently injure another’s property.

Although mental anguish is a real and serious harm, there are two principal reasons why courts are not willing to recognize it as a compensable element of damages in every 495*495 case where it occurs. First, it is difficult to predict. The invasion of the same legal right may lead to extreme anguish in one person while causing essentially no emotional damage to another. Because of this variability in human nature, it is difficult for the law to distinguish between those instances when mental anguish is reasonably foreseeable from particular conduct and those when it is so remote that the law should impose no duty to prevent it. For this reason, Texas courts at one time categorized mental anguish in most types of cases as too remote or speculative to be compensable as actual damages, holding the emotional consequences of the tort relevant only to exemplary damages. See Crawford v. Doggett, 82 Tex. 139,17 S.W. 929, 930 (1891)(citing Traweek v. Martin-Brown Co., 79 Tex. 460, 14 S.W. 564, 565-66 (1890)); Bassham v. Evans, 216 S.W. 446, 451 (Tex.Civ.App.—Amarillo 1919, no writ); 1 SEDGWICK, A TREATISE ON THE MEASURE OF DAMAGES § 359, at 705-06 (9th ed.1913). But see Stuart v. Western Union Tel. Co., 66 Tex. 580, 18 S.W. 351, 354 (1885) (when mental anguish is the natural result of an injury, it is included in actual damages).

Second, even in circumstances where mental anguish is a foreseeable result of wrongful conduct, its existence is inherently difficult to verify. For years the fear of false claims led us to require objective bodily symptoms of anguish in most types of cases. We eliminated this “physical manifestation” requirement after concluding that physical symptoms are not an accurate indicator of genuine mental anguish. See Boyles, 855 S.W.2d at 598; St. Elizabeth Hosp. v. Garrard, 730 S.W.2d 649, 650 (Tex.1987),overruled on other grounds by Boyles, 855 S.W.2d 593. Yet even in those cases where a defendant has breached the type of duty for which mental anguish is recoverable, we frequently demand “direct evidence of the nature, duration, and severity of [the] mental anguish, … establishing a substantial disruption in the plaintiffs’ daily routine.” Parkway Co. v. Woodruff, 901 S.W.2d 434, 444 (Tex.1995). While we recognize that such artificial evidentiary barriers as the Parkway standard may merely encourage exaggeration and penalize those who deal constructively with life’s vicissitudes, we continue to insist on such safeguards because the law has not yet discovered a satisfactory empirical test for what is by definition a subjective injury.

These considerations, filtered over decades and centuries through the common law process, have led most courts to conclude that there are some categories of cases in which the problems of foreseeability and genuineness are sufficiently mitigated that the law should allow recovery for anguish. Mental anguish damages are recoverable for some common law torts that generally involve intentional or malicious conduct such as libel, see Leyendecker & Assocs., Inc. v. Wechter, 683 S.W.2d 369, 374 (Tex.1984),and battery, see Fisher v. Carrousel Motor Hotel, Inc., 424 S.W.2d 627, 630 (Tex.1967),and by analogy for knowing violations of certain statutes such as the Deceptive Trade Practices Act, see Luna v. North Star Dodge Sales, Inc., 667 S.W.2d 115, 117 (Tex.1984). This is appropriate because the high level of culpability affects the determination of proximate cause, see RESTATEMENT (SECOND) OF TORTS §§ 435B, 502(2) (1965), and makes it just that the defendant should bear the risk of any overcompensation that an award of mental anguish damages in a particular case might entail. However, Likes has not alleged that the City intended or knew that its actions would result in the flooding of her home, or that it acted with malice.

Moreover, even where the defendant’s conduct was merely negligent, “Texas has authorized recovery of mental anguish damages in virtually all personal injury actions.” Krishnan v. Sepulveda, 916 S.W.2d 478, 481 (Tex.1995). “Where serious bodily injury is inflicted, … we know that some degree of physical and mental suffering is the necessary result.” Brown v. Sullivan, 71 Tex. 470, 10 S.W. 288, 290 (1888); accord T. & P. Ry. v. Curry, 64 Tex. 85, 87-88 (1885); Kennedy v. Missouri Pac. R.R., 778 S.W.2d 552, 557 (Tex.App.—Beaumont 1989, writ denied); Texas & N.O. R.R. Co. v. Cade, 351 S.W.2d 663, 664 (Tex.Civ.App.—Waco 1961, writ ref’d n.r.e.). Similarly, when the defendant’s negligence causes a mental shock which produces a serious bodily injury, the defendant is liable for that injury provided it 496*496 was foreseeable, see Houston Elec. Co. v. Dorsett, 145 Tex. 95, 194 S.W.2d 546 (1946) (plaintiff suffered “brain deterioration” after almost being struck by a bus); Hill v. Kimball, 76 Tex. 210, 13 S.W. 59 (1890) (plaintiff miscarried after witnessing violent altercation), and mental anguish is one element of damages just as it would be for any other serious injury. Likes has not claimed damages for bodily injury, however, and the minor physical symptoms she describes, such as difficulty sleeping, are not serious bodily injuries that can form the basis for recovering mental anguish damages.

Mental anguish is also compensable as the foreseeable result of a breach of duty arising out of certain special relationships. See Boyles, 855 S.W.2d at 600. These include the physician-patient relationship, see Krishnan, 916 S.W.2d at 482, perhaps because most physicians’ negligence also causes bodily injury, and a very limited number of contracts dealing with intensely emotional noncommercial subjects such as preparing a corpse for burial, see Pat H. Foley & Co. v. Wyatt, 442 S.W.2d 904(Tex.Civ.App.—Houston [14th Dist.] 1969, writ ref’d n.r.e.), or delivering news of a family emergency, see Stuart, 66 Tex. 580, 18 S.W. 351. In an earlier era, courts found a special relationship of this sort between railroads and their passengers. See Gulf, C. & S.F. Ry. v. Luther, 40 Tex.Civ.App. 517, 90 S.W. 44, 46-48 (1905, writ ref’d) (collecting authorities). We have made it clear, however, that most relationships, whether legal or personal, create no duty to avoid causing mental anguish. See Motor Express, Inc. v. Rodriguez, 925 S.W.2d 638, 639 (Tex.1996) (landowner-invitee relationship); Boyles,855 S.W.2d at 600 (intimate relationship). There is no suggestion in this case of any special relationship that could impose such a duty on the City with respect to Likes.

Without intent or malice on the defendant’s part, serious bodily injury to the plaintiff, or a special relationship between the two parties, we permit recovery for mental anguish in only a few types of cases involving injuries of such a shocking and disturbing nature that mental anguish is a highly foreseeable result. These include suits for wrongful death, see Cavnar v. Quality Control Parking, Inc., 696 S.W.2d 549, 551 (Tex. 1985),and actions by bystanders for a close family member’s serious injury, see Freeman v. City of Pasadena, 744 S.W.2d 923 (Tex. 1988). Likes has not experienced any of the injuries that this Court has recognized as giving rise to mental anguish damages based on their shocking and disturbing nature.

The preceding analysis is obviously far from exhaustive, for the law of mental anguish damages is rooted in societal judgments, some no longer current, about the gravity of certain wrongs and their likely effects. As a result of this “ad hoc pattern of development,” Parkway, 901 S.W.2d at 443, “[t]he case law in the field … is in an almost unparalleled state of confusion and any attempt at a consistent exegesis of the authorities is likely to break down in embarrassed perplexity.” Shipley, Annotation, Right to Recover for Emotional Disturbance or Its Physical Consequences, in the Absence of Impact or Other Actionable Wrong, 64 A.L.R.2d 100, 103 (1959). Our opinion today does not attempt the perhaps impossible task of distilling a unified theory of mental anguish from the existing precedents. Instead, we seek merely to erect a framework of existing case law to assist in examining the claim before us. From that process, it is clear that the present case falls outside the types of cases in which mental anguish has traditionally been compensable under Texas or prevailing American law.

In remanding for a trial on the merits, the court of appeals concluded that “mental anguish [was] self-evident in the nature of [Likes’s] experience,” 910 S.W.2d at 529—in other words, that the flooding of one’s home and possessions is one of those extremely shocking and disturbing injuries which guarantee the genuineness and foreseeability of mental anguish despite the absence of willful or malicious misconduct, serious bodily injury, or a special relationship between the parties. We disagree.

While few persons suffering serious bodily injury would feel made whole by the mere recovery of medical expenses and lost wages, many whose property has been damaged or destroyed will be entirely satisfied by recovery 497*497 of its value. As a rule, this is measured by the property’s market value or the cost of repairing it. See Pasadena State Bank v. Isaac, 149 Tex. 47, 228 S.W.2d 127, 128-29 (1950). In some cases, however, the damaged property consists of “articles of small market value” that “have their primary value in sentiment.” Brown v. Frontier Theatres, Inc., 369 S.W.2d 299, 304-05 (Tex.1963). Such property can only be adequately valued subjectively; yet, the owner should still be compensated. As the Court discussed in Brown, special rules apply in a suit to recover for the loss of property that is primarily of sentimental value:

It is a matter of common knowledge that items such as these generally have no market value which would adequately compensate their owner for their loss or destruction. Such property is not susceptible of supply and reproduction in kind, and their greater value is in sentiment and not in the market place. In such cases the most fundamental rule of damages that every wrongful injury or loss to persons or property should be adequately and reasonably compensated requires the allowance of damages in compensation for the reasonable special value of such articles to their owner taking into consideration the feelings of the owner for such property.

Id. at 305 (citations omitted). The owner’s feelings thus help determine the value of the destroyed item to the owner for purposes of property, not mental anguish, damages. Because a plaintiff whose property has been harmed can ordinarily recover fully for that loss through economic damages, our reluctance to leave a legally injured plaintiff with no remedy at all, which has rightfully influenced courts to look favorably on awarding mental anguish damages, does not come into play in cases where the primary injury is to property. See Sanchez v. Schindler, 651 S.W.2d 249, 251 (Tex.1983)(permitting mental anguish damages for wrongful death of a child because the traditional pecuniary loss rule would result in an award of no damages).

For these reasons, we reaffirm today that damages measured by diminution in value are an adequate and appropriate remedy for negligent harm to real or personal property, and that mental anguish based solely on negligent property damage is not compensable as a matter of law. The proper measure of Likes’s damages—although she cannot recover on those claims for which the City has sovereign immunity from suit for property damages—is (1) the loss in market value of her property caused by the defendant’s negligence and (2) for those items of small or no market value that “have their primary value in sentiment,” Brown v. Frontier Theatres, 369 S.W.2d at 305, the loss in value to her. Because the injury to Likes’s property was not intentional or malicious, or even grossly negligent, we need not decide whether mental anguish arising out of property damage may be legally compensable when a heightened degree of misconduct is found. Compare Luna, 667 S.W.2d at 117 (stating in dicta that mental anguish is recoverable for “willful tort, willful and wanton disregard, or gross negligence”), with Reinhardt Motors, Inc. v. Boston, 516 So.2d 509, 511 (Ala.1986)(limiting mental anguish for property damage to cases in which the injury “is committed under circumstances of insult or contumely” and thus constitutes a tort against the plaintiff personally rather than a mere property tort).

In attempting to create general rules for this complex field, we have sometimes uttered dicta that might support Likes’s position. Two of our early cases establishing that one cannot recover for mental anguish in the absence of a recognized legal injury— what we now know as the rule of Boyles v. Kerr—suggested in passing that an injury to property would suffice. See Stuart, 18 S.W. at 353; Gulf, C. & S.F. Ry. v. Levy, 59 Tex. 563, 566 (1883). We soon rejected this suggestion, however, when we were actually called on to decide claims for mental anguish arising out of injuries to property interests. See Gulf, C. & S.F. Ry. v. Trott, 86 Tex. 412, 25 S.W. 419 (1894) (negligently frightening horses so that they broke plaintiff’s wagon); Crawford, 82 Tex. 139,17 S.W. 929 (wrongful but nonmalicious sequestration of home); Houston, E. & W.T. Ry. Co. v. Seale, 28 Tex.Civ.App. 364, 67 S.W. 437 (1902, no writ) (damage to personal property during shipment); 498*498 Yoakum v. Dunn, 1 Tex.Civ.App. 524, 21 S.W. 411 (1892, no writ)(same).

Although this Court has not considered a mental anguish claim based solely on negligent damage to property since the beginning of the century, we have consistently and recently held that without proof of heightened culpability, mental anguish is not recoverable under other causes of action for injuries to economic rights such as breach of contract, see Stewart Title Guar. Co. v. Aiello, 941 S.W.2d 68, 72 (Tex.1997),negligent misrepresentation, see Federal Land Bank Ass’n v. Sloane, 825 S.W.2d 439, 442-43 (Tex.1991), and violations of statutory regulatory schemes like the Insurance Code, see State Farm Life Ins. Co. v. Beaston, 907 S.W.2d 430, 436 (Tex.1995), or the Deceptive Trade Practices Act, see Duncan v. Luke Johnson Ford, Inc., 603 S.W.2d 777, 779 (Tex.1980).

The courts of appeals have likewise held, with the exception of the cases on which the court below relied, that mental anguish is not a compensable result of injuries to property interests. See, e.g., First Nat’l Bank v. Gittelman, 788 S.W.2d 165 (Tex.App.—Houston [14th Dist.] 1990, writ denied) (conversion without malice). Notably, the courts of appeals have repeatedly denied recovery in cases where, as here, the plaintiffs’ mental anguish arose out of legal injuries involving the home and its contents. See Conann Constructors, Inc. v. Muller, 618 S.W.2d 564 (Tex.Civ.App.—Austin 1981, writ ref’d n.r.e.) (breach of warranty involving septic system leakage onto lawn); Callaway,602 S.W.2d 330 (negligent maintenance of sewer causing sewage backup into house); National Van Lines, Inc. v. Lifshen, 584 S.W.2d 298 (Tex. Civ.App.—Dallas 1979, no writ) (non-willful^[1] DTPA violation resulting in damage to household goods); Phillips v. Latham, 523 S.W.2d 19, 26-27 (Tex.Civ.App.—Dallas 1975, writ ref’d n.r.e.) (wrongful trustee’s sale of plaintiffs’ home when plaintiffs were not in default on deed of trust); Rogowicz v. Taylor & Gray, Inc., 498 S.W.2d 352, 355-56 (Tex. Civ.App.—Tyler 1973, writ ref’d n.r.e.) (breach of warranty involving defects in foundation of house); Hunt v. Weems, 208 S.W.2d 423 (Tex.Civ.App.—Austin 1948, writ dism’d) (forcible detainer of apartment).

The court below relied on three court of appeals cases for its holding that “mental anguish is self-evident” and therefore recoverable in cases involving negligent property damage. 910 S.W.2d at 528-29. Those cases were Shade v. City of Dallas, 819 S.W.2d 578 (Tex.App.—Dallas 1991, no writ) (house flooded with sewage); Brown & Root, Inc. v. City of Cities Mun. Util. Dist., 721 S.W.2d 881 (Tex.App.—Houston [1st Dist.] 1986, no writ) (cracks in walls and foundation of home); and Parr Golf, Inc. v. City of Cedar Hill,718 S.W.2d 46 (Tex.App.—Dallas 1986, no writ) (business flooded with sewage). The rationales that Shade, Brown & Root, and Parr Golf offered for allowing mental anguish damages are either flawed, outdated, or inapplicable to the present case.^[2]

499*499 Parr Golf began from the premise that “in a simple negligence case proof of physical injury is necessary to sustain an award of damages for mental anguish,” and held that the claim for mental anguish could proceed on the sole grounds that the plaintiff had presented evidence of nausea, sleeplessness, and aggravation of his high blood pressure. Parr Golf, 718 S.W.2d at 48. This analysis failed to recognize that the quantum of proof—governed at that time by the physical manifestation rule, now by Parkway‘s evidentiary requirements—does not become relevant unless the plaintiff has established a breach of a duty for which mental anguish damages are recoverable. Because it confused proof of harm with liability, Parr Golf did not discuss the question that is before us today: whether a breach of the duty to exercise care in the operation of a drainage system so as not to negligently injure another’s property can give rise to damages for mental anguish.

The court of appeals in Brown & Root held, without fully explaining its reasoning, that the case fell within an exception to the physical manifestation requirement for situations where “mental anguish is self-evident in the nature of [the] act[].” Brown & Root, 721 S.W.2d at 884-85. It pointed out that mental anguish is recoverable for many intentional or willful torts, and mentioned a fact that might have been construed as evidence of willful misconduct—the defendants had failed to respond to numerous complaints about the gradual deterioration of the plaintiffs’ house—but never stated expressly that this evidence was the basis for awarding mental anguish damages. To the extent that Brown & Root was based on a finding that the defendants acted willfully, then even if correctly decided, it is not controlling in the present action for negligence only. Brown & Root can also be read, however, to mean that mental anguish is self-evident in the nature of merely negligent property damage. The court of appeals in Shade gave Brown & Rootthis interpretation, citing that case for the proposition that “[i]f the City were found to be negligent, [the plaintiff] could recover mental anguish damages.” Shade, 819 S.W.2d at 582. For the reasons discussed above, we disapprove of Shade and Brown & Root to the extent that they hold mental anguish is recoverable when it arises from negligent property damage.

Our holding today is in no way inconsistent with our recent decision in Parkway Co. v. Woodruff. In that case, we explicitly emphasized the limited nature of our inquiry: “[W]e are focusing only on the type of evidence required to support an award of mental anguish damages in cases in which recovery is allowed.” Parkway, 901 S.W.2d at 442. The Court did not find it necessary to consider whether mental anguish was recoverable for negligent property damage. The court of appeals had rested its decision on the legal insufficiency of the plaintiffs’ evidence of mental anguish, Parkway Co. v. Woodruff, 857 S.W.2d 903, 914-16 (Tex. App.—Houston [1st Dist.] 1993), and we simply affirmed on the same grounds. In fact, we hinted at today’s decision when we pointed out the distinction between the “disturbing or shocking injuries” for which mental anguish has traditionally been recoverable and mere negligent property damage, observing that “[w]hile the flooding of the Woodruffs’ home certainly disrupted their lives temporarily, under our substantive law this type of disruption will not support an inference that compensable mental anguish occurred.” Id. at 445.

Our decision today accords with the overwhelming majority of American jurisdictions. See RESTATEMENT (SECOND) OF TORTS § 911 cmt. e (1979) (“Compensatory damages are not given for emotional distress caused merely by the loss of … things….”); 1 DOBBS, LAW OF REMEDIES § 5.15(1) at 876 (2d ed. 1993) (“In general, the owner of damaged property cannot recover damages for emotional distress as an element of damage to the property.”); Shipley, Annotation, Recovery for Mental Shock or Distress in Connection with Injury to or Interference with Tangible Property, 28 A.L.R.2d 1070, 1078 (1953) (“[T]he courts in general appear to be extremely reluctant to allow recovery for mental disturbance occasioned by a merely negligent injury to chattels.”). Numerous states in recent years have considered claims for mental anguish on facts similar to the ones in this case. Although a few states 500*500 allow recovery in such cases, see Riggins v. Dixie Shoring Co., 577 So.2d 1060 (La.App.) (plaintiff witnessed damage to house during levelling), rev’d on other grounds, 590 So.2d 1164 (La.1991); Edwards v. Talent Irrigation Dist., 280 Or. 307, 570 P.2d 1169 (1977)(flooding of garden), most hold that as a matter of law mental anguish is not compensable in an action for negligent property damage where the plaintiff is not physically injured. See Hayes v. Newton Bros. Lumber Co., Inc., 481 So.2d 1123 (Ala.1985) (mobile home damaged by fire); Lubner v. City of Los Angeles, 45 Cal.App.4th 525, 53 Cal. Rptr.2d 24 (1996, rev.denied) (truck crashed into home destroying artworks made by plaintiffs); Dobbins v. Washington Suburban Sanitary Comm’n, 338 Md. 341, 658 A.2d 675 (1995) (flooding of home); Day v. Montana Power Co., 242 Mont. 195, 789 P.2d 1224 (1990) (restaurant damaged by leaking gas tanks); Smith v. Clough, 106 Nev. 568, 796 P.2d 592 (1990) (vehicle driven into house); Caprino v. Silsby, 226 A.D.2d 1078, 642 N.Y.S.2d 120 (1996) (home struck by vehicle); McMeakin v. Roofing & Sheet Metal Supply Co., 807 P.2d 288 (Okla.App.1990) (house collapsed when bricks piled on roof); Evans v. Mutual Mining, 199 W.Va. 526, 485 S.E.2d 695 (1997) (flooding of home); Blagrove v. JB Mechanical, Inc., 934 P.2d 1273 (Wyo.1997) (flooding of home). In Hawaii, the Supreme Court ruled at one point that mental anguish damages were recoverable as a foreseeable result of the negligent flooding of a house, see Rodrigues v. State, 52 Haw. 156, 52 Haw. 283, 472 P.2d 509 (1970), but the state legislature in 1986 reversed that policy, enacting a statute barring liability for negligent infliction of emotional distress based solely on damage to property, HAW.REV.STAT. ANN. § 663-8.9 (Michie 1995).

Finally, Likes’s pleadings attribute her mental anguish not only to the damaging of her property but also to “her feelings of insecurity both for her home, personal property and personal safety during times of rainfall.” Since we have determined that mental anguish is not recoverable based on actual past damage to property, a fortiori Likes may not recover for mental anguish based on fear of future damage to her personal property and her home. Nor may she recover damages for her fear of injury, since she was not actually injured. It has been established for over a century that “[a] person who is placed in peril by the negligence of another, but who escapes without injury, may not recover damages simply because he has been placed in a perilous position. Nor is mere fright the subject of damages.” Trott, 25 S.W. at 420; accord RESTATEMENT (SECOND) OF TORTS § 436A (1965).

Because the City did not breach any duty that would subject it to liability for Likes’s mental anguish if it were a private defendant, we do not decide whether mental anguish is a personal injury within the meaning of section 101.021 of the Tort Claims Act.

Under Certain Circumstances, Plaintiffs Can Recover Both Cost of Repair and Diminished Value

According to Parkway Co. v. Woodruff, 901 SW 2d 434 – Tex: Supreme Court 1995, Texas law does not permit double recovery. Southern Co. Mut. Ins. Co. v. First Bank & Trust, 750 S.W.2d 170, 173-74 (Tex.1988). When the prevailing party fails to elect between alternative measures of damages, the court should render the judgment affording the greatest recovery. See, e.g., Kish v. Van Note, 692 S.W.2d 463, 468 (Tex.1985) (rendering judgment for each separate element of damages in order to give the plaintiffs complete compensation for their losses).

Damages for diminution in value and damages for cost of repairs are not always duplicative. Diminution in value does not duplicate the cost of repairs if the diminution is calculated based on a comparison of the original value of the property and the value after repairs are made. See Ludt v. McCollum, 762 S.W.2d 575, 576 (Tex.1988). As the court of appeals recounted, however, the Woodruffs’ appraiser calculated the diminution in value by comparing the original value of the house to the value of the unrepaired house:

The Woodruffs’ expert appraiser testified that he had done two appraisals of market value as of September 19, 1983, one assuming the flooding, and attendant damages of a cracked slab, had occurred and one assuming it had not. The house was worth $240,000 before it flooded and without being subject to flooding. After it flooded and with the damages cause[d] by the flooding, it was worth $120,000.

857 S.W.2d at 913 (emphasis added). The Woodruffs also sought, and the jury awarded, $100,000 for the cost to repair the slab of the house. The Woodruffs were required to choose between the diminution in market value of the house and the cost of repair; they cannot recover both. Accordingly, we reduce the judgment for actual damages by $100,000.

Proving Value-The Property Owner Rule

The Property Owner rule allows a property owner to testify to the value of his own home, if his testimony is based on market value.

This is according to Natural Gas Pipeline Co. of Am. v. Justiss, 397 SW 3d 150 – Tex: Supreme Court 2012.  A property owner may testify to the value of his property. We explained in Porras v. Craig, 675 S.W.2d 503, 504 (Tex. 1984), that “[o]pinion testimony concerning [damages to land] is subject to the same requirements as any other opinion evidence, with one exception: the owner of the property can testify to its market value, even if he could not qualify to testify about the value of like property belonging to someone else.” We noted, however, that a property owner’s testimony must be based on market, rather than intrinsic or some other speculative value of the property. Id. at 505. We stated that “[t]his requirement is usually met by asking the 156*156 witness if he is familiar with the market value of his property.” Id.

Thanks to Dale Felton for this authority:  Presumption that owner will be familiar with his or her own property and know its value does not extend to reasonable cost of repairing owner’s property, particularly when those repairs are of technical or specialized nature. Necessity of total roof replacement and reasonable cost thereof are matters of specialized and technical nature. Accordingly, expert testimony is required to establish necessity and reasonableness of roof replacement. Wortham Bros., Inc. v. Haffner, 347 S.W.3d 356 (Tex. App.—Eastland 2011, no pet.).  The court said:

Some courts have held that evidence pertaining to the necessity and reasonableness of repair costs falls within the exclusive domain of an expert. See Legacy Motors, LLC v. Bonham, No. 02-07-00065-CV, 2007 WL 2693863, at *4 (Tex.App.-Fort Worth Sept. 13, 2007, no pet.) (mem. op.); Ha v. W. Houston Infiniti, Inc., No. 01-94-00884-CV, 1995 WL 516993, at *2 (Tex.App.-Houston [1st Dist.] Aug. 31, 1995, writ denied) (op. on reh’g) (not designated for publication); see also Executive Taxi/Golden Cab v. Abdelillah, No. 05-03-01451-CV, 2004 WL 1663980, at *1 (Tex.App.-Dallas July 19, 2004, pet. denied) (mem. op.) (stating that an estimate without the testimony of the person making the estimate or other expert testimony is no evidence of the necessity of the repair or the reasonableness of the costs of the repair) (citing Jordan Ford, Inc. v. Alsbury, 625 S.W.2d 1, 3 (Tex.Civ.App.-San Antonio 1981, no writ)). As a general rule, matters involving specialized or technical knowledge require expert testimony. See FFE Transp. Servs., Inc. v. Fulgham, 154 S.W.3d 84, 90-91 (Tex.2004). The necessity of subsequent, total roof replacements performed immediately after the work performed by and on behalf of Wortham Bros. and the reasonableness of the cost of the subsequent roof replacements are matters of a specialized and technical nature. Accordingly, we conclude that expert testimony was required to establish the necessity and reasonableness of the subsequent roof replacements.

We disagree with the trial court’s determination that the Haffners’ status as property owners qualifies them to offer an opinion on the necessity and reasonableness of repair costs. Under the ” Property Owner Rule,” a property owner is generally qualified to testify as to the value of his or her property even if he or she is not an expert and would not be qualified to testify as to the value of other property. Reid Road Mun. Util. Dist. No. 2 v. Speedy Stop Food Stores, Ltd., 337 S.W.3d 846, 852-53 (Tex.2011); see Porras v. Craig, 675 S.W.2d 503, 504 (Tex.1984). This rule is based on the presumption that an owner will be familiar with his or her own property and know its value. Reid Road Mun. Util. Dist. No. 2, 337 S.W.3d at 853. This presumption does not extend to the reasonable cost of repairing the owner’s property particularly when those repairs are of a technical or specialized nature.

The Haffners presented a great deal of evidence to support the trial court’s findings that the roof repairs performed by or on behalf of Wortham Bros. were deficient. Thus, the record contains evidence of the necessity of some subsequent repairs. However, there is no expert testimony that the roofing work by Wortham Bros. had to be completely removed and replaced. Furthermore, there is no competent evidence of the reasonableness of the costs of the subsequent roofing work performed by Campbell Construction and Roofing. In this regard, the Haffners’ testimony regarding the costs of the subsequent roofing work does not constitute evidence of the reasonableness of those costs.

The Haffners cite McGalliard v. Kuhlmann, 722 S.W.2d 694, 697 (Tex.1986), for the proposition that a factfinder can form its own opinion on damages based upon its own experience and common experience. An expert in McGalliard testified that the cost necessary to sufficiently repair a home would be $113,088.31. 722 S.W.2d at 696. However, the trial court, sitting as the factfinder, only awarded actual damages of $12,500. Id. at 695. The intermediate court of appeals modified the trial court’s damage award to $113,088.31 on the basis that the expert’s damage testimony was uncontroverted. Id. at 696. The supreme court reversed the intermediate court of appeals on the rationale that expert testimony does not establish any material fact as a matter of law even if the expert testimony is uncontroverted. Id. at 697. The supreme court held that the trier of fact is afforded considerable discretion in evaluating opinion testimony from an expert on the issue of damages. Thus, the holding in McGalliard applies to a situation where the factfinder awards a lesser amount of damages than indicated by the evidence. It does not stand for the proposition that the factfinder may award damages for the cost of repairs based upon its own experience and knowledge in the absence of competent evidence of damages.

The Haffners cite Terminix Int’l, Inc. v. Lucci, 670 S.W.2d 657, 664 (Tex.App.-San Antonio 1984, writ ref’d n.r.e.), in support of their contention that a homeowner may testify as to the reasonable cost of home repairs. The repairs at issue in Terminix constituted $50 for supplies used to make stop-gap, remedial repairs in the face of termite damage. 670 S.W.2d at 664. De minimis repairs of this nature are much different than the replacement of two recently installed roofs at a cost of several thousand dollars.

For similar authority consider Chuong Cam Ha v. W. Houston Infiniti, Inc., No. 01-94-00884-CV, 1995 WL 516993, at *1–2 (Tex. App.—Houston [1st Dist.] Aug. 31, 1995, writ denied):

Consider also that an entity may also make use of the property owner rule. “We hold that the Property Owner Rule is limited to those witnesses who are officers of the entity in managerial positions with duties related to the property, or employees of the entity with substantially equivalent positions and duties. Further, the Property Owner Rule falls within the ambit of Texas Rule of Evidence 701 and therefore does not relieve the owner of the requirement that a witness must be personally familiar with the property and its fair market value, but the Property Owner Rule creates a presumption as to both…LaBeff, however, was not an employee or officer of Speedy Stop. Nor did his affidavit set out facts showing he was personally familiar with the Property and its value and that his opinion was not substantively an expert opinion based on specialized knowledge, skill, experience, training, or education. Thus, the trial court did not abuse its discretion by excluding his opinion as to the Property’s diminution in value.”  Reid Rd. Mun. Util. Dist. No. 2 v. Speedy Stop Food Stores, Ltd., 337 S.W.3d 846, 849 (Tex. 2011).

And the property owner must be properly disclosed as an expert:

A witness giving such testimony must be properly disclosed and designated as an expert and the witness’s testimony is subject to scrutiny under rules regarding experts and expert opinion. See Seale, 732 S.W.2d at 669; Perry, 667 S.W.2d at 264; see also Asplundh Mfg. Div. v. Benton Harbor Eng’g, 57 F.3d 1190 (3d Cir.1995). Any other principle would allow parties to conceal expert testimony by claiming the witness is one whose opinions are merely for the purpose of explaining the witness’s perceptions and testimony. See generally Gregory P. Joseph, Emerging Expert Issues Under the 1993 Disclosure Amendments to the Federal Rules of Civil Procedure, 164 F.R.D. 97, 108 (1996) (noting that “there is no good reason to allow what is essentially surprise expert testimony,” and that courts “should be vigilant to preclude manipulative conduct designed to thwart the expert disclosure and discovery process”).

In order to recover actual damages for repair costs under the DTPA, the traditional rule is that the injured party must show that the repairs are necessary and the cost of repairs is reasonable. GATX Tank Erection Corp. v. Tesoro Petroleum Corp., 693 S.W.2d 617 (Tex.App.1985, writ ref’d n.r.e.). This traditional rule has recently been questioned, and there is some indication that the DTPA may not require proof of necessity and reasonableness. See Jacobs v. Danny Darby Real Estate, Inc., 750 S.W.2d 174, 176 (Tex.1988).

Carrow v. Bayliner Marine Corp., 781 S.W.2d 691, 693 (Tex. App.—Austin 1989, no writ)

Recovery of Physical Injury to Real Property

While some cases state that the cost of repair or the diminished value must be appropriate, this real estate lawyer, writes about claims specific to real property.  She writes that in real property, the measure of damages is controlled by whether the damage is permanent or temporary.  She also writes of an economic feasibility (total loss) exception and an extrinsic value of trees exception.  Her article is based on Wheeler v. Enbridge Pipelines, L.P.

Damages for Breach of Earnest Money Contract

Generally, the measure of damages for breach of contract to sell real estate is the difference between the contract price and the market value of the property at the time of the breach. Broady v. Mitchell, 572 S.W.2d 36, 42 (Tex. Civ. App.—Houston [1st Dist.] 1978, writ ref’d n.r.e.)

Conversion Damages vs DTPA Damages

The value of the converted property at the time of the wrongful taking is generally held to be the proper measure of damages.  Higgins v. Intraworld Dev. Corp., 498 S.W.2d 234, 236 (Tex. Civ. App.—Houston [1st Dist.] 1973, no writ).  Generally, the measure of damages for conversion is the fair market value of the property at the time and place of the conversion.R.J. Suarez Enterprises Inc. v. PNYX L.P., 380 S.W.3d 238, 242 (Tex. App.—Dallas 2012, no pet.) But see Tex. Bus. and Org. Code § 17.45(11)(DTPA)(allowing replacement cost).

Loss of Use Damages

When the loss of use damage is less than the cost to replace a vehicle, he may recover loss of use through trial even if he only seeks at trial to “recover the cost of buying a replacement car.”  Town E. Ford Sales, Inc. v. Gray, 730 S.W.2d 796, 804 (Tex. App.—Dallas 1987, no writ).  A party need not actually rent a vehicle to recover. Id. The case seems to overlook damages that were awarded even though a pleading did not support the recovery.

In Texas, a person whose car has been totally destroyed as a result of a tort may recover only the value of the car, while a person whose car is repairable may also recover for loss of use of the car. See Hanna v. Lott, 888 S.W.2d 132, 139 (Tex.App.—Tyler 1994, no writ); see also Pasadena State Bank v. Isaac, 149 Tex. 47, 228 S.W.2d 127, 128 (1950)  Especially when a plaintiff does not have the resources to repair a partially damaged vehicle, he can recover loss of use for more than two weeks.  Mondragon v. Austin, 954 S.W.2d 191, 194 (Tex. App.—Austin 1997, pet. denied). “In light of the above discussion and the facts of this case, we believe Austin is eligible to recover loss of use damages in excess of the two weeks it would have taken a mechanic to repair his car. Austin lost the use of his car because Mondragon, while intoxicated, negligently drove backwards down a street and collided with the car. The loss continued for more than a year because Mondragon and his insurance company chose to deny the claim.” Id. A defendant may plead failure to mitigate, but must prove it. Id.  Some courts may suggest that lost profits may be available for loss of use of a vehicle. Texas Farm Bureau Mut. Ins. Co. v. Wilde, 385 S.W.3d 733 (Tex. App.—El Paso 2012, no pet.).

We agree with this modern trend, and we now hold that the owner of personal property that has been totally destroyed may recover loss-of-use damages in addition to the fair market value of the property immediately before the injury. J & D Towing, LLC v. Am. Alternative Ins. Corp., 478 S.W.3d 649, 676 (Tex. 2016). The damages may not be awarded for an unreasonably long period of lost use. Id. A plaintiff may not recover loss-of-use damages for a period longer than that reasonably needed to replace the personal property. Id.

Partial Destruction Damages

Where personal property has been only partially destroyed, Texas law is clear as to direct and loss-of-use damages. The default rule for measuring direct damages is “the difference in the market value immediately before and immediately after the injury to such property at the place where the damage was occasioned.”²⁶ But this rule is not absolute. For example, where it would be economical and reasonable to repair the property, “the owner of the injured property may [instead] recover the reasonable costs of such replacements and repairs as are necessary to restore the damaged article to its condition immediately prior to the accident.”²⁷ Additionally, whether the owner recovers direct damages under the default rule or otherwise,²⁸ the owner may recover loss-of-use damages, such as the “pecuniary loss of the use of an automobile damaged in a collision.”