Diminution in Value and Repair Costs Awardable in Water Run-Off Claim

Like some construction claims, water run-off claims can involve many types of damages, which may be caused by many different parties.  In a July 2012 water run-off case, a homeowner was allowed to recover damages for both diminution in value and repair costs.  While such damages would be considered duplicative in normal scenarios, they were permitted in this water run-off case. 

In addition, the case reveals the importance of providing notice of potentially liable non-parties.  In connection with tort reform in Georgia, juries must consider the contribution of non-parties to a plaintiff’s damages.  But in order for defendants to take advantage of this rule, defendants must provide notice under O.C.G.A. § 51-12-33(d).  As demonstrated by this case, failure to provide this notice can be detrimental to defendants.

Background

The case arose out of the construction of a supermarket near Homeowner’s property.  According to the Homeowner, the construction resulted in a four-fold increase in water run-off on Homeowner’s property.  The increased run-off resulted in erosion and other significant damages to Homeowner’s property.

The jury heard evidence of diminution in value and projected costs necessary to protect the property from future harm.  They also heard about Homeowner’s personal strife in dealing with the run-off problem, which resulted in “injury to his peace of mind and feelings.”  In the end, the jury found Developer liable and awarded Homeowner almost $1 million, plus attorney fees, costs, and punitive damages.

Analysis

Developer claims that the jury award, which included both diminution-in-value damages along with future repair costs, resulted in impermissible duplication.  But as explained by a Supreme Court opinion, there are certain situations in which recovery of diminution damages and repair costs would be permissible.

In such cases, notwithstanding remedial measures undertaken by the injured party, there remains a diminution in value of the property, and an award of only the costs of remedying the defects will not fully compensate the injured party.

As a result, the court allowed Homeowner to recover damages for diminution in value in addition to future remediation costs.

Second, Developer argued that the jury should have apportioned some of the damages to certain non-parties – thereby reducing damages recoverable from Developer.  As noted above, the court did not require apportionment of damages because Developer did not provide the statutory notice required by O.C.G.A. § 51-12-33(d).

Negligence or fault of a nonparty shall be considered if the plaintiff entered into a settlement agreement with the nonparty or if a defending party gives notice not later than 120 days prior to the date of trial that a nonparty was wholly or partially at fault; and (2)[t]he notice shall be given by filing a pleading in the action designating the nonparty and setting forth the nonparty’s name and last known address, or the best identification of the nonparty which is possible under the circumstances, together with a brief statement of the basis for believing the nonparty to be at fault.

Since Developer did not file the notice required by this statute, the jury was not required to apportion the fault among non-parties.

Developer argued that the rule only applies to named non-parties, not unnamed non-parties.  Based on this argument, the jury should have considered the fault of unnamed non-parties.  The court, however, rejected Developer’s argument.  The above-cited rule “provides the mechanism by which the defendant exercises its statutory right to have such non-party tortfeasors presented to the jury.”  The failure to comply with the statutory mechanism effectively resulted in a waiver of Developer’s right to apportionment of damages among non-parties.

Leave a Reply

Your email address will not be published. Required fields are marked *