The word “stigma” is defined in the dictionary as a mark of shame or discredit. Normally we associate this word with people, but property can suffer from a similar stain. It seems like common knowledge that when you are involved in a motor vehicle collision and your car is damaged, that even when it is fixed, it no longer has the same value. Once you disclose that it has been involved in an accident, it is worth less to a buyer due to the simple fact that it was previously damaged. This is referred to as stigma damage associated with a previous accident.
Stigma damages differ from diminished value of a vehicle. Diminished value refers to physical damage, for example frame damage, to a vehicle that prevents the vehicle from ever being repaired to its pre-loss condition.
Stigma damages are recoverable in tort. In other words, if an accident was not your fault and your car was wrecked, you are entitled to recover from the person that hit you the difference between the value of your vehicle immediately before the accident and the value of your vehicle immediately after it was fixed. If they were uninsured/underinsured, then your own uninsured/underinsured motorist coverage applies, if available and not specifically excluded in your policy.
Defense attorneys like to refer to the case of Moeller v. Farmers to argue that Washington courts disfavor awarding damages for stigma. Moeller, however, does not stand for the proposition that stigma damages are disfavored outside of the context of interpreting insurance contracts. In Moeller, the court was interpreting an insurance contract and reading coverage into an ambiguity. Within Moeller, the court refers to a New Mexico case that in turn cites additional cases similarly interpreting insurance contracts and determining whether to super-impose stigma damages into the contracts’ promises to “repair and replace.” It’s not surprising that courts would be reluctant to do so in such a context (i.e., negotiated contract).
When pursuing a claim against the person that hit you, all applicable damages should be explored. Stigma damages are capable of calculation and should be awarded with sufficient proof. This has long been the case in Washington with respect to all kinds of property damage: “The primary principles to be applied in awarding damages for negligent injuries to property is that the owner shall have actual monetary compensation for the loss sustained. If the property is a total loss the measure of damages is the value of the property destroyed or damaged. This is its market value, if it has a market value. If the property is damaged but not destroyed, the measure of damages is the difference between the market value of the property before the injury and its market value after the injury.” McCurdy v. Union PAc. RR, 68 Wn.2d 457, 467 (1966).
Recently, the court in Ibrahim had an opportunity to discuss the issue: “…’loss of value’ and ‘diminished value.’ The two are not synonymous. ‘Diminished value’ is a term of art, apposite only when a vehicle cannot be restored to its preloss physical condition. It is undisputed that Ibrahim’s vehicle was restored to its pre-loss physical condition…..Ibrahim does have a viable claim for stigma damages against the underinsured motorist. When a plaintiff’s personal property is harmed but not destroyed, the measure of damages may be calculated as the loss in the market value of the property following the harm…. Ibrahim’s vehicle was harmed but not destroyed, and the market value lost is coextensive with the stigma damages incurred. Accordingly, Ibrahim is ‘legally entitled to recover’ stigma damages from the underinsured motorist as a matter of tort law.” Ibrahim v. AIU, 312 P.3d 998 (2013). Unfortunately, he was pursing the claim against his insurance, not the uninsured motorist, and his policy had contracted around stigma damage by specifically omitting such coverage.
Stigma damages are consistently awarded in various areas of damage to property: see Mayer v. Sto Industries, 156 Wn.2d 677, 132 P.3d 115, 124 (2006) (Sto argued that the trial court erred in awarding the Mayers “stigma damages,” damages for the home’s diminished value. However, where the damage to real property is permanent, a plaintiff is entitled to recover, not only for the costs of restoration and repair, but also for the property’s stigma); See also Pugel v. Monheimer, 83 Wn.App. 688, 692, 922 P.2d 1377 (1996) (determining that withdrawal of building’s lateral support permanently damaged marketability); see also Grant v Leith, 67 Wn.2d 234, 237, 407 P.2d 157 (1965) (sustaining an award for restoration and permanent depreciation. The Court of Appeals noted that “[t]he Mayers presented unrebutted expert testimony that in addition to the repairs, they had suffered a permanent loss because they will have to disclose that the home is sided with EIFS, a known defective product.” 123 Wn.App. at 464, 98 P.3d 116. We affirm the Court of Appeals on the trial court’s award of stigma damages”).