AIGARS REZEVSKIS, INDIVIDUALLY AND AS REPRESENTATIVE OF ALL PERSONS SIMILARLY SITUATED, APPELLANT,
v.
THE ARIES INSURANCE CO., APPELLEE
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Rezevskis sought to recover diminished value damages from his auto insurer following hurricane damage to his car. The court affirmed dismissal of his complaint, holding that an insurance policy containing a "repair or replace" limitation does not cover loss in resale value resulting from the stigma of prior damage.
The court held that the policy's "repair or replace" limitation permits no reasonable interpretation other than restoration to substantially the same pre-loss condition, and does not include compensation for diminished resale value resulting from market psychology regarding previously damaged vehicles.
[1] An insurance policy must be construed in accordance with its plain meaning when the policy is unambiguous.
[2] The plain meaning of "repair or replace" in an insurance policy limits the insurer's obligation to the cost of restoring the property to its pre-loss condition.
Previewing 2 of 4 headnotes on this case. FLexlaw’s editorially structured points of law — every proposition, pinpointed — are reserved for members.
Join FLexlaw to unlock all legal intelligence“An insurance policy governs the rights and obligations of the parties thereto, and the policy must be construed in terms of its plain meaning, where, as here, the policy is unambiguous.”
Establishes the foundational rule that unambiguous insurance policies are interpreted according to their plain meaning.
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Join FLexlaw to unlock all legal intelligenceRezevskis filed a claim under an Aries Insurance auto policy for diminished value of his car following damage from Hurricane Irene. The policy limited…
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SHEVIN, Judge.
Aigars Rezevskis appeals a trial court order dismissing with prejudice his complaint for failure to state a cause of action. We affirm.
Rezevskis filed the action to recover under an auto insurance policy with The Aries Insurance Company for the diminished value of his car following damage resulting from Hurricane Irene. The Aries policy provides, in pertinent part:
Our limit of liability will be the lesser of:
1. The actual cash value of the stolen or damaged property less the applicable deductible shown in the Declarations, up to the limit of $35,000.
2. The amount necessary to repair or replace the property with other of the like, kind and quality.
(Emphasis added). Aries refused to pay that claim contending that the policy did not provide for diminished value coverage. We agree with Aries’s contention.
An insurance policy governs the rights and obligations of the parties thereto, and the policy must be construed in terms of its plain meaning, where, as here, the policy is unambiguous. Florida Residential Prop. & Cas. Joint Underwriting Ass’n v. Kron, 721 So. 2d 825 (Fla. 3d DCA 1998); American Mfrs. Mut. Ins. Co. v. Horn, 353 So. 2d 565 (Fla. 3d DCA 1977), cert. denied, 366 So. 2d 885 (Fla.1978).
In common usage, “repair” means “to restore by replacing a part or putting together what is torn or broken” or, stated slightly differently, “[t]o bring back to good or useable condition.” There is no concept of “value” in the ordinary meaning of the word. Ascribing to the words “repair or replace” an obligation to compensate the insured for things which, by their very nature, cannot be “repaired” or “replaced” would violate the most fundamental rules of contract construction.
Carlton v. Trinity Universal Ins. Co., 32 S.W. 3d 454, 464 (Tex.App.2000)(footnotes omitted). Pursuant to the “repair or replace” limitation of liability in the Aries policy, the insurer’s responsibility is limited to the amount necessary to return the car to substantially the same condition as before the loss. Nowhere does that obligation include liability for loss due to “a stigma on resale resulting from ‘market psychology that a vehicle that has been damaged and repaired is worth less than a similar one that has never been damaged.” Carlton, 32 S.W. 3d at 465. The Aries policy’s express provision that the insurer’s responsibility is limited to the amount necessary to “repair or replace” permits no other reasonable interpretation. Thus, the diminished value resulting from damage not susceptible to repair or replacement does not fall within the insurer’s obligation under the policy.
Rezevski’s reliance on Arch Roberts & Co. v. Auto-Owners Ins. Co., 305 So. 2d 882 (Fla. 1st DCA 1974), and Auto-Owners Ins. Co. v. Green, 220 So. 2d 29 (Fla. 1st DCA 1969), is misplaced. The Arch Roberts court determined that the insurer fulfilled its policy obligation by offering to repair the car; the court did not obligate the insurer to compensate insured for “diminished value.” In Green, the court held that an insured was not required to accept the proposed repairs and execute a release when there was a possibility of undisclosed damage to the vehicle and the release was not conditioned upon insurer’s payment for such further repairs. Gh'een merely decided the release issue; it did not address the issue before us.
Accordingly, we hold that the trial court properly dismissed the case as Aries is not responsible for the diminished value of insured’s car. Affirmed.
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Siegle v. Progressive Consumers Ins. Co., 819 So. 2d 732 (Fla. 2002)…reted to cover diminished value. All three District Courts of Appeal that have been faced with the issue before us today have held that the disputed policy language does not provide coverage for diminished value. In Rezevskis v. Aries Insurance Co., 784 So. 2d 472 (Fla. 3d DCA 2001), the court stated: Pursuant to the “repair or replace” limitation of liability in the Aries policy, the insurer’s responsibility is limited to the amount necessary to return the car to substantially the same condition as before t…
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Siegle v. Progressive Consumers Ins. Co., 788 So. 2d 355 (Fla. 4th DCA 2001)…urt in Carlton, have concluded that the language in these types of policies is not ambiguous and simply does not obligate the insurer to pay for reduction in market value after completing a quality repair job. See, e.g., Rezevskis v. Aries Ins. Co., 784 So. 2d 472 (Fla. 3d DCA 2001)(adopting the rationale expressed in Carlton); Johnson v. State Farm Mut. Auto. Ins. Co., 157 Ariz. 1, 754 P. 2d 330 (Ariz.Ct.App.1988); Ray v. Farmers Ins. Exch., 200 Cal.App.3d 1411, 246 Cal.Rptr. 593 (1988). Because of the sign…
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Orkin Exterminating Co., Inc. v. DelGUIDICE, 790 So. 2d 1158 (Fla. 5th DCA 2001)…ity, does not obligate the insurer to additionally provide diminution damages after it completes a “first-rate repair” which returns the vehicle to its pre-accident level of appearance, performance and function. In Rezevskis v. Aries Insurance Co., 784 So. 2d 472 (Fla. 3d DCA 2001), the third district similarly held that such a “repair or replace” clause in a motor vehicle policy does not place on the insurer the further obligation to pay for the diminution in value caused by the market psychology that a veh…
Previewing 3 of 4 citing cases — full citator treatment, depth of discussion, and citing context are member features.
Join FLexlaw to unlock all legal intelligenceAuthorities Cited
- Am. Mfrs. Mut. Ins. Co. v. Horn, 353 So. 2d 565 (Fla. 3d DCA 1977)
- ARCH Roberts & Co. v. Auto-Owners Ins. Co., 305 So. 2d 882 (Fla. 1st DCA 1974)
- Fla. Residential Prop. & Cas. Joint Underwriting Ass'n v. Kron, 721 So. 2d 825 (Fla. 3d DCA 1998)
- Auto-Owners Ins. Co. v. Green, 220 So. 2d 29 (Fla. 1st DCA 1969)