This question of diminished value is more complex than the parties or court wish to point out.

Henry ran into Oliver’s new Jeep. Henry’s insurance company paid about $15,000 to fix it. Oliver then sued for diminished value of about $9,000. Henry’s defense was that Oliver shouldn’t get diminished value because he had no intention of selling the car. The trial court denied summary judgment on that and an arbitrator found for Oliver. Henry appeals. The Court of Appeals affirms.

The opinion first explains that diminished value is compensable, though Henry hadn’t denied that. It then holds that a sale is not necessary in order to determine or make “actual” the diminished value. The cases do not explicitly say so. The Restatement might say so, depending on how you interpret it, but the court doesn’t interpret it that way. And “a victim should [not] be required to sell his vehicle in order to establish a claim.”

Well, no, unless that is an element of the claim; the argument assumes its own truth. But the bigger problem is that not requiring one party to sell now requires the other to buy now. If the accident hadn’t happened the value would remain in the car and would steadily erode until the car was sold; now it is converted into immediate wealth at immediate value. The claim here was that a buyer would pay only wholesale value because of the crash and that the difference between wholesale and retail is $9,000. But when Oliver eventually does sell his Jeep the difference between wholesale and retail is going to be a whole lot less than that. Oliver is being wildly overcompensated.

These things can probably be addressed by testimony but it would be nice to see somebody suggest that the issue is more than black and white. But it doesn’t look like either party here did so we don’t blame the court.

(link to opinion)

Here’s a question we’d assumed had been definitively answered about twenty-five years ago. Apparently not, or else it’s another example of people raising old questions they themselves just thought of. 

Bondwriter, a Fidelity agent, mistakenly issued a contractor’s bond without authority. The contractor knew of the mistake and returned it –  but had first made a copy, with which it was able to get a job since the property owner (the City of Flagstaff), which usually demanded an original, didn’t check to see whether it had one. The contractor didn’t finish the project; Fidelity decided it had to pay on the bond; then it sued Bondwriter for breach of contract and negligence. Bondwriter named the contractor and owner as non-parties at fault. 

After a bench trial the trial court ruled for Fidelity but allocated 95% of the fault to the contractor and Flagstaff on both the contract and negligence claims. Fidelity appealed, arguing that allocation of fault does not apply to contract.

The court of appeals agrees. 12-2506 does not mention contract; “fault,” which it does mention, isn’t a concept that applies in contract; the legislative history had nothing to do with contract.

This is probably the reason the case was published. Most of the long opinion deals with Bondwriter’s attempts to argue that it wasn’t at fault because Flagstaff “ratified” the contract or because it didn’t really breach the exact wording of its agency agreement. This makes slightly more sense when you know that the lower court had ruled before trial that the bond was invalid, someone having convinced it that a municipality can’t, by statute, make a bond claim unless it has the original. But Bondwriter, although it was apparenlty the “someone,” drew the wrong conclusions about what that meant to the case.

(link to opinion)

The question in this attorney-fee dispute is whether Mulcaire “prevailed” in its mandamus action. The court concludes that it didn’t but did.

Mulcaire, a contractor, lost a bid for a City of Cottonwood job and sued to force a rebid. The City then fired the winning bidder and announced that it would do the work itself – in part to avoid this lawsuit – and moved to dismiss the case as moot. After an evidentiary hearing, the trial court instead found that Mulcaire would have won had the City not already rescinded the winning contract. It entered what purported to be a judgment on the merits in Mulcaire’s favor even though no relief was granted. That of course makes no sense – a mandamus that doesn’t mandate anything – except to set up what came next: a judgment awarding Mulcaire its fees.

The prevailing party in a statutory mandamus is entitled to fees (12-2030). The City appealed the fee award, arguing that Mulcaire hadn’t prevailed. (It didn’t appeal the “merits” award, since it won the award against it, so that nonsense is not on review.)

The Court of Appeals – after examining the nature of mandamus, the legislative history, and other fee statutes – concludes that to get fees you have to get an actual mandamus, i.e., an order requiring the government to do something. Which Mulcaire didn’t.

Except that it wins anyway. The court says that a party “cannot by its own voluntary conduct ‘moot’ a case and deprive a court of jurisdiction.” For this it cites two cases; one it can’t have read since that case says nothing about mootness, the other comes closer to supporting the City than Mulcaire. Anyway, the court says, not awarding fees here would “undercut the . . . purpose” of the statute that the court has just said doesn’t support an award here. And mandamus is equitable and there are “unique circumstances” in this case and – well, you know the routine. The opinion affirms the fee award.

So what was the basis of the trial court’s fee award? Its inherent equitable power? What about the cases saying fee awards are statutory? Why does the court think the Legislature enacted the statute in the first place?

Some courts that invoke “equitable principles” actually show some grasp of them. Others use the phrase as code for “we can do anything we want.” We report, you decide.

(link to opinion)