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Although you may have heard a good deal about the Sims v. Allstate verdict rendered in favor of Allstate in its contention that it need not pay first party diminished value claims, I am certain you have heard nothing about the Allgood v. Meridian decision. Rendered the day before Sims, an Indiana Court of Appeals reversed the trial court’s dismissal of Allgood’s suit and allowed it to go forward against her insurer on exactly the same issue (first party claim for diminished value). Allgood v. Meridian, 807 N.E.2d 131 (In. Ct. App. 2004).

The Sims decision was rendered April 29, 2004. The Allgood decision was issued April 28, 2004. I have waited almost an entire year to see if the Allgood ruling would garner the same fanfare and media attention that the Allstate case was given. In fact, it has received no attention, whatsoever, and was not even mentioned in various articles on the subject of diminished value published soon after the Sims verdict.

Notably, Auto Body Repair News published “Allstate Wins Diminished Value Ruling in Illinois” in its July 2004 issue, and the article cited other states whose recent decisions were alleged setbacks for diminished value. Not only did the ABRN article fail to mention the Allgood decision, when I called the author to confirm certain information about the other decisions, he told me he would look into the questions raised and call me back. I’m still waiting.

One of the issues I needed to have clarified was the author’s assertion that there existed a similar decision in Ohio [precluding diminished value from recovery]. In its vagueness, this statement is misleading. Initially, the alleged “Ohio decision”, while rendered in Ohio, applied Kentucky substantive law. In other words, although it was procedurally brought in Ohio, because that is where the defendant was located, the decision was based upon the law of Kentucky. To say that this is an Ohio decision without clarification implies that it was decided using the law of the State of Ohio. In fact, Ohio courts (applying Ohio law) have not spoken on a first party claimant’s ability to recover diminished value from his or her own carrier.

Secondly, the use of the mere expression “claim for diminished value” or “diminished value” fails to identify a very important component: Is the claim made by a first party or a third party? The law in a single state can be (and often is) different depending on the status of the claimant. The widely publicized opinions have all been first party diminished value cases. They have not involved claims brought by third parties seeking recovery.

These are important distinctions and glossing over them creates confusion. Ok, that’s a nice way of saying that failing to make these distinctions is, intentionally or not, misleading.

From now on, I expect everyone to identify diminished value claims as first party or third party, and if you say that a decision was rendered in X state court, I can assume the substantive law of that jurisdiction was applied. There. Now that I have set the rules, go on reporting and sin no more.