Loss Of Use Claims

Fort Worth Insurance Lawyers and those in Saginaw, North Richland Hills, Benbrook, Lake Worth, Arlington, and other parts of Tarrant County need to know the claims that allow for recovery of “loss of use.”
The Corpus Christi Court of Appeals issued an opinion in 1988, that gives some insight into this element of loss and the types of cases where it is recoverable. The style of the case is, Chemical Express Carriers, Inc. v. French. Here is some background.
The claim arises out of a situation where some airport fuel was contaminated. French and others named in the lawsuit were the operators of the facility where the contamination occurred. The trial court ruled in favor of French and this appeal followed.
On November 9, 1981, Chemical Express made a delivery of jet fuel to Young’s Flying Service. Young’s had three tanks next to each other where it stored fuel: two tanks contained grades of fuel suitable only for use in jets; and one tank contained a grade suitable for use in propeller driven aircraft.
One of Young’s employees directed a Chemical Express fuel truck to one of the jet tanks for a routine delivery of fuel. After filling the tank there was an excess of fuel in the truck and the Chemical Express driver emptied the remainder of the jet fuel into a tank designated for non-jet fuel. Chemical Express did not dispute their negligence in this situation.
When a pilot finally noticed the contamination, the aircraft involved in this lawsuit had already been flown for varying times on the contaminated gas.
Pearson is an insurance agent who used one of the planes flown on contaminated gas in his business. He depended on the plane to ferry his clients and their accountants and attorneys back and forth from their offices in diverse parts of the state to Pearson’s office, where paperwork connected to his business was processed. After learning of the contamination, Pearson took his plane to his aircraft mechanic who advised Pearson that any engine run on contaminated fuel should be replaced with a new engine. While his engines were being replaced, Pearson was unable to find a substitute aircraft suitable for conducting business in the normal manner. Pearson’s aircraft had been specifically suited to carry his clients in comfort, and his business suffered without the aircraft.
The trial court had awarded Pearson $40,500 for his loss of use of his aircraft due to the contamination and resulting loss of use while the engines were being replaced.
Pearson testified that he used his aircraft to facilitate his business deals with clients residing more than 300 miles from Harlingen, comprising 85% of his total clientele. He needed the airplane on constant standby, so that it would be available wherever a client was ready. Pearson would then fly to the client’s city and ferry the client, his accountants and his attorneys to Pearson’s Houston office and back, to discuss the deal with Pearson’s attorneys and sign the necessary documents.
Because of the age and wealth of his clientele, Pearson needed a pressurized cabin class aircraft with a stair door and comfortable seating. Pearson testified that he was not able to find an adequate substitute aircraft for rent during the six week period. He further stated that, even if one had been available, a rented aircraft would have “ruined the finesse and casualness we needed to get the wealthy client involved.”
As the result of being deprived of the use of his aircraft, Pearson claims to have lost all of his out-of-town business for that period.
In evaluating the value of this “loss of use” claim, the court stated that, “Generally, the correct measure for loss of use damages is the reasonable rental value of the property or a substitute.” But it also stated the law in saying, “However, it is not a prerequisite to recovery of damages that the plaintiff actually rent a substitute during the period of the loss of use.” Texas law also says that “Latitude is allowed in determining damages where there is no precise measurement.”
Chemical Express argued that the extent of Pearson’s business losses as a result of a six week loss of use of his airplane was unforeseeable and should not be allowed in damages. The court noted that Chemical Express was confusing the foreseeability of the injury with the foreseeability of the extent of the injury. The foreseeability element of proximate cause requires only that the injury be of such general character as might reasonably have been anticipated. It was clearly foreseeable that negligently contaminating aviation fuel might cause damage to, and loss of use of, commercial aircraft, and thus loss of profits to businessmen who regularly depend on their aircraft. Simply because Pearson was a highly successful businessman whose business was susceptible to unusually high losses even for short term loss of use of his airplane is no reason to deny or limit his recovery.
This case shows a way of recovering “loss of use” that is beyond what most attorneys are use to and thus is a valuable case to reference in the appropriate situation. An experienced Insurance Law Attorney should always be consulted when making claims so that all potential recoveries are made.