In a case that will be of interest to most equipment rental companies, In J & D Towing, LLC v. Am. Alternative Ins. Corp., the Texas Supreme Court recently held that an owner of personal property may recover loss-of-use damages for totally destroying property in Texas. See 59 Tex. Sup. Ct. J. 214 (Tex. 2016), 2016 WL 91201, at *1 (Tex. Jan. 8, 2016). The Court's recent decision resolved an appellate split in allowing recovery for loss of use damages, as consequential loss, when there is a total loss to property in addition to the fair market value of that property.Loss-of-use damages are often appropriately expressed in terms of consequential damages. Loss-of-use damages typically compensate a property owner for damages that result from "a reasonable period of lost use of personal property, such as the amount of lost profits caused by the owners inability to use the personal property in its business. Loss-of-use damages can be the cost of renting substitute property, or in the case of equipment rental companies, it can take the form of the rental value of the owners equipment. However there is a limitation: A plaintiff may not recover loss-of-use damages for a period longer than that reasonably needed to replace the personal property. As a result, Texas is now in line with a majority of jurisdictions that allow a plaintiff to recover the value of the property, as well as interest on the loss-of-use damages and compensation for loss of use in a total-destruction case.
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