Mathias, J.
Shield Global Partners-G1, LLC (“Shield”) appeals the judgment of the Monroe Circuit Court in favor of Lindsay Forster (“Forster”) in Shield’s negligence action against Forster seeking damages for the inherent diminished value of a motor vehicle damaged in an accident that was Forster’s fault. Shield presents two issues for review, which we restate as: (1) whether the trial court erred as a matter of law by concluding that Indiana does not recognize damages for inherent diminished value; and (2) whether the trial court clearly erred by concluding that Shield did not present evidence sufficient to support its claim for diminished value damages.
We reverse and remand.
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Shield first argues that the trial court erred as a matter of law by concluding that Indiana does not permit the recovery of inherent diminished value of personal property, what the trial court referred to as “stigma” damages. The parties agree that the applicable law was set forth in the case relied on by the trial court, Wiese-GMC, Inc. v. Wells, which summarized the law of damages as follows:
[T]he fundamental measure of damages in a situation where an item of personal property is damaged, but not destroyed, is the reduction in fair market value caused by the negligence of the tort feasor. This reduction in fair market value may be proved in any of three ways, depending on the circumstances. First, it may be proved by evidence of the fair market value before and the fair market value after the causative event. Secondly, it may be proved by evidence of the cost of repair where repair will restore the personal property to its fair market value before the causative event. Third, the reduction in fair market value may be proved by a combination of evidence of the cost of repair and evidence of the fair market value before the causative event and the fair market value after repair, where repair will not restore the item of personal property to its fair market value before the causative event.
626 N.E.2d 595, 599 (Ind. Ct. App. 1993) (emphases added), trans. denied. Although the parties agree that this language controls, they disagree on the precise meaning of this language and how it applies in the present case. This, of course, is a question of law that we review de novo. See Koch, 996 N.E.2d at 369.
Shield argues that, under Wells, damages for diminished value are recoverable whenever an item of property suffers a decrease in fair market value despite being fully repaired. Forster argues that there is no diminished value when the property is fully repaired. The trial court concluded that Shield’s claim for inherent diminished value, what it referred to as “stigma of defect” damages, is not recognized in Indiana law for property which is not permanently damaged. We believe this misreads Wells.
The Wells court did not hold that diminished value damages are recoverable only when the property is permanently damaged. Instead, it held that diminished value damages are recoverable when “repair will not restore the item of personal property to its fair market value before the causative event.” Wells, 626 N.E.2d at 599. We read this to mean that, even if the repair restores the property to its previous condition, damages may still be recovered if there is a resulting loss of fair market value to the property as a result of it having been damaged and then repaired.
Our reading of Wells comports with the economic reality that property that has been damaged and repaired often has a lesser fair market value than property that was never damaged in the first place. This is especially true in the case of automobiles, where numerous online services, including Carfax, allow anyone to easily check to see if an automobile has been involved in an accident. Automobiles that have been involved in accidents, even if they have been successfully and fully repaired, usually have a diminished value. Indeed, all other things being equal, few if any would prefer a car that has been in an accident, even if fully repaired, to one that has never been in an accident, unless the repaired car was available at a lower price.
As stated in Wells, “the fundamental measure of damages in a situation where an item of personal property is damaged, but not destroyed, is the reduction in fair market value caused by the negligence of the tort feasor.” Id. The cost of repair is an adequate measure of damages only when the repair restores the property to its fair market value before the damage. Id. In cases where the repair will not restore the property to its pre-accident value, the reduction in value may be proved by a combination of evidence of the cost of repair and the difference between the fair market value of the property before and after the accident. Id.
Because the trial court erred regarding the applicable law, we could reverse on this ground alone, as the court viewed the evidence from in incorrect legal perspective. But the trial court, in our opinion, also clearly erred with regard to the evidence of damages submitted by Shield.
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Conclusion
The trial court erred by concluding that Shield could not recover damages for diminished value because the Truck had been successfully repaired. It then compounded this error by ignoring the uncontroverted evidence that the Truck had a diminished value as a result of being involved in an accident and being repaired. We therefore reverse the judgment of the trial court and remand for proceedings consistent with this opinion.
Kirsch, J., and Bailey, J., concur.