May a homeowner recover for “stigma damage”? The wrecked car syndrome applied to South Carolina Construction Law

Over the past ten years, my construction defect practice has led me to believe that most lawsuits arise over some sort of condition which is perpetuated by public sentiment. EIFS and Mold cases served to create an entire niche of experts, or professional witnesses equipped with equipment of all kinds, some being more sophisticated than others (The individuals and their equipment). The increase in publicly condemned products has led entire neighborhoods to hire inspection teams who find defects or, deviations, perhaps from “industry standards”, architectural plans, and other standards of care.

When these deviations cause physical damage to the tangible, or physical property, a construction case can be actionable for monetary damages. The issue I would like to ponder today, however, involves those situations when there is truly minimal, or no physical damage resulting from a ridiculed product or deviation from the industry norm. Some owners file suit claiming that there is a certain “stigma” attached to their home and this will not allow them to enjoy it, or resell it.

South Carolina case law does not provide specifically for the claim of stigma damages and the prevailing case law is only clear that some damage, albeit temporary, must be a pre-requisite to a monetary award.

Under South Carolina law, “[t]he general rule is that in case of an injury of a permanent nature to real property … the proper measure of damages is the diminution of the market value by reason of that injury, or in other words, the difference between the value of the land before the injury and its value after the injury. Where (defective construction practices or products) result in a temporary or non-permanent injury to real property, the injured landowner can recover the depreciation in the rental or usable value of the property caused by the pollution.” Yadkin Brick Co., Inc. v. Materials Recovery Co., 339 S.C. 640, 529 S.E.2d 764 (Ct. App. 2000).
Where the injury is temporary, the landowner can recover the depreciation in the rental or usable value of the property caused by the injury. Peoples Federal Savings and Loan Ass’n of South Carolina v. Resources Planning Corp., 358 S.C. 460, 596 S.E.2d 51 (2004).

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