How Are Damages to Real Property Calculated Under Tennessee Law?

Sometimes I like to write about specific issues that have come up in my own law practice.  When I confront certain issues, I assume there are other attorneys and individuals who deal with the same concerns.  One of those issues I recently addressed is how damages are calculated when there is damage to real property.  Tennessee courts have been fairly consistent on this subject over the years.  The Tennessee Court of Appeals’ decision of Fuller v. Orkin, 545 S.W.2d 103 (Tenn. Ct. App. 1975), discussed the appropriate measure of damages for real property as follows: 

[T]he measure of damages for injury to real estate is the difference between the reasonable market value of the premises immediately prior to and immediately after injury but if the reasonable cost of repairing the injury is less than the depreciation in value, the cost of repair is the lawful measure of damages.  Of course, the trier of fact can also take into consideration the reasonable cost of restoring the property to its former condition in arriving at the difference in value immediately before and after the injury to the premises.

Another resource Tennessee attorneys use on these kinds of issues are the Tennessee Pattern Jury Instructions.  These are the instructions that most Tennessee judges use to advise the jurors of the law in a case.  The current 2014 Tennessee Pattern Jury Instruction on this specific issue provides as follows:

T.P.I.—CIVIL 14.45 Damage to Real Property

The measure of damage to real property is the lesser of the following amounts:

1 The reasonable cost of repairing the damage to the property; or

2 The difference between the fair market value of the premises immediately prior to and immediately after the damage.

Obviously, other kinds of damages can be appropriate depending on the type of case and whether there is a specific statute on the issue that enhances or multiplies the damages.  However, the general rule, discussed above, is relatively clear and well established for Tennessee.