Unique Construction Defect Damages Mitigation Issues
| Jurisdiction | Colorado,United States |
| Citation | Vol. 44 No. 2 Pg. 33 |
| Pages | 33 |
| Publication year | 2015 |
Articles Construction Law
Unique Construction Defect Damages Mitigation Issues
By Ronald M. Sandgrund, Jennifer A. Seidman.
Construction Law articles are sponsored by the CBA Construction Law Section. They address construction-related issues. The coordinating editor and section encourage the submission of substantive law articles addressing issues of interest to practitioners in the field of construction law.
Coordinating Editor
James W. Bain of Benjamin, Bain & Howard, L.L.C., Greenwood Village—(303) 290-6600, jamesbain@bbhlegal. com
This article discusses unique damages mitigation questions that arise often during residential and commercial construction defect disputes, and offers suggestions on how to handle these issues during litigation.
Failure to mitigate damages is a standard defense raised nearly automatically in construction defect cases.[1] Although extensive Colorado case law generally discusses damages mitigation and a pattern jury instruction exists, the unusual fact patterns in construction defect disputes create unique damages mitigation issues. This article discusses three such issues. The first involves the sometimes blurred distinction between mitigation of damages and comparative negligence in construction defect suits and the question of whether the two doctrines are mutually exclusive. The second addresses what common construction defect fact patterns support a failure to mitigate damages defense and the factors that affect this analysis. The third relates to whether Colorado's Construction Defect Action Reform Act (CDARA)[2] preempts the failure to mitigate doctrine in construction defect cases, particularly a property owner's refusal to accept a construction professional's repair offer.
Mitigation of Damages in Colorado
A person injured by the wrongful or negligent acts of another, whether as the result of a tort or of a breach of contract, must exercise reasonable care and diligence to avoid loss or to minimize or lessen the resulting damage.[3]
Generally, the injured party has the duty to take reasonable steps under the circumstances to mitigate damages sustained.[4] Thus, injured parties "may not recover damages for injuries which they reasonably might have avoided."[5] This duty to mitigate arises from the "avoidable consequences" doctrine, [6] which is designed to discourage economic and physical waste.[7]
Various circumstances may limit a plaintiff's duty to mitigate damages.[8] Also, a failure to mitigate damages is excused if mitigation would require inordinate or unreasonable measures or if there were reasonable grounds for the failure to mitigate.[9]
A party's failure to mitigate is an affirmative defense that may be raised by an adverse party, who bears the burden of proving the defense.[10] A mitigation defense may be established by proving that the injured party failed to take reasonable steps to minimize the resulting damages.[11] However, unlike other affirmative defenses, "only rarely, if ever" will a failure to mitigate constitute a complete defense against a claim.[12] For this reason, an instruction setting forth the elements of and applicable affirmative defenses to a particular claim should almost never include a failure to mitigate as such a defense.[13]
Generally, what constitutes a reasonable effort to mitigate damages raises a question of fact.[14] A successful plaintiff may also recover as damages those expenses incurred in taking reasonable steps to mitigate damages.[15]
Failure to Mitigate and Comparative Fault as Mutually Exclusive Doctrines
Both the defenses of a failure to mitigate and comparative fault (negligence)[16] hinge on proof of a claimant's failure to exercise reasonable care.[17] However, a plaintiff has no duty to anticipate a tortfeasor's wrongful acts and, therefore, has no duty to mitigate damages until after the original injury has occurred.[18] Thus, the "doctrine of avoidable consequences is a damages principle [that] differs from the doctrine of contributory negligence, " as it "applies after a legal wrong has occurred, but while damages may still be averted, and bars recovery only for such damages."[19] Therefore, a failure to mitigate may be viewed as a claimant's duty to prevent "further" injury to himself or herself, while comparative fault involves a duty not to contribute to causing the "initial" injury.[20] However, some advocate applying proportionate fault principles to both pre-injury and post-injury conduct.[21] Also, a few jurisdictions have merged the avoidable consequences doctrine into their comparative and proportionate fault frameworks.[22] Nothing indicates that Colorado's legislature intended to do the same.
While timing generally differentiates a claimant's conduct as a failure to mitigate from comparative fault, [23] in some unique construction defect disputes, these distinctions may become blurred. For example, if a builder who improperly constructs a home's foundation recommends that a new homeowner not install irrigation within ten feet of the foundation walls to mitigate the risk of foundation damage, but the homeowner ignores this recommendation and later suffers foundation movement, the builder may argue that installing the irrigation system constitutes either comparative negligence or a failure to mitigate. The former characterization rests on the fact that the homeowner's conduct preceded the injury; the latter characterization is grounded on the fact that the builder's wrongful conduct created a known risk long preceding the homeowner's conduct. Regardless of which characterization is correct, the homeowner may be able to establish that the irrigation water did not substantially contribute to the movement, so the homeowner's actions do not constitute either comparative fault or a failure to mitigate.
Some wrongful conduct by a construction professional causes continuous damage, eliminating a specific time of injury, while also delaying manifestation of the damage. Thus, a hidden construction defect may cause property damage that reveals itself much later. This delay between defective construction, the resulting injury, and discovery of the defect or consequential damage may affect whether the claimant's intervening conduct should be deemed a failure to mitigate or comparative fault. As noted above, generally, a plaintiff must be aware that he or she has sustained injury before a duty to mitigate arises. However, even where the alleged mitigation failure occurs before the plaintiff knows of the damage, counsel may argue that in the case of latent defects, this does not convert a failure to mitigate into comparative negligence where the damage has already occurred. There is no controlling Colorado law on this point.
Practical Considerations Concerning Damages Mitigation and Comparative Fault
Both failure to mitigate and comparative fault are affirmative defenses that must be proven by the defending party.[24] Still, many lawyers believe that distinguishing between mitigation and comparative fault has practical consequences at trial and on appeal.
First, once a jury assesses percentage comparative fault, all damages under the Pro Rata Liability Act[25] are reduced by that percentage fault. By contrast, a jury will reduce a claimant's damages due to a failure to mitigate by the fixed dollar of damages the claimant failed to mitigate. In other words, while comparative negligence apportions losses between parties, the mitigation doctrine allocates the loss entirely to one party. This distinction may mean lower net jury damages awards if the jury considers only a failure to mitigate defense rather than a comparative fault defense. Nevertheless, as noted above, Colorado has not decided whether the Pro Rata Liability Act encompasses and subsumes the common law failure to mitigate defense.[26]
Conversely, the jury's focus when considering comparative negligence is the claimant's share of the blame in causing harm to himself or herself. In contrast, in evaluating a mitigation defense, the jury does not consider the claimant's blame for the original injury, but only whether an innocent victim of injury should have done something to reduce the extent of the injury. Some lawyers believe that this distinction may translate to higher net jury damages awards if the jury considers only a failure to mitigate defense, rather than a comparative fault defense founded on blame.
Second, the relative risks of reversible error for a comparative fault defense compared to a failure to mitigate defense may differ.[27] If error occurs in how comparative fault was allocated by the jury, such as fault being assessed to a party or non-party later found to have owed the plaintiff no legal duty, [28] a nearly complete retrial may be necessary for a proper fault allocation because the second jury may need to consider nearly all the same evidence of conduct, causation, and damages in recalculating the fault allocation. In contrast, if error occurs in the mitigation instruction, it is reasonable to conclude that a considerably more limited retrial on this very narrow damages issue would be necessary.
Third, defendants risk juror alienation by raising weak mitigation defenses, appearing to blame the victim. For example, class actions were filed in the mid-1990s about using floating concrete slab-on-grade floors over expansive soils.[29] One builder's trial strategy illustrated this problem when it argued that cracking and differential heaving of this slab flooring and the resulting damage to a home's interior finishes was caused by the homeowners' failure to mitigate their damages by: (1) planting and watering a single tomato plant within five feet of the home's foundation; and (2) failing to remove and replace (at significant cost) more than...
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