Chapter 12-1 Mitigation of Damages

• Jurisdiction: United States

12-1 Mitigation of Damages

The duty to mitigate damages, sometimes called the doctrine of avoidable consequences,¹ reduces the damages recoverable by a plaintiff if the defendant can plead and prove that the plaintiff failed to act reasonably and limit the extent of loss.² Mitigation of damages is distinct from contributory negligence. Contributory negligence addresses conduct which caused or contributed to cause the losses claim; mitigation deals with post-occurrence negligence that prolonged or enhanced the extent of dam-age.³ Failing to wear a seatbelt does not cause the motor vehicle accident but it does cause or contribute to cause the personal injuries sustained in the wreck and is thus contributory negligence.⁴ Refusing to take needed antibiotics post-accident which then leads to infection is a failure to mitigate. "A mitigation of damages instruction is proper when the negligence complained of merely contributed to or added to the extent of the losses or injuries but has no part in causing the incident in question."⁵

The duty to mitigate damages includes taking affirmative steps to minimize the loss,⁶ although there are limits on this duty. The plaintiff need not accept financial risks,⁷ sacrifice contractual rights⁸ or accept an inadequate settlement offer in order to mitigate damages.⁹

During the time that a contract or duty to perform is in effect, if the defendant has equal opportunity with the plaintiff to perform, and equal knowledge of the consequences of nonperformance, the defendant cannot reduce the recovery of damages by insisting the plaintiff mitigate damages.¹⁰ An "injured party is not required to minimize damages resulting from . . . fraud."¹¹

The duty to mitigate arises in both contract and tort cases.¹² In contract and business tort litigation, the defendant generally must plead a failure to mitigate damages as an affirmative defense.¹³ In personal injury litigation, the Texas Supreme Court has rejected mitigation as an affirmative defense because a failure to mitigate does not defeat the plaintiff's claim for damages "in whole or in specific part" as required by Tex. R. Civ. P. 94.¹⁴ "There is a strong policy reason for holding that a failure to mitigate damages in a personal injury case is not an affirmative defense" because it "would result in a proliferation of special issues in an area already mired in a prolixity of complicated issues."¹⁵

In contract and business tort litigation, however, failure to mitigate more likely results in a specifically identifiable and quantifiable increase in damages, and thus the defendant must specifically plead a plaintiff's failure to mitigate,¹⁶ as well as prove the extent of avoidable loss resulting from the plaintiff's failure to mitigate.¹⁷

Where the defendant contends the plaintiff actually has mitigated losses by some amount (such as by leasing property vacated prematurely by the defendant), the defendant is not required to plead the actual mitigation as an affirmative defense.¹⁸ "Rather, the [defendant's] evidence of the [plaintiff's]...