Chapter 9 - § 9.5 • MITIGATION OF DAMAGES

• Jurisdiction: Colorado

§ 9.5 • MITIGATION OF DAMAGES

A homeowner has a duty to reasonably mitigate his or her damages.⁴⁰³ Failure to mitigate is an affirmative defense that the defendant must raise and prove.⁴⁰⁴ Usually, what constitutes a failure to mitigate is a question of fact.⁴⁰⁵

In City of Westminster v. Centric-Jones Constructors, the Colorado Court of Appeals held that a plaintiff was not excused from providing some basis for the jury to allocate damages between the benefit of its bargain and the defendant's alleged breaches.⁴⁰⁶ The court held that where the plaintiff's repair costs included the cost to repair construction errors allegedly attributable to the defendant and costs attributable to correcting design deficiencies attributable to others, shifting the burden of allocating the plaintiff's repair costs to the defendant under the guise of the defendant's mitigation defense disregarded deficiencies in the plaintiff's damages proof.

A plaintiff's failure to mitigate may be excused if reasonable grounds exist for such failure, such as financial inability to pay for needed repairs.⁴⁰⁷ While it has been said that persons against whom another has committed a tort cannot recover for harm that would not have ensued if they had not unreasonably refused the good faith offer of the tortfeasor to prevent the harm, if the original act was intentionally wrongful or negligent, it may be reasonable for such persons to decline to trust the good will or skill of the tortfeasor.⁴⁰⁸ Thus, a homeowner's failure to permit a construction professional to make repairs may be excused depending on the facts.

A plaintiff's failure to mitigate damages is also excused if mitigation would require inordinate or unreasonable measures, or if there are other, reasonable grounds for the failure to mitigate.⁴⁰⁹ What constitutes reasonable efforts to mitigate damages is a fact-specific inquiry, and is typically for the jury to decide.⁴¹⁰ Where a construction professional offers to make repairs, but insists on a release of all claims for damages, or refuses to warrant the repair work to the extent of the original work, a property owner may be able to justifiably refuse the offer.⁴¹¹

§ 9.5.1—Failure to Mitigate and Comparative Fault as Mutually Exclusive Doctrines

Both the defenses of failure to mitigate and comparative fault (negligence) hinge on proof of a claimant's failure to exercise reasonable care.⁴¹² 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.⁴¹³ 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."⁴¹⁴ Therefore, a failure to mitigate may be viewed as failure of a claimant to prevent "further" injury to himself or herself, while comparative fault involves a duty not to contribute to causing the "initial" injury.⁴¹⁵ However, at least one commentator has advocated abandoning the avoidable consequences doctrine entirely in favor of applying proportionate fault principles to both pre-injury and post-injury conduct,⁴¹⁶ and some jurisdictions have merged the avoidable consequences doctrine into their comparative and proportionate fault frameworks.⁴¹⁷ There is no evidence Colorado's legislature intended to do the same.

While timing is a key difference between a failure to mitigate and comparative fault,⁴¹⁸ in construction defect cases, these distinctions may become blurred.⁴¹⁹ For example, complications may arise when a construction professional's wrongful conduct results in injury or damage that progresses over time, so that there is no one, discrete moment of injury, or the manifestation of the damage is greatly delayed. In the case of a latent defect, the wrongful conduct might create a hidden construction defect, but the actual consequential property damage might not occur or manifest until much later. This delay between the wrongful conduct (the defective construction) and the resulting injury (and discovery of the defect or consequential damage) may affect whether the claimant's intervening and allegedly unreasonable conduct should be deemed a failure to mitigate or comparative fault.

Although a plaintiff must be aware that he or she has sustained an injury before a duty to mitigate arises, this does not necessarily turn a failure to take mitigative action into comparative negligence if the failure occurs before such awareness arises. This is because it is the awareness itself that gives rise to the plaintiff's recognition of the foreseeable risk of injury and the resulting tort duty to use reasonable care to avoid that injury. Furthermore, it may be difficult to distinguish between mitigation and comparative negligence defenses where, for example, a plaintiff owner normally would not have any duty to mitigate the construction defect, but the owner contracted directly with the designer, and the contractor contends the design was negligent, contributing to the defectively constructed improvement.

§ 9.5.2—Mitigation, Delay Damages, and Liquidated Damages

A mitigation defense may apply if a claimant does not exercise reasonable diligence to minimize its delay damages. In Westec Construction Management Co. v. Postle Enterprises I, Inc., the Colorado Court of Appeals held that while the plaintiff property owner was not required to accept a change order that would...