Opinion ID: 2717726
Heading Depth: 4
Heading Rank: 1

Heading: The District Court Used the Proper

Text: Legal Standard to Determine VICI’s Damages Regarding the 2010 Period We first review whether the District Court used the proper legal standard in awarding expectation damages. According to the Restatement (Second) of Contracts § 347, expectation damages are calculated by (1) the loss to the nonbreaching party (2) plus any loss, including incidental or consequential loss, caused by the breach (3) less any cost or other loss that the non-breaching party avoided by not having to perform. In other words, “expectation damages is measured by the amount of money that would put the promissee in the same position as if the promisor had performed the contract.” Duncan v. Theratx, Inc., 775 A.2d 1019, 1022 (Del. 2001) (citing Restatement (Second) of Contracts § 347 cmt. a). Expectation damages may not be speculative. When establishing the loss the non-breaching party incurred as a result of the breach, a plaintiff must “‘lay a basis for a reasonable estimate of the extent of his harm, measured in money.’” Emmet S. Hickman Co. v. Emilio Capaldi Developer, Inc., 251 A.2d 571, 573 (Del. Super. Ct. 1969) (quoting 5 Corbin on Contracts, 125 Pt. 6, Ch. 56 § 1020). Additionally, a plaintiff may only recover those damages that were foreseeable or likely to follow from the breach of an agreement. McClain v. Faraone, 369 A.2d 1090, 1092 (Del. 1977). Once the loss attributable to nonperformance has been determined, a court must subtract any costs avoided as a 36 result of the breach that are evident in the record. WaveDivision Holdings, LLC v. Millennium Digital Media Sys., L.L.C., Case No. 2993-VCS, 2010 WL 3706624, at ,  (Del. Ch. Sept. 17, 2010) (“[Plaintiff] is only entitled to recover the net loss it has suffered because of [Defendant’s] breach.”). A court must also reduce the calculated damages by the amount of loss “‘that [the plaintiff] could have avoided by reasonable efforts.’” W. Willow-Bay Court, LLC v. Robino-Bay Court Plaza, LLC, Case No. 2742VCN, 2009 WL 458779, at  (Del. Ch. Feb. 23, 2009) (quoting Restatement (Second) of Contracts § 350 cmt. b). T-Mobile claims that the District Court awarded VICI $7 million for the 2010 period without applying any legallyrecognized measure of damages. We disagree. The District Court recited the proper standard, including the requirement to reduce damages by the amount of actual costs avoided: Generally, “the non-breaching party is entitled to recover ‘damages that arise naturally from the breach or that were reasonably foreseeable at the time the contract was made.’ Contract damages ‘are designed to place the injured party in an action for breach of contract in the same place as he would have been if the contract had been performed. Such damages should not act as a windfall.’” Paul v. Deloitte & Touche, LLP, 974 A.2d 140, 146–47 (Del. 2009) (citations omitted); Duncan v. Theratx, Inc., 775 A.2d 1019, 1022 (Del. 2001) (citing Restatement (Second) Of Contracts § 347). Further, damages should be reduced by costs or other loss avoided by the non-breaching party. See Restatement (Second) Of Contracts § 350. “[A] party may avoid costs by suspending its own performance when confronted with breach 37 and avoid loss by making substitute arrangements.” West Willow–Bay Court, LLC v. Robino–Bay Court Plaza, LLC, No. 2742– VCN, 2009 WL 458779, at  (Del. Ch. Feb. 23, 2009) (citing Restatement (Second) Of Contracts § 350 cmt. b (“Once a party has reason to know that performance by the other party will not be forthcoming, he is ordinarily expected to stop his own performance to avoid further expenditure.”)). Also, a party may not generally recover damages for losses that it could have avoided by reasonable efforts. Id. (citing Restatement (Second) Of Contracts § 350 cmt. b). Thus, the injured party has a duty to mitigate or minimize its costs and losses. Id. (citing Restatement (Second) Of Contracts § 350 cmt. b) (noting that “the injured party is under no obligation to [mitigate], although it will not be awarded damages for any loss that could be avoided”). VICI Racing, LLC v. T-Mobile USA, Inc., 921 F. Supp. 2d 317, 333 (D. Del. 2013).