Opinion ID: 1058831
Heading Depth: 2
Heading Rank: 1

Heading: Pleading Mitigation of Damages

Text: Monahan contends that mitigation of damages cannot be raised as a defense unless it has been specifically pled by the defendant. This is so, he asserts, because mitigation is an affirmative defense and [i]t is axiomatic that an affirmative defense must be specifically pled, but also must be affirmatively pled. Monahan cites no case law to support his contention, but references a treatise that states: [t]here are numerous issues that the defendant must himself plead as affirmative defenses. If he fails to raise these issues they are deemed to be waived. [8] Monahan also argues that Rule 3:18(e) [9] contemplates that affirmative defenses must be pled because it states that they may ... be included in the same paper as a defendant's grounds of defense, counterclaims, cross-claims, pleas, demurrers, and other motions. Because Obici did not raise mitigation in its initial or amended Grounds of Defense, or in any other written pleading, Monahan avers Obici failed to properly place the question of mitigation in issue, and was not entitled to pursue it or obtain an instruction on it. Obici responds by arguing that although Virginia case law identifies mitigation as an affirmative defense, it has never mandated that mitigation of damages must be specifically pled. Obici contends that an affirmative defense such as mitigation of damages does not have to be specifically pled, but may be forthcoming from the evidence adduced at trial. Whether mitigation of damages must be specifically pled is an issue of first impression in Virginia. For the reasons that follow, we agree with Obici that mitigation of damages need not be specifically pled in order for a defendant to assert it, provided the issue has otherwise been shown by the evidence. We have held on numerous occasions that mitigation of damages is an affirmative defense. [10] Forbes v. Rapp, 269 Va. 374, 380, 611 S.E.2d 592, 596 (2005) (An assertion that an injured party has failed to mitigate damages is an affirmative defense); see also R.K. Chevrolet v. Bank of the Commonwealth, 256 Va. 74, 77, 501 S.E.2d 769, 771 (1998); Marefield Meadows, Inc. v. Lorenz, 245 Va. 255, 266, 427 S.E.2d 363, 369 (1993); Foreman v. E. Caligari & Co., 204 Va. 284, 290, 130 S.E.2d 447, 451 (1963). Consequently, the defendant bears the burden of proving that the plaintiff failed to mitigate his damages. R.K. Chevrolet, 256 Va. at 77, 501 S.E.2d at 771. It has long been required that a party raise specific defenses (just as a plaintiff must give notice of claims) so that surprise and prejudice at trial from late revelation of unanticipated legal theories is avoided. See, e.g., Chesapeake & O. Ry. v. Osborne, 154 Va. 477, 506, 153 S.E. 865, 873 (1930) (filing of a grounds of defense by defendant limited in its defenses to the ground there stated); see also City Gas Co. v. Poudre, 113 Va. 224, 226, 74 S.E. 158, 160 (1912) (purpose of requiring a grounds of defense is to give the plaintiff reasonable notice of the particular defense upon which the defendant expects to rely, so that he may not be prejudiced by surprise). This has generally led to a requirement that affirmative defenses must be pled in order to be relied upon at trial. See, e.g., Brooks v. Bankson, 248 Va. 197, 206, 445 S.E.2d 473, 478 (1994) (defense of fraud). Exceptions to this general rule have been recognized in some factual contexts where the issue addressed by an affirmative defense was not disclosed in a plaintiff's pleading, and only became apparent as the evidence was being received at trial. In such instances, it has been held that an affirmative defense issue is properly heard even though it was not pled. See, e.g., Lawson v. States Constr. Co., 193 Va. 513, 521, 69 S.E.2d 450, 455 (1952) (statute of frauds); McKee v. McKee, 206 Va. 527, 532, 145 S.E.2d 163, 166 (1965) (condonation); Franklin Jewelry Co. v. Masch, 160 Va. 756, 764-65, 169 S.E. 583, 584 (1933) (ultra vires); see also Twardy v. Twardy, 14 Va.App. 651, 656-57, 419 S.E.2d 848, 851 (1992) (estoppel need not have been pled because nothing of record suggested that the issue of estoppel would be involved until later in the proceedings). Other affirmative defenses have been addressed by statute, which either obviate the need for pleading, or expressly require that a particular defense be pled. Compare Roanoke Mtg. Co. v. Henritze, 151 Va. 220, 225, 144 S.E. 430, 431 (1928) (under prior law, usury shown on the face of the contract precluded recovery of interest, even if not pled), with, e.g., Jones v. Jones, 249 Va. 565, 571-72, 457 S.E.2d 365, 369 (1995) (under Code § 8.01-235 an affirmative defense of the statute of limitations must be specifically pled: [t]he objection that an action is not commenced within the limitation period prescribed by law can only be raised as an affirmative defense specifically set forth in responsive pleading). It is generally true that mitigation of damages, like other defenses, is routinely and properly raised in a defendant's pleadings. However, the requirements for raising mitigation of damages in a pleading have not been addressed by statute, and no prior case law has affirmatively noted that failure to plead this particular defense waives the right to rely on such proof at trial. While our prior cases have not directly addressed the pleading of mitigation, our decision in Chappell v. Smith, 208 Va. 272, 156 S.E.2d 572 (1967), is instructive on the issue before us. Our decision in Chappell addresses what evidence a defendant in default for failing to file either a responsive pleading or a grounds of defense could present during the trial for damages. This Court held: Neither [former] Rule 3:19 nor any statute prohibits counsel for a defendant in default from ... offering evidence in mitigation of damages. Id. at 276, 156 S.E.2d at 575. The defendant was thus permitted to raise the affirmative defense of mitigation of damages despite that defense not having been specifically pled. Our holding in Chappell highlights the distinctive characteristics that mitigation of damages has as an affirmative defense. Unlike most affirmative defenses, mitigation of damages is not a defense that, if proven, constitutes an absolute bar to the plaintiff's claim. Instead, a defense of mitigation recognizes that a plaintiff's conduct following the defendant's negligence may be a reason for reducing damages, but it does not necessarily bar all recovery. Sawyer v. Comerci, 264 Va. 68, 77, 563 S.E.2d 748, 754 (2002). This context distinguishes mitigation of damages from those other affirmative defenses or special pleas, which, if proven, constitute an absolute defense to the claim. See, e.g., Nelms v. Nelms, 236 Va. 281, 289, 374 S.E.2d 4, 9 (1988) (listing as [f]amiliar illustrations such defenses as statute of limitations, absence of proper parties, res judicata, usury, a release, prior award, infancy, bankruptcy, denial of partnership, bona fide purchaser, and denial of an essential jurisdictional fact alleged in the bill) (citing E. Meade, Lile's Equity Pleading and Practice, § 199, p. 114 (3d ed. 1952)). Because neither statute nor our precedent requires that mitigation of damages be specifically pled as a condition precedent to its assertion as an affirmative defense, and taking into account the unique characteristics of this defense, we hold that mitigation of damages is not required to be specifically pled before a defendant may assert it, provided the issue has been otherwise shown by the evidence. [11] The trial court thus did not err in permitting Obici to offer a mitigation of damages instruction despite its failure to plead that defense, subject to the presence of sufficient evidence, which we address below.