Opinion ID: 2760779
Heading Depth: 4
Heading Rank: 1

Heading: Brighton’s Failure to Defend Avalon

Text: Aegis’s first argument is that Brighton should have tendered a defense to Avalon. Invoking the doctrine of avoidable consequences, Aegis argues that it cannot incur liability resulting from Brighton’s breach of its contract with Avalon. -13- This argument cannot be reconciled with the language in the indemnity clause or Washington law on mitigation of damages. Under Washington law, Brighton would ordinarily be unable to recover damages that could have been reasonably avoided. See Ainsworth v. Progressive Cas. Ins. Co., 322 P.3d 6, 18 (Wash. App. 2014). In Aegis’s view, Brighton could have minimized its damages by tendering a defense to Avalon. This argument ignores Paragraph 12.4 and Aegis’s own opportunity to mitigate the damages. Paragraph 12.4 states that Brighton’s failure to defend Avalon would not excuse Aegis’s duty to indemnify Brighton: “[I]n the event [Aegis] does not elect to assume the defense of any claim, then any failure of [Brighton] to defend . . . any claim . . . shall not relieve [Aegis] of its obligations hereunder.” Appellant’s App. at 96. Through this language, the parties agreed that Aegis would continue to incur a duty to indemnify Brighton even if Brighton breached its own duty to defend Avalon. In this manner, Aegis and Brighton expressly modified the common law duty to mitigate damages. Aegis argues that Paragraph 12.4 simply preserved existing indemnity obligations, pointing out that the paragraph refers to continuation of Aegis’s “obligations hereunder.” The term “hereunder” means “as provided for under the terms of this document.” New Oxford Am. Dict. 813 (3d ed. 2010). Brighton’s suit against Aegis is based on Paragraph 12.2 in the same contract. Thus, -14- Paragraph 12.4 unambiguously preserves Brighton’s right to obtain damages in the event of a failure by either Brighton or Aegis to defend Avalon. Aegis argues that this interpretation would “put the contract in contradiction to Washington’s firmly settled doctrine of avoidable consequences.” Appellant’s Opening Br. at 23. In Aegis’s view, this contradiction forces us to accept its interpretation of Paragraph 12.4 because “there is no language in the contract indicating the parties intended an abrogation of the doctrine of avoidable consequences.” Id. at 25. We believe Aegis’s argument is self-defeating. The parties’ intentions are reflected most clearly through the language in the contract. See Washington v. R.J. Reynolds Tobacco Co., 211 P.3d 448, 451-52 (Wash. App. 2009). As Aegis states, Paragraph 12.4 conflicts with the common law duty to mitigate damages. In this manner, the parties unambiguously showed their intent: When they agreed to Paragraph 12.4, they showed their intent to modify the common-law duty to mitigate damages. See Seabed Harvesting, Inc. v. Dep’t of Nat. Res., 60 P.3d 658, 662 (Wash. App. 2002). Even without this qualification of the common law duty of mitigation, Aegis cannot reduce the damage award based on Brighton’s breach of its contract with Avalon. In Washington, “a plaintiff has no ‘duty’ to mitigate when the defendant has equal opportunity to do so.” Walker v. Transamerica Title Ins. Co., 828 P.2d 621, 625 (Wash. App. 1992). When Brighton tendered a defense to Aegis, the two -15- had equal opportunity to step in and defend Avalon. In these circumstances, Aegis cannot invoke the mitigation doctrine to reduce Brighton’s award of damages.