Opinion ID: 2717726
Heading Depth: 4
Heading Rank: 2

Heading: Failure to Mitigate is an Affirmative

Text: Defense Numerous Delaware Superior Court cases and District Court of Delaware cases have held failure to mitigate is an affirmative defense. Route 40 Holdings v. Tony’s Pizza & Pasta Inc., Case No. 10c-03-057, 2010 WL 2161819, at  (Del. Super. Ct. May 27, 2010) (dismissing the defendant’s counterclaim for failure to mitigate because “[c]ourts often refer to this concept as a ‘duty to mitigate,’ [but] technically it is not a duty because there are no damages for breach of the duty” and therefore is a defense to be pled in the defendant’s answer) (internal quotations omitted); Tanner, 1981 WL 191389, at  (“Failure to mitigate damages is an affirmative defense, and the burden of proving the failure falls upon the defendant.”); O’Riley v. Rogers, Case No. S08C-07020RFS, 2011 WL 3908404, at -3 (Del. Super. Ct. Aug. 30, 2011) (applying Tanner to personal injury cases in denying the defendant’s motion for a new trial based on failure to mitigate); Munro v. Beazer Home Corp., Case No. U608-03081, 2011 WL 2651910, at  (Del. C.P. June 23, 2011) (in a post-trial opinion on allocation of damages the court found “Delaware recognizes the affirmative defense of failure to mitigate damages”); Conway, 831 F. Supp. at 359 (“The mitigation of damages is an affirmative defense.”). Since it is an affirmative defense, the breaching party bears the burden of proof. Conway, 831 F. Supp. at 359 (“[T]he burden of proving plaintiff failed to mitigate his damages falls squarely on defendant.”); Stinson, 53 F. Supp. at 868 (“The general 48 authority—and, in fact, the almost universal weight of authority—is that the burden of pleading and proving mitigation of damages is upon the [breaching party].”).17 The Restatement (Second) of Contracts also looks to the breaching party to show that a substitute transaction was available. Restatement (Second) Contracts § 350 cmt. c. It states that “damages are not recoverable for loss that the 17 This Court has consistently held the breaching party bears the burden to show failure to mitigate in cases applying the law of other states. Glenn Distributors Corp. v. Carlisle Plastics, Inc., 297 F.3d 294, 302 (3d Cir. 2002) (“[T]he party who has breached the contract or caused the loss has the burden of showing the losses could have been avoided through the reasonable efforts of the damaged party.” (emphasis omitted) (Pennsylvania law)); Koppers Co., Inc. v. Aetna Cas. & Sur. Co., 98 F.3d 1440, 1448 (3d Cir. 1996) (“Mitigation is an affirmative defense, so the burden of proving a failure to mitigate is on the defendant.”); Fashauer v. New Jersey Transit Rail Operations, Inc., 57 F.3d 1269, 1288 (3d Cir. 1995) (holding the burden of proof “falls on the wrongdoer to show that the damages were lessened or might have been lessened by the plaintiff”) (discussing Jones v. Consol. Rail Corp., 800 F.2d 590, 593 (6th Cir. 1986)); Kutner Buick, Inc. v. Am. Motors Corp., 868 F.2d 614, 620 (3d Cir. 1989) (reversing because the trial court incorrectly imposed the burden to “include in the [damages] calculation all offsets which would be proper mitigation of damages” on the plaintiff); S. J. Groves & Sons Co. v. Warner Co., 576 F.2d 524, 529 (3d Cir. 1978) (“The burden of proving that losses could have been avoided by reasonable effort and expense must be borne by the party who has broken the contract.”). 49 injured party could have avoided without undue risk, burden or humiliation.” Id. § 350(1). The commentary explains “the burden is generally put on the party in breach to show that a substitute transaction was available. . . .” Id. § 350 cmt. c. Several Delaware courts have cited to section 350 approvingly in addressing the duty to mitigate. See, e.g., Duncan v. Theratx, Inc., 775 A.2d 1019, 1026 nn.22-23 (Del. 2001) (answering a certified question on the proper measure of damages); John Petroleum, Inc. v. Parks, Case No. 06C10-039, 2010 WL 3103391, at  (Del. Super. June 4, 2010) (adopting the commissioner’s report and recommendation that the plaintiff took reasonable measures to mitigate), aff’d, Parks v. John Petroleum, Inc., 16 A.3d 938 (Del. 2011); W. Willow-Bay Court, LLC, 2009 WL 458779, at  & n.51. When considered in the context of litigation, it follows that a defendant must show failure to mitigate. A plaintiff has the burden of proving damages. Paul v. Deloitte & Touche, LLP, 974 A.2d at 146-47 (affirming summary judgment for the defendant). But a plaintiff does not need to plead mitigation efforts. Stinson, 53 F. Supp. at 868. Rather, the defendant must plead failure to mitigate in its answer. Route 40 Holdings, 2010 WL 2161819, at  (explaining failure to mitigate is an affirmative defense available to a defendant in a contract dispute and is properly pled as a defense in the defendant’s answer); Tanner, 1981 WL 191389, at  (“[I]t is necessary for the defendant to specially plead plaintiff’s failure to mitigate damages.”). Thus, once a plaintiff proves its damages, a defendant has the burden to show the damages award should be limited because the plaintiff failed to take reasonable measures to mitigate its loss. W. Willow-Bay Court, LLC, 2009 WL 458779, at  (finding the plaintiff was entitled to the full expectation damages it had shown because the defendant’s theory of mitigation was not reasonable). This inquiry 50 considers whether mitigation was feasible, what measures to limit damages were reasonable under the circumstances, and whether the plaintiff took sufficient measures to mitigate. Brzoska, 668 A.2d at 1367 (holding mitigation is required “if it is feasible to do so”); Lynch, 429 A.2d 497, 504 (“[W]hether mitigation is required depends upon the circumstances of the case and is subject to a rule of reasonableness.”); Krauss v. Greenbarg, 137 F.2d 569, 573 (3d Cir. 1943) (affirming a jury verdict for the defendants’ counterclaim, because “one is not required to go through the motions of attempting to avoid damages when it is certain that they will prove of no avail”). A defendant need not provide an accounting of the costs a plaintiff should have avoided, but the burden is properly on a defendant to articulate the actions that would have been reasonable under the circumstances to mitigate loss. Collier v. Leedom Const. Co., 84 F. Supp. 348, 350-52 (D Del. 1949). As with other affirmative defenses, a plaintiff cannot anticipate and answer all of the possible theories of mitigation. A defendant must put a plaintiff on notice as to what measures the defendant believes were reasonable under the circumstances but the plaintiff failed to take. Cf. Lynch, 429 A.2d at 505 (finding the mitigating measures the defendant asserted were unreasonable). This principle is consistent with “the usual rule that the burden of proof rests upon him who alleges . . . .” Murphy v. T. B. O’Toole, Inc., 87 A.2d 637, 638 (Del. Super. Ct. 1952) (citing 2 Jones Civil Evidence (Horwitz ed.) § 192 in granting summary judgment to the defendants); see also Del. Coach Co v. Savage, 81 F. Supp. 293, 296 (D. Del. 1948) (finding for the defendant after a bench trial because “[t]he burden of proof rests upon the party asserting the affirmative of an issue”). Similarly, the Restatement (Second) of Contracts Commentary provides that “the burden is generally put on the 51 party in breach to show that a substitute transaction was available . . . .” Restatement (Second) of Contracts § 350 cmt. c. Accordingly, we must follow the Delaware cases holding that failure to mitigate is an affirmative defense and that a defendant bears the burden of proof to show a plaintiff’s damages should be reduced on that basis. Affirmative defenses not raised in litigation are waived. Abdi v. NVR, Inc., 945 A.2d 1167 n.6 (Del. 2008) (affirming the district court’s jury instruction because the issue was tried by consent but observing that “[g]enerally, if a defendant does not plead an affirmative defense, he or she waives that defense” (quoting Kaplan v. Jackson, Case No. 90C-JN-6, 1994 WL 45429, at  (Del. Super. Ct. Jan. 20, 1994))).