Opinion ID: 1171472
Heading Depth: 3
Heading Rank: 2

Heading: Deduction for Comparative Negligence or Failure to Mitigate Damages.

Text: The jury allocated 15% of the total fault to Bohna for his comparative negligence and failure to mitigate his damages. Bohna argues that there should have been no deduction because neither the comparative negligence nor the failure to mitigate theories should have gone to the jury.
HT argues that Bohna was comparatively negligent by failing to inform HT of his dyslexia, a condition which might have impaired his ability to give informed consent to the excess offer strategy. [17] Bohna maintains that this was not at issue because during the trial he withdrew his claim that he lacked capacity to give informed consent. Thus Bohna argues the trial court erred in instructing the jury on comparative negligence. In order for Bohna to prevail on this question, we must find, after reviewing the record, that HT's claim for comparative negligence was limited to the dyslexia issue, and that Bohna withdrew any claim that he lacked capacity due to dyslexia. We find that the record supports Bohna's position. First, in response to Bohna's motion for directed verdict on the issue of comparative negligence, HT's attorney stated that [w]ith regard to the comparative negligence issue, I thought about that over the weekend, as to what the elements of comparative negligence are here, and I think there's one are[a]; ... and this is dependent upon what they're going to claim, but I think that they have claimed it and there is evidence on both sides of the issue. And, that is Phil Bohna  if Phil Bohna is contending that he did not understand what he was doing because he had some sort of a disability, then it is our contention that he was negligent in not making that known to us... . That is the only area that I am currently aware of, after having really thought about it and reviewed my notes and that sort of thing, that gets into the comparative negligence area. (Emphasis added.) HT's attorney took the same position in closing argument to the jury: [I]n terms of [Bohna's] negligence, there's only one area; and that is if Mr. Bohna, and maybe this is no longer a contention for Mr. Sandberg's argument. If Mr. Bohna ... wants you to believe that somehow he did not understand or was impaired in his ability . .. to give informed consent, then he was negligent for not informing Hughes, Thorsness of his impairment. .. . [T]hat may no longer be an issue in the case if Mr. Sandberg means what he says about they're not contending that he didn't understand. (Emphasis added.) Thus, HT's claim for comparative negligence was limited to Bohna's dyslexia. Second, Bohna's attorney confirmed in closing argument that Bohna withdrew any claim based on lack of capacity: Mr. DeLisio discussed the fact that whether or not Mr. Bohna is somehow comparatively negligent, and he said he doesn't make that claim unless we claim that Mr. Bohna lacked the capacity to sign the consent. We don't make that claim. Before the trial court instructed the jury, Bohna moved to withdraw the issue of comparative negligence from the jury's consideration, but the trial court denied the motion. In this the trial court erred because together these representations by counsel effectively withdrew the issue of comparative negligence from the case.
Bohna maintains that no instruction on failure to mitigate should have been given, arguing that [a]n insured client has no duty to take bankruptcy to mitigate the damages for which his lawyer or insurer may be liable. HT counters that under the facts of this case Bohna did have a duty to mitigate his damages by attempting to discharge his debt in bankruptcy because: 1) he was advised that if he agreed to the excess offer of judgment strategy, he would likely have to attempt to discharge the excess judgment in bankruptcy; and 2) after consulting with an independent attorney, he indicated that he would follow that strategy. [18] We agree with Bohna and hold that the trial court should not have instructed the jury on mitigation. Although the parties frame this issue as a question of duty, we note that Bohna's bankruptcy would not have reduced HT's liability. HT's malpractice not only caused Bohna to incur liability to Stevens, but also created an asset. This asset is Bohna's malpractice claim against HT. Had Bohna filed for bankruptcy, a court would have appointed a bankruptcy trustee whose duties would have included collecting all of Bohna's assets including his malpractice claim against HT. See 4 Collier on Bankruptcy § 541.10(a)(1) (15th ed. 1987) (The bankruptcy estate includes causes of action belonging to the debtor.). The only thing that would have changed had Bohna filed for bankruptcy is that the named plaintiff in the present case would have been the bankruptcy trustee rather than Bohna. Hanover Ins. Co. v. Tyco Indus. Inc., 500 F.2d 654, 657 (3d Cir.1974) (The bankruptcy trustee is authorized, exclusively, to bring actions that could have been instituted by the bankrupt.). Moreover, even if Bohna's bankruptcy would have reduced HT's liability, we hold as a matter of public policy that the duty to mitigate does not extend to filing for bankruptcy. [19] As we observed in Anchorage Independent School District v. Stephens, 370 P.2d 531, 533 (Alaska 1962), the rationale behind the duty to mitigate damages is a recognition that legal rules are designed not only to prevent and repair individual loss and injustice, but to protect and conserve the economic welfare and prosperity of the whole community. No one's interests are served by allowing a plaintiff to recover as damages that which the plaintiff could have reasonably avoided in the first place. Under the present circumstances, Bohna's bankruptcy would not serve the longrun economic welfare and prosperity of the community. This is so because the primary victim in this case is Stevens. Bohna's injury derives from Stevens' injury. Unfortunately, there is no way Bohna could mitigate the damages he caused Stevens. On the other hand, Bohna had liability insurance which serves two purposes: to protect Bohna from the financial ruin of having to pay Stevens' loss, and to compensate Stevens for his loss. The offer of judgment strategy was clearly in conflict with both purposes. First, liability insurance is supposed to protect an insured from bankruptcy, rather than facilitate an insured's entry into that process. Second, insureds and their insurers cannot agree to reduce applicable insurance coverage after an accident occurs. That was the objective of the excess offer of judgment strategy, which necessarily included Bohna's bankruptcy. [20] This strategy contravened public policy. [21] As a matter of law, Bohna's decision not to follow that strategy cannot be considered a failure to mitigate damages. For these reasons, we conclude that the trial court erred in deducting $920,931.74 for Bohna's alleged comparative fault or failure to mitigate damages. With only Allstate and HT left to share the fault, they are responsible for the 15% which the jury assigned to Bohna. They share this additional burden in the ratio originally allocated between them by the jury, 51/34. This results in Allstate's fault totalling 60% and HT's totalling 40%.