Court Opinion

ID: 9627081
Source: CourtListenerOpinion
Date Created: 2023-08-22 08:33:13.982537+00
Date Added: 2024-06-11T15:27:40.412170
License: Public Domain

HARDIMAN, Circuit Judge,
concurring.
I agree with the result reached by the majority in all respects. I write separately to opine that the District Court’s finding that the Pruskys did not reasonably mitigate their damages should be affirmed only because of our deferential standard of review.
I.
The parties vigorously dispute the standard of review applicable to the mitigation issue.15 The Pruskys argue for plenary review while ReliaStar asserts that the reasonableness of mitigation efforts is a factual determination that we must review for clear error. Like the majority, I believe ReliaStar’s position is more persuasive, especially in light of our decision in Windsor Securities, Inc. v. Hartford Life Insurance Co., 986 F.2d 655, 668 (3d Cir.1993), where we applied the clear error standard in affirming the district court’s finding that an investor failed to mitigate his damages. Id. at 657-58. Under this deferential standard of review, we may not overturn the District Court’s “plausible” findings of fact even if we are “convinced that had [we] been sitting as the trier of fact, [we] would have weighed the evidence differently.” Brisbin v. Superior Valve Co., 398 F.3d 279, 285 (3d Cir.2005) (quoting Anderson v. City of Bessemer, 470 U.S. 564, 573-74, 105 S.Ct. 1504, 84 L.Ed.2d 518 (1985)).
Had I been sitting as the trier of fact in this case, I probably would have found that the Pruskys pursued a reasonable mitigátion strategy. In the typical case, an aggrieved investor acts reasonably when he places his investment into a low-risk interest-bearing account. In light of the “unique set of facts” of this case, Maj. Op. § II.A, however, I cannot say that the District Court’s contrary conclusion was implausible or clearly erroneous. Accordingly, I disagree with the majority only insofar as it suggests that had we evaluated the Pruskys’ actions de novo, we would have found them unreasonable. The majority makes this suggestion in two ways.
First, the majority faults the Pruskys for failing to adopt the “next-best” investment alternative to their favored market-timing strategy. Maj. Op. § II.A.1; see also id. (adopting Ormesa Geothermal rule that alternative investment should be “as close as possible to the original investment” and citing with approval the Fish-man rule that substitute investment must be the “most lucrative” alternative). The duty to mitigate, which falls upon the non-breaching party, is not so onerous and does not so narrowly limit the options available to aggrieved investors. It requires merely “reasonable” conduct, not conduct that is “next-best,” “as close as possible,” or “most lucrative.” See In Re Kellett Aircraft Corp., 186 F.2d 197, 198-99 (3d Cir.1950) (“The rule of mitigation of damages may not be invoked ... merely for the purpose of showing that the injured person might have taken steps which seemed wiser or would have been more advantageous to the defaulter.”) (emphasis added).
Second, the majority deviates from our rule that reasonableness must be determined from the perspective of the non-breaching party at the time of the breach. Kellett, 186 F.2d at 198. Contrary to the *269majority’s suggestion, Maj. Op. § II.A.1, a mitigation strategy that is initially reasonable does not become unreasonable because of subsequent events. Rather, subsequent events effect only the amount of any “mitigation offset.” Maj. Op. § II.A.2 (emphasis added); see also Br. of Appellee 23 (noting that Dr. Warther’s analysis was relevant to determining “by what amount, if any, to reduce [the Pruskys’] damages in connection with alternative strategies.”).
For example, subsequent market events are relevant to determining the amount by which a non-breaching party’s award will be reduced if a court first determines that the party failed to reasonably mitigate. See, e.g., Restatement (2d)Contracts § 350 cmt. f, illus. 16. Conversely, subsequent market events may render a non-breaching party’s reasonable mitigation efforts unsuccessful, in which case, the breaching party will be liable for any additional loss incurred as a result of the non-breaching party’s “reasonable but unsuccessful” efforts. Restatement (2d) CONTRACTS § 350(2), and cmt. h.
Evaluating the options available to the Pruskys at the point of ReliaStar’s breach, Kellett, 186 F.2d at 198, the money market subaccount virtually guaranteed at least some profit and was therefore at least a reasonable choice. As it turned out, the bond and equity subaccounts outgained the money market subaccount from 2003-2007, but the opposite result could just as easily have obtained, as it did from 2000-2003. Were I considering these circumstances in the first instance, I would have been inclined to conclude that the Pruskys pursued a reasonable strategy that, in hindsight, proved to be less “lucrative” than the similarly reasonable strategies proffered by ReliaStar. On this basis, I likely would have concluded that the Pruskys satisfied their duty to mitigate. Kellett, 186 F.2d at 198 (“Where a choice has been required between two reasonable courses, the person whose wrong forced the choice can not complain that one rather than the other was chosen.”).
Notwithstanding the foregoing observations, our standard of review requires that we defer to the District Court’s “plausible” findings of fact regarding the Pruskys’ mitigation efforts. See Brisbin, 398 F.3d at 285. For that reason, I concur in the result reached by the majority.

. See Br. of Appellant 18, 30, 37; Br. of Appellee 2, 9-12, 14-15, 19, 20 n. 6, 21-22, 24, 28; Reply Br. of Appellant 2-3.