Brief Fact Summary. A contract to provide concrete for the construction of a bridge was breached by one of the contracting parties. At issue, was whether the non-breaching party properly mitigated its damages.
Synopsis of Rule of Law. Certain circumstances exist in the context of mitigation where "continuing with the performance of an unsatisfactory contractor will avoid losses which might be experienced by engaging others to complete the project."
The burden is on the plaintiff to establish proximate cause between breach and damage and if the loss caused by a breach cannot be isolated from that attributable to other factors, no damages may be awarded.View Full Point of Law
Issue. Was the trial court's calculation of damage correct for the July 9, 1970 pour?
• Did the trial court properly handle the mitigation of damages issue?
Held. Yes. The court observed, "[t]he burden is on the plaintiff to establish proximate cause between breach and damage and if the loss caused by a breach cannot be isolated from that attributable to other factors, no damages may be awarded." The court concluded, "the trial judge might well have decided that there was an inadequate basis for proration between damages precipitated by Warner's conduct and that of Groves, in which event there would have been no recovery."
• No. The court observes that the Appellant really had only three practical choices: "allow Warner to continue in the hope of averting even greater losses; substitute Trap Rock for all of Warner's work a choice made doubtful by Trap Rock's ability to handle the project; or, lastly, use Trap Rock as a supplemental supplier." The court concludes that each of these possibilities have their own shortfalls, which the district court did not recognize. The court quotes [In re Kellett Aircraft Corp.], which found "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. … The rule of mitigation of damages may not be invoked by a contract breaker as a basis for hypercritical examination of the conduct of the injured party, or 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. . . . One is not obligated to exalt the interest of the defaulter to his own probable detriment." The court then declares, certain circumstances exist where "continuing with the performance of an unsatisfactory contractor will avoid losses which might be experienced by engaging others to complete the project." In this type of setting, the best strategy for mitigating damages is sticking with the original plan. As such, the court held the district court inappropriately found that the Appellant should have engaged Trap Rock.
Discussion. This case offers a unique perspective on how courts should confront the issue of mitigation of damages.