Whether the claim sounds in tort or contract, an injured party has an obligation to minimize the financial consequences of the defendant’s wrongful conduct whenever possible.122 This obligation, however, is subject to the rule of reasonableness. A plaintiff need not take unreasonable or unreasonably speculative steps to fulfill his or her obligation.123 Nor must a party face undue risk, burden, or humiliation in mitigating costs and damages. If the injured party takes reasonable, but unsuccessful, steps to limit costs and losses, recovery is permissible. 123.1 Further, a party is not required to mitigate damages where the other party’s conduct was intentional or malicious.124
The burden is on the breaching party to show that the losses could have been avoided by the non-breaching party.125 The failure to mitigate does not prohibit all recovery, but instead denies recovery of the portion of the losses attributable to the failure to mitigate.126 A plaintiff who mitigates the damages may recover the reasonable and proper expenses in connection therewith, provided that (i) the effort to minimize damages was reasonably warranted by and proportionate to the injury and consequences to be avoided, and (ii) the mitigating act was taken under the reasonable belief that it would avoid or reduce the damages otherwise to be apprehended by the wrongful act.127
A corollary to the rule of mitigation is that any gains made by an injured party on other transactions after the injury are not to be deducted from damages otherwise recoverable unless such gains could not have been made had there been no breach.128 Where the defendant’s actions caused both a detriment and a benefit to the plaintiff, the value of the benefit offsets the detriment only when the benefits accruing to the plaintiff are sufficiently proximate to the wrong alleged and occur during the period of damage. “But for” causation is not sufficient to establish such an offset.129
122. Rhone-Poulenc Basic Chemicals Co. v. American Motorists Ins. Co., 616 A.2d 1192, 1197 (Del. 1992); Lynch v. Vickers Energy Corp., 429 A.2d 497, 504 (Del. 1981), overruled in part on other grounds by Weinberger v. UOP, Inc., 457 A.2d 701 (Del. 1983); H & H Poultry Co. v. Whaley, 408 A.2d 289, 291-92 (Del. 1979); Gulf Oil Corp. v. Slattery, 172 A.2d 266, 270 (Del. 1961); American Gen. Corp. v. Continental Airlines Corp., 622 A.2d 1, 11 (Del. Cli. 1992), aff’d mem., 620 A.2d 856 (Del. 1993); State v. Berenguer, 321 A.2d 507, 511 (Del. Super. 1974); Katz v. Exclusive Auto Leasing, Inc., 282 A.2d 866, 868 (Del. Super. 1971); MacArtor v. Graylyn Crest III Swim Club, Inc., 187 A.2d 417, 421 (Del. Ch. 1963); Meding v. Robinson, 157 A.2d 254, 257 (Del. Super. 1959), aff’d, 163 A.2d 272 (Del. 1960); Brosius-Eliason Co. v. DiMondi, C.A. No. 11,338, slip op. at 10, Berger, V.C. (Del. Ch. Nov. 15, 1991); Krieger v. Crisconi, C.A. No. 6017, slip op. at 5, Hartnett, V.C. (Del. Ch. June 15, 1981), reh’g denied, C.A. No. 6017, Hartnett, V.C. (Del. Ch. Sept. 18, 1981); Dave Hall, Inc. v. Huljones Constr. Co., C.A. No. 5076, slip op. at 3, Longobardi, J. (Del. Super. Mar. 18, 1976).
123. Lynch v. Vickers Energy Corp., 429 A.2d 497, 504 (Del. 1981), overruled in part on other grounds by Weinberger v. UOP, Inc., 457 A.2d 701 (Del. 1983); American Gen. Corp. v. Continental Airlines Corp., 622 A.2d 1, 11 (Del. Ch. 1992), aff’d mem., 620 A.2d 856 (Del. 1993); Nash v. Hoopes, 332 A.2d 411, 414 (Del. Super. 1975). See also Murphy v. Mellon Bank (Delaware) N.A., C.A. No. 87-0029, slip op. at 10, Lee, J. (Del. Super. Nov. 30, 1988).
123.1. West Willow-Bay Court, LLC v. Robino-Bay Court Plaza, LLC, C.A. No. 2742-VCN, slip op. at 21, Noble, V.C. (Del. Ch. Feb. 23, 2009), aff’d mem., 985 A.2d 391 (Del. 2009) (TABLE).
124. Fintak v. Ridenour, C.A. Nos. 88C-AP-7 & 89C-OC-18, slip op!-at 5, Steele, J. (Del. Super. May 29, 1991).
125. Dave Hall, Inc. v Huijones Constr. Co., C.A. No. 5076, slip op. at 2 n.2, Longbardi, J. (Del. Super. Mar. 18, 1976).
126. See Meding v. Robinson, 52 Del. 299, 157 A.2d 254, 257 (Del. Super. 1959), aff’d, 163 A.2d 272 (Del. 1960); Dave Hall, Inc. v Huljones Constr. Co., C.A. No. 5076, slip op. at 3, Longbardi, J. (Del. Super. Mar. 18, 1976).
127. Sears, Roebuck & Co. v Facciolo, 320 A.2d 347, 350 (Del. 1974). See also Katz v. Exclusive Auto Leasing, Inc., 282 A.2d 866, 868 (Del. Super. 1971).
128. Katz v. Exclusive Auto Leasing, Inc., 282 A.2d 866, 868 (Del. Super. 1971).
129. Trans World Airlines, Inc. v. Summa Corp., C.A. No. 1607, slip op. at 32, Walsh, J. (Del. Ch. May 15, 1986), aff’d, 540 A.2d 403 (Del.), cert. denied, 488 U.S. 403 (1988).
© 2010 David L. Finger