Mitigation

The duty to mitigate damages is a legal doctrine that pervades the law.  This duty exists in a variety of circumstances, and wise owners of “stuff” (e.g. real property, equipment, a business) regularly remind themselves of this duty.

Example 1:  You’re a Landlord and you have a Tenant who skips out on a 12-month lease after 2 months.  As the Landlord, you cannot simply sit on an empty unit for the next 10 months and claim that the Tenant owes you rent for that 10-month period.  You must employ reasonable means to rent that unit and mitigate your damages.

Example 2:  You own commercial transportation equipment used to haul materials across the country.  If the equipment is damaged in a hurricane, you should not simply wait until the equipment is repaired and attempt to claim lost profits if you lose the contract or are delayed in completing its performance.  You should rent substitute equipment to maintain your hauling contract.  You are properly mitigating your damages.

Example 3:  Your business has a sewer backup that shuts down your business.  You cannot simply sit on your hands hoping someone rescues you.  You must employ reasonable means to continue your operations and thereby mitigate your damages.

These three scenarios generally demonstrate the importance of damage mitigation.  Consider this doctrine when bad things happen.  And remember to contact trusted professional advisors early in the process.  You may save yourself time and money.

I do not have a funny damage mitigation video.

 

Advertisements

2 Comments on “Mitigation”

  1. Surly SAR says:

    Don’t get me started on the subject of mitigation – especially as it pertains to my house, water damage, and my homeowners’ insurance.

    On 1-December, the bathtub in the main bathroom cracked in a couple of places, causing a slow leak through the fiberglass tub any into the area under the tub. The failure must have been gradual, but we only noticed it when 40-gallons of bathwater (from my 2-year old’s bath) started leaking through the basement ceiling. The resultant water damage caused three (3) rooms of damage: bathroom, adjoining hallway+bedroom, and basement. I had to call my insurance provider and get Paul Davis Restoration to immediately mitigate the water damage. That meant my $1,000 deductable got that going. Fine…

    Two (2) inspections later – both inspectors agreed that there was a defect in the tub. However, while the insurance company brought about the possibility of subjugation to the tub manufacturer or/and the homebuilder, I am SOL in recouping the subsequent tub loss/replacement. Seems that insurance handles the ‘effects,’ but not the ‘cause’ in this particular case. Payment was finally released on 4-January to cover the water (completed) water mitigation and (pending) replacement of carpet/pad, subfloor, and basement ceiling tiles. Better yet, since the damages totaled $32 more than $5,000, the insurance company is withholding ~$900 until project completion. Wonderful…

    Side note: After talking to the principal at Re-Bath today, I found out that the fiberglass tub structure should be reinforced with expanding foam or concrete to prevent excessive flex of the tub due to water and body weight (something did not happen on the original tub). Whatever solution we take will be better than the original when we built this home 7+ years ago. Homeownership is a real b*tch. Times like these I wish I could mitigate my risk by residing in a rental property. We would be much richer in the pocket if we would have never went the path of suburban home ownership….another day’s topic.

    • The DA Blog says:

      Post Of The Year thus far, SAR. You flew out of starting gate with a 4-length lead after 50 yards.

      Let’s discuss this outside of this forum. I’d be interested to assist if I can. Don’t SOL just yet …


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s