Dennis BeaverJuly 8, 2022 • By Dennis Beaver

The next time you have trouble falling asleep:

(1) Get out of bed and find your homeowners or business owner’s insurance policy.

(2) Read that section titled, “Your obligation after a loss,” and specifically the Mitigation of Damages clause, which may resemble:

Each Party shall use reasonable efforts to mitigate any damages incurred by such Party hereunder.

(3) When you begin to yawn, return to bed, wondering, “What does mitigate mean?”
A Rude Awakening

“At around three in the morning we were awakened by a phone call from the sheriff’s office, informing us that a car — driven by a drunk driver and pursued by deputies — had crashed through the chain-link fence that surrounds our auto wrecking facility, commonly known as a junkyard. Brad, our 35 year-old son, manages it.

“I immediately went to the lot and found a BMW so new that it did not have license plates, smashed to pieces. The driver survived and, fortunately, had insurance,” “Louie” said.

Where Were The Dogs?

“The business is in a run-down section of town, and attracts thieves. Our security system has eight legs – two large, expensively-trained Dobermans: ‘Terminator,’ fierce, and if approached by a stranger, would bark and snarl, with a clear message to keep away!

“The other, far more docile and friendly, became our ‘inside’ dog, spending most of its time in the office area. We call her ‘Angel.’”

Terminator was nowhere to be seen after the incident, but later in the day Louie was notified by Animal Control that it had obviously run out of the yard through the damaged fence, was run over by a car and killed. The driver’s insurance company agreed to compensate him for the dog’s value – about $15,000 – and pay to repair the fence.

“Angel has remained at the property ever since, and we keep her inside the office behind the counter, but she is not leashed or on a chain.”

Brad Failed to Have the Fence Repaired

Louie explained that he had a trip out of town scheduled that afternoon, and told his son to have the fence repaired at once.

“Mr. Beaver, I’ve read your column for years and love the expression you use, that ‘He was standing behind the door when common sense was handed out.’ That describes Brad!

“On a good day his common sense IQ is 25! Instead of getting a fence company to perform emergency repairs, I learned upon my return that he was getting estimates and the hole remained, just partially covered by scrap from the lot.”

Brad also had Angel stay outside, providing security, as Terminator had done, free to roam the property.

Burglary Gone Bad

This was an ideal situation for what any first-year law student could predict was going to happen.

“During my absence, three high school students were seen on video getting into the lot through the poorly patched fence, wandered around and were bitten by Angel as they were about to leave with stolen property. Fortunately their injuries were mostly superficial, because Angel was not as nasty as Terminator could be.

“We were issued a citation by animal control. Also, the boys’ families hired an attorney who is asking for $50,000. My insurance company is denying coverage, saying that we failed to mitigate our damages by not patching the fence promptly as well as violating the leash law.

“Our attorney recommends that we pay. How can anyone reward three thieves this way? Any suggestions, Mr. Beaver?”

Failure to Mitigate Damages

The “duty to mitigate damages” means that financial compensation — from an injury or breach of contract — can be reduced if the injured person failed to take reasonable steps to lessen (mitigate) their damages.

So, failing to move your car to the side of the road after a crash – when you could have – isn’t going to be rewarded when it is hit by another vehicle.

In personal injury cases, refusing or delaying medical care is a green light for claims adjusters to take the position that prompt treatment would have lessened the severity of injuries, or, there were no injuries and therefore, claim denied.

A delay in calling 911 when your house is on fire, thinking insurance will pay to rebuild it, is another surprisingly common example of a failure to mitigate damages. It could also be seen as insurance fraud.

Being overly patient with a contractor who fails to perform on time – resulting in lost business – will, likewise, not be rewarded by a court.

Recently I spoke with a reader who waited over a year for completion of a sign for his fried chicken restaurant, required in the franchise agreement.

Without the sign, he could not open and wanted to sue the owner of the sign company for lost sales. He spoke with four lawyers, each saying, “It was promised to be ready in 30 days, so why didn’t you just hire a different sign company to finish the job?”

I asked the same question. His answer in a deep, Southern accent: “My momma told me to be patient. Are you going to help me or what?”

My response: “You need to be seen by a doctor.”

Why? Because it is clear that you were born without certain organs.

My Advice to Louie

While there was clearly a failure to mitigate damages, I disagree with the recommendation to pay anything to these three creeps who caused their own injuries.

I referred Louie to an insurance defense attorney who worked out an agreement with the parents. “We won’t ask the D.A. to prosecute them if they all agree to drop any claims against us.” The parents agreed.

Dennis Beaver practices law in Bakersfield and enjoys hearing from his readers. Contact Dennis Beaver.