Mitigation of Damages

Defenses frequently include comparative fault, failure to mitigate, third party fault, offset, contribution, impleading a third party, laches, and many others. How do you handle these defenses? Can the defendant's witness explain facts to support the asserted defenses?
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David A. Szwak
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Joined: Tue Jul 26, 2005 4:15 am

Mitigation of Damages

Post by David A. Szwak »

Graham v. CSC Credit Services, Inc.
306 F.Supp.2d 873

Even assuming that Fair Credit Reporting Act (FCRA) required consumer to mitigate damages, consumer who alleged that inaccurate tradeline in his credit report caused him to receive mortgage loan at higher rate than he otherwise would have did not fail to mitigate when he did not refinance after tradeline was removed and interest rates fell; consumer had already made mortgage payments when tradeline was removed, and refinancing would have caused him to incur additional closing costs and spend additional time.

2. Mitigation of Damages
[6] CSC argues that as a matter of law, Graham has failed to mitigate his damages. CSC asserts that after it removed the Gateway tradeline from Graham's credit report, interest rates fell below the rate at which Graham refinanced his mortgage in June 2002. CSC further asserts that if Graham had refinanced again, he could have eliminated any damages *880 that he incurred as a result of the June 2002 refinancing.
The Court has been unable to locate any FCRA cases addressing a consumer's duty to mitigate damages. Assuming such a duty does exist, CSC fails to demonstrate that, by refinancing, Graham would have eliminated his damages. CSC fails to establish that Graham could have refinanced at a particular interest rate, particularly when weeks after closing on the First Republic loan, Graham's wife left her paying job to stay home with their child. Even if Graham had refinanced the remaining principal on his mortgage loan at a lower interest rate, he had already made payments at the higher interest rate until September 2002, when the Gateway tradeline was removed. Additionally, Graham would have incurred additional closing costs and spent additional time if he had attempted to refinance again. CSC has failed to show that as a matter of law, Graham failed to mitigate his damages.
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