Moore v. Continental Insurance Company
In Moore v. Continental Insurance Company, 813 P.2d 1296 (Wyo. 1991), after repeatedly receiving late premium payments from the insured, the insurer cancelled the homeowner's policy and refunded the last payment.
Upon receipt of the refund, the insured contacted the local agent and was told the policy had been cancelled.
Beyond asking the local agent to see if another company would pick up the insurance, the insured did nothing to obtain replacement coverage until after his home was seriously damaged by fire.
The Court affirmed summary judgment for the insurer based upon the insured's failure to act to mitigate his damages.
The Court said:
"A party may, in certain instances, be required to mitigate his damages, and whether an injured party has exercised reasonable diligence and care in mitigating damages is for the trier of fact to decide. However, where reasonable minds could not differ with respect to efforts to mitigate, as here, summary judgment is appropriate." (Moore, 813 P.2d at 1300-01.)
In reaching this result in Moore, the Court quoted Restatement (Second) of Contracts 350 (1981):
"(1) Except as stated in Subsection (2), damages are not recoverable for loss that the injured party could have avoided without undue risk, burden or humiliation.
"(2) The injured party is not precluded from recovery by the rule stated in Subsection (1) to the extent that he has made reasonable but unsuccessful efforts to avoid loss."
(813 P.2d at 1301.)
Explaining 350, the Court said:
"The rationale of this principle, which differentiates it from mitigation in a more general sense, is that damages which the plaintiff might have avoided with reasonable effort and without undue risk, expense, or humiliation are either not caused by the defendant's wrong or need not have been, and, therefore, are not to be charged against him. 11 Williston on Contracts 1353 (3rd ed. 1968); 5 Corbin on Contracts 1039 (1964)." Id.