The non-breaching party has an affirmative duty to use reasonable diligence and good efforts to mitigate or minimize its damages. Deutz-Allis Credit Corp. v. Jensen, 458 N.W.2d 163, 166 (Minn. Ct. App. 1990); Bass v. Equity Residential Holdings, LLC, 849 N.W.2d 87, 92 (Minn. Ct. App. 2014). The scope of the duty to mitigate depends on the nature of the contractual obligation and the contract's intended
Therefore, Article 9 of Minnesota's version of the UCC, which expressly requires commercial reasonableness in a sale, is not directly applicable. Deutz-Allis Credit Corp. v. Jensen, 458 N.W.2d 163, 166 (Minn. App. 1990). The leases both establish that Article 2A of Minnesota's UCC governs Lyon's options in the event of default by Jude's.
1983) ("Lesmeister argues strongly that his damages, being contractual in nature, should not be reduced by any percentage of fault attributable to him. However, Lesmeister ... was under a duty to take reasonable steps to mitigate his damages."); DeutzβAllis Credit Corp. v. Jensen , 458 N.W.2d 163, 166 (Minn. Ct. App. 1990) ("It is a well-settled principle of contract law that a nonbreaching party is duty-bound to use reasonable diligence to mitigate damages."); Bass v. Equity Residential Holdings, LLC , 849 N.W.2d 87, 92 (Minn. Ct. App. 2014) ("Generally, the party alleging a loss because of a tort or breach of contract has a duty to mitigate damages.").
Under Minnesota law, the injured party upon a breach of contract has the duty to use reasonable diligence in mitigating damages. Deutz-Allis Credit Corp. v. Jensen, 458 N.W.2d 163, 166 (Minn.Ct.App. 1990). However, what constitutes reasonable diligence "will depend on the facts of the particular case."
Deutz-Allis Credit Corp. v. Jensen, 458 N.W.2d 163, 166 (Minn.App. 1990). Reasonableness is a question of fact left to the jury.
Lesmeister v. Dilly, 330 N.W.2d 95, 103 (Minn.1983); Cnty. of Blue Earth v. Wingen, 684 N.W.2d 919, 924 (Minn.App.2004); DeutzβAllis Credit Corp. v. Jensen, 458 N.W.2d 163, 166 (Minn.App.1990) (stating that an injured party must use βreasonable diligence and good efforts to minimize ... lossesβ).
Gander Mountain argues that the damage calculation differs depending on whether one takes into account Grandoe's attempt to mitigate its damages, but β[i]t is a well-settled principle of contract law that a nonbreaching party is duty-bound to use reasonable diligence to mitigate damages.β DeutzβAllis Credit Corp. v. Jensen, 458 N.W.2d 163, 166 (Minn.Ct.App.1990). Gander Mountain has provided no case law support for its assertion that there is more than one way to calculate damages in this case, and in the absence of multiple ways to calculate damages, we cannot say that Grandoe's damages were not readily ascertainable.
βIt is a well-settled principle of contract law that a nonbreaching party is duty-bound to use reasonable diligence to mitigate damages.β Deutz-Allis Credit Corp. v. Jensen, 458 N.W.2d 163, 166 (Minn.Ct.App. 1990); see also County of Blue Earth v. Wingen, 684 N.W.2d 919, 924 (Minn.Ct.App. 2004). β[I]n the case of a breach of contract the burden of proof is upon the defendant to show that damages were or could have been mitigated by reasonable diligence.β
"It is a well-settled principle of contract law that a nonbreaching party is duty-bound to use reasonable diligence to mitigate damages." Deutz-Allis Credit Corp. v. Jensen, 458 N.W.2d 163, 166 (Minn. Ct. App. 1990). Although Comco breached the Management Agreement by failing to indemnify FMS, FMS mitigated its damages by successfully tendering defense to Scottsdale.
Thus, the Lease Agreements should be characterized as security agreements for the sale of the Equipment. See Deutz-Allis Credit Corp. v. Jensen, 458 N.W.2d 163, 166 (Minn. App. Ct. 1990) (finding that a lease was not a security agreement since "[t]he purchase option price was for the estimated fair market value of the combine at the end of the lease term and was clearly not nominal consideration"); In re JII Liquidating, Inc., 341 B.R. 256, 267 (Bankr. N.D. Ill. 2006) (stating that "[t]rue leases usually govern the temporary use of property and require the return of the leased item to the lessor at the end of a specified term," and that "[i]n contrast, leases intended as security are subject to either Article 2 (sales) or Article 9 (secured transactions) of the UCC") (stating also that "to determine whether an agreement that contends to be a lease is a true lease or a security agreement, the Court must look to state law"); Pointe Sanibel Development Corp. v. Sundial Beach and Tennis, Inc., 1993 WL 500529, at *4 (Minn. App. 1993) (stating that "[i]f the lessee has an option to buy for no or nominal consideration, the lease is intended for security"); FBS Business Finan