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Early Mitigation of Damages

Damages are the monetary results of litigation. They can range from compensation for injuries incurred by a plaintiff to attorney's fees. As a result, they can range from a single dollar in nominal damages to millions of dollars in extensive litigation cases.  Due to this wide range, it is prudent to evaluate the potential economic effects of any litigation with legal representation.

 

A recent case heard by California Court of Appeals can be seen as a cautionary tale for the effects of not taking prudent steps to evaluate economic effect of litigation.


 

. In the case of Beck v. Stratton, a misunderstanding over $303.50 resulted in the defendant having to pay $38,447 in damages.

 

In this case, the plaintiff of the original case, Stratton, sent a demand to the defendant and his former employer, Beck, for $1,075 in back pay. Beck proceeded to hand over this note to his payroll service that, for no identifiable reason, paid Stratton only $771.45. Stratton asked Beck on multiple occasions to be paid the additional $303.50 to no avail. As a result, Stratton filed a complaint with California Division of Labor Standards Enforcement for his remaining $303.50. The DLSE awarded Stratton $303.50 plus penalties and interest for a total of $6,060.96

 

At this point (if not earlier), Beck should have sought appropriate legal counsel. Instead, he proceeded to fail to properly file the case, which resulted in the case being filed as an unlimited civil case instead of a limited civil case. An unlimited case puts no cap on the available damages while limited civil case puts a cap of $25,000 on the proceeding. As a result, the court found in favor of Beck and awarded him the $303.50 in back pay, $6,778.85 in damages, and  $31,365 in attorneys fees, which was only the plaintiff's fees and did not factor in the defendant's attorneys fees.

 

Beck's failure to properly mitigate his damages early by paying the $303.50 resulted in the payment of $38,447.35 to the plaintiff. If anything can be gained from Beck's errors, it is that a small issue can result in serve penalties if not handled properly. As a result, it would be prudent to seek proper legal counsel for any potential claims in order to properly determine their merit, response to them properly and determine, if possible, the extent of any possible damages. The earlier that damages can be mitigated, the better the result will likely be.

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Larson & Gatson

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