CLARK B. WINTER, AS TREASURER OF AMERICAN EXPRESS COMPANY, AN UNINCORPORATED JOINT STOCK ASSOCIATION FOR PROFIT, APPELLANT,
v.
AMERICAN AUTOMOBILE ASSOCIATION, A CORPORATION, APPELLEE

Fla. 3d DCA | 1963-01-29
No. 61-778
Before PEARSON, TILLMAN, C. J., and HORTON and BARKDULL, JJ.
149 So. 2d 386 Florida District Court of Appeal, Third District (1963) Positive Treatment
Cited by 7 cases

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Holding

The court held that the plaintiff had a duty to mitigate damages by dishonoring stolen traveler's cheques and failed to do so.


Facts & Procedural History

Amexco sued AAA for amounts paid on traveler's cheques stolen from AAA's possession. AAA had agreed to exercise the same care for Amexco's cheques as …

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Opinion of the Court
BARKDULL, Judge.

BARKDULL, Judge.

The appellant [plaintiff in the trial court], hereafter known as Amexco, brought its action seeking recovery of amounts paid by it to holders of certain of its Traveler’s Cheques. Said cheques were in the possession of [and stolen from] the office of the appellee-defendant, hereafter known as AAA. This action was based on the alleged failure of AAA to comply with an agreement between Amexco and AAA, whereby AAA obtained possession of. said cheques for purposes of sale to the general public. The cause was heard and decided below on a stipulated set of facts, and judgment was rendered for the defendant-appellee.

In reviewing the record on appeal, this court has determined the following facts: (1) That Amexco had executed an agreement with AAA, pursuant to which Amexco delivered to AAA, certain of its Traveler’s Cheques. Said agreement provided for AAA to exercise the same care and protection of these cheques as it did its own currency. (2) That AAA had insured its currency against theft. (3) That Amexco had requested AAA to insure Amexco’s cheques against theft and had acted in reliance on AAA’s assurance that its theft insurance covered Amexco’s cheques by delivering to and allowing AAA to retain the cheques in question. (4) That theft of Amexco’s cheques was not covered by AAA’s insurance. (5) That the Traveler’s Cheques were cleared through normal banking channels and ultimately honored by Amexco in the State of New York. Thus, when Amexco’s Traveler’s Cheques were subsequently stolen from AAA’s office and were found not to be covered by AAA’s insurance, there can be no doubt that AAA had violated the standard of care required of it and that Amexco had sustained its burden of proof. However, AAA asserted the affirmative defense of mitigation of damages, insisting that Amex-co had a duty to mitigate its damages by dishonoring the stolen cheques when presented for payment.

In an action on a contract, if a plaintiff [by reasonable exertion of care] can prevent damages resulting to him by reason of the defendant’s wrongful acts, it is his duty to do so and, so far as he can thus prevent them, he cannot recover therefor. State ex rel. Dresskell v. City of Miami, 153 Fla. 90, 13 So.2d 707; Young v. Cobbs, Fla.1959, 110 So.2d 651, 71 A.L.R.2d 1100; 9 Fla.Jur., Damages, § 20. In reviewing the record, we find that AAA timely notified Amexco of the theft of the cheques and that at no time thereafter did Amexco refuse to honor or even question any of the stolen cheques when presented for payment. As Amexco was under a duty to make a reasonable attempt to mitigate damages and as they made no attempt whatsoever to do so, there can be no doubt that AAA has established a prima facie defense against Amexco. See: Warren v. Stoddart, 105 U.S. 224, 26 L.Ed. 1117; Oakland Metal Stamping Company v. Forest, 352 Mich. 119, 89 N.W.2d 503; 25 C.J.S. Damages § 34a.

By this appeal, Amexco is attempting to refute the affirmative defense established by AAA by contending: (1) It was under legal duty to honor the bulk of the cheques even though it had timely notice of the theft, because the majority of the cheques were negotiated in California and, under California law, they were obligated to do *388so, [See: T.W.A. v. Bank of America, 1941, 46 Cal.App.2d 708, 116 P.2d 791] or, (2) It had a right to dishonor the cheques but was not under a duty to do so. This contention was advanced on the theory that due to the type business Amexco is engaged in, dishonoring the cheques would do irreparable damage to that business and could possibly result in damages in excess of the value of the stolen cheques, and Amexco should not be required to endanger its own business to protect AAA, the initial wrongdoer in this case. See: Frederick Raff Co v. Murphy, 1929, 110 Conn. 234, 147 A. 709.

As to the first proposition urged by the appellant, the traveler’s cheques ultimately cleared Amexco’s bank in New York and, under the law of that State, the appellant was under no legal obligation to honor the stolen traveler’s cheques. See: First National City Bank v. Frederics-Helton Travel Service, Inc., 29 Misc.2d 1041, 209 N.Y.S.2d 704. Therefore, having no legal obligation to honor same, they had a “right” if not a “duty” to dishonor the said cheques.

As to the second proposition advanced by the appellant, this appears to be the principal point urged and, possibly, it might have been able to sustain this proposition in the trial court had it been presented in a reply to the affirmative defense or any proof tendered to establish the facts now urged on this appeal.1 That, notwithstanding the “right” to dishonor, they were under no “duty” to do so to the detriment of its business reputation. This reply to the defendant’s affirmative defense of opportunity to mitigate was clearly a burden of the plaintiff in the trial court. See Restatement of Contracts, 1932 Ed. 536. The appellant urges that this was a burden of the defendant upon the general authority which states that a defendant must establish facts in mitigation of damages. See: Finberg Trading Company v. Republic of China, 5th Cir., 1955, 220 F.2d 844; Miller v. Long, 126 Ind.App. 482, 131 N.E. 348, 132 N.E.2d 272; 134 A.L.R. 242, and cases cited therein. However, the facts in mitigation in this cause were the right and opportunity to dishonor and, when the defendant had established this, the burden of proof then shifted back to the plaintiff to establish its right to ignore the doctrine of mitigation.

Therefore, for the reasons stated, the final judgment of the trial court is affirmed.

Affirmed.


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Citator

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  • Jenkins v. Graham, 237 So. 2d 330 (Fla. 4th DCA 1970)
    …The principle of avoidable consequences is that one seeking damages as the result of another’s act cannot recover those damages which he could have avoided by the exercise of reasonable care. Winter v. American Automobile Association, Fla.App.1963, 149 So. 2d 386. Since the doctrine addresses itself to equity, we see no reason why it should not be applied to a situation such as the present where a contractor seeks a mechanic’s lien on an interest in real property owned by a party with whom he had no contract…
  • Raskin v. Otten, 273 So. 2d 433 (Fla. 3d DCA 1973)
    …who had use of and benefited from the subject property, to recover additional benefits in the form of these expenses. United Service Corp. v. Vi-An Construction Corp., Fla.1955, 77 So. 2d 800; Winter v. American Automobile Association, Fla.App.1963, 149 So. 2d 386. We have considered appellees’ petition for rehearing and find it to be without merit. It is hereby denied. Accordingly, for the reasons stated above the trial court’s decision is affirmed in part and reversed in part.…
  • Tampa Pipeline Transp. Co. v. Chase Manhattan Serv. Corp., 928 F. Supp. 1568 (M.D. Fla. 1995)
    …greement proposed by the defendant. The doctrine of avoidance of consequences is well-established in Florida. Messer v. E.F. Hutton & Co., 833 F.2d 909, 921 (11th Cir.1987). That doctrine was stated in Winter v. American Auto. Ass’n, 149 So.2d 386, 387 (Fla.App.1963) (brackets in original), as follows: In an action on a contract, if a plaintiff [by reasonable exertion of care] can prevent damages resulting to him by reason of the defendant’s wrongful acts, it is his duty to do so and, so…

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