## Facts

- Sheep ranchers G. Emery Davis, Sam Davis, and their families financed their operations through operating loans from First Interstate Bank of Idaho, N.A.
- The Bank agreed to lend funds for the Davises’ 1983–84 sheep ranching operations and assured them it would continue financing.
- In December 1983, negotiations for renewal/extension broke down and the Bank did not provide the promised funds.
- The Bank conceded it had a valid lending contract and that it breached that contract by failing to lend in December 1983.
- Sam Davis submitted an affidavit stating that after the Bank refused to fund, he sought alternative financing from Idaho First National Bank and the Farmers Home Administration.
- The Davises were unable to obtain substitute financing, lacked funds for feed and operations, and many sheep starved.
- The Davises sued for breach of contract and related tort-based claims; the Bank argued damages should be limited due to alleged failure to mitigate.

## Issues

1. Whether summary judgment was proper on the ground that the Davises failed, as a matter of law, to mitigate damages under the avoidable consequences doctrine after the Bank’s admitted breach.
2. Whether the Bank, as the party asserting failure to mitigate, met its burden on summary judgment to show no genuine dispute of material fact regarding reasonable mitigation measures and their likely effectiveness.

## Decision

- The Idaho Supreme Court reversed the summary judgment for the Bank and remanded for further proceedings.
- The court held the Bank did not carry its burden to establish failure to mitigate as a matter of law.
- Evidence, including Sam Davis’s affidavit describing efforts to obtain substitute financing, created a triable factual dispute on the reasonableness of the Davises’ post-breach conduct.
- Because reasonableness of mitigation is ordinarily a fact question, the mitigation defense could not be resolved on summary judgment on this record.

## Legal Principles

- The avoidable consequences doctrine (failure to mitigate damages) is an affirmative defense; the defendant bears the burden of proof.
- A defendant seeking summary judgment on failure to mitigate must show the absence of a genuine issue of material fact that (a) reasonable steps were available to reduce loss, and (b) the plaintiff unreasonably failed to take them.
- When the evidence permits differing inferences about the reasonableness or feasibility of mitigation efforts, summary judgment is improper.

## Conclusion

The court reinstated the Davises’ claims for adjudication because the Bank’s mitigation defense required fact-finding on the availability and reasonableness of alternative measures after the Bank’s admitted breach, and the Bank failed to conclusively prove avoidable consequences at the summary-judgment stage.


Davis v. First Interstate Bank of Idaho, N.A., 115 Idaho 418, 765 P.2d 680 (Idaho 1988)