## Facts

- Chad DeRosier bought steeply sloped property in Duluth, Minnesota, intending to build a house and needing substantial fill to level the site.
- Utility Systems of America, Inc. (USA), a contractor working on a nearby road project, was excavating material and could reduce its own disposal costs by dumping fill closer to the project.
- DeRosier asked USA to dump fill on his property. USA agreed on the condition that DeRosier obtain the required city permit.
- DeRosier obtained a permit allowing the deposit of 1,500 cubic yards of fill and delivered a copy of the permit to USA.
- While DeRosier was away, USA deposited far more than the permitted amount—about 6,500 cubic yards—covering the property.
- DeRosier demanded that USA remove the excess fill. USA refused to do so without payment, denying responsibility and asserting that DeRosier had not properly communicated the limit and had not satisfied other site-related requirements.
- DeRosier’s contractor advised that construction could not proceed until the excess fill was removed and estimated removal would cost at least $20,000.
- USA offered to remove the excess fill only if DeRosier paid USA $9,500, which USA represented as its cost to perform the removal.
- DeRosier declined to pay USA and instead hired a different contractor to remove the excess fill, paying approximately $22,800 (the trial court awarded $22,829).
- DeRosier sued USA for breach of the oral agreement regarding the amount of fill to be placed on his property.
- After a bench trial, the district court found an oral contract limiting fill to about 1,500 cubic yards, found USA in breach, and awarded DeRosier $22,829 in general damages (removal costs) and $8,000 in consequential damages (construction-related costs tied to the overfill and delay).
- USA appealed the damages awards.

## Issues

1. Whether DeRosier failed to mitigate damages by refusing USA’s offer to remove the excess fill for $9,500.
2. Whether the evidence supported the district court’s award of $22,829 in general damages for removal of the excess fill.
3. Whether the district court properly awarded $8,000 in consequential damages related to additional construction costs.

## Decision

- The court affirmed the district court’s award of $22,829 in general damages for the reasonable cost of removing the excess fill.
- The court held DeRosier did not fail to mitigate damages by refusing USA’s offer, because USA conditioned its “cure” on DeRosier paying new consideration to the breaching party.
- The court reversed the award of consequential damages, concluding that the claimed consequential losses were not recoverable on this record under the governing standards for such damages.

## Legal Principles

- A nonbreaching party may recover general damages measured by the reasonable cost to restore the property (or performance position) to what the contract contemplated.
- The duty to mitigate requires reasonable efforts to reduce loss, but it generally does not require the injured party to accept a proposed fix from the breaching party when the breaching party demands additional payment to correct its own breach.
- Consequential damages are recoverable only when they are sufficiently connected to the breach and meet the applicable limits on recovery (including proof and the requirement that such losses be within the scope of what the parties could reasonably have expected at contracting).

## Conclusion

The Minnesota Court of Appeals held that USA breached an oral agreement by dumping far more fill than permitted and affirmed DeRosier’s recovery of the reasonable third-party costs to remove the excess fill, while reversing the separate consequential-damages award; it also clarified that mitigation did not require DeRosier to pay the breaching contractor to fix the problem.


DeRosier v. Utility Systems of America, Inc., 780 N.W.2d 1 (2010)