Appellant egg producers sought review of the judgment entered by the Superior Court of Alameda County (California) on their cross-demand to respondent feed company’s action to recover for purchases. Appellants contended they did not have the burden of proof as to adequacy of efforts to mitigate consequential damages under the California Uniform Commercial Code and were also entitled to an offset for a claim of a joint venture not a party
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Respondent feed company sought recovery of the balance due for appellant egg producers’ feed purchases. Appellants cross-demanded for breach of warranties and fraud, claiming losses from the feed’s nutritional deficiencies, including loss of good will. The trial court nonsuited the claim for loss of good will, on the basis that appellants did not meet its burden of proving it made reasonable efforts to mitigate damages. On appeal, the court held that under the California Uniform Commercial Code (UCC), while the burden of proving the extent of loss incurred by way of consequential damages rested with the injured party, Cal. Com. Code § 2715(2)(a) (Cal. UCC) imposed upon the allegedly breaching party the burden of proving the inadequacy of efforts to mitigate consequential damages. Appellants therefore had no duty to present evidence of mitigation and the granting of the nonsuit was reversible error. Appellants also sought to offset the claim of a joint venture against respondent’s claim. The court held because the joint venture was not a party against whom respondent had a claim, those losses could not be asserted as an offset in this action, under Cal. Civ. Proc. Code § 431.70.
The court reversed the trial court judgment in favor of respondent feed company because the trial court improperly allocated to appellant egg producer the burden of proof as to the adequacy of efforts made to mitigate appellant’s loss of good will.