                                             PRECEDENTIAL

           UNITED STATES COURT OF APPEALS
                FOR THE THIRD CIRCUIT
                     _____________

                    Nos. 13-1615 & 13-1780
                        _____________

                      VICI RACING, LLC
                                Appellant in 13-1780
                             v.

                     T-MOBILE USA, INC.,
                                 Appellant in 13-1615
                        _____________

           Appeal from the United States District Court
                   for the District of Delaware
              (D.C. Civ. Action No. 1-10-cv-835)
           District Judge: Honorable Sue L. Robinson
                         ______________

                    Argued January 14, 2014

   Before: AMBRO, GREENAWAY JR., Circuit Judges,
             and BAYLSON*, District Judge

                (Opinion Filed: August 13, 2014)

       *
          Honorable Michael M. Baylson, United States
District Court for the Eastern District of Pennsylvania, sitting
by designation.
John D. Lowery, Esquire
Gavin W. Skok, Esquire
1001 Fourth Avenue
Seattle, WA 98154

James C. Martin, Esquire (Argued)
Colin E. Wrabley, Esquire
225 Fifth Avenue
Pittsburgh, PA 15222

Peter J. Walsh, Jr., Esquire
Jennifer C. Wasson, Esquire
1313 North Market Street
6th Floor, P.O. Box 951
Wilmington, DE 19801

      Counsel for Appellant in 13-1615
      (Cross Appellee in 13-1780)

Juan C. Antorcha, Esquire
Joseph P. Klock, Jr., Esquire (Argued)
283 Catalonia Avenue
Coral Gables, FL 33134

Christopher D. Loizides, Esquire
1225 King Street
Wilmington, DE 19801

      Counsel for Appellee in 13-1615
      (Cross Appellant in 13-1780)




                               2
                      ______________

                OPINION OF THE COURT
                     ______________

Baylson, District Judge

I.    Introduction

        This appeal arises out of a contract dispute between
VICI Racing LLC (“VICI”), the owner of a sports car racing
team, and T-Mobile USA, Inc. (“T-Mobile”), a
telecommunications company that agreed to be a corporate
sponsor of the sports car team. Appellant/Cross-Appellee T-
Mobile appeals a $7 million judgment entered against it in the
District Court for the District of Delaware. After a bench
trial, the District Court ruled that T-Mobile breached a
contract with Appellee/Cross-Appellant VICI and awarded
VICI $7 million in damages. On appeal, T-Mobile argues
that it should not have been held liable for any damages
arising out of the contract and is instead entitled to damages.
VICI filed a cross-appeal, seeking an additional $7 million
pursuant to what it contends is a liquidated damages clause in
the contract.

II.   Background

      VICI is the former operator of a sports car racing team
that competed in the American Le Mans Series.1 VICI
Racing, LLC v. T-Mobile USA, Inc., 921 F. Supp. 2d 317, 320
(D. Del. 2013). T-Mobile owns and operates a wireless

      1
          The American Le Mans Series is a series of sports
car races that is sanctioned by the International Motor Sports
Association. J.A. 887.




                               3
telephone service including        automobile-based    wireless
telephone service. J.A. 887.

       Beginning in March 2009, VICI President Ron
Meixner entered into discussions with T-Mobile executives
about sponsoring the VICI team for the 2009, 2010, and 2011
Le Mans racing seasons. VICI Racing, 921 F. Supp. 2d at
320. Meixner informed T-Mobile that a “sponsorship would
be economically valuable for T-Mobile because VICI could
offer T-Mobile to be the network service provider for the
VW/Audi Group and Porsche AG Telematics services.” Id.
(internal quotation marks and citation omitted).2 A number of
discussions were held within T-Mobile about the financial
opportunities associated with providing telematics services to
VW, Audi, and Porsche, as well as how the Agreement with
VICI would secure that business. See id. at 321-22.

       2
           The District Court did not make any findings about
the meaning of the term “telematics” nor did the contract
define the term. We note that it has been defined as “[t]he
branch of science concerned with the use of technological
devices to transmit information over long distances,” Collins
English Dictionary (10th ed. 2009), available at
http://dictionary.reference.com/browse/telematics, and as
“refer[ring] to the broad industry related to using computers
in concert with telecommunications systems. This includes
dial-up service to the Internet as well as all types of networks
that rely on a telecommunications system to transport data.
The term has evolved to refer to systems used in automobiles
that combine wireless communication with GPS tracking.
The term is further evolving to include a wide range of
telecommunication functions that originate or end inside
automobiles,” Telematics, WEBOPEDIA,
http://www.webopedia.com/TERM/T/telematics.html.




                               4
      A.     The Agreement

        On March 30, 2009, T-Mobile and VICI entered into a
Sponsorship Agreement (the “Agreement”). J.A. 894. The
Recitals section of the Agreement states that T-Mobile agrees
to sponsor VICI and that VICI and T-Mobile “desire to
promote and maintain their respective corporate images and
reputations through participation in the 2009, 2010 and 2011
American LeMans race seasons.” Id. at 887. The Agreement
required VICI to field one T-Mobile-sponsored Porsche
racecar during the 2009 season and two T-Mobile-sponsored
Porsche racecars during each of the 2010 and 2011 seasons.
Id. at 887. The Agreement also required VICI to display T-
Mobile’s logo and trademark on its racecars, trailers,
uniforms, and other promotional items. Id. at 888-89.

       Additionally, section 5.8 of the Agreement provides
that “VICI grants to [T-Mobile] the right to be the exclusive
wireless carrier supplying wireless connectivity for the
Porsche, Audi and VW telematics programs beginning in
model year 2011 with such exclusivity continuing throughout
the Term of this Agreement.” Id. at 888. The meaning and
relevance of section 5.8 were a hotly disputed issue at trial.

       As for T-Mobile, section 4 of the Agreement required
it to make the following payments to VICI:

      2009 Race Season: $1,000,000.00 payable by
      April 1, 2009;[3]

      2010 Race Season: $7,000,000.00 payable by
      January 1, 2010; and


      3
          This amount was timely paid by T-Mobile to VICI
and is not in dispute.




                              5
       2011 Race Season: $7,000,000.00 payable by
       January 1, 2011.

Id. at 887-88.

       The Agreement also contains three other provisions
that are relevant to this appeal. Section 13.2 of the
Agreement is a force majeure clause. According to that
provision,

       [i]f a party’s performance of any non-monetary
       obligation under this Agreement is prevented by
       any condition wholly beyond such party’s
       control, the affected party will be excused from
       such performance, provided the affected party:
       (a) provides prompt written notice of such
       interference, the nature of such interference and
       the expected duration of such interference to the
       other party; and (b) resumes performing its
       obligations hereunder promptly following the
       removal of such interfering condition. The
       other party will be relieved from performing its
       obligations under this Agreement for the
       duration of such interference. Such delay or
       failure shall not constitute a breach of this
       Agreement . . . .

Id. at 893.

      Section 14.7 of the Agreement is a severability clause,
which provides

       [t]he provisions of this Agreement are severable
       and, if any one or more provisions are
       determined to be illegal or otherwise
       unenforceable, in whole or in part, the




                               6
       remaining provisions, and pay partially
       enforceable    provisions     to   the   extent
       enforceable, shall nevertheless be binding and
       enforceable, and such illegal or otherwise
       unenforceable provisions shall be replace[d] by
       such valid provisions which come closest to the
       purpose and intent of this Agreement

Id. at 893.

       Finally, section 11 of the Agreement has a provision
under the heading “Limitation of Liabilities.” Section 11.2 of
that provision provides in all capital letters

       [t]he maximum aggregate liability of either
       party and any of its affiliates to the other party,
       and the exclusive remedy available in
       connection with this agreement for any and all
       damages, injury, losses arising from any and all
       claims and/or causes of action, shall be limited
       to $20,000 or the aggregate payments payable
       under this agreement, whichever is higher . . . .

Id. at 892 (some capitalization omitted).
       B.     The “Telematics” Collaboration

       As the District Court’s findings of fact detail,
beginning in April 2009, Meixner worked with T-Mobile to
secure “telematics” business from VW, Audi, and Porsche.
For example, Meixner helped set up meetings for T-Mobile
with the President and CEO of Porsche Motorsports North
America, provided the contact information of fifteen “key
people in telematics” at VW, VICI Racing, 921 F. Supp. 2d at
325 (citation omitted), and helped pitch T-Mobile’s services
at a meeting with VW. Id. at 324-26. T-Mobile, however,




                                7
complained that things were “moving a little slower than [it]
would like.” Id. at 325 (citation omitted).

      C.     The Accident

       On July 18, 2009, T-Mobile’s sponsored racecar
sustained engine and body damage from an accident while
racing. Id. On August 2, 2009, Meixner sent a letter to T-
Mobile’s President and legal department notifying them about
the accident. In the letter, Meixner stated that the racecar
would not be able to race for 45 to 60 days while it was
undergoing repairs. A T-Mobile executive responded by
expressing his displeasure that the repairs would mean guests
of T-Mobile would not see the T-Mobile racecar compete in
an upcoming race. Id.

      D.     Termination of the Agreement

       On January 5, 2010, Meixner sent T-Mobile a notice of
default, indicating that T-Mobile had failed to pay the $7
million due under the Agreement by January 1, 2010. Id. at
327. On January 7, 2010, T-Mobile sent a letter to Meixner
terminating the Agreement, claiming that VICI materially
breached the contract because
      VICI made a material representation and
      warranty (Section 5.8) that VICI had the
      authority to bind Audi, VW and Porsche . . . to
      an obligation making [T-Mobile] the exclusive
      wireless carrier supplying wireless connectivity
      for the . . . telematics programs beginning in
      model year 2011. As it turns out . . . VICI does
      not have and has never had the authority to
      grant such rights . . . or to contractually bind
      Audi and VW in that regard. . . . VICI has not




                              8
       provided any other real support to T-Mobile to
       assist us in meeting that objective.

       In addition, we note that VICI failed, without
       justification or prior notice to [T-Mobile], to
       race . . . at one key event where [T-Mobile] was
       present with business guests.

Id. (alterations in original).

       E.      Proceedings in the District Court

       On September 30, 2010, VICI filed suit in the District
of Delaware against T-Mobile, claiming that T-Mobile
breached the Agreement when it failed to pay VICI
$7 million on January 1, 2010 and seeking $14 million in
damages. T-Mobile asserted, as an affirmative defense and
counterclaim, that VICI did not perform its obligations under
the contract (1) by failing to race during the period the T-
Mobile-sponsored car was damaged and (2) by failing to
provide T-Mobile with telematics business to three
automakers. T-Mobile also alleged fraudulent inducement
and equitable fraud against VICI.

       Prior to trial, the parties filed a “joint proposed pretrial
order.” This document is divided into several sections where
each party listed its own statement of disputed facts, disputed
issues of law, and a statement of what the parties intended to
prove. Id. at 78.

       At the bench trial, VICI’s evidence and contentions on
damages were exclusively dedicated to the argument that
section 11.2 was a liquidated damages clause that fixed the
amount of damages at $14 million. T-Mobile did not contest
VICI’s characterization of section 11.2. It also did not assert
as an affirmative defense, nor argue at trial, that VICI failed




                                 9
to mitigate its damages. Rather, T-Mobile relied on the
argument that section 5.8 (the telematics provision) was an
essential term of the Agreement—that is, if section 5.8 was
found to be unenforceable, then the entire Agreement would
be unenforceable.      Because the Agreement would be
unenforceable without section 5.8, T-Mobile argued that this
conclusion required the District Court to award it damages in
quantum meruit. T-Mobile also argued that it had been
fraudulently induced into entering the Agreement by VICI’s
representation that it had the authority to secure telematics
business from VW, Audi, and Porsche.4

        On February 11, 2013, the District Court entered
judgment in favor of VICI. In a comprehensive opinion
accompanying its judgment, the District Court made detailed
findings of fact and conclusions of law. It determined that T-
Mobile breached the Agreement by failing to make the
obligatory payment of $7 million on January 1, 2010. VICI
Racing, 921 F. Supp. 2d at 334. It also concluded that section
5.8 was ambiguous on its face and that parol evidence did not
resolve the ambiguity. Id. at 328-29. According to the
District Court’s findings of fact, before the final Agreement
was signed, Robert Hines, T-Mobile’s inside counsel, spoke
with Meixner about section 5.8. According to Meixner’s
testimony, during that conversation the T-Mobile official
explained that section 5.8 only meant “that T-Mobile is
exclusive to [VICI] and that [VICI] cannot shop this around
and get—promote any other wireless carriers, and that was
it.”5 Id. at 324. The District Court reached clear findings that

       4
        The District Court rejected T-Mobile’s fraudulent
inducement argument. T-Mobile does not appeal that ruling.
       5
         The quoted testimony is arguably contrary to T-
Mobile’s arguments in this litigation. There was clearly




                              10
the language of section 5.8 is “too convoluted to have any one
clear meaning,” is “fairly susceptible of different
interpretations,” could “have two or more different
meanings,” and that “an examination of the rest of the
contract reveals no other provisions that in any way
illuminate the language contained in section 5.8.” Id. at 326.

       In reaching this finding, the District Court rejected T-
Mobile’s argument that it only entered the contract because of
its understanding of section 5.8. Id. at 328. Specifically, the
Court concluded that even if it were “to assume the veracity
of T-Mobile’s subjective understanding [of section 5.8], the
evidence of record does not support that this subjective
understanding was ‘objectively manifested’ to VICI or that
VICI knew or should have known of it.” Id. at 331. The
Court then severed section 5.8 pursuant to section 14.7 (the
severability provision) of the Agreement. Id. at 330.

       In response to T-Mobile’s argument that VICI first
breached the contract, the Court concluded that, although
VICI did not meet its obligation to race for the entire 2009
season, that failure was excused under the Agreement’s force
majeure provision (section 13.2) because the racecar had been
damaged in an accident and VICI had provided notice to that
effect. Id. at 332.

        With respect to damages, the Court awarded VICI
expectation damages of $7 million for T-Mobile’s breach of
contract. Id. at 334. In support of this award, the Court found
that VICI had relied upon receipt of the $7 million payment to
pay for expenses remaining from the 2009 season and to pay
for preparation costs for the 2010 season. Id.


conflicting testimony on the intent of the parties as to the
contractual language.




                              11
       Though this issue was not raised by the parties, the
District Court also concluded that VICI had a responsibility to
mitigate its damages after T-Mobile sent its termination
notice by, for example, attempting to find a substitute primary
sponsor for the 2010 and 2011 seasons. Id. The Court thus
refused to award the second $7 million payment to VICI,
observing in a footnote that it would not award VICI $14
million pursuant to section 11, which it described as a “quasi
liquidated damages provision,” because that amount was
“unreasonably large” and would constitute an unenforceable
“penalty,” or “windfall.” Id. at 334 n.22.

       Both parties appealed the District Court’s judgment.

III.   Jurisdiction

        VICI’s complaint invoked federal diversity jurisdiction
under 28 U.S.C. § 1332. Because T-Mobile is a corporation,
it is a citizen of its state of incorporation and where it
maintains its principal place of business. Zambelli Fireworks
Mfg. Co., Inc. v. Wood, 592 F.3d 412, 419 (3d Cir. 2010). T-
Mobile was incorporated in Delaware and maintains its
principal place of business in the State of Washington. It
therefore is a citizen of both Delaware and Washington for
diversity purposes. Because VICI is a limited liability
company, it is a citizen of any state in which its members are
citizens. Id. at 418 (“[T]he citizenship of an LLC is
determined by the citizenship of its members.”). VICI’s sole
member is Ron Meixner, who is a citizen of Florida. VICI is
thus a citizen of Florida for diversity purposes. The amount
in controversy is $14 million. Because the parties are diverse
and the amount in controversy is over $75,000, we have
subject matter jurisdiction over this case. We have appellate
jurisdiction under 28 U.S.C. § 1291.




                              12
IV.   Standards of Review

        On appeal from a bench trial, our court reviews a
district court’s findings of fact for clear error and its
conclusions of law de novo. McCutcheon v. Am.’s Servicing
Co., 560 F.3d 143, 147 (3d Cir. 2009). For mixed questions
of law and fact “we apply the clearly erroneous standard
except that the District Court’s choice and interpretation of
legal precepts remain subject to plenary review.” Gordon v.
Lewistown Hosp., 423 F.3d 184, 201 (3d Cir. 2005). “To the
extent that the District Court’s conclusions rested on
credibility determinations, our review is particularly
deferential.” Travelers Cas. & Sur. Co. v. Ins. Co. of N. Am.,
609 F.3d 143, 156-57 (3d Cir. 2010) (citing Anderson v.
Bessemer City, 470 U.S. 564, 575 (1985)). A finding of fact
is clearly erroneous when it is “completely devoid of
minimum evidentiary support displaying some hue of
credibility or bears no rational relationship to the supportive
evidentiary data.” Berg Chilling Sys., Inc. v. Hull Corp., 369
F.3d 745, 754 (3d Cir. 2004).

       With respect to damages, we review de novo “whether
the district court applied the appropriate measure of contract
damages in a legal sense.” Id.

V.    Liability

      A.     T-Mobile’s Contentions

       As noted above, the District Court found that section
5.8 of the Agreement was unenforceable and severed the
provision. As an initial matter, we note that T-Mobile does
not appeal the District Court’s finding that section 5.8 was




                              13
ambiguous and, therefore, unenforceable.6 Rather, T-Mobile
appeals only the District Court’s decision to sever section 5.8
from the Agreement and to enforce the remainder of the
Agreement. T-Mobile argues that the Court erred by severing
section 5.8 because it failed to analyze whether section 5.8
was essential to the Agreement as a whole, as required by
Delaware law.

       Specifically, T-Mobile argues that Delaware law
required the District Court to consider whether severance was
consistent with the intention of the contracting parties. It
claims that the Court did not analyze the parties’ intent on
whether they would have signed the Agreement without the
severability provision, and instead relies solely on the fact
that the Agreement included a severability clause. T-Mobile
also contends that the presence of the clause in the Agreement
may be indicative, but is not conclusive, of the parties’ intent
with respect to severability. As a result, it argues that the
record supports a finding by this Court of reversible error
because the record shows that the parties would not have
       6
            The District Court applied the correct legal
principles in reaching its determination that the provision was
ambiguous.      After determining that the provision was
ambiguous on its face, the Court then considered parol
evidence to try to ascertain the parties’ intentions. This
approach is approved by the Supreme Court of Delaware. See
GMG Capital Invs., LLC v. Athenian Venture Partners, I,
L.P., 36 A.3d 776 (Del. 2012) (“Where a contract is
ambiguous, the interpreting court must look beyond the
language of the contract to ascertain the parties’ intentions.”
(internal quotation marks omitted)). The District Court,
acting as factfinder, considered the relevant parol evidence,
but concluded that the extrinsic evidence did not resolve the
ambiguity.




                               14
entered the Agreement without an enforceable telematics
provision.

       Additionally, T-Mobile points to the second half of the
severability provision, which states that, where any provision
of section 11 is severed, it “shall be replace[d]” with a
provision that “come closest to the purpose and intent of this
Agreement.” J.A. 893. By not replacing the severed
provision with a provision that addressed the same purpose
and intent of the severed clause, T-Mobile posits that the
District Court erred.

        T-Mobile further contends that the Court erred by
finding that the force majeure provision of the contract
excused VICI’s breach by failing to race in several races in
2009 following a crash that damaged VICI’s racecar. T-
Mobile claims that VICI only relied upon its own economic
limitations when insisting that it could not race another car,
and also that the District Court erred by not inferring a
foreseeability requirement into the force majeure provision.
In its pretrial statement, T-Mobile at no time mentioned
foreseeability as a required element for implementation of the
force majeure clause on the contract. See id. 78.

      B.     VICI’s Contentions

        VICI contends that the District Court attempted to
interpret section 5.8 according to its plain terms, giving
priority to the parties’ intentions, but ultimately found the
provision to be ambiguous. Continuing with this contention,
it argues that the Court then appropriately considered
extrinsic evidence, but found that it did not clarify the
meaning of the provision.

      As part of the evaluation of extrinsic evidence, VICI
suggests that the District Court rejected T-Mobile’s




                              15
interpretation of section 5.8 as not credible and found that,
even if T-Mobile’s interpretation was held in good faith, T-
Mobile never conveyed that understanding to VICI such that
VICI knew or should have known of it.

       VICI also argues that the District Court’s decision to
sever section 5.8 and enforce the remainder of the Agreement
should also be affirmed. It maintains that the District Court
properly found that (1) the severability clause of the
Agreement showed that the parties clearly intended to enter a
severable Agreement, (2) the remainder of the Agreement
was enforceable, and (3) the record did not support T-
Mobile’s characterization of section 5.8 as integral to the
Agreement.

       Finally, VICI disputes the argument that the District
Court ignored the second part of the severability clause,
which provided that a severed provision would be replaced
with a valid provision that “comes closest to the purpose and
intent of this Agreement.” J.A. 893. According to VIC, the
Court considered and attempted to replace the severed
provision, but found that the ambiguity of section 5.8
prevented it from ascertaining section 5.8’s relationship to the
“purpose and intent of th[e] Agreement.” Id. 888.

       VICI also argues that the District Court properly
applied the force majeure provision of the contract to excuse
VICI’s own breach. In VICI’s view, T-Mobile conflates the
economic hardship experienced after a force majeure event
with the force majeure event itself, as (1) VICI could not have
foreseen the damage to the car or the steps that it would need
to take to repair that damage, and, in any event, (2) T-Mobile
waived all of its appellate arguments on damages.

       We review below the parties’ contentions on VICI’s
cross-appeal in which VICI asserts the District Court erred in




                               16
refusing to award damages for the full $14 million damages it
claimed in this case.

       C.     The District Court Did Not Err in Severing
              Section 5.8 and Enforcing the Remainder of
              the Contract

       Delaware law is clear that “[a]n invalid term of an
otherwise valid contract, if severable, will not defeat the
contract.” Hildreth v. Castle Dental Ctrs., Inc., 939 A.2d
1281, 1283-84 (Del. 2007). Thus, “a court will enforce a
contract with an indefinite provision if the provision is not a
material or essential term.” Echols v. Pelullo, 377 F.3d 272,
275 (3d Cir. 2004) (finding a contract could not be enforced
due to its failure to specify minimum compensation for
performance); see also Hindes v. Wilmington Poetry Soc’y,
138 A.2d 501, 503 (Del. Ch. 1958) (declaring contract invalid
and noting that while it is true that “material provisions of an
agreement can be so indefinite that the agreement will not be
enforced,” “it is equally true that a court will not upset an
agreement where the indefinite provision is not an essential
term”). Having decided that section 5.8 was too ambiguous
to enforce, the District Court then considered whether the
ambiguity of section 5.8 defeated the contract as a whole.

       The inquiry turns on the parties’ intentions. Orenstein
v. Kahn, 119 A. 444, 445 (Del. 1922) (noting that whether a
contract is severable is a question of the intent of the parties).
“Delaware courts recognize that the parties’ intent to enter
into a divisible contract may be expressed in the contract
directly, through a severability clause.” Doe v. Cedars Acad.,
LLC, No. 09C-09-136, 2010 WL 5825343, at *4 (Del. Super.
Ct. Oct. 27, 2010) (severing provision of contract and
enforcing remainder of contract, including forum selection
clause) (citations omitted).




                               17
       If a court finds that the parties intended a contract to be
severable, it must then determine whether the remaining
terms of the contract are sufficiently definite that the
agreement can be enforced, since “[a] contract must be
reasonably definite in its terms to be enforceable.”
Scarborough v. State, 945 A.2d 1103, 1112 (Del. 2008)
(holding that trial court abused its discretion by refusing to
consider terms of oral agreement between parties); see also
Echols v. Pelullo, 377 F.3d 272, 275 (3d Cir. 2004) (“In
Delaware, as in most jurisdictions, a court will not enforce a
contract that is indefinite in any of its material and essential
provisions.”); Parker-Hannifin Corp. v. Schlegel Elec.
Materials, Inc., 589 F. Supp. 2d 457, 463 (D. Del. 2008)
(granting motion to enforce settlement agreement and
explaining that a contract contains all essential terms and is
therefore enforceable when “it establishes the heart of the
agreement”).

        The severability clause in the Agreement is clear and
reflects the parties’ intentions that unenforceable provisions
would be severed from the contract and the remaining
provisions would be enforced. To repeat, in pertinent part,
the Agreement states:

       The provisions of this Agreement are severable
       and, if any one or more provisions are
       determined to be . . . unenforceable, . . . the
       remaining provisions . . . shall nevertheless be
       binding and enforceable, and such illegal or
       otherwise unenforceable provisions shall be
       replace[d] by such valid provisions which come
       closest to the purpose and intent of this
       Agreement.




                               18
J.A. 893. As the District Court recognized, this provision “is
a clear manifestation of the parties’ intention to create a
contract wherein any unenforceable provisions would not
destroy the entire agreement.” Id. at 24. Moreover, the
Agreement contained sufficiently definite terms that it could
be enforced. Id.

       T-Mobile argues that the District Court did not
determine whether section 5.8 was essential to the
Agreement. It is unclear whether T-Mobile argues that
section 5.8 is essential as evidence that the parties did not
intend for the provision to be severable or to show that,
without section 5.8, the Agreement cannot be enforced
because it no longer reflects the essential terms of the parties’
agreement. Nevertheless, the contention fails.

       As for the first contention, the Court clearly found the
severability provision to be unambiguous. VICI Racing, 921
F. Supp. 2d at 330. As discussed above, we find no error in
the Court’s conclusion. As for the second contention, that the
remaining terms of the contract could not be enforced, we
also find no error. Although it did not frame its analysis in
those terms, the Court clearly rejected T-Mobile’s argument,
offered both on appeal and at trial, that it only entered the
Agreement to gain telematics business from various
automakers. Indeed, the Court concluded that “although T-
Mobile has repeatedly asserted that it entered into the
sponsorship only to gain the telematics business[,] . . . this
intention is not reflected in the four corners of the
agreement.” Id. at 328 (internal quotation marks omitted). In
support of this conclusion, “[t]he recitals state the purpose of
the contract is to sponsor a[ ] . . . racecar” and that “[t]he
sponsorship contract in question is eight pages long and
contains over 300 lines of text . . . [in which] the word
telematics is used only one time, in a three line provision
(section 5.8) with no indication that this provision was the




                               19
bedrock of the deal for T-Mobile.” Id. (emphasis added)
(internal citations and quotation marks omitted).7 Another
reason supporting this conclusion is the failure of the parties
to define telematics or to include, in the contract, any term
stating that the provision of telematics was part of VICI’s
obligation.

       Thus, the District Court properly determined that the
parties intended to sever unenforceable contractual terms
from the contract and that the telematics provision was not an
essential term of the Sponsorship Agreement and properly
dealt with the remaining contractual terms.

       Nor do we find persuasive T-Mobile’s argument that
the District Court erred by not replacing the severed provision
of section 5.8 with another provision that “comes closest to
the purpose and intent of the Agreement” per the severability
provision in the Agreement. J.A. 893.           In light of the
unresolvable ambiguity as to the meaning of section 5.8 and
the lack of any discussion of telematics in any other part of
the Agreement, the Court could not possibly have conjured
another provision that would “come[ ] close to the purpose
and nature of the Agreement” with respect to telematics.8


      7
          Although the District Court went on to consider
parol evidence to determine the meaning of the section, doing
so did not contradict or undercut the conclusion that the
telematics provision was not essential to the parties’
contractual formation.
      8
        T-Mobile also argues that the District Court failed to
consider the apportionment of consideration—that is, failed to
determine whether the contract permitted apportionment of
the consideration to certain promises. We reject this




                              20
       D.     The District Court Did Not Err in Finding
              That the Force Majeure Provision Excused
              VICI’s Breach

       Having determined that the District Court properly
severed section 5.8 and enforced the remainder of the
Agreement, we next turn to the question of whether the
Agreement’s force majeure provision excused VICI’s failure
to enter a racecar into several races in 2009. It determined
that the provision did excuse VICI’s breach. T-Mobile
contests that conclusion.

       A force majeure clause defines an area of events that
might excuse nonperformance within the contract period.
Gulf Oil Corp. v. F.E.R.C., 706 F.2d 444, 452 (3d Cir. 1983)
(citing United States v. Brooks-Callaway Co., 318 U.S. 120,
123-24 (1943)) (holding that a Federal Energy Regulatory
Commission order constituted legal error on force majeure
issue and discussing difference in application of force
majeure clauses in warranty and non-warranty context). As
the District Court noted, “[a]s a general matter, ‘[f]orce
majeure clauses are . . . drafted to protect a contracting party
from the consequences of adverse events beyond that party’s
control.” VICI Racing, 921 F. Supp. 2d at 331 (quoting
Stroud v. Forest Gate Dev. Corp., Case Nos. Civ.A.20063-
NC and Civ.A.20464-NC, 2004 WL 1087373, at *5 (Del.
Ch. May 5, 2004) (unpublished) (rejecting occurrence of
force majeure event where real estate developer “encountered
problems with groundwater which interfered with
construction of the foundation” because “that [] is not what
caused [the developer] to miss its contractual performance

argument in light of the fact that the Agreement contains a
severability provision that reflects the parties’ intention to
allow certain unenforceable provisions of the contract to be
severed without concern for apportionment of consideration.




                               21
date; it missed that date because it had not previously moved
diligently”). 9      As with all contractual interpretation,
however, a court must determine the intent of the parties from
the contractual language. Stroud, 2004 WL 1087373, at *5
n.25.

       The District Court found that the car accident
constituted a force majeure under the terms of the Agreement,
and observed:

      Turning to section 13.2 of the agreement, the
      force majeure provision at issue may be
      invoked if three conditions are met: (1) the
      prevented obligation is a nonmonetary
      obligation that is prevented by a condition
      beyond a party’s control; (2) the affected party
      provides prompt notice of the interference, its
      nature, and expected duration; and (3)
      performance of the prevented obligation
      resumes as soon as the interference is removed.

            []Turning to the facts, the obligation that
      was prevented in this case was certainly a non-
      monetary one; VICI was prevented from racing

      9
         Unpublished opinions of Delaware courts may be
cited in Delaware, although not as binding precedent. See
Oglesby v. Penn Mut. Life Ins. Co., 877 F. Supp. 872, 896 n.2
(D. Del. 1994) (“Unpublished orders of the Delaware
Supreme Court have precedential effect in Delaware.”);
Appellate Handbook Comm. of the Del. Supreme Court Rules
Advisory Comm., Delaware Appellate Handbook, at 8-vi
(1996) (“Under Supr. Ct. R. 17(a), unpublished orders of the
Supreme Court may now be cited as precedent, as well as
unpublished orders and opinions of the lower courts.”).




                              22
      because of damage to the racecar sustained in
      an accident at the Lime Rock race. Two weeks
      after the VICI racecar sustained damage,
      Meixner faxed a notice to T-Mobile’s president
      and legal department explaining that the car
      would be out of commission for 45 to 60 days.
      VICI resumed racing in October 2009 at Mazda
      Raceway Laguna Seca.

              []T-Mobile argues that VICI improperly
      invoked the force majeure provision of the
      agreement because the interference that
      prevented VICI from racing was a financial one.
      The court need not address T-Mobile’s legal
      arguments on this basis because its contention is
      factually inaccurate. . . . The interference was
      the damage sustained in the accident at the
      Lime Rock race. The fact that money can solve
      a problem does not mean that a lack of money
      caused the problem. The court finds that VICI's
      failure to race the T-Mobile Le Mans car at four
      races was not a breach of contract because
      Meixner adhered to the force majeure
      procedures outlined in section 13.2 of the
      agreement.

VICI Racing, 921 F. Supp. 2d at 332 (citations
and footnotes omitted).

       T-Mobile argues, as it did before the District Court,
that VICI’s force majeure argument impermissibly relies on
economic hardship, which cannot excuse performance under
Delaware law. In support of this contention, T-Mobile points
out that a VICI representative testified that VICI could have
raced in the next race following the accident if it had been in
a healthier financial condition. As such, T-Mobile contends




                              23
that a mere increase in expense does not constitute a force
majeure.

       As the District Court correctly recognized, T-Mobile
misinterprets the force majeure law regarding economic
hardship. The law makes clear that reasonable, unextreme
economic hardship cannot constitute a force majeure itself.
However, the force majeure—as recognized by the District
Court—was not an economic hardship but rather an
automobile crash. Id. (stating that the condition preventing
performance “was the damage sustained in the accident at the
Lime Rock race”). Thus, the only case law relied upon by T-
Mobile has no present bearing since it merely supports the
general proposition that financial hardship itself does not
constitute a condition excusing performance under a force
majeure provision.

              1.     Foreseeability as Requisite for Force
                     Majeure to Excuse Non-Performance

        T-Mobile also argues that VICI failed to prove that the
condition preventing performance—the damage to the
racecar—could not have been foreseen at the time the parties
entered the Agreement. It contends that there was no
evidence in the record suggesting that the automobile crash
and the subsequent damage caused by it could not have been
foreseen and thus that the force majeure provision does not
apply. VICI responds that neither the type of damage to the
car, the type of repairs needed as a result of that damage, nor
the lack of parts available to do those repairs, could have been
foreseen.

       As a preliminary point, we note that the force majeure
provision in the Agreement imposes three conditions—that
“(1) the prevented obligation is a nonmonetary obligation that
is prevented by a condition beyond a party’s control; (2) the




                               24
affected party provides prompt notice of the interference, its
nature, and expected duration; and (3) performance of the
prevented obligation resumes as soon as the interference is
removed”—none of which mention foreseeability. VICI
Racing, 921 F. Supp. 2d at 333. Nevertheless, some courts
have inferred such a condition even where the contract makes
no mention of it.

        However, because T-Mobile did not raise the
foreseeability issue below, see, e.g., J.A. 78, it may not secure
appellate relief on this issue.            In re Diet Drugs
(Phentermine/Fenfluramine/Dexfenfluramine) Prod. Liab.
Litig., 706 F.3d 217, 226 (3d Cir. 2013). “It is axiomatic that
arguments asserted for the first time on appeal are deemed to
be waived and consequently are not susceptible to review in
this court absent exceptional circumstances.” Tri-M Grp.,
L.L.C. v. Sharp, 638 F.3d 406, 416 (3d Cir. 2011) (internal
quotation marks omitted). This waiver rule serves several
important judicial interests, such as “protecting litigants from
unfair surprise; promoting the finality of judgments and
conserving judicial resources; and preventing district courts
from being reversed on grounds that were never urged or
argued before them.” Id. (alternation and internal quotation
marks omitted). Because T-Mobile did not present the
foreseeability argument to the District Court, we deem it
waived.

       Even if T-Mobile had not waived the foreseeability
argument, we would be required to predict how the Delaware
Supreme Court would rule on this question, since that Court
has yet to address the issue. The only Delaware court to
address the topic is the Court of Chancery in Stroud. There,
the Chancery Court interpreted a contract for the acquisition
of two townhouses in the process of being built. The contract
included a force majeure clause that enumerated several types
of events that would fall within the provision’s scope, but also




                               25
included a catch-all phrase: “or any other reason whatsoever
beyond the control of” the party. Stroud, 2004 WL 1087373,
at *5. The real estate developer argued that the force majeure
clause excused its performance due to a series of delays
caused by the inspection and rejection of the water detention
pond and delays in obtaining the final County approval. Id. at
*6-7. The Chancery Court rejected these arguments, noting
that such delays were “almost inevitable in the real estate
development setting” and that “every event that, in some
sense, ‘delays’ progress is not the meat of a force majeure
clause.” Id. at *5, *7. In light of those considerations, the
Court reasoned that,

       [u]ltimately, the most likely expectation of the
       parties to the Agreement [was] that the force
       majeure clause encompasses two concepts:
       first, that the delay-causing event was beyond
       the reasonable control of [the development
       company] and, second, that the event was not
       reasonably foreseeable in the ordinary course of
       real estate development.
Id. at *5.

        At no point did the Court in Stroud suggest that all
force majeure clauses must be read to incorporate the concept
of foreseeability. Rather, the Chancery Court engaged in
standard contractual analysis to determine the intent of the
contracting parties, and found that, given the nature of the
real estate industry, the parties expected the clause to include
such a concept.

       Other courts have found that contractual force majeure
provisions that do not discuss whether the excusing event
must be unforeseeable should be construed to require
unforseeability. Indeed, in Gulf Oil Corp., 706 F.2d at 453,




                               26
this Court considered a force majeure provision in a gas
warrant contract and observed that: “To support a definition
of force majeure in a warranty contract, we must stress the
element of uncertainty or lack of anticipation which
surrounds the event’s occurrence and must affect the
availability and delivery of gas.” Id. In reaching the result,
we expressly rejected petitioner’s argument “that the contract
terms are to protect the parties from both foreseeable and
unforeseeable events.” Id. Again, the opinion made much of
the specific circumstances of the gas industry, even stating
that “[o]ur decision is based on the contract’s daily warranty.”
Id. at 453.

       There is some rationale to suggest that a racecar crash
during a competitive car race, as the mechanical breakdowns
and maintenance repairs at issue in Gulf, should not constitute
a force majeure because “their frequent, almost predictable,
occurrence takes them outside of a force majeure excuse to
non-performance.” Id. at 454. Nevertheless, because the
Agreement does not expressly incorporate a non-
foreseeability condition into its terms and because T-Mobile
did not raise the issue at the trial level, we decline to reach the
issue here. It would be ill-advised to wade into the uncharted
waters of Delaware state law without a fully developed record
on the issue at the trial level.10 For example, there are facts in

       10
          The Court notes that certain arguments by VICI
suggest that the parties were aware of the possibility of a
racecar accident and the consequences that would result. In
VICI’s opening statement, counsel stated that Ron Meixner
explained to T-Mobile representatives that “if we have one
car and the car has a problem, we can be out of racing for a
while.” J.A. 142. Counsel additionally argued that, after the
accident, Mr. Meixner then told T-Mobile: “I told you this
would be a problem.” J.A. 145.




                                27
the record to suggest that T-Mobile did not notify VICI that it
considered the failure to race to constitute a breach and did
not terminate the contract upon VICI’s failure to breach,
which might suggest either that T-Mobile deemed the non-
performance to be either non-material or excused by the force
majeure provision.

        Moreover, the application of the waiver doctrine here
serves to protect at least the three judicial interests noted
above: “protecting [VICI] from unfair surprise; promoting the
finality of judgments and conserving judicial resources; and
preventing district courts from being reversed on grounds that
were never urged or argued before them.” Tri-M Group,
LLC, 638 F.3d at 416 (alternation and internal quotation
marks omitted).

        Because a factual record on this line of argument was
not developed, and in view of the judicial interests that the
waiver doctrine is designed to protect, the most prudent
course of action is to deem the foreseeability issue waived.
Therefore, we affirm the District Court’s findings on this
issue. The consequences of this holding are discussed below
in the context of VICI’s cross-appeal.

VI.   Liquidated Damages

       T-Mobile claims that the District Court erred when it
awarded $7 million to VICI based on T-Mobile’s failure to
make the 2010 payment. It argues that by awarding the full
2010 payment amount the District Court failed to properly
apply the principles of expectation damages.11 VICI, in its

      11
          T-Mobile also argues that the District Court should
have awarded T-Mobile, not VICI, damages under a quantum
meruit theory. Because we hold that there was a binding
contract between the parties, T-Mobile’s argument fails. See




                              28
cross-appeal, claims that the District Court erred when it
declined to award $7 million for T-Mobile’s failure to make
the 2011 payment. VICI argues that section 11.2 of the
Agreement is a liquidated damages clause that precludes the
District Court from awarding anything other than $14 million
to VICI—that is, the total amount that T-Mobile failed to pay
under the Agreement.

       We first address VICI’s contention that section 11.2 of
the Sponsorship Agreement was a liquidated damages clause,
for a finding in VICI’s favor on this point would moot any
further discussion of damages.

       The District Court characterized section 11.2 as a
“quasi liquidated damages provision.” VICI Racing, 921 F.
Supp. 2d at 334 n.22.12 It went on to note that, if it awarded
the second $7 million payment as liquidated damages, then
that award would be “unreasonably large” and thus
“unenforceable on grounds of public policy as a penalty.” Id.
We review a district court’s construction of a contract de
novo. Ram Constr. Co., Inc. v. Am. States Ins. Co., 749 F.2d
1049, 1053 (3d Cir. 1984) (“Construction, which may be

Chrysler Corp v. Airtemp. Corp., 426 A.2d 845, 853-54 (Del.
Super. Ct. 1980) (summary judgment) (“With respect to the
theory of quantum meruit or contract implied by law, courts
of this State have long recognized that recovery on such a
theory will be considered only if it is determined that the
relationship of the parties is not governed by an express
contract.”).
      12
           As an initial matter, we disagree with the District
Court’s implied adoption of a “quasi liquidated damages”
doctrine because under Delaware law a provision either calls
for liquidated damages or it does not.




                              29
usefully distinguished from interpretation, is a process by
which legal consequences are made to follow from the terms
of the contract and its more or less immediate context . . . .
When construction of a contract is the issue before an
appellate court, the question is one of law and freely
reviewable.” (internal quotation marks and citations
omitted)).

        In Delaware, “[c]ontract law allows parties to establish
only a good faith estimation of actual damages sustained as a
result of a contract's termination.” Del. Bay Surgical Servs.,
P.C. v. Swier, 900 A.2d 646, 650 (Del. 2006). This good
faith estimation is known as liquidated damages.

       Liquidated damages are a sum to which the
       parties to a contract have agreed, at the time of
       entering into the contract, as being payable to
       satisfy any loss or injury flowing from a breach
       of their contract. It is, in effect, the parties’ best
       guess of the amount of injury that would be
       sustained in a contractual breach, a way of
       rendering certain and definite damages which
       would otherwise be uncertain or not easily
       susceptible of proof.

Id. (quoting S.H. Deliveries, Inc. v. Tristate Courier &
Carriage, Inc., Case No. 96C-02-086-WTQ, 1997 WL
817883, at *6-8 (Del. Super. Ct. May 21, 1997)).

       To determine whether a contractual provision is one
for liquidated damages, Delaware courts ask whether the
provision unambiguously demonstrates the parties’ intention
to set a fixed amount to be paid in the event of breach. See
Ballenger v. Applied Digital Solutions, Inc., Case No.
Civ.A.19399, 2002 WL 749162, at *12 (Del. Ch. April 24,
2002) (noting that creation of a liquidated damages provision




                                30
“must have been the unambiguous intention of the contracting
parties”); PSL Air Lease Corp. v. E.B.R. Corp., Case Nos.
757-Civ.A.1970 and 758-Civ.A.1970, 1974 WL 173050, at
*3 (Del. Super. Ct. Oct. 17, 1974) (“Because the lease
provision does not clearly and unambiguously fix an amount
to be paid as damages[,] the clause is not a liquidated
damages clause.”). A term is ambiguous when the provision
is “reasonably or fairly susceptible of different interpretations
or may have two or more different meanings.” Rhone-
Poulenc Basic Chem. Co. v. Am. Motorists Ins. Co., 616 A.2d
1192, 1196 (Del. 1992).

      Section 11 of the Agreement,                entitled
“Limitation of Liabilities,” provides:

       11.1 Even if either party . . . has been advised of
       the possibility of damages, they will not be
       liable to the other party. . . for any damages . . .
       including without limitation: special, indirect,
       incidental, punitive, consequential, or treble
       damages; loss of privacy damages[,] personal
       injury or property damages; or any damages
       whatsoever resulting from the transactions
       contemplated under this agreement.

       11.2 The maximum aggregate liability of either
       party . . . and the exclusive remedy available in
       connection with this agreement for any and all
       damages, injury, losses arising from any and all
       claims and/or causes of action, shall be limited
       to $50,000 or the aggregate payments payable
       under this agreement [$14 million], whichever
       is higher. . . .

J.A. at 892 (emphases added and some capitalization
omitted).




                               31
       VICI claims that sections 11.1 and 11.2 operate
together to limit recoverable damages (section 11.1) and
specify the exact liquidated remedy (section 11.2).
According to its interpretation, section 11.1 prohibits “any
damages whatsoever” while section 11.2 provides the
“exclusive remedy”: $50,000 or the amount remaining on the
contract, whichever is higher. VICI also relies on a
survivorship clause in the Agreement that provides that
section 11 “survive[s] any termination of this Agreement for
any reason” as additional support for its interpretation. Id.

        We are not persuaded that section 11.2 is a liquidated
damages clause. First, section 11’s heading reads “Limitation
of Liabilities,” not “Liquidated Damages.” Although a
provision’s heading is not dispositive to the analysis, Donegal
Mut. Ins. Co. v. Tri-Plex Sec. Alarm Sys., 622 A.2d 1086,
1089 (Del. Super. Ct. 1992), the remainder of section 11.2 is
replete with language that establishes that this clause is
indeed a liability limitation provision. First, section 11.2 sets
the “maximum aggregate liability” under the contract.
Limiting the maximum liability does not set a fixed sum, as
required under Delaware liquidated damages law; it merely
erects a damages ceiling. Second, the provision states that
any and all damages “shall be limited”—words that
communicate an unmistakable intention to limit liability, not
set a fixed sum. Finally, the payments contemplated by the
provision also fail to set a fixed sum. Instead, it calls for a
payment of $50,000 or the “aggregate payments payable
under the agreement, whichever is higher.”

      The structure of the rest of the Agreement also
supports the conclusion that section 11.2 was not intended to
provide liquidated damages. A liquidated damages provision
is permitted when the damages from a breach would
otherwise be difficult to predict or calculate. Del. Bay
Surgical Servs., P.C., 900 A.2d at 651. The payment




                               32
schedule set forth in section 4 of the Agreement, however,
makes it clear what damages VICI could expect to incur in
the event of a breach.13 Section 11’s limitation- of-liability
language, when read together with section 4, clearly sets the
maximum possible damages available to VICI. Accordingly,
it makes little sense to construe a clause to be a liquidated
damages provision when damages are relatively easy to
calculate by reference to the Agreement.

       As VICI recognizes, section 11.2 does use the phrase
“exclusive remedy,” which could suggest that the provision
contemplates a liquidated remedy. The better reading of
those words, however, is that T-Mobile’s liability is limited to

       13
          For the sake of convenience, we set out this
       provision again:

       4.     FEES AND MARKETING SUPPORT

              4.1     [T-Mobile] agrees to pay VICI the
              following sponsorship fees during the
              Initial Term:

              2009 Race Season: $1,000,000.00
              payable by April 1, 2009;

              2010 Race Season: $7,000,000.00
              payable by January 1, 2010; and

              2011 Race Season: $7,000,000.00
              payable by January 1, 2011.

J.A. at 887-88.




                               33
paying $50,000 or the remainder owed under the contract,
whichever is higher. As we have discussed, these payment
possibilities essentially reiterate the expectations of the
parties under the contract and thus do not provide for
liquidated damages. Moreover, even if the words “exclusive
remedy” would support a liquidated damages reading, the
remainder of section 11.2 would be ambiguous at best. Under
Delaware law, a liquidated damages clause must be
unambiguous. Ballenger, 2002 WL 749162, at *12. We
therefore affirm the District Court’s judgment not to construe
the Agreement to provide a liquidated damages remedy.

VII.   The District Court’s Damages Calculation for the
       2010 Payment

       Because section 11.2 is not a liquidated damages
provision, we turn to whether the District Court properly
awarded expectation damages under the contract.

       We note at the outset that T-Mobile failed to raise any
issue related to damages in its pretrial statement, J.A. 78, or at
trial. After the Court issued its judgment, T-Mobile could
have filed a motion for a new trial or a motion to set aside the
judgment on the ground that the damages award was
excessive, pursuant to Federal Rule of Civil Procedure 50. It
did neither. Accordingly, T-Mobile did not preserve any
argument about damages for appeal. See Brenner v. Local
514, United Bhd. of Carpenters, 927 F.2d 1283, 1298 (3d Cir.
1991) (“It is well established that failure to raise an issue in
the district court constitutes waiver of the argument.”). Even
if T-Mobile’s arguments were properly before the Court, we
find that they lack merit.

      Review of the District Court’s damages calculation is a
mixed question of law and fact. The determination of what
legal standard to apply when calculating damages, and




                               34
whether that standard was properly applied, are questions of
law. The determination of facts upon which to apply this
legal standard is a question of fact. Accordingly, we “must
accept the trial court’s findings of historical or narrative facts
unless they are clearly erroneous, but we must exercise
plenary review of the trial court’s choice and interpretation of
legal precepts and its application of those precepts to the
historical facts.” Univ. Minerals, Inc. v. C.A. Hughes & Co.,
669 F.2d 98, 103 (3d Cir. 1981).

        In assessing the damages that resulted from this
breach, the District Court bifurcated its analysis, addressing
the damages incurred from the failure to make the 2010 and
2011 payments separately. We structure our analysis along
similar lines. This section, part VII, focuses on the District
Court’s $7 million damages award based on T-Mobile’s
failure to make the 2010 payment under the agreement. Part
VII.A.1 concludes that the District Court used the proper
legal standard when calculating damages for the 2010
payment. Part VII.A.2 concludes that it did not err in
applying this standard with regard to VICI’s losses and the
costs it avoided as a result of T-Mobile’s breach. Parts
VII.B.1 and VII.B.2 discuss the nature of mitigation damages
as an affirmative defense. Part VII.B.3 concludes that the
District Court did not err in calculating VICI’s 2010 damages
without regard to mitigation because T-Mobile waived that
affirmative defense. Part VIII addresses the ruling of the
Court regarding the 2011 payment and concludes that the
Court applied the wrong legal standard in reaching its
conclusions. Part IX briefly concludes.

       A.     Expectation Damages

        T-Mobile claims that the District Court failed to apply
“any legally-recognized measure” of damages. Appellant’s
Initial Br. at 41. It also claims that the Court failed to deduct




                               35
the actual costs avoided by VICI as a result of T-Mobile’s
breach and failed to deduct the costs that VICI could have
avoided through reasonable mitigation efforts.

             1.     The District Court Used the Proper
                    Legal Standard to Determine VICI’s
                    Damages Regarding the 2010 Period

       We first review whether the District Court used the
proper legal standard in awarding expectation damages.
According to the Restatement (Second) of Contracts § 347,
expectation damages are calculated by (1) the loss to the non-
breaching party (2) plus any loss, including incidental or
consequential loss, caused by the breach (3) less any cost or
other loss that the non-breaching party avoided by not having
to perform. In other words, “expectation damages is
measured by the amount of money that would put the
promissee in the same position as if the promisor had
performed the contract.” Duncan v. Theratx, Inc., 775 A.2d
1019, 1022 (Del. 2001) (citing Restatement (Second) of
Contracts § 347 cmt. a).

       Expectation damages may not be speculative. When
establishing the loss the non-breaching party incurred as a
result of the breach, a plaintiff must “‘lay a basis for a
reasonable estimate of the extent of his harm, measured in
money.’”     Emmet S. Hickman Co. v. Emilio Capaldi
Developer, Inc., 251 A.2d 571, 573 (Del. Super. Ct. 1969)
(quoting 5 Corbin on Contracts, 125 Pt. 6, Ch. 56 § 1020).
Additionally, a plaintiff may only recover those damages that
were foreseeable or likely to follow from the breach of an
agreement. McClain v. Faraone, 369 A.2d 1090, 1092 (Del.
1977).

      Once the loss attributable to nonperformance has been
determined, a court must subtract any costs avoided as a




                              36
result of the breach that are evident in the record.
WaveDivision Holdings, LLC v. Millennium Digital Media
Sys., L.L.C., Case No. 2993-VCS, 2010 WL 3706624, at *19-
20, *23 (Del. Ch. Sept. 17, 2010) (“[Plaintiff] is only entitled
to recover the net loss it has suffered because of
[Defendant’s] breach.”). A court must also reduce the
calculated damages by the amount of loss “‘that [the plaintiff]
could have avoided by reasonable efforts.’” W. Willow-Bay
Court, LLC v. Robino-Bay Court Plaza, LLC, Case No. 2742-
VCN, 2009 WL 458779, at *4 (Del. Ch. Feb. 23, 2009)
(quoting Restatement (Second) of Contracts § 350 cmt. b).

       T-Mobile claims that the District Court awarded VICI
$7 million for the 2010 period without applying any legally-
recognized measure of damages. We disagree. The District
Court recited the proper standard, including the requirement
to reduce damages by the amount of actual costs avoided:

       Generally, “the non-breaching party is entitled
       to recover ‘damages that arise naturally from
       the breach or that were reasonably foreseeable
       at the time the contract was made.’ Contract
       damages ‘are designed to place the injured party
       in an action for breach of contract in the same
       place as he would have been if the contract had
       been performed. Such damages should not act
       as a windfall.’” Paul v. Deloitte & Touche,
       LLP, 974 A.2d 140, 146–47 (Del. 2009)
       (citations omitted); Duncan v. Theratx, Inc.,
       775 A.2d 1019, 1022 (Del. 2001) (citing
       Restatement (Second) Of Contracts § 347).
       Further, damages should be reduced by costs or
       other loss avoided by the non-breaching party.
       See Restatement (Second) Of Contracts § 350.
       “[A] party may avoid costs by suspending its
       own performance when confronted with breach




                               37
      and avoid loss by making substitute
      arrangements.” West Willow–Bay Court, LLC
      v. Robino–Bay Court Plaza, LLC, No. 2742–
      VCN, 2009 WL 458779, at *4 (Del. Ch. Feb.
      23, 2009) (citing Restatement (Second) Of
      Contracts § 350 cmt. b (“Once a party has
      reason to know that performance by the other
      party will not be forthcoming, he is ordinarily
      expected to stop his own performance to avoid
      further expenditure.”)). Also, a party may not
      generally recover damages for losses that it
      could have avoided by reasonable efforts. Id.
      (citing Restatement (Second) Of Contracts §
      350 cmt. b). Thus, the injured party has a duty
      to mitigate or minimize its costs and losses. Id.
      (citing Restatement (Second) Of Contracts §
      350 cmt. b) (noting that “the injured party is
      under no obligation to [mitigate], although it
      will not be awarded damages for any loss that
      could be avoided”).

VICI Racing, LLC v. T-Mobile USA, Inc., 921 F. Supp. 2d
317, 333 (D. Del. 2013).

             2.     The District Court Did Not Err in
                    Applying the Proper Damages
                    Standard or Clearly Err in Finding
                    Facts to Support Its Damages Award
                    for the 2010 Period Regarding Actual
                    Costs Avoided

       T-Mobile next argues that the District Court did not
properly apply the correct legal standard to the facts in the
record because it failed to subtract the costs VICI avoided by
not racing in 2010.




                              38
       In applying the expectation damages standard, the
District Court made findings about what VICI expected to
gain from T-Mobile under the contract. The Court looked to
the language of the sponsorship agreement, as the best
evidence of the expectations of the parties, to find that VICI
expected to receive $7 million in 2010. Id. at 344; see also
Eagles Indus., Inc. v. DeVilbiss Health Care, Inc., 702 A.2d
1228, 1232 (Del. 1997) (“Contract terms themselves will be
controlling when they establish the parties’ common meaning
so that a reasonable person in the position of either party
would have no expectations inconsistent with the contract
language.”). Section 4 of the Sponsorship Agreement clearly
delineates the monetary payments that VICI expected to
receive and that T-Mobile expected to pay. See supra note
13. Based on the timing of T-Mobile’s breach, section 4’s
payment schedule supports the District Court’s finding that
VICI expected to receive a $7 million payment on January 1,
2010.

        The Court then made affirmative findings about the
expenses and losses that VICI incurred as a result of the
breach. For instance, it credited Meixner’s testimony that a
normal budget for a car was $5 million, though the bottom
line was $2.5 million. VICI Racing, 921 F. Supp. 2d at 333.
It also found that VICI incurred losses in the 2009 season to
help make up for the underfunded 2009 budget T-Mobile
provided that year, although VICI offset some of these
expenses with additional sponsorships. Id. It found that VICI
incurred additional expenses to pay for the damaged racecar
in 2009. Id. at 334. And it found that VICI incurred
expenses in 2009 to help prepare for the 2010 season. Id.

        The District Court’s citations to the record provide
substantial support for finding that VICI incurred losses and
costs as a result of the breach. These costs included loans to
float the team in 2009 that VICI expected to repay with the




                              39
2010 payment, J.A. 391-93 (cited by the District Court at
VICI, 921 F. Supp. 2d at 334)14; the costs of repairing the car
in 2009, id. at 395 (cited by the District Court at VICI, 921 F.
       14
            Counsel (Q):      But you had a car?
            Meixner (A):      I had a car.
            Q: And you had equipment, correct?
            A: Yes.
            Q: And you had assets?
            A: Yes.
            Q: And you had a house that your wife and
            children lived in; correct?
            A: Yes.
            Q: You had all of these things. And where did
            the money come from to go between a million and
            two-and-a-half million?
            A: From us and from—we borrowed money and
            all kinds of things.
            Q: And all the various amounts that Mr. Lowery
            was discussing that you owe this money and that
            money and this judgment, that judgment—
            A: Yes.
            Q: —the mortgage foreclosure against your
            house?
            A: Yes.
            Q: All because you didn’t have enough money to
            do this deal?
            A: Yes.
            Q: Why did you do it?
            A: Because I know I’m going to get a payment in
            January of 2010.

J.A. 391-393.




                               40
Supp. 2d at 334)15; and the costs of preparing to race for
2010, id. at 415 (cited by the District Court at VICI, 921 F.
Supp. 2d at 334).16

       Despite these testimony excerpts and findings, T-
Mobile claims that the District Court erred by failing to make
findings regarding the actual costs avoided by VICI and by

            15
              Q: Okay. Did you pay for the engine from
            Porsche?
            A: Yes.
            Q: Did you pay for all the repairs to the car?
            A: Yes.
            Q: And the car actually ran again, didn’t it?
            A: Yes. And it ran perfectly.
            Q: So whatever you had to do to scrape together
            the money to run the car, you did?
            A: We did.

J.A. 395.
      16
         Q: Okay, What if anything, did you do with
      respect to requirements under the contract between
      October 9th of 2009 and January 5th of 2010?
      A: Well, we were preparing for the next—for the
      new season.
      Q: Could you explain to the Court what you did?
      A: Well, we ordered another trailer because it was
      going to be two cars next year. And we had new staff
      on standby, because we tried some other people. And
      I had ordered two Porsches from Porsche, for two race
      cars.

J.A. 415.




                              41
failing to deduct those costs from VICI’s damages award. T-
Mobile cannot prevail on these arguments. First, it made
none of these arguments in its pretrial statement, J.A. 78,
during the trial, in post-trial briefing, id. at 1339 and 1414, or
in post-trial motions. Second, although the District Court did
not expressly state that costs were actually avoided, what
those avoided costs were, or whether those costs were offset
by VICI’s losses as a result of the breach, not expressly
making these findings is not a reason to reverse or remand.

       T-Mobile argues that because the District Court
awarded VICI $7 million—the same amount that VICI would
have received in 2010 had T-Mobile performed under the
contract—it therefore failed to deduct the actual costs VICI
avoided by not racing in 2010. Although the Court did not
make express findings about the actual costs avoided by not
racing, T-Mobile is incorrect in asserting that it failed to
apply the proper damages standard.

       As quoted supra Part VII.A.1, the District Court
correctly identified—and thus was well aware of—its duty to
deduct actual costs avoided from its damages calculation.
The better reading of the Court’s opinion is that it implicitly
concluded that any actual costs avoided were offset by other
losses VICI incurred.

        The District Court did not conclude that VICI was
entitled to damages based on the contract alone. The fact that
it considered the additional losses suffered by VICI over the
course of 2009 and 2010 indicates that it considered gains and
losses in addition to the gross revenue VICI anticipated
receiving from T-Mobile under the contract. By taking the
time to cite examples of these losses, and then awarding VICI
$7 million, the Court implicitly found that there were no costs
avoided relative to the losses incurred by VICI as a result of
the breach. See W. Willow-Bay Court, 2009 WL 458779, at




                               42
*4 (“Damages are awarded in an amount equal to the loss in
value occasioned by the defendant’s nonperformance.”);
Restatement (Second) of Contracts § 347 (stating that a
party’s expectation interest includes “the loss in value to him
of the other party’s performance caused by its failure . . . plus
any other loss . . . caused by the breach . . . .) (emphasis
added).

       In view of the fact that T-Mobile never raised this
issue pre-trial, never argued to the District Court at trial that
VICI actually avoided costs, and never objected post-trial to
the Court’s analysis, the Court was under no obligation to
make a specific finding about costs avoided—that is, it did
not have to expressly find that the actual costs avoided were
offset by VICI’s losses. The Court fully discussed the
expenses and losses VICI incurred in attempting to fulfill the
contract. See supra notes 14-16 and accompanying text.
Implicit in these findings is the conclusion that the costs
avoided by VICI not racing in 2010 did not warrant a
reduction in the damages award, given the expenses and
losses sustained by VICI. A trial court’s findings are
sufficient if the affirmative facts found by it, construed as a
whole, negate a rejected contention. Rayonier, Inc. v. Polson,
400 F.2d 909, 923 (9th Cir. 1968); see also Bowles v. Cudahy
Packing Co., 154 F.2d 891, 894 (3d Cir. 1946) (“The trial
court is not required to make findings on all the facts
presented and need only find such ultimate facts as are
necessary to reach the decision in the case. The judgment
should stand if the opinion below gives the appellate court a
clear understanding of the basis of the decision.” (internal
quotation marks, alterations, and citations omitted)). The
District Court’s affirmative findings dispensed with the need
to expressly find that the costs that were actually avoided
were not greater than the losses incurred by VICI as a result
of the breach. Accordingly, it did not commit legal error in
calculating VICI’s damages regarding actual costs avoided.




                               43
       Next, the District Court did not commit clear error in
its fact-finding when it determined that the actual costs
avoided by VICI were offset by its losses.

       There is evidence in the record that VICI actually
avoided certain costs—namely, VICI avoided the costs
associated with racing in 2010. As discussed above, the
question that the District Court implicitly answered was that
the losses suffered by VICI were offset by the actual costs
avoided. There is no precise indication in the record as to
how much money was spent in 2009 and 2010 to fund the
2009 season and prepare for the 2010 season. Similarly, there
is no precise indication in the record as to what costs were
actually avoided by not racing. All the record makes clear is
that there were some losses incurred and some costs avoided.
To that extent, there is no precise evidence in the record as to
whether VICI actually experienced a loss greater than its
expected gain from the contract and the costs it avoided by
not racing in 2010.

       “Fact finding does not require mathematical certainty.”
Schulz v. Pa. R.R., 350 U.S. 523, 526 (1956). Because the
District Court is not required to rule with mathematical
precision, because T-Mobile ignored the damages issue
below, and because VICI introduced evidence as to both the
losses it incurred and the costs it avoided in 2010, the Court’s
implicit finding that any actual costs avoided were offset by
VICI’s losses need not be disturbed. “[I]t is the very essence
of the trial court’s function to choose from among the
competing and conflicting inferences and conclusions that
which it deems most reasonable.” Evans v. United States,
319 F.2d 751, 755 (1st Cir. 1963). Accordingly, “an appellate
court has no power to disturb a finding of fact of a trial court
where it is based on some substantial though conflicting
evidence.” Id. at 753; see also Frederick v. United States,
386 F.2d 435, 435 (3d Cir. 1967) (“Upon conflicting evidence




                               44
the district court found that the appellant had not established
this factual claim. That finding was permissible and we
sustain it.”).

       Whatever our own views of the evidence, whether we
believe that the actual costs avoided warrant a reduction in
the $7 million award or not, it is not our charge to remand to
the District Court to perform a recalculation based on a
difference of opinion. See Speyer, Inc. v. Humble Oil and
Refining Co., 403 F.2d 766, 770 (3d Cir. 1968) (“In reviewing
the decision of the District Court, our responsibility is not to
substitute findings we could have made had we been the fact-
finding tribunal; our sole function is to review the record to
determine whether the findings of the District Court were
clearly erroneous, i.e., whether we are ‘left with a definite and
firm conviction that a mistake has been committed.’” (quoting
United States v. U.S. Gypsum Co., 333 U.S. 364, 395 (1949))
abrogated on other grounds by Francioni v. Gibsonia Truck
Corp., 372 A.2d 736, 739-751 (Pa. 1977).

       Based on a review of the record, it is clear that, not
only were the District Court’s findings free from clear error,
they were supported by substantial evidence. Accordingly,
we cannot question the District Court’s award any more than
we could question an award made by a jury. Indeed, if the
District Court had instructed a jury on the damages standard
recited in its opinion; and a jury had reviewed the evidence in
the record; and upon that review the jury determined that a
$7 million award was appropriate, the jury award would be
impervious to appellate second-guessing. Given the evidence
in the record, we are obliged to afford the District Court
similar deference.

       Specifically, this Court can only find error in a district
court’s factual finding if it is “completely devoid of minimum
evidentiary support displaying some hue of credibility” or




                               45
unless it “bears no rational relationship to the supportive
evidentiary data.” Berg Chilling Sys., 369 F.3d at 754
(citations omitted). Based on the record citations in the
District Court’s opinion, we cannot say that the District Court
clearly erred. Its finding—albeit implicit—is not completely
devoid of minimum evidentiary support and bears a rational
relationship to the supportive evidentiary data. For these
reasons, we have no power to disturb that finding and reject
T-Mobile’s contentions to the contrary.

       B.     Mitigation of Damages

              1.     The Breaching Party Has the Duty to
                     Mitigate Damages

        First year law students are generally taught that a
plaintiff claiming breach of contract himself has a duty to
mitigate. 11 Corbin on Contracts, § 57.11 (1993) (“It is not
infrequently said that it is the ‘duty’ of the injured party to
mitigate damages so far as can be done with reasonable
effort.”).    However, that maxim has a corollary: “[t]he
burden of proving that losses could have been avoided by
reasonable effort and expense must always be borne by the
party who has broken the contract.” Id.

       Delaware law is consistent. Although there is no
specific precedent from the Delaware Supreme Court or this
Court applying Delaware law, lower Delaware courts and the
District Court of Delaware consistently apply Delaware law
to conclude mitigation is an affirmative defense. Moreover,
we have been unable to find any cases to the contrary. See
Stinson v. Edgemoor Iron Works, 53 F. Supp. 864, 868 (D.
Del. 1944) (concluding, in the absence of clear Delaware
Supreme Court authority, Delaware would follow the general
weight of authority and hold that “the burden of pleading and
proving mitigation of damages is upon the defendant”);




                              46
Steven W. Feldman, Autonomy and Accountability in the Law
of Contracts: A Response to Professor Shiffrin, 58 Drake L.
Rev. 177, 241 (2009) (“[T]he overwhelming weight of
authority states that the breaching promisor must prove that
the promisee inappropriately failed in avoiding or alleviating
his injury.” (internal quotation marks omitted)).

       The Supreme Court of Delaware has held that a “party
has a general duty to mitigate damages if it is feasible to do
so.” Brzoska v. Olson, 668 A.2d 1355, 1367 (Del. 1995)
(remanding on whether mitigation was reasonable). “[B]ut
whether mitigation is required depends upon the
circumstances of the case and is subject to a rule of
reasonableness.” Lynch v. Vickers Energy Corp., 429 A.2d
497, 504 (Del. 1981) (citations omitted) (reversing judgment
for the defendants after a bench trial because the lower court
incorrectly found failure to mitigate) overruled on other
grounds by Weinberger v. UOP, Inc., 457 A.2d 701 (Del.
1983). Mitigation is a limitation on the plaintiff’s ability to
recover damages that could have been avoided. W. Willow-
Bay Court, LLC, 2009 WL 458779, at *4 (observing that, as
“a general rule, a party cannot recover damages for loss that
he could have avoided by reasonable efforts,” and finding
after a damages trial that the plaintiff made reasonable,
although unsuccessful, effort to mitigate (quoting
Restatement (Second) of Contracts § 350 cmt. b)).

        But this mitigation is a burden of conduct, not a burden
of proof at trial. Conway v. Hercules Inc., 831 F. Supp. 354,
359 (D. Del. 1993) (finding in a pre-trial order that
“[d]efendant asserts plaintiff must show he mitigated his
damages with ‘reasonable diligence,’ but in so asserting . . .
defendant confuses the duty with the burden.” (citation
omitted)). A plaintiff must prove damages, and a defendant
may show those damages should be limited because the
plaintiff failed to take reasonable mitigating measures.




                               47
Tanner v. Exxon Corp., Case No. 79C-JA-5, 1981 WL
191389, at *4 (Del. Super. Ct. July 23, 1981) (denying the
defendant’s motion for summary judgment because the
defendant did not plead mitigation and produced no evidence
its theory of mitigation was feasible). The party asserting the
limitation bears the burden of proof. Id.

              2.      Failure to Mitigate is an Affirmative
                      Defense

        Numerous Delaware Superior Court cases and District
Court of Delaware cases have held failure to mitigate is an
affirmative defense. Route 40 Holdings v. Tony’s Pizza &
Pasta Inc., Case No. 10c-03-057, 2010 WL 2161819, at *1
(Del. Super. Ct. May 27, 2010) (dismissing the defendant’s
counterclaim for failure to mitigate because “[c]ourts often
refer to this concept as a ‘duty to mitigate,’ [but] technically it
is not a duty because there are no damages for breach of the
duty” and therefore is a defense to be pled in the defendant’s
answer) (internal quotations omitted); Tanner, 1981 WL
191389, at *4 (“Failure to mitigate damages is an affirmative
defense, and the burden of proving the failure falls upon the
defendant.”); O’Riley v. Rogers, Case No. S08C-07020RFS,
2011 WL 3908404, at *2-3 (Del. Super. Ct. Aug. 30, 2011)
(applying Tanner to personal injury cases in denying the
defendant’s motion for a new trial based on failure to
mitigate); Munro v. Beazer Home Corp., Case No. U608-03-
081, 2011 WL 2651910, at *8 (Del. C.P. June 23, 2011) (in a
post-trial opinion on allocation of damages the court found
“Delaware recognizes the affirmative defense of failure to
mitigate damages”); Conway, 831 F. Supp. at 359 (“The
mitigation of damages is an affirmative defense.”). Since it is
an affirmative defense, the breaching party bears the burden
of proof. Conway, 831 F. Supp. at 359 (“[T]he burden of
proving plaintiff failed to mitigate his damages falls squarely
on defendant.”); Stinson, 53 F. Supp. at 868 (“The general




                                48
authority—and, in fact, the almost universal weight of
authority—is that the burden of pleading and proving
mitigation of damages is upon the [breaching party].”).17

       The Restatement (Second) of Contracts also looks to
the breaching party to show that a substitute transaction was
available. Restatement (Second) Contracts § 350 cmt. c. It
states that “damages are not recoverable for loss that the

      17
          This Court has consistently held the breaching party
bears the burden to show failure to mitigate in cases applying
the law of other states. Glenn Distributors Corp. v. Carlisle
Plastics, Inc., 297 F.3d 294, 302 (3d Cir. 2002) (“[T]he party
who has breached the contract or caused the loss has the
burden of showing the losses could have been avoided
through the reasonable efforts of the damaged party.”
(emphasis omitted) (Pennsylvania law)); Koppers Co., Inc. v.
Aetna Cas. & Sur. Co., 98 F.3d 1440, 1448 (3d Cir. 1996)
(“Mitigation is an affirmative defense, so the burden of
proving a failure to mitigate is on the defendant.”); Fashauer
v. New Jersey Transit Rail Operations, Inc., 57 F.3d 1269,
1288 (3d Cir. 1995) (holding the burden of proof “falls on the
wrongdoer to show that the damages were lessened or might
have been lessened by the plaintiff”) (discussing Jones v.
Consol. Rail Corp., 800 F.2d 590, 593 (6th Cir. 1986));
Kutner Buick, Inc. v. Am. Motors Corp., 868 F.2d 614, 620
(3d Cir. 1989) (reversing because the trial court incorrectly
imposed the burden to “include in the [damages] calculation
all offsets which would be proper mitigation of damages” on
the plaintiff); S. J. Groves & Sons Co. v. Warner Co., 576
F.2d 524, 529 (3d Cir. 1978) (“The burden of proving that
losses could have been avoided by reasonable effort and
expense must be borne by the party who has broken the
contract.”).




                              49
injured party could have avoided without undue risk, burden
or humiliation.” Id. § 350(1). The commentary explains “the
burden is generally put on the party in breach to show that a
substitute transaction was available. . . .” Id. § 350 cmt. c.
Several Delaware courts have cited to section 350
approvingly in addressing the duty to mitigate. See, e.g.,
Duncan v. Theratx, Inc., 775 A.2d 1019, 1026 nn.22-23 (Del.
2001) (answering a certified question on the proper measure
of damages); John Petroleum, Inc. v. Parks, Case No. 06C-
10-039, 2010 WL 3103391, at *6 (Del. Super. June 4, 2010)
(adopting the commissioner’s report and recommendation
that the plaintiff took reasonable measures to mitigate), aff’d,
Parks v. John Petroleum, Inc., 16 A.3d 938 (Del. 2011); W.
Willow-Bay Court, LLC, 2009 WL 458779, at *8 & n.51.

        When considered in the context of litigation, it follows
that a defendant must show failure to mitigate. A plaintiff has
the burden of proving damages. Paul v. Deloitte & Touche,
LLP, 974 A.2d at 146-47 (affirming summary judgment for
the defendant). But a plaintiff does not need to plead
mitigation efforts. Stinson, 53 F. Supp. at 868. Rather, the
defendant must plead failure to mitigate in its answer. Route
40 Holdings, 2010 WL 2161819, at *1 (explaining failure to
mitigate is an affirmative defense available to a defendant in a
contract dispute and is properly pled as a defense in the
defendant’s answer); Tanner, 1981 WL 191389, at *4 (“[I]t is
necessary for the defendant to specially plead plaintiff’s
failure to mitigate damages.”).

       Thus, once a plaintiff proves its damages, a defendant
has the burden to show the damages award should be limited
because the plaintiff failed to take reasonable measures to
mitigate its loss. W. Willow-Bay Court, LLC, 2009 WL
458779, at *8 (finding the plaintiff was entitled to the full
expectation damages it had shown because the defendant’s
theory of mitigation was not reasonable). This inquiry




                               50
considers whether mitigation was feasible, what measures to
limit damages were reasonable under the circumstances, and
whether the plaintiff took sufficient measures to mitigate.
Brzoska, 668 A.2d at 1367 (holding mitigation is required “if
it is feasible to do so”); Lynch, 429 A.2d 497, 504
(“[W]hether mitigation is required depends upon the
circumstances of the case and is subject to a rule of
reasonableness.”); Krauss v. Greenbarg, 137 F.2d 569, 573
(3d Cir. 1943) (affirming a jury verdict for the defendants’
counterclaim, because “one is not required to go through the
motions of attempting to avoid damages when it is certain
that they will prove of no avail”). A defendant need not
provide an accounting of the costs a plaintiff should have
avoided, but the burden is properly on a defendant to
articulate the actions that would have been reasonable under
the circumstances to mitigate loss. Collier v. Leedom Const.
Co., 84 F. Supp. 348, 350-52 (D Del. 1949).

       As with other affirmative defenses, a plaintiff cannot
anticipate and answer all of the possible theories of
mitigation. A defendant must put a plaintiff on notice as to
what measures the defendant believes were reasonable under
the circumstances but the plaintiff failed to take. Cf. Lynch,
429 A.2d at 505 (finding the mitigating measures the
defendant asserted were unreasonable).

        This principle is consistent with “the usual rule that the
burden of proof rests upon him who alleges . . . .” Murphy v.
T. B. O’Toole, Inc., 87 A.2d 637, 638 (Del. Super. Ct. 1952)
(citing 2 Jones Civil Evidence (Horwitz ed.) § 192 in granting
summary judgment to the defendants); see also Del. Coach
Co v. Savage, 81 F. Supp. 293, 296 (D. Del. 1948) (finding
for the defendant after a bench trial because “[t]he burden of
proof rests upon the party asserting the affirmative of an
issue”). Similarly, the Restatement (Second) of Contracts
Commentary provides that “the burden is generally put on the




                               51
party in breach to show that a substitute transaction was
available . . . .” Restatement (Second) of Contracts § 350
cmt. c.

        Accordingly, we must follow the Delaware cases
holding that failure to mitigate is an affirmative defense and
that a defendant bears the burden of proof to show a
plaintiff’s damages should be reduced on that basis.
Affirmative defenses not raised in litigation are waived. Abdi
v. NVR, Inc., 945 A.2d 1167 n.6 (Del. 2008) (affirming the
district court’s jury instruction because the issue was tried by
consent but observing that “[g]enerally, if a defendant does
not plead an affirmative defense, he or she waives that
defense” (quoting Kaplan v. Jackson, Case No. 90C-JN-6,
1994 WL 45429, at *2 (Del. Super. Ct. Jan. 20, 1994))).

              3.     T-Mobile Waived         the   Failure   to
                     Mitigate Defense

       T-Mobile did not raise failure to mitigate in its
pleadings or in its pre-trial Statement of Disputed Legal
Issues. See J.A. 84-96. It did not offer any argument or
evidence regarding failure to mitigate at trial. T-Mobile was
in breach of contract but did not present any evidence or
argument as to what measures VICI should have or could
have taken to limit its loss but failed to take. The District
Court did not make any findings about T-Mobile’s failure to
plead or raise failure to mitigate. The record is undisputed
that T-Mobile did not raise this issue at any time during trial,
and thus it waived its failure to mitigate damages defense.

       The District Court, however, concluded that VICI had
a responsibility to mitigate its damages and had the burden of
presenting evidence of its efforts to do so. Finding that VICI
had failed to satisfy this burden, the Court decided that it
would not award damages related to the 2011 payment. In




                               52
other words, the District Court’s handling of the mitigation
issue was confined to the 2011 payment. We address the
District Court’s reasoning on that score in detail in Part VIII
below. For the purposes of reviewing the 2010 award,
however, it suffices to say that the District Court did not have
to consider whether VICI failed to mitigate its damages or
adjust the 2010 damages award based on that consideration.
It therefore did not err when it limited its calculation of the
2010 damages award to the losses VICI incurred and the costs
it avoided as a result of the breach by T-Mobile.

VIII. The District Court’s Damages Calculation for the
      2011 Payment

        As previously discussed, the Agreement provides that
VICI would be entitled to an additional $7 million for its
services under the contract during the 2011 racing season.18
VICI asserts in its cross appeal, as it did in its complaint and
at trial, that it was entitled to the second $7 million due in
2011.

        At trial, VICI relied exclusively on the argument that
the liquidated damages provision of the Agreement required
the District Court to award the second $7 million. In
rejecting this argument, the Court observed that “VICI had a
responsibility to mitigate damages.” VICI Racing, 921 F.
Supp. 2d at 334. It then stated that

       VICI did not present evidence as to its efforts to
       mitigate T-Mobile’s breach by trying to find a
       primary sponsor for the 2010 and 2011 seasons.

       18
           As discussed supra, VICI did not race a car that
season due to damage the car sustained in a crash, although
that nonperformance was excused by the force majeure
provision.




                               53
      Awarding the second $7 million, due by
      January 1, 2011, would provide VICI with an
      unfair windfall.

Id. The Court then elaborated on this conclusion in a
footnote, where it observed that even if it found section 11.2
to be a liquidated damages clause, or a “quasi-liquidated”
damage clause, “having the second $7 million payment
survive the breach would render the liquidated damages
‘unreasonably large’ and ‘unenforceable on grounds of public
policy as a penalty.’” Id. n.22 (quoting Restatement (Second)
of Contracts § 356).

       Although we affirm the District Court in rejecting
VICI’s argument that section 11.2 is a liquidated damages
clause, the reasoning is problematic. We have already
rejected the Court’s characterization of section 11.2 as a
“quasi-liquidated damages” clause. See supra note 12.
Additionally, the Court’s analysis misapplied three distinct
legal concepts: (1) the duty to mitigate; (2) penalty; and (3)
windfall.

       The District Court committed two legal errors in its
mitigation analysis. First, it improperly placed the burden on
VICI to present evidence that it took reasonable efforts to
mitigate its losses. As discussed supra Part VII.B.1, the party
asserting a limitation on a damages award bears the burden of
proof. Second, the Court erred when it conducted a
mitigation analysis in the first place—for T-Mobile waived
that basis for reducing damages by not pleading it as an
affirmative defense. As discussed supra Part VII.B.2, the
failure to mitigate is an affirmative defense, and an
affirmative defense that is not pled is waived, Abdi v. NVR,
Inc., 945 A.2d 1167 n.6 (Del. 2008).




                              54
        The District Court also erred when it stated that
awarding damages for the 2011 payment would render the
award a penalty. We have not found any case under
Delaware law applying the concept of a penalty outside the
liquidated-damages context. Since we hold that section 11.2
is not a liquidated damages clause, any award that may be
granted as a result of T-Mobile’s failure to make the 2011
payment is not a penalty. See PSL Air Lease Corp., 1974 WL
173050, at *2-3 (declining to address defendant’s argument
that the purported liquidated damages clause would operate as
a penalty after holding that the clause was not a liquidated
damages clause).

       Finally, the District Court did not properly support its
conclusion that awarding the second $7 million would result
in an unfair windfall. Delaware courts use the term
“windfall” to describe any damage amount in excess of a
party’s expectation interest.

See Paul v. Deloitte & Touche, LLP, 974 A.2d at 146-47
(denying damages to terminated employee because doing so
would award him double compensation); Henkel Corp. v.
Innovative Brands Holdings, LLC, Case No. 3663-VCN, 2013
WL 396245, at *5-6 (Del. Ch. Jan. 31, 2013) (denying
plaintiff recovery for both the difference in sale price between
time of breach and time of eventual sale and lost income
because doing so would put plaintiff in better position than it
would have been had the contract been performed); Council
of Unit Owners of Sea Colony E. v. Carl M. Freeman Assocs.,
Inc., 564 A.2d 357, 362-63 (Del. Super. Ct. 1989) (holding
that cost of repair was the correct measure of damages for
breach of construction contract and did not constitute windfall
even though the full cost of repair would extend the useful
life of the buildings beyond the amount reasonably
anticipated at the time of contract).




                               55
       Other jurisdictions maintain a similar concept of
windfall. In Ed Miller & Sons, Inc. v. Earl, the Supreme
Court of Nebraska considered an appeal from a trial court
judgment in favor of a lessor for unpaid rent and the projected
cost of repairing a parking lot. 502 N.W.2d 444, 450 (Neb.
1993). The Court held that the repair cost of the parking lot,
rather than the diminished value, was the correct measure of
damages. It noted that the repair costs provided a reasonably
accurate measure and would not constitute a windfall to the
lessor. Id. at 451.

        Similarly, in Old Stone Corp. v. United States, the
United States Court of Claims discussed windfall in an
opinion following a trial on damages. 63 Fed. Cl. 65, 96
(2004), aff'd in part, rev’d in part, 450 F.3d 1360 (Fed. Cir.
2006). It considered whether restitution would be the proper
measure of damages. In particular, the Court noted that the
relevant question regarding windfall “is whether an award of
restitution would place the [plaintiff] in an overall better
position than if the breach of contract had not occurred.” Id.
(quoting Hansen Bancorp, Inc. v. United States, 367 F.3d
1297, 1317 (Fed. Cir. 2004)).

       Here, the District Court determined that, because VICI
did not present evidence of its efforts to mitigate its damages,
awarding $7 million based on the 2011 payment would either
constitute an unfair windfall or a penalty. The only reasons
the Court gave for this conclusion were based on (1) a
misapplication of mitigation principles and (2) an erroneous
substitution of liquidated-damages principles where no
liquidated damages provision existed. The Court reached this
conclusion without finding—either explicitly or implicitly—
what losses VICI incurred or what costs it avoided as a result
of the breach. To find a windfall, the District Court must find
that VICI’s requested damages exceed its expectation interest.
Accordingly, the District Court erred in calculating VICI’s




                               56
expectation damages for the 2011 period. For these reasons,
we vacate the District Court’s ruling on VICI’s cross appeal.

        On remand, the District Court is to consider, in the
first instance, upon applying the appropriate burden of proof,
whether to award VICI the additional $7 million or a lesser
sum based on a proper measure of expectation damages,
including the deduction of actual costs avoided. See Savarese
v. Agriss, 883 F.2d 1194, 1210 (3d Cir. 1989) (vacating a
damages award based on erroneous application of
Pennsylvania law). The Court shall not consider any
evidence or argument that VICI failed to mitigate damages, in
view of our holding that T-Mobile waived this issue.

IX.   Conclusion

       The District Court’s award of $7 million is affirmed.
Its decision regarding VICI’s damages resulting from T-
Mobile’s failure to make the 2011 payment is vacated. The
case is hereby remanded to reconsider the 2011 damages
issue in light of this opinion. On remand, the District Court
should also consider the proper award of attorney’s fees to
VICI in light of its reassessment of the 2011 damages issue.
Should there be any further appeals in this matter, they should
be referred to this panel.




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