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FACTS: A owns Lot X with an unclouded title. Neighbor B has constructed a building encroaching onto A’s land, creating a cloud on title and diminishing marketability. A sues B for damages arising from the encroachment and to quiet title. After discovery, A delays instituting the action for several months, during which B completes improvements that worsen the encroachment. Which statement best expresses the injured party’s duty to mitigate damages in this land-title related action?

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The injured party may recover only the difference between the market value before and after the encroachment, regardless of mitigation. A delay in instituting action automatically bars recovery of damages. Mitigation applies only to contractual breaches, not to injuries to title or property encroachments. The injured party must take reasonable steps to minimize damages; failure to do so may reduce recovery.

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