Opinion
21-cv-00082-SI
11-08-2022
SCOTT JOHNSON, Plaintiff, v. GARY C. BURTON, et al., Defendants.
JUDGMENT
RE: DKT. NO. 17
SUSAN ILLSTON, UNITED STATES DISTRICT JUDGE
Before the Court is plaintiff's motion for entry of judgment pursuant to the parties' February 26, 2021 settlement agreement. Dkt. No. 17. Plaintiff seeks $1,000 that defendants have failed to pay as well as $1,500 as “liquidated damages to file a motion to reopen the case.” Dkt. No. 17-2 at 3.
Courts distinguish between liquidated damages, which are generally enforceable, and penalties, which are not. In re Late Fee and Over-Limit Fee Litigation, 741 F.3d 1022, 1026 (9th Cir. 2014). A liquidated damages provision is enforceable “if the damages flowing from the breach are likely to be difficult to ascertain or prove at the time of the agreement, and the liquidated sum represents a good faith effort by the parties to appraise the benefits of the bargain.” Id. And liquidated damages “are customarily unenforceable as penalties when they are in excess of actual damage caused by a contractual breach.” Id. Under California law, a liquidated damages clause will generally be considered unreasonable and unenforceable “if it bears no reasonable relationship to the range of actual damages that the parties could have anticipated would flow from a breach.” Ridgley v. Topa Thrift & Loan Ass'n, 17 Cal.4th 970, 977, 953 P.2d 484, 488 (1998). Here, the liquidated damages are intended to cover the cost “to file a motion to reopen the case.” Dkt. No. 17-2 at 3. But attorney's fees are not difficult to ascertain. Nor has plaintiff filed a motion to reopen this case; instead, plaintiff has filed a brief motion for entry of default. The Court therefore finds that the $1,500 liquidated damages provision is unenforceable.
Good cause shown, and pursuant to the agreement of the parties, judgment is entered in favor of Plaintiff and against Defendant Diamond Laundry and Cleaners, Inc., a California Corporation, in the amount of $1,000.
IT IS SO ORDERED.