Smart Oil, LLC v. DW Mazel, LLC

Dist. Ct. did not err in granting plaintiff’s motion for summary judgment in action alleging that defendant breached contract calling for sale of 30 parcels of land with gas stations and convenience stores, where defendant failed to close on agreement and failed to pay plaintiff earnest money called for in agreement, which served as liquidated damages clause. Contract called for defendant to pay total of $750,000 in earnest money in two stages, and defendant never paid any earnest money and had failed to provide timely written notice of disapproval of said sale, which would have entitled defendant to return of any earnest money. Ct. rejected defendant’s argument that plaintiff had failed to satisfy two conditions precedent requiring plaintiff to have authority to sell subject properties and to submit certain due diligence materials. Moreover, instant liquidated damages provision satisfied all three factors required in any valid liquidated damages provision, in that: (1) it was agreed to by parties as settlement of damages claim; (2) amount of liquidated damages was reasonable in light of instant $67 million contract; and (3) actual damages arising out of breach would be uncertain and difficult to prove. Fact that plaintiff had not incurred any damages at time of defendant’s failure to close on properties or that defendant had not placed any money into escrow account did to require different result.