El Centro Mall, LLC v. Payless ShoeSource, Inc.

Opinion

ARONSON, J.

Defendant Payless ShoeSource, Inc. (Payless), ceased operations at a shopping center owned by plaintiff El Centro Mall, LLC (ECM), before the end of its lease term. Per a lease provision, ECM charged Payless liquidated damages of 10 cents per square foot of leased space for each day Payless did not operate, totaling $98,010. Payless refused to pay, alleging the liquidated damages provision in the lease was an unenforceable penalty under Civil Code section 1671.

Payless contends the trial court erred when it determined the provision did not constitute an unlawful penalty.…