Kesterson v. Juhl

Plaintiffs appeal a summary judgment dismissing their claims for breach of contract and declaratory judgment. The principal issue concerns the validity of a “loan fee” of $102,000 required in the event of untimely repayment of a $145,000 loan. Plaintiffs contend that the fee is an unenforceable liquidated damages provision. Defendant contends that it is a valid, if costly, fee for additional time to pay off the loan. The trial court held that the provision was enforceable as a matter of law. We disagree and reverse and remand.

The relevant facts are not in dispute. On January 24, 1995, the…