Appellant lessee appealed a judgment of the Municipal Court of the Oakland-Piedmont Judicial District (California), which awarded respondent lessor unpaid rent under an acceleration clause in the lease.
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Overview
Appellant lessee entered into a lease with respondent lessor for a term of three years. Appellant vacated the premises and two months later defaulted in the payment of rent prior to termination of the lease. The trial court awarded respondent the total amount of unpaid rent under the lease pursuant to an acceleration clause. On appeal, the court reversed and held that the acceleration clause was void and unenforceable, either as being an agreement for liquidated damages when damages were readily ascertainable or as a penalty. The court ruled that respondent was attempting to substitute an agreement for liquidated damages for a certain and definite measure of damages under Cal. Civ. Code §§ 1670 and 1671. The court remanded the case for a new trial on the issue of actual damages suffered by respondent.
Outcome
The court reversed the judgment in favor of respondent lessor and against appellant lessee, and remanded for a new trial on the issue of respondent’s actual damages, because the acceleration clause in the lease was void and unenforceable on the grounds that damages were readily ascertainable under the law.
