Johnson v. Burton
- Susan Illston
- 3:21-cv-00082
- U.S. District Court · Northern District of California
- 2
In Johnson v. Burton, Judge Illston entered $1,000 judgment against Diamond Laundry and Cleaners, Inc., rejecting an additional $1,500 liquidated-damages request.
The judgment directly affects Scott Johnson and Diamond Laundry and Cleaners, Inc. The opinion does not state an outcome as to the other named defendants.
What happened
In Johnson v. Burton, Scott Johnson asked the court to enter judgment under the parties’ February 26, 2021 settlement agreement. He sought $1,000 that defendants had not paid and another $1,500 described as liquidated damages for filing a motion to reopen the case.
The court explained that liquidated damages must reasonably reflect anticipated losses and cannot operate as a penalty. It decided that the $1,500 provision, which was meant to cover the cost of filing a motion to reopen the case, was unenforceable.
The court entered judgment for Scott Johnson and against Diamond Laundry and Cleaners, Inc., for $1,000. Judge Susan Illston did not award the additional $1,500.
The detailed version
- Johnson v. Burton · No. 3:21-cv-00082
- Susan Illston
- Nov. 8, 2022
Background
Scott Johnson moved for entry of judgment under the parties’ February 26, 2021 settlement agreement. He sought $1,000 that defendants had failed to pay, plus $1,500 described as “liquidated damages to file a motion to reopen the case.”
Court’s analysis
The court distinguished liquidated damages from penalties. Liquidated damages are generally enforceable when losses from a breach would likely be difficult to determine when the agreement was made and the agreed amount reflects a good-faith estimate of the bargain’s value. Under California law, a liquidated-damages clause is generally unreasonable and unenforceable when it has no reasonable relationship to the actual damages the parties could have anticipated from a breach.
The court found that the $1,500 provision was intended to cover the cost of filing a motion to reopen the case. It therefore found that provision unenforceable.
Disposition
The court entered judgment in favor of Scott Johnson and against Diamond Laundry and Cleaners, Inc., a California corporation, in the amount of $1,000. The opinion does not award the requested additional $1,500.
Read the full 2-page opinion on CourtListener, the free public archive maintained by the Free Law Project.