Filed 3/2/15 Stadium Promenade v. Shake It Up CA4/3




                      NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication
or ordered published for purposes of rule 8.1115.


              IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                                     FOURTH APPELLATE DISTRICT

                                                DIVISION THREE


STADIUM PROMENADE, LLC,

    Plaintiff, Cross-Defendant, and                                    G049753
    Respondent,
                                                                       (Super. Ct. No. 30-2011-00516041)
         v.
                                                                       OPINION
SHAKE IT UP, LLC, et al.,

    Defendants, Cross-Complainant, and
    Appellants.



                   Appeal from a judgment of the Superior Court of Orange County, Gregory
H. Lewis, Judge. Reversed and remanded.
                   Lewis & Ham, Yoon Ham and Michael Lewis for Defendants,
Cross-Complainants and Appellants.
                   Wendel, Rosen, Black & Dean, Kevin R. Brodehl and Dana C. Tsubota for
Plaintiff, Cross-Defendant and Respondent.
                                          *                  *                  *
                Stadium Promenade, LLC (Stadium Promenade) sued Shake It Up, LLC
(Shake It Up), Petaluma Family Limited Partnership (Petaluma), and Gary Kanter
(collectively, Tenants) for breach of contract, alleging Tenants failed to pay rent and
other sums due under a commercial lease and guaranty. Tenants cross-complained for
breach of the implied covenant of good faith and fair dealing, alleging Stadium
Promenade unreasonably refused to allow Tenants to switch the restaurant franchise they
operated on the leased premises after they lost the right to operate the franchise specified
in the lease.
                On the eve of trial, the parties settled their claims. Tenants agreed to pay
Stadium Promenade $180,000 in four installments, and all parties agreed to exchange
general releases. The written settlement agreement the parties later executed also stated
Stadium Promenade was entitled to have a $350,000 stipulated judgment entered against
Tenants if they failed to timely make any installment payment. Tenants failed to make
the initial $50,000 payment and the trial court promptly entered the stipulated judgment
upon Stadium Promenade’s request.
                We reverse. Under well established authority, including this court’s
opinion in Greentree Financial Group, Inc. v. Execute Sports, Inc. (2008)
163 Cal.App.4th 495 (Greentree), the judgment constitutes an unenforceable penalty
because it bears no reasonable relationship to the range of actual damages the parties
could have anticipated would result from Tenants breaching the settlement agreement. In
reaching this conclusion, we also reject Stadium Promenade’s contention Tenants may
not appeal the stipulated judgment because they agreed to it and thereby waived any
objection. As explained below, courts may not validly enter a void judgment or order
even if the parties agree to it.




                                               2
                                             I

                             FACTS AND PROCEDURAL HISTORY

              In August 2010, Shake It Up entered into a lease (Lease) with Stadium
Promenade to rent commercial real property (Property) in a large retail shopping and
entertainment center in Orange, California. The Lease had a 10-year term with two
five-year options, and authorized Shake It Up to operate a Shakey’s Pizza (Shakey’s)
franchise or other business approved by Stadium Promenade. Shake It Up agreed to pay
minimum monthly rent of nearly $11,000 over the Lease’s first five years and nearly
$17,000 over the second five years. The Lease also required Shake It Up to pay a pro
rata share for advertising, real property taxes, common area expenses, and utilities.
Petaluma, with Kanter acting as general partner, executed the “Guaranty of Lease”
(Guaranty) guaranteeing Shake It Up’s performance under the Lease.
              Shortly after executing the Lease, Shake It Up began construction on the
tenant improvements necessary to operate a Shakey’s franchise on the Property, but in
July 2011, Shakey’s cancelled Shake It Up’s franchise before the improvements were
completed. Shake It Up notified Stadium Promenade and requested permission to
operate another restaurant franchise—The Tilted Kilt—on the Property. Stadium
Promenade, however, refused to approve the switch and Shake It Up was left with a
10-year lease for a commercial property on which it could not operate the only business
the Lease authorized. Shake It Up soon stopped making rent payments to Stadium
Promenade, and a contractor who had performed some of the unfinished tenant
improvements recorded a mechanic’s lien against the Property, claiming Shake It Up had
failed to pay for all of the work.
              After serving several notices to pay rent or quit, Stadium Promenade filed
an unlawful detainer action to recover possession of the property. In December 2011,
Shake It Up voluntarily surrendered possession and Stadium Promenade filed a first


                                             3
amended complaint alleging Shake It Up breached the Lease and Petaluma and Kanter
breached the Guaranty.1 At that time, Stadium Promenade sought nearly $128,000 in
unpaid rent, damages resulting from the mechanic’s lien recorded on the Property,
interest, and attorneys fees.
              Tenants answered the complaint and alleged numerous affirmative
defenses, including that Stadium Promenade breached the Lease’s implied covenant of
good faith and fair dealing by refusing to allow Shake It Up to operate any restaurant
other than Shakey’s. Tenants also filed a cross-complaint against Stadium Promenade
and Shakey’s. After multiple successful demurrers by Stadium Promenade, Tenants’
second amended cross-complaint alleged a single cause of action against Stadium
Promenade for breach of the Lease based on the same conduct underlying Tenants’
affirmative defense for breach of the implied covenant of good faith and fair dealing.
              In December 2012, approximately one month before the trial date, Tenants
made an ex parte application to continue trial and reopen discovery. Tenants argued they
needed more time to conduct discovery because they had just learned Stadium
Promenade relet the Property for use as the same restaurant franchise it had refused to
allow Shake It Up to operate on the Property—i.e., The Tilted Kilt. The trial court denied
Tenants’ ex parte application.
              In January 2013, the parties settled this action at a mandatory settlement
conference. They later executed the “Settlement Agreement and General Release”
(Settlement Agreement) that required Tenants to pay Stadium Promenade a total of
$180,000 in four installments—three $50,000 payments due on January 10, 2014,
January 10, 2015, and January 10, 2016, and a final $30,000 payment due on January 10,
2017. The Settlement Agreement included mutual general releases of all claims relating


       1      Stadium Promenade also named Ben Kanter on the breach of guaranty
cause of action, but he is not a party to this appeal.


                                             4
to the Lease, the Property, and this action, and also stated it shall not “be construed as,
and is not, an admission that the parties violated any of their duties or obligations.”
Finally, the Settlement Agreement stated, in the event Tenants fail to make any payment
under the Agreement, “Stadium [Promenade] may request, and the Orange County
Superior Court shall, pursuant to Code of Civil Procedure section 664.6, enter judgment
in favor of Stadium [Promenade] pursuant to the Stipulated Judgment attached hereto as
Exhibit ‘B.’” Attached to the Settlement Agreement was a stipulated judgment against
Tenants for $350,000, less any payments Tenants made under the Settlement Agreement.
              Tenants failed to make the initial $50,000 payment in January 2014. After
giving Tenants notice of the default, Stadium Promenade filed an ex parte application
requesting the trial court to enter the stipulated judgment against Tenants. Citing Civil
Code section 16712 and our decision in Greentree, Tenants opposed the application by
arguing the stipulated judgment was an unenforceable penalty because its $350,000
amount bore no reasonable relationship to the range of actual damages the parties could
have anticipated would arise from Tenants’ failure to pay the first $50,000 installment
under the Settlement Agreement. The trial court granted Stadium Promenade’s
application without explanation and entered the “Stipulated Judgment” (Stipulated
Judgment) against Tenants in the full amount of $350,000. This appeal followed.

                                              II

                                        DISCUSSION

A.     The Stipulated Judgment is Appealable
              Stadium Promenade contends Tenants’ appeal should be dismissed because
Tenants agreed to entry of the Stipulated Judgment and thereby waived all objections to
it. We disagree.

       2      All statutory references are to the Civil Code unless otherwise stated.


                                              5
              Under Code of Civil Procedure section 664.6, the trial court entered the
Stipulated Judgment to enforce the parties’ settlement because Tenants had breached the
Settlement Agreement. That code section authorizes trial courts to enter judgment under
the terms of a settlement the parties agreed to in writing or orally before the court. (Code
Civ. Proc., § 664.6.) A judgment entered under Code of Civil Procedure section 664.6 is
appealable even though the parties agreed or stipulated to the judgment. (See Critzer v.
Enos (2010) 187 Cal.App.4th 1242, 1251 [“a judgment on an order granting a motion to
enforce settlement under [Code of Civil Procedure] section 664.6 is appealable”]; Hines
v. Lukes (2008) 167 Cal.App.4th 1174, 1183.)
              Moreover, “[Code of Civil Procedure] section 664.6 does not allow a court
to endorse or enforce a provision in a settlement agreement or stipulation which is illegal,
contrary to public policy, or unjust. [Citations.] Consequently, even though there is a
strong public policy favoring the settlement of litigation, this policy does not excuse a
contractual clause that is otherwise illegal or unjust.” (Timney v. Lin (2003)
106 Cal.App.4th 1121, 1127.) “‘The rule is settled that the courts will not enforce a
contract to perform an act prohibited by statute [citation], or by ordinance [citation].’
[Citation.]” (Ibid.) Indeed, “a court ‘may reject a stipulation that is contrary to public
policy [citation], or one that incorporates an erroneous rule of law [citation].’ [Citation.]
The trial court has the duty to ensure that the stipulated judgment is just and cannot act as
a mere puppet. [Citation.] More importantly, a court cannot validly enter a judgment or
order which is void even if the parties agree to it.” (Plaza Hollister Ltd. Partnership v.
County of San Benito (1999) 72 Cal.App.4th 1, 12-13.)
              As explained below, section 1671 renders contractual penalties or
forfeitures illegal and unenforceable as against public policy if they bear no reasonable
relationship to the actual damages caused by the breach that triggered them. (Ridgley v.
Topa Thrift & Loan Assn. (1998) 17 Cal.4th 970, 976-977 (Ridgley); Purcell v.
Schweitzer (2014) 224 Cal.App.4th 969, 974-975 (Purcell).) The public policy expressed

                                              6
in that code section may not be waived or circumvented by language in the contract.
Indeed, not even an express waiver of the right to appeal or the right to contest a
stipulated judgment on any ground will prevent a party from challenging a penalty or
forfeiture included in the stipulated judgment. (Purcell, at pp. 972, 975; see Sybron
Corp. v. Clark Hosp. Supply Corp. (1978) 76 Cal.App.3d 896, 902 & fn. 3.) If a party
could not challenge an illegal term in a contract because he or she agreed to it, all statutes
and other authorities establishing prohibitions on certain types of contracts or contractual
provisions would be rendered meaningless and unenforceable. That is not the law.
              Stadium Promenade cites Papadakis v. Zelis (1991) 230 Cal.App.3d 1385,
and several other cases for the proposition, “It is settled that a party cannot appeal from a
judgment to which he has stipulated, as part of a settlement.” (Id. at p. 1387; see Norgart
v. Upjohn Co. (1999) 21 Cal.4th 383, 400; Reed v. Murphy (1925) 196 Cal. 395, 398-399;
Mecham v. McKay (1869) 37 Cal. 154, 158-159; City of Gardena v. Rikuo Corp. (2011)
192 Cal.App.4th 595, 604-605.) None of these cases, however, involved a challenge that
a term in a stipulated judgment or contract was illegal and unenforceable. Accordingly,
they do not prevent Tenants from appealing the Stipulated Judgment.

B.     The Stipulated Judgment Constitutes an Unenforceable Penalty
              Tenants contend the trial court erred in entering the Stipulated Judgment
against them because it constitutes an unenforceable penalty that illegally punishes them
for failing to perform under the Settlement Agreement. According to Tenants, the
Stipulated Judgment is unenforceable because it bears no reasonable relationship to the
damages the parties could have anticipated would result from Tenants’ failure to pay the
initial installment under the Settlement Agreement. We agree.
              “California law has . . . long recognized that a provision for liquidation of
damages for contractual breach—for example, a preset late payment penalty—can under
some circumstances be designed as, and operate as, a contractual forfeiture. To prevent


                                              7
such operation, our laws place limits on liquidated damages clauses.” (Ridgley, supra,
17 Cal.4th at pp. 976-977.) Section 1671, subdivision (b), provides, “a provision in a
contract liquidating the damages for the breach of the contract is valid unless the party
seeking to invalidate the provision establishes that the provision was unreasonable under
the circumstances existing at the time the contract was made.” (§ 1671, subd. (b); see
Ridgley, at p. 977.)
              “A liquidated damages clause will generally be considered unreasonable,
and hence unenforceable under section 1671[, subdivision] (b), if it bears no reasonable
relationship to the range of actual damages that the parties could have anticipated would
flow from a breach. The amount set as liquidated damages ‘must represent the result of a
reasonable endeavor by the parties to estimate a fair average compensation for any loss
that may be sustained.’ [Citation.] In the absence of such relationship, a contractual
clause purporting to predetermine damages ‘must be construed as a penalty.’ [Citation.]
‘A penalty provision operates to compel performance of an act [citation] and usually
becomes effective only in the event of default [citation] upon which a forfeiture is
compelled without regard to the damages sustained by the party aggrieved by the breach
[citation]. The characteristic feature of a penalty is its lack of proportional relation to the
damages which may actually flow from failure to perform under a contract. [Citations.]’
[Citation.]” (Ridgley, supra, 17 Cal.4th at p. 977; see Jade Fashion & Co., Inc. v.
Harkham Industries, Inc. (2014) 229 Cal.App.4th 635, 646 (Jade Fashion).)
              “In short, ‘[a]n amount disproportionate to the anticipated damages is
termed a “penalty.” A contractual provision imposing a “penalty” is ineffective, and the
wronged party can collect only the actual damages sustained.’ [Citations.]” (Ridgley,
supra, 17 Cal.4th at pp. 977-978; see Purcell, supra, 224 Cal.App.4th at p. 974 [“‘Absent
a relationship between the liquidated damages and the damages the parties anticipated
would result from a breach, a liquidated damages clause will be construed as an
unenforceable penalty’”].)

                                               8
              “A liquidated damages provision is not invalid merely because it is
intended to encourage a party to perform, so long as it represents a reasonable attempt to
anticipate the losses to be suffered. [Citation.] A court will interpret a liquidated
damages clause according to its substance, and if it is otherwise valid, will uphold it even
if the parties have referred to it as a penalty.” (Weber, Lipshie & Co. v. Christian (1997)
52 Cal.App.4th 645, 656 (Weber); see Ridgley, supra, 17 Cal.4th at p. 979 [“‘We have
consistently ignored form and sought out the substance of arrangements which purport to
legitimate penalties and forfeitures’”]; Greentree, supra, 163 Cal.App.4th at p. 499.)
“Whether the amount to be paid upon breach of a contractual term should be treated as
liquidated damages or as an unenforceable penalty is a question of law, which we review
de novo.” (Greentree, at p. 499; see Jade Fashion, supra, 229 Cal.App.4th at p. 646.)
              In Greentree, we applied these principles to reverse a stipulated judgment
on facts virtually identical to this case. There, the plaintiff sued the defendant for breach
of contract, alleging the defendant failed to pay the plaintiff $45,000 for financial
services. The parties reached a settlement they memorialized in a stipulation for entry of
judgment, which provided the defendant would pay the plaintiff $20,000 in two
installments, and if the defendant failed to make either payment the plaintiff was entitled
to have judgment entered against the defendant for the full amount sought in the
plaintiff’s complaint, including interest and attorneys fees. The defendant failed to make
the initial $15,000 payment and the plaintiff promptly asked the trial court to enter
judgment against the defendant for more than $61,000, consisting of $45,000 in damages
for breach of the underlying contract, nearly $14,000 in prejudgment interest, and more
than $2,000 in attorneys fees and costs. Over the defendant’s objection that the judgment
was excessive, the trial court entered the requested judgment. (Greentree, supra,
163 Cal.App.4th at p. 498.)
              We reversed because the judgment for more than three times what the
parties agreed to in settlement of the case bore no reasonable relationship to the range of

                                              9
actual damages the parties could have anticipated from a breach of the settlement
stipulation. As we explained, “‘[D]amages for the withholding of money are easily
determinable—i.e., interest at prevailing rates.’ [Citation.]” (Greentree, supra,
163 Cal.App.4th at p. 500.) We further explained, “the judgment would have been
enforceable if it had been designed to encourage [the defendant] to make its settlement
payments on time, and to compensate [the plaintiff] for its loss of use of the money plus
its reasonable costs in pursuing the payment,” but the judgment for $40,000 more than
the $20,000 required under the settlement stipulation went well beyond compensating the
plaintiff for the damages it suffered and instead impermissibly punished the defendant for
failing to pay. (Ibid.; see Purcell, supra, 224 Cal.App.4th at pp. 975-976 [stipulated
judgment for nearly $60,000 constituted illegal penalty for breach of settlement
agreement requiring payment of $38,000]; Sybron, supra, 76 Cal.App.3d at pp. 899, 903
[stipulated judgment for $100,000 constituted illegal penalty for failure to make timely
installment payment on $72,000 settlement].)
              In Greentree, the plaintiff argued the amount specified in the judgment was
reasonably related to the damages the plaintiff suffered based on the defendant’s breach
of the underlying financial services agreement. We rejected that argument because the
relevant breach was the breach of the settlement stipulation, not the breach of the
underlying financial services agreement. The trial court entered the judgment because
the defendant breached the settlement stipulation, not because the defendant breached the
underlying financial services agreement. When it entered into the settlement stipulation,
the defendant released its claim for breach of the financial services agreement and the
stipulation specifically declared that neither side admitted liability on that underlying
claim. By entering into the settlement stipulation, the plaintiff substituted the defendant’s
undisputed obligation to pay $20,000 for the disputed claim based on the financial
services agreement, the uncertainty of what, if anything, the trier of fact might award on
that claim, and the outlay of time and money required to try the claim. Accordingly, any

                                             10
judgment based on the settlement stipulation had to be reasonably related to the
anticipated damages caused by breach of the stipulation, not breach of the underlying
financial services agreement. (Greentree, supra, 163 Cal.App.4th at pp. 499-500.)
              Here, the Settlement Agreement provision authorizing entry of the
Stipulated Judgment does not use the phrase liquidated damages, but its legal effect is
unmistakably the same as a liquidated damages provision. (Ridgley, supra, 17 Cal.4th at
p. 979; Greentree, supra, 163 Cal.App.4th at p. 499; Weber, supra, 52 Cal.App.4th at
p. 656.) It predetermines the amount of damages Stadium Promenade is entitled to
receive if Tenants breach their contractual obligation to make any of the four installment
payments, and therefore it is not enforceable unless the Stipulated Judgment’s amount
bears a reasonable relationship to the amount of actual damages the parties could have
anticipated Stadium Promenade would suffer if Tenants breached their obligation to
make the installment payments. (Ridgley, at p. 977.) Nothing in the Settlement
Agreement or the appellate record, however, establishes a relationship—let alone a
reasonable one—between Tenants’ failure to make the initial $50,000 payment and the
$350,000 Stipulated Judgment. The Stipulated Judgment is seven times the amount of
the payment Tenants missed. Even treating Tenants’ breach as accelerating the
remaining three installment payments, the Stipulated Judgment is $170,000 more than the
entire amount the Settlement Agreement required Tenants to pay. Greentree and the
other cases discussed above therefore compel the conclusion the Stipulated Judgment
illegally penalizes Tenants for failing to pay, rather than compensate Stadium Promenade
for reasonably anticipated damages caused by that failure. (Greentree, at pp. 499-500;
see Purcell, supra, 224 Cal.App.4th at pp. 975-976; Sybron, supra, 76 Cal.App.3d at
pp. 899, 903.)
              Somewhat tellingly, Stadium Promenade makes no effort to justify the
amount of the Stipulated Judgment in terms of its relationship to either the one
installment Tenants failed to make or the entire amount the Settlement Agreement

                                            11
required them to pay. Instead, Stadium Promenade contends the Stipulated Judgment is
enforceable because the provision in the Settlement Agreement authorizing its entry is
not a liquidated damages clause, but rather “an alternative performance clause that allows
for a discounted payment if timely made.” According to Stadium Promenade, the
Settlement Agreement gave Tenants a choice: “[they] could either pay a discounted
settlement sum of $180,000 at set intervals, or [they] could have judgment entered in the
full amount of past due rents that remained owing—i.e., $350,000.” This argument
borders on frivolous for three reasons.
              First, on its face, the Settlement Agreement provision authorizing entry of
the Stipulated Judgment is not an alternative performance provision. An alternative
performance provision gives a contracting party multiple ways to perform its obligations
under the contract without breaching the contract. (See Ridgley, supra, 17 Cal.4th at
p. 978.) Here, the Settlement Agreement gave Tenants only one option in how to
perform—make the four installment payments totaling $180,000. The provision
authorizing the Stipulated Judgment came into effect only if Tenants breached by failing
to make a payment and it specified the amount of damages Stadium Promenade was
entitled to receive for that breach. Accordingly, it was a liquidated damages provision,
not an alternative performance provision.
              Second, Stadium Promenade relies only on case law from the State of
Washington to support its contention. (See Bellevue School Dist. No. 405 v. Bentley
(1984) 38 Wash.App. 152.) California law, however, has long rejected the contention
that contractual provisions imposing an unreasonable penalty for failure to timely pay are
enforceable alternative performance provisions. (Sybron, supra, 76 Cal.App.3d at p. 900
[“Although provisions for liquidated damages for late payments can be characterized as
provisions for alternative performance rather than penalties, and were once enforced as
such [citation], it is now clear that when such ‘late charges’ bear no relation to actual
damages for delay, they are void”].)

                                             12
              Third, Tenants never agreed “the full amount of past due rents that
remained owing [under the Lease at the time of the settlement was] $350,000,” or that the
$180,000 represented a “discount” from the full amount due under the Lease and the
Guaranty. The parties agreed to settle their disputed claims, including not only Stadium
Promenade’s breach of lease and breach of guaranty claims, but also Tenant’s affirmative
defense and cross-complaint for breach of the covenant of good faith and fair dealing
implied in the Lease. The Settlement Agreement generally releases both sides from all
claims and liabilities relating to the Lease and this action; it also specifically declares it
“is not to be construed as, and is not, an admission that the parties violated any of their
duties or obligations.” Accordingly, Stadium Promenade no longer has a claim for any
amount it contends Tenants owed under the Lease or Guaranty, and it cannot justify the
amount of the Stipulated Judgment by reference to any amounts purportedly due under
those documents.3 (See Greentree, supra, 163 Cal.App.4th at pp. 499-500.)
              Restating the same basic argument, Stadium Promenade also contends the
Stipulated Judgment is valid even if the Settlement Agreement provision authorizing its
entry is construed as a liquidated damages clause because the Stipulated Judgment does
not require Tenants “to pay any more than that which they admittedly owed for past due
rent.” As just explained, Tenants never admitted or agreed they owed $350,000 in past
due rent under the Lease, and Stadium Promenade surrendered all claims to past due rent
when it entered into the Settlement Agreement. The only relevant consideration in

       3      Tenants filed a “Motion to Consider Additional Evidence on Appeal,”
asking us to consider the lease between Stadium Promenade and the restaurant to which it
relet the Property after Tenants surrendered possession. Tenants contend the lease shows
Stadium Promenade relet the Property for significantly more than they were required to
pay under the Lease, and therefore Stadium Promenade did not suffer any damages
caused by Tenants purported failure to pay rent. We deny the motion because the lease
between Stadium Promenade and the new tenant is irrelevant. As explained above, the
only relevant consideration here is the damages Stadium Promenade suffered when
Tenants breached the Settlement Agreement; any breach of the Lease is irrelevant.


                                               13
determining the enforceability of the Stipulated Judgment is whether its amount bears a
reasonable relationship to the loss that could be anticipated if Tenants failed to perform
under the Settlement Agreement. For the reasons already explained, that relationship is
lacking.
              Stadium Promenade attempts to distinguish Greentree on the ground the
settlement stipulation in that case lacked an admission of liability, but Tenants here admit
they were liable for $350,000 in past due rent. Not so. Here, as in Greentree, the
Settlement Agreement includes a provision disclaiming any admission of liability and
also generally releases all claims except the obligation to perform under the Settlement
Agreement. Greentree is on all fours with this case and compels the reversal of the
Stipulated Judgment.4
              Finally, Tenants state they do not dispute the “non-penalty aspect of the
Settlement Agreement should be enforced” and merely ask that the principal amount of
the judgment be reduced to $180,000. We accept this concession, and therefore do not
address whether Tenants’ failure to make the initial payment under the Settlement
Agreement accelerated the other installments and entitled Stadium Promenade to a
judgment for the full amount of the settlement, including those installments not yet due.
We remand for the trial court to reduce the judgment to $180,000, less any amounts
already paid, and plus postjudgment interest and costs. (Greentree, supra,
163 Cal.App.4th at pp. 502-503.)

       4      Stadium Promenade contends Curren v. Escamilla (In re VEC Farms, LLC)
(Bankr. N.D.Cal. 2008) 395 B.R. 674, mirrors this case and is persuasive authority
showing we should affirm the Stipulated Judgment. We disagree. Although Curren
discussed California law on liquidated damages clauses, it specifically concluded it was
not bound to follow California law. (Id. at p. 689.) Moreover, Curren concluded
Greentree was distinguishable on its facts because Greentree involved underlying claims
for breach of contract, while Curren involved underlying claims for breach of fiduciary
duty and to set aside insider corporate transactions. (Curren, at pp. 689-690 & fn. 12.)
As explained above, we conclude Greentree is dispositive.


                                             14
              Furthermore, we note the Settlement Agreement includes a provision
stating the parties shall bear their own attorneys fees and costs leading up to the
Settlement Agreement, but the prevailing party is entitled to attorneys fees and costs “[i]n
the event that an action is brought by any Party hereto to enforce this [Settlement]
Agreement.” On remand, the trial court may decide whether any party is entitled to
attorney fees under the Settlement Agreement and, if so, the amount.

                                             III
                                        DISPOSITION

              The judgment is reversed and the matter is remanded to the trial court with
directions to reduce the judgment against Tenants to $180,000, less any amounts already
paid, and plus postjudgment interest and costs. On remand, the trial court also may hear
and decide a motion for attorneys fees under the attorneys fee provision in the Settlement
Agreement. Tenants shall recover their costs on appeal.



                                                   ARONSON, J.

WE CONCUR:



O’LEARY, P. J.



IKOLA, J.




                                             15
