Holloway Automotive Group v. Giacalone

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Plaintiff Holloway Automotive Group (Holloway) appealed a circuit court order ruling that the liquidated damages clause contained in the parties’ contract was unenforceable. Holloway was an authorized franchisee of Mercedes-Benz North America. Defendant Steven Giacalone purchased a new vehicle from Holloway. At the time of the purchase, the defendant signed an “AGREEMENT NOT TO EXPORT:” “MBUSA prohibits its authorized dealers from exporting new Mercedes-Benz vehicles outside of the exclusive sales territory of North America and will assess charges against [Holloway] for each new Mercedes-Benz vehicle it sells . . . which is exported from North America within one (1) year.” By signing the agreement, defendant promised “not [to] export the Vehicle outside North America . . . for a period of one (1) year” from the date of the Agreement and, if he did so, to pay Holloway $15,000 as liquidated damages. The vehicle was subsequently exported within the one-year period. Holloway sued claiming breach of contract and misrepresentation and seeking liquidated damages in the amount of $15,000, plus interest, costs, and attorney’s fees. The trial court found that the Agreement was entered into “between the parties to protect [Holloway] from a claim by [MBUSA],” but that MBUSA did not, in fact, charge Holloway any fees despite the vehicle having been exported. The trial court declined to enforce the liquidated damages clause in the agreement. After review, the Supreme Court concluded that the $15,000 liquidated damages provision was enforceable because Holloway’s damages resulting from the breach were not “easily ascertainable.” Accordingly, the Court held the trial court’s determination that the liquidated damages provision in the parties’ Agreement was unenforceable was not supported by the record and was erroneous as a matter of law. View "Holloway Automotive Group v. Giacalone" on Justia Law