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Contracts Keyed to Burton
Dobson Bay Club II DD, LLC v. La Sonrisa de Siena, LLC
Citation:393 P.3d 449
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Canadian Imperial Bank of Commerce loaned Dobson Bay Club II DD, LLC (hereinafter “Dobson Bay”) (defendant) $28.6 million. In doing so, the bank received a promissory note and deed of trust evidencing Dobson Bay’s obligation to repay the loan. If Dobson Bay was late in its payments, it was required to pay default interest and collections costs, along with a five percent late fee would be assessed on the payment amount pursuant to a liquidated damages clause. La Sonrisa de Siena, LLC (hereinafter “La Sonrisa”) (plaintiff) purchased the promissory note and deed of trust from the bank. La Sonrisa alleged Dobson Bay owed more than $30 million, including a $1.4 million late fee pursuant to the liquidated damages clause. Dobson Bay argued that the liquidated damages clause was an unenforceable penalty.
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