McGuire

In this breach of contract case, plaintiffs Brian K. and Shirley A. McGuire and Lynn E and Mary A. Smith (collectively, plaintiffs) sued defendant More-Gas Investments, LLC (More-Gas), over two contracts in which plaintiffs agreed to purchase certain real estate from More-Gas. In each instance, More-Gas had refused to pay plaintiffs money More-Gas had promised to pay in the alternative to performing certain other tasks relating to the properties.

More-Gas successfully moved for summary adjudication of the breach of contract causes of action on the ground the payment provisions were unenforceable penalty provisions rather than valid liquidated damages clauses. On plaintiffs’ appeal, we conclude the trial court erred because More-Gas’s motion for summary adjudication failed to eliminate the possibility that the contractual provisions in question were instead valid provisions for alternative performance. Accordingly, we reverse.

FACTUAL AND PROCEDURAL BACKGROUND

The Orchard Property

In May 2006, plaintiffs contracted to purchase for $1.05 million two lots More-Gas owned on Orchard Road in Acampo. Three addendums to the purchase agreement required More-Gas to ensure that…