Biancalana

Plaintiff David Biancalana sued defendants Robert J. Fleming, Catherine A. Fleming, and Wee Four Inc., for declaratory relief regarding the enforceability of a prepayment penalty clause in a promissory note. The trial court held that the clause was enforceable, and plaintiff appeals from the judgment. We agree with the trial court’s interpretation of the clause and affirm.

Background

Defendants owned commercial real property. Plaintiff was one of their tenants. In 1985, defendants’ real estate broker negotiated a cash sale of the property for $1.2 million. The broker told plaintiff that the new owner would likely take plaintiff’s premises for his own. This fact apparently motivated plaintiff to buy the building on tax-deferred installment terms arranged by the broker. The terms were designed to accommodate plaintiff’s dearth of money and defendants’ desire for retirement income at a level akin to one the cash sale would have provided after taxes. The purchase price was $950,000, payable with $50,000 down and a 20-year promissory note (amortized over 30 years) at 14 percent interest ($10,644 monthly) secured by a deed of trust against the property. The note provided as…