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BTS2/19/2002
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 977(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 977(b). This opinion has not been certified for publication or ordered published for purposes of rule 977.
The issue presented is elemental-may a defendant resist an action for rescission by relying on a liquidated damages provision of the contract the plaintiff is seeking to rescind? The answer is equally simple-no; reliance on the liquidated damages provision comes into play only if the contract is valid and enforceable. Until the validity of the contract is determined with respect to the rescission claim, the validity of the liquidated damages provision cannot by itself support a summary judgment for the defendant.
BACKGROUND
The pertinent facts are without dispute.
Plaintiff BTS, Inc. owns and operates a vehicle towing service and a vehicle storage yard. Defendants Sonitrol Corporation of Contra Costa and Kimberlite Corporation are in the business of selling, installing, and monitoring burglar alarm systems. Pursuant to a written contract, plaintiff purchased an alarm system from defendants for $4,300. Plaintiff further agreed to pay defendant a monitoring charge of $219 per month and to erect a chain link fence. When the system failed to work to plaintiff's satisfaction during the next several months, an inspection revealed that defendants had failed to provide all components of the system and night watchmen as required by the contract. Plaintiff served defendants with a notice rescinding the contract.
Plaintiff filed a complaint with causes of action for rescission and damages for "all sums paid to the defendants on account of the purchase price . . . monthly fees, and costs of fencing . . . in accordance with the instructions and conditions imposed by the defendants."
The contract contained a provision entitled "Limitations of Damages," which reads as follows:
"It is understood and agreed by the parties hereto that DEALER [defendants] is not an insurer and that insurance, if any, covering personal injury and property loss or damage to CLIENT'S [plaintiff's] premises shall be obtained by CLIENT, at CLIENT'S sole expense; that the payments provided for herein are based solely on the value of the service set forth herein and are unrelated to this value of CLIENT'S property or the property of others located on CLIENT'S premises; that DEALER makes no guarantee, representation or warranty including any implied warranty of merchantability or fitness for particular purpose that the system or service supplied will avert or prevent occurrences or the consequences therefrom which the system or service is intended to detect or avert, except for the provisions of the Sonitrol Security System Limited only as it may apply to any loss occurring while this Agreement is in force and if such warranty is in effect in conjunction with this Agreement.
"CLIENT acknowledges it is impractical and extremely difficult to fix the actual damages, if any, which may proximately result from a failure to perform any of DEALER'S obligations or a failure or malfunction in the system to properly operate because of, among other things, the uncertain amount or value of CLIENT'S property or the property of others which may be lost or damaged; the uncertainty of the response time of the police or other authority; the inability to ascertain what portion of any loss would be proximately caused by DEALER'S failure to perform any of its obligations or failure of its equipment to properly operate; or the nature
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