BTHHM Berkeley, LLC v. Johnston
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This case involves Stewart Johnston who was the defendant, cross-complainant, and appellant, against BTHHM Berkeley, LLC, PNG Berkeley, LLC, Michail Family 2004 Living Trust, Bianca Blesching, Scot Hawkins (collectively, BTHHM), and Holda Novelo and Landmark Real Estate Management, Inc. (collectively, Landmark). Johnston owned a property which he was to lease to BTHHM for a cannabis dispensary once permits were granted by the City of Berkeley. However, after the city approved the permit, Johnston refused to deliver possession of the property to BTHHM, leading to a lawsuit by BTHHM against Johnston.
Following mediation, a two-page term sheet titled “Settlement Term Sheet Agreement” was signed by all parties. Johnston later wished to withdraw from the agreement. BTHHM and Landmark moved to enforce the term sheet pursuant to section 664.6 of the Code of Civil Procedure, which the court granted. Johnston failed to make the payments required by the enforcement orders. The court granted BTHHM's motion for entry of judgment, awarded prejudgment interest to BTHHM, entered judgment against Johnston, and dismissed his cross-complaint with prejudice.
The Court of Appeal of the State of California First Appellate District Division Four reversed the trial court’s award of prejudgment interest but otherwise affirmed the decision. The court held that substantial evidence supported the trial court’s finding that the term sheet’s language evinces the parties’ mutual agreement to settle the case according to its terms. However, the court concluded that the award of prejudgment interest was unauthorized as it differed materially from the terms of the parties’ agreement.
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