Bankr. WDNC: Stonebridge v NVR- Liquidated Damages Clauses; Third-Party Indemnification

Summary: In a dispute regarding a failed real estate development, Stonebridge asserted a breach of contract claim.  In response, NVR argued that a liquidated damages provision limited its liability for damages.  The Bankruptcy Court found that Stonebridge could not complain that a negotiated liquidated damages provision was insufficient or invalid.  The Bankruptcy Court also rejected the assertion by Stonebridge that NVR was required to indemnify economic damages, finding that the contract between the parties required indemnification of "damage to property and persons" not as to performance of the contract. An additional third-party complaint was raised against NVR by William Leath, a guarantor of the loans made to Stonebridge, also asserting breach of contract and indemnification.  The Bankruptcy Court found that as there was no mention in the contract between Stonebridge and NVR   of Leath,  no such liability extended from NVR to him.   Stonebridge v NVR- Liquidated Damages Clauses; Third-Party Indemnification.PDF