Barrie School v. Patch

Andrew and Pamela Patch (defendants) enrolled their daughter in the Barrie School (the school) (plaintiff), a private Montessori school, for the 2004–2005 academic year. The parties entered into a re-enrollment agreement (the agreement) that required the Patches pay a $1,000 nonrefundable deposit and to notify the school in writing by May 31, 2004, if they intended to withdraw their daughter before the end of the school year. If the Patches notified the school after that date, they agreed to pay the remaining tuition balance of $13,490 pursuant to a liquidated-damages clause. On July 14, 2004, the Patches withdrew their daughter, refused to pay the liquidated-damages amount, and demanded the return of their $1,000 deposit. The school filed suit against the Patches for breach of contract and sought the remaining tuition balance for the academic year plus 12 percent interest and attorney’s fees. The Patches filed a counterclaim and sought the return of their $1,000 deposit. At trial, the court held that the liquidated-damages clause in the agreement was valid and legally enforceable but that the school did nothing to mitigate its damages. The court ruled in favor of the Patches, and the school appealed. The appellate court affirmed the trial court’s judgment, and the Maryland Court of Appeals granted certiorari to review.