This section contains the nature of the case and procedural background.

CC&R requires owners of lots within the subdivision to complete any construction of a dwelling within one year. The CC&R contains a liquidated damages clause that provides a $25 daily fine for any violation of the CC&R. On September 20, 1999, Benedict (D) began construction on her lot. On October 31, 2000, P gave D written notice that P was in violation of the one-year construction limitation covenant. P filed suit to require completion of the construction and for assessment of liquidated damages. P moved for partial summary judgment on the question whether D was in compliance with the covenant. D filed a cross-motion for summary judgment challenging the validity of the liquidated damages provision. The trial court found that D was not in compliance with the covenant but also that the CC&R's liquidated damages clause was impermissible. P appealed.

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