eKourier April 2010

Daily Security Checks and Audits Should Prevent These Costly Mistakes M ajor U.S.A. storage operator, Public Storage, has recently lost a case caused by the incorrect occupancy of a space by a customer.

The brief summary from the Self Storage Legal Review explains how simple error can get expensive. It provides further weight on the importance of undertaking our regular Space Audits and Security Checks. “The Wrong Space” A jury returning a large verdict against a self storage operator is not common and always gets our attention. A verdict of $750,000 ($750,000 punitive damages and $5,000 in contract damages by a Cook County, Illinois jury is something to get the attention of every self storage operator. The trial judge, who presided over Vartika v Public Storage, Inc. , Case No. 03-L-014696, reduced the verdict to $462,429 ($69,145 property damage, $207,435 punitive damage and $185,849 attorney’s fees , but even the reduced amount seems extreme for a storage operator who may have made an unfortunate mistake but had no intent to harm its customer. The dispute arose when Ms Vartika rented a space at a Public Storage facility. The plaintiff alleged that she was taken to the space by the site manager, who demonstrated how the lock operated and placed her property in the storage space.

damages award is one issue for which they are seeking appellate review. This verdict indicated the risk that self storage operators face every time they sell a customer’s stored property. While few lien sales result in litigation, when they do the stakes are often very high. This is because lien sales offer plaintiffs the opportunity to recover punitive damages and attorney’s fees. While the Vartika case is not a typical lien sale case, the property loss incurred by the plaintiff was less than 15% of the total award. It is noteworthy that the attorneys who brought the suit recovered almost three times the award to the plaintiff. When a self storage operator conducts a lien sale, the risks are far greater than the value of the goods sold. The Self Storage Legal Review The Self Storage Association Foundation. Nov/Dec 2009 Sam Kennard

found that she could not open the lock. She asked the manager about the property and he told her she had not paid the rent. She said this was impossible as she had set up an automatic payment account. It turned out that her property was not in the space that Public Storage records indicated she had rented and the contents of her space had been sold. “It turned out that her property was not in the space that Public Storage records indicated she had rented and the contents of her space had been sold.” The primary issue in the case was whose mistake it was that the plaintiff was occupying the wrong space. Both the jury and the judge concluded that it was Public Storage’s fault that the tenant’s property was put in the wrong space and the company was liable for her lose. However, it is clear that Ms Vartika’s property was disposed of as a result of an unfortunate mistake. Public Storage is appealing this verdict. The propriety of the punitive

She paid her account by automatic credit card payment. She checked on her

property regularly and on one visit

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Kennards Kourier April 2010