Case Number: EC065629 Hearing Date: February 01, 2019 Dept: A
Kevorkian v Public Storage
MOTION FOR SUMMARY JUDGMENT OR ALTERNATIVELY SUMMARY ADJUDICATION
Calendar: 5
Case No: EC065629
Hearing Date: 2/1/19 (cont. from 1/11/19)
Action Filed: 10/18/16
Trial: 3/11/19
MP:
Defendants Public Storage, Tony Borja, Juana Delira, and Aaron Delvalle
RP:
Plaintiff Antarnik Kevorkian
ALLEGATIONS:
Plaintiff rented a storage unit from the Defendants. When Plaintiff was visiting his storage unit on May 27, 2016, he discovered that the lock on the door had been cut and that his unit had been ransacked. Defendants had not advised him of this crime. Further, when Plaintiff attempted to investigate the burglary, he discovered that the Defendants’ cameras, alarms, and recording devices were fake and not working.
The second amended complaint (“SAC”), filed May 4, 2017, alleges causes of action for: (1) negligence; (2) NIED; (3) fraud; (4) breach of contract; (5) violation of Business and Professions Code §17500; and (6) violation of Business and Professions Code §17200.
The Court sustained Defendants’ demurrer to the 3rd and 4th causes of action in the SAC without leave to amend. Thus, the only remaining causes of action are the 1st, 2nd, 5th, and 6th causes of action.
RELIEF REQUESTED:
Defendants move for summary judgment on the second amended complaint. Alternatively, Defendants move for summary adjudication on the following issues:
Issue 1: Plaintiff’s 1st cause of action for negligence fails because the release and waiver bar liability in this case, and Plaintiff assumed the risk of loss of his personal property.
Issue 2: Plaintiff’s 2nd cause of action for NIED fails because the release and waiver bar liability in this case, Plaintiff assumed the risk of loss of his personal property, and Public Storage did not have a duty to protect against the criminal conduct of third parties.
Issue 3: Plaintiff’s 5th cause of action for violation of Business & Professions Code, §17500 fails on the ground that Plaintiffs cannot establish by competent, admissible evidence that such a violation occurred and Plaintiff lacks standing to bring such a claim.
Issue 4: Plaintiff’s 6th cause of action for violation of Business & Professions Code, §17200 fails on the ground that Plaintiffs cannot establish by competent, admissible evidence that such a violation occurred and Plaintiff lacks standing to bring such a claim.
Issue 5: Defendants seek summary adjudication that their liability, if any, be limited to no more than $5,000.
DISCUSSION:
Prior Hearing
This matter initially came for hearing on January 11, 2019. The Court issued its tentative ruling, denying Plaintiff’s request for a continuance under CCP §437c(h) and denying the motion for summary judgment or, in the alternative, summary adjudication. At the hearing, the Court continued the hearing to February 1, 2019, ordering Plaintiff to file any further briefing by January 23, 2019 and any reply brief by Defendants on January 28, 2019.
Plaintiff filed a supplemental brief on January 22, 2019.
Defendants filed a supplemental reply brief on January 28, 2019.
CCP §437c(h)
In the opposition, Plaintiff references CCP §437c(h) and asks that the Court continue the motion or deny it on the basis of lack of discovery.
Subsection (h) states: “If it appears from the affidavits submitted in opposition to a motion for summary judgment or summary adjudication, or both, that facts essential to justify opposition may exist but cannot, for reasons stated, be presented, the court shall deny the motion, order a continuance to permit affidavits to be obtained or discovery to be had, or make any other order as may be just. The application to continue the motion to obtain necessary discovery may also be made by ex parte motion at any time on or before the date the opposition response to the motion is due.” (CCP §437c(h).)
Plaintiff states in his declaration that he has been unable to conduct “certain discovery” and thus has been unable to access information essential to his opposition. (Kevorkian Decl., ¶8.) He states that his inability to obtain responses to Defendants’ FROG, SROG, RPD, and RFA has materially impacted his ability to oppose the motion and obtain evidence regarding Defendants’ misconduct. (Id., ¶11.) He states that a hearing on his motion to request the Court’s interference with Public Storage’s delay/refusal to produce all areas of discovery responses will be heard on December 28, 2018. (Id., ¶10.)
“Where the opposing party submits an adequate affidavit showing that essential facts may exist but cannot be presented timely, the court must either deny summary judgment or grant a continuance.” (Dee v. Vintage Petroleum, Inc. (2003) 106 Cal.App.4th 30, 34–35.) Here, Plaintiff’s declaration fails to state what essential facts may exist but cannot timely be presented. Plaintiff’s declaration is vague and states without specificity that such discovery will allow him to obtain evidence regarding Defendants’ misconduct. Such a request for a continuance or denial of the motion should be accompanied by a declaration that adequately shows that its proposed discovery would have led to facts essential to justify the opposition. (See Scott v. CIBA Vision Corp. (1995) 38 Cal.App.4th 307, 325-26.)
Further, at the December 28, 2018 hearing on Plaintiff’s motion for the Court’s interference, the Court denied Plaintiff’s motion, stating that it amounted to a camouflaged motion for reconsideration. The Court noted that Plaintiff’s motion to compel discovery was previously denied on January 5, 2018 and his motions to compel further responses were denied on May 25, 2018 on the basis of untimeliness. As it appears from Plaintiff’s declaration that the discovery at issue is the same discovery that was at issue in the prior discovery motions and the most current motion for the Court’s intervention, the Court should deny Plaintiff’s request for a continuance as Public Storage is under no obligation to produce discovery responses to the purportedly outstanding discovery.
Finally, in reply, Defendants point out that in March 2018, the Court granted the parties’ stipulation for a trial continuance (to March 2019) to allow for time to complete any outstanding discovery, but since then Plaintiff has not propounded any additional written discovery or noticed any depositions. (Reply at p.5.)
For the reasons above, the Court will deny Plaintiff’s request for a continuance under CCP §437c(h).
Release Language in the Lease/Rental Agreement
Where a release constitutes a clear and unequivocal waiver with specific reference to the defendant’s negligence, it will be sufficient. (Madison v. Superior Court (1988) 203 Cal.App.3d 589, 597.) “For it to be valid and enforceable, a written release exculpating a tortfeasor from liability for future negligence or misconduct must be clear, unambiguous and explicit in expressing the intent of the parties. [Citation.] If a tortfeasor is to be released from such liability the language used ‘must be clear, explicit and comprehensible in each of its essential details. Such an agreement, read as a whole, must clearly notify the prospective releasor or indemnitor of the effect of signing the agreement.’” (Id. at 598.) However, “[a]ll contracts which have for their object, directly or indirectly, to exempt anyone from responsibility for his own fraud, or willful injury to the person or property of another, or violation of law, whether willful or negligent, are against the policy of the law.” (Civ. Code, §1668.)
Defendants argue that Plaintiff contractually waived and released his rights to recover in this case pursuant to the Lease/Rental Agreement that he signed. In support of their initial burden, Defendant provide evidence showing that Plaintiff and Public Storage entered into the Lease/Rental Agreement for storage unit 4112 in Pasadena on December 21, 2012. (Fact 1.) Plaintiff electronically signed and initialed the Lease/Rental Agreement and the Insurance Addendum. (Fact 2.) The Lease/Rental Agreement states at section 6:
To the extent occupant’s insurance lapses or Occupant does not obtain insurance coverage for the full value of Occupant’s personal property stored in the Premises, Occupant agrees Occupant will personally assume all risk of loss. Owner and Owner’s agents, affiliates, authorized representatives and employees (“Owner’s Agents”) will not be responsible for, and Occupant hereby releases Owner and Owner’s Agents from any responsibility for, any loss, liability, claim, expense or damage to property that could have been insured (including without limitation any Loss arising from the active or passive acts, omissions or negligence of Owner or Owner’s Agents) (the “Released Claims”). Occupant waives any rights of recovery against Owner or Owner’s Agents for the Released Claims, and Occupant expressly agrees that the carrier of any insurance obtained by Occupant shall not be subrogated to any claim of Occupant against the Owner or Owner’s Agents.
(Borja Decl., Ex. A [Lease/Rental Agreement, §6] [emphasis in original].)
Section 7 of the Lease/Rental Agreement states that Public Storage and its agents have no responsibility to Plaintiff for any loss, liability, claim, expense, damage to property or injury to person from any cause, “unless the Loss is directly caused by Owner’s fraud, willful injury or willful violation of law.” (emphasis added)
In the Insurance Addendum, Plaintiff signed his acknowledgement and understanding that all personal property stored in the unit is done at his own risk, he is responsible for insuring his own goods, and Public Storage will not insure Plaintiff’s personal property. (Borja Decl., Ex. B [Insurance Addendum].) Under his signature, Plaintiff declined to apply for insurance with the New Hampshire Insurance Company. (Id.; Fact 3-5; Pl.’s Depo. at pp.72-73.)
Based on the evidence submitted, Defendants have shown that they entered into a valid release agreement with Plaintiff, such that Plaintiff would release Public Storage and its agents from any responsibility, loss, etc. to property that could have been insured. The contract between Public Storage and Plaintiff (the renter of the public storage unit at issue) defines their legal relationship. (Sackett v. Public Storage Management (1990) 222 Cal.App.3d 1088, 1089.)
Further a review of the Lease/Rental Agreement shows that it is not one that is subject to public interest to which Civil Code, §1668 would apply. The case Cregg v. Ministor Ventures (1983) 148 Cal.App.3d 1107 is instructive. In Cregg, the plaintiff had entered into an agreement with a public storage facility to store her personal belongings. The lease agreement provided that the lessor/defendant was free from all liability, loss, etc. on account of or arising out of any injuries or losses. (Cregg, supra, 148 Cal.App.3d at 1109.) The agreement further stated that the lessee/plaintiff was required, at her sole expense, to maintain insurance on the property stored on the premises and that defendant shall not be responsible for theft or damage, if any, to said property caused by any cause whatsoever. (Id.) The Court of Appeal determined that despite its broad language, Civil Code, §1668 applied only to contracts involving the “public interest” and thus did not apply to every contract. (Id. at 1111.) The Court considered the factors delineated in Tunkl v. Regents of University of California (1963) 60 Cal.2d 92, 98, to find that “it may not reasonably be said that the subject lease involved ‘the public interest.’” (Id. at 1111.) The Court also commented that the plaintiff was afforded the option by defendant of greater monthly payments under the lease agreement with insurance or of purchasing insurance elsewhere, and the plaintiff was not subjected to an adhesive contract under which she must accept the exculpatory clause or forego the lease. (Id.)
Admittedly, the language in and effect of section 6 of the Lease/Rental Agreement is similar to the language in Cregg, and such kinds of lease agreements for storage of property would not ordinarily be subject to Civil Code §1668 as they do not involve the public interest. However, the difference between the Lease/Rental Agreement at issue in this action versus the agreement at issue in Cregg is that this Lease/Rental Agreement at issue includes language in section 7 stating that Public Storage and its agents will not be liable “unless the Loss is directly caused by Owner’s fraud, willful injury or willful violation of law.” Thus, even though the Lease/Rental Agreement is not subject to Civil Code §1668, Defendants effectively agreed by their own terms to be subject to the similar exclusions listed in section 1668.
Thus, while the Lease/Rental Agreement does not involve the public interest and the language itself does not violate public policy (as it provides the particular exclusion of section 1668), Defendants have not established in fact whether they did not engage in fraudulent conduct. Defendants’ motion is framed by the allegations of the complaint and thus Defendants must satisfy their initial burden of proof by presenting facts to negate an essential element, or to establish a defense. (CCP §437c(p)(2); Scalf v. D. B. Log Homes, Inc. (2005) 128 Cal.App.4th 1510, 1520.) As alleged in the SAC, one of the basis of Plaintiff’s claims is that Defendants engaged in fraud by knowingly placing fake security cameras and alarms without informing renters. (See SAC, ¶¶29, 47, 50.) Defendants have shown the existence of an enforceable Lease/Rental Agreement and Insurance Addendum, but have not established that they have a “complete defense”—i.e., that they did not engage in any fraud, willful injury, or violation of the law as alleged by Plaintiff in the SAC.
CCP §437c(p)(2):
A defendant or cross-defendant has met his or her burden of showing that a cause of action has no merit if the party has shown that one or more elements of the cause of action, even if not separately pleaded, cannot be established, or that there is a complete defense to the cause of action. Once the defendant or cross-defendant has met that burden, the burden shifts to the plaintiff or cross-complainant to show that a triable issue of one or more material facts exists as to the cause of action or a defense thereto. The plaintiff or cross-complainant shall not rely upon the allegations or denials of its pleadings to show that a triable issue of material fact exists but, instead, shall set forth the specific facts showing that a triable issue of material fact exists as to the cause of action or a defense thereto.
(CCP §437c(p)(2) [emphasis added].)
The separate statement and evidence provided by Defendants fail to show that they did not engage in fraudulent conduct by way of their representations regarding their security measures. At most, Defendants argue that their alleged use of fake surveillance cameras did not cause or contribute to the incident alleged in the SAC, but Defendants fail to address whether they did or did not make misrepresentations regarding their security systems when advertising their services to Plaintiff, or engaged in other types of fraud to deceive Plaintiff or other renters.
As Defendants have not established their initial burden in showing that they have a complete defense to Plaintiff’s causes of action as stated in the SAC, which is premised in part on Defendants’ allegedly fraudulent acts, the burden does not shift to Plaintiff on this issue.
Negligence and NIED
With regard to the negligence and NIED causes of action, Defendants argue that they were not a substantial factor in the criminal act. They argue they may rely on factually devoid discovery responses to shift the burden of proof to Plaintiff. However, Defendants have not cited to what factually devoid or deficient discovery responses Plaintiff has provided.
Defendants attached Plaintiff’s responses to form interrogatories, special interrogatories, and requests for production of document as Exhibits E to G of their moving papers, but fail to cite to what evidence shows that Plaintiff has only provided factually devoid responses. This is Defendants’ burden to apprise the Court and the opposing party. In addition, a review of Defendants’ separate statement also shows that the only discovery response cited by Defendants is Special Interrogatory No. 15 in Fact 1, which was not cited by Defendants to support a showing that Plaintiff only had factually devoid discovery responses.
Thus, Defendants have not provided any actual evidence in support of these arguments, nor is this “lack of evidence” argument (or facts thereto) stated in Defendants’ separate statement. A defendant making a “no evidence” motion must introduce admissible evidence (by declaration or otherwise) that, “discovery was ‘sufficiently comprehensive, and plaintiffs’ responses so devoid of facts, as to lead to the inference that plaintiffs could not prove [their case] upon a stringent review of the direct, circumstantial and inferential evidence.’” (Casey v. Perini Corp. (2012) 206 Cal.App.4th 1222, 1231 [quoting Andrews v. Foster Wheeler LLC (2006) 138 Cal.App.4th 96, 107].) In addition, a defendant making a “no evidence” motion must also establish that, by the time the case comes up for trial, the plaintiff “cannot reasonably expect to obtain” the evidence necessary to raise a triable issue of fact on the issue. (Schieding v. Dinwiddie Construction Company (1999) 69 Cal.App.4th 64, 83; Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 854-855 [noting that a defendant seeking summary judgment “must show that the plaintiff does not possess needed evidence . . . the defendant must also show that the plaintiff cannot reasonably obtain needed evidence . . .”].)
Accordingly, the Court will deny the motion for summary adjudication as to Issues 1 and 2.
Violation of Business & Professions Code, §§17200 and 17500
Business & Professions Code, §17500 et seq. is known as the False Advertising Law and in order to state a false advertising claim, a plaintiff must establish that: (1) the statements in the advertising are untrue or misleading, and (2) the defendants knew, or by the exercise of reasonable care should have known, that the statements were untrue or misleading. (Bus. & Prof. Code §17500; see also National Council Against Health Fraud, Inc. v. King Bio Pharms., Inc. (2003) 107 Cal. App. 4th 1336, 1342.) Section 17500 applies to the dissemination in any advertising media of any “statement” concerning real or personal property offered for sale. (Committee on Children’s Television, Inc. v. General Foods Corp. (1983) 35 Cal. 3d 197, 210.) Private plaintiffs are authorized to bring civil actions to enjoin and seek restitution from false advertisers under California Business and Professions Code §17535.
Business & Professions Code, §17200 et seq. prohibits any unlawful, unfair, or fraudulent business act or practice, including any deceptive, untrue, or misleading advertising and acts prohibited by section 17500 et seq. A claim based on the fraudulent prong can be based on representations that deceive because they are untrue, but also those which may be accurate on some level, but will nonetheless tend to mislead or deceive. (Morgan v. AT&T Wireless Services, Inc. (2009) 177 Cal. App. 4th 1235, 1255.) The ‘fraud’ prong of unfair competition law is unlike common law fraud or deception because a violation can be shown even if no one was actually deceived, no one relied upon the fraudulent practice, or no one sustained any damage. (Buller v. Sutter Health (2008) 160 Cal. App. 4th 981, 986.) It is not necessary to plead that the fraudulent deception was actually false, known to be false by the perpetrator, and reasonably relied upon by a victim who incurs damages. (In re Tobacco II Cases (2009) 46 Cal. 4th 298, 312.) This distinction reflects the focus of the Unfair Competition Law on the defendant’s conduct, rather than the plaintiff’s damages, in service of the statute’s larger purpose of protecting the general public against unscrupulous business practices. (Id.)
Defendants argue that Plaintiff waived and released these claims for violation of the Business & Professions Code. However, as discussed above, Defendants have not established that they have a complete defense under the waiver argument (i.e., Civil Code, §1668 and allegations for fraud).
Defendants also argue that Plaintiff lacks any evidence to support these causes of action and standing. However, it is Defendants’ burden in summary judgment/adjudication to show that Plaintiff lacks such evidence. At most, Defendants argue that Plaintiff has not established standing because he lacks evidence of any loss of money or injury caused by Defendants’ unfair, unlawful, or fraudulent conduct; however, Defendants fail to state this in their separate statement or cite to the specific evidence showing that Plaintiff has only provided factually devoid discovery responses.
Thus, Defendants have not upheld their initial burden in summary adjudication as to Issues 3 and 4.
Limited Liability
Finally, Defendants seek summary adjudication that their liability, if any, be limited to no more than $5,000.
Section 7 of the Lease/Rental Agreement states:
Owner and Owner’s Agent will have no responsibility to Occupant or to any other person for any loss, liability, claim, expense, damage to property or injury to persons (“Loss”) from any cause, including without limitation, Owner’s and Owner’s Agents active or passive acts, omissions, negligence or conversion, unless the Loss is directly caused by Owner’s fraud, willful injury or willful violation of law. Occupant shall indemnify and hold Owner and Owner’s Agents harmless from any loss incurred by Owner and Owner’s Agents in any way arising out of Occupant’s use of the Premises or the Property including, but not limited to, claims of injury or loss by Occupant’s visitors or invitees. Occupant agrees that Owner’s and Owner’s Agents’ total responsibility for any Loss from any cause whatsoever will not exceed a total of $5,000. By INITIALING HERE AK, Occupant acknowledges that he understands and agrees to the provisions of this paragraph.
(Lease/Rental Agreement, §7.)
“[L]imitation of liability provisions have long been recognized as valid in California.” (Markborough Cal., Inc. v. Superior Court (1991) 227 Cal.App.3d 705, 714.) Defendants rely on Civil Code, §1840, which states: “The liability of a depositary for negligence cannot exceed the amount which he is informed by the depositor, or has reason to suppose, the thing deposited to be worth.”
Thus, while there may be an argument for the negligence cause of action to be limited to $5,000 for claims of liability, Plaintiff’s other claims against Defendants are for violation of Business & Professions Code, §§17200 and 17500. These causes of action are based on Defendants’ allegedly fraudulent conduct and advertising. It has yet to be determined what amount of restitution may be awarded as a result therefrom (if any). Accordingly, the Court will deny the motion for summary adjudication as to Issue 5.
RULING:
Deny Plaintiff’s request for a continuance under CCP §437c(h).
Deny Defendants’ motion for summary judgment or, in the alternative, summary adjudication.