Bruce Berlin v. Public Storage, Inc.
MEMORANDUM OF DECISION
This action arises from the plaintiff's alleged loss of his personal property kept in a self-storage unit at the defendant's place of business in Bridgeport, Connecticut. The issues to be decided are (1) whether the exculpatory agreement between the parties expressly releases the defendant from liability for the loss of the plaintiff's property and, if so, whether the agreement violates public policy; and (2) whether the limitation of liability clause maximizing the plaintiff's damages at the amount of $5,000 is enforceable.
On March 23, 2007, the plaintiff, Bruce Berlin, filed a five-count complaint against the defendant, Public Storage, Inc. The complaint is not a model of clarity, but the plaintiff appears to allege the following causes of action: breach of contract; recklessness; conversion; statutory theft; and a violation of the Connecticut Unfair Trade Practices Act.1 The defendant has filed an answer, special defense, and a counterclaim in which it seeks a declaratory judgment in accordance with General Statutes § 52–29 based on the liability limitation provision in the storage agreement. Specifically, the defendant requests an order “declaring that the lease limits the amount that [the plaintiff] may recover against [the defendant] in this lawsuit to $5,000,” and further requests “all other relief that the [c]ourt deems fair and equitable in the circumstances.” 2
The defendant moves for summary judgment on its counterclaim for declaratory judgment “and requests that [the court] uphold the exculpatory provisions contained in the lease agreement as a matter of law.” The plaintiff opposes the motion alternatively claiming that there are issues of fact relating to the enforceability and limitation of liability provisions of the lease agreement, and that the provisions are unenforceable as a matter of law.
The material facts are undisputed. The parties entered into a lease agreement on April 16, 1998 for the storage of the plaintiff's personal property in a self-service unit at the defendant's facility in Bridgeport, Connecticut. The agreement provided that the value of all of the plaintiff's personal property stored in the unit would not exceed the amount of $5,000, and that the defendant's liability for any loss of the property was limited to that amount. Additionally, the agreement provided the plaintiff with the option to purchase additional insurance covering his property. The plaintiff bought an additional $2,000 in insurance covering his property.3
The plaintiff stored porch and patio furniture, poolside furniture, gardening tools and “other odds and ends” in the unit. He did not declare the value of his items or prepare an inventory of the items.
The plaintiff paid rent to the defendant for the unit for approximately six years. In March 2004, the defendant informed the plaintiff that it had removed his property from the unit and disposed of it. The plaintiff filed a complaint with the local police. In his incident report, the investigating officer noted that the defendant stated that the “items in [the plaintiff's] storage unit were removed in error.”
“Summary judgment is a method of resolving litigation when pleadings, affidavits, and any other proof submitted show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law ․ The motion for summary judgment is designed to eliminate the delay and expense of litigating an issue when there is no real issue to be tried.” (Citations omitted.) Wilson v. New Haven, 213 Conn. 277, 279, 567 A.2d 829 (1989). “[A]ny party may move for summary judgment upon any counterclaim or cross complaint as if it were an independent action.” Practice Book § 17–44.
“In seeking summary judgment, it is the movant who has the burden of showing the nonexistence of any issue of fact. The courts are in entire agreement that the moving party for summary judgment has the burden of showing the absence of any genuine issue as to all the material facts, which, under applicable principles of substantive law, entitle him to a judgment as a matter of law. The courts hold the movant to a strict standard. To satisfy his burden the movant must make a showing that it is quite clear what the truth is, and that excludes any real doubt as to the existence of any genuine issue of material fact ․ As the burden of proof is on the movant, the evidence must be viewed in the light most favorable to the opponent ․ When documents submitted in support of a motion for summary judgment fail to establish that there is no genuine issue of material fact, the nonmoving party has no obligation to submit documents establishing the existence of such an issue ․ Once the moving party has met its burden, however, the opposing party must present evidence that demonstrates the existence of some disputed factual issue ․ It is not enough, however, for the opposing party merely to assert the existence of such a disputed issue. Mere assertions of fact ․ are insufficient to establish the existence of a material fact and, therefore, cannot refute evidence properly presented to the court under Practice Book § [17–45].” (Internal quotation marks omitted.) Ramirez v. Health Net of the Northeast, Inc., 285 Conn. 1, 10–11, 938 A.2d 576 (2008).
The defendant first argues that it is entitled to summary judgment because the plaintiff did not answer the counterclaim, and thus, the defendant's allegations therein are deemed admitted under Practice Book § 10–19. “Every material allegation in any pleading which is not denied by the adverse party shall be deemed to be admitted, unless such party avers that he or she has not any knowledge or information thereof sufficient to form a belief.” Practice Book § 10–19. “An opponent's admission merely relieves a party of the burden of proving by a preponderance of the evidence the factual allegations admitted ․ The defendant still [has] to prove that he was entitled to the relief sought.” (Citation omitted.) Reese v. First Connecticut Small Business Investment Co., 182 Conn. 326, 329, 438 A.2d 99 (1980) (holding that a plaintiff's failure to file an answer to a defendant's counterclaim, although perhaps an implied admission, does not necessarily entitle the defendant to judgment as a matter of law). The plaintiff's failure to respond to the defendant's counterclaim admits only the existence of the exculpatory provision and liability limitation. The defendant still must meet its burden to demonstrate that there are no issues of material fact on the issues on which it seeks summary judgment.
The court will next address the defendant's claims that summary judgment should be granted in its favor because (1) the exculpatory agreement between the parties expressly releases the defendant from liability for the loss of the plaintiff's property, and the agreement does not violate public policy, and (2) the limitation of liability clause capping the plaintiff's damages at $5,000 is enforceable even if the exculpatory clause is invalid.
The court will initially consider whether the exculpatory agreement between the parties expressly released the defendant from liability for the loss of the plaintiff's property. The seminal case addressing the validity of exculpatory clauses is Hanks v. Powder Ridge Restaurant Corp., 276 Conn. 314, 322, 885 A.2d 734 (2005).
“[T]he law's reluctance to enforce exculpatory provisions of this nature has resulted in the development of an exacting standard by which courts measure their validity. So, it has been repeatedly emphasized that unless the intention of the parties is expressed in unmistakable language, an exculpatory clause will not be deemed to insulate a party from liability for his own negligent acts ․ Put another way, it must appear plainly and precisely that the limitation of liability extends to negligence or other fault of the party attempting to shed his ordinary responsibility ․”
“Not only does this stringent standard require that the drafter of such an agreement make its terms unambiguous, but it mandates that the terms be understandable as well. Thus, a provision that would exempt its drafter from any liability occasioned by his fault should not compel resort to a magnifying glass and lexicon ․ Of course, this does not imply that only simple or monosyllabic language can be used in such clauses. Rather, what the law demands is that such provisions be clear and coherent ․ Although ordinarily the question of contract interpretation, being a question of the parties' intent, is a question of fact ․ [w]here there is definitive contract language, the determination of what the parties intended by their contractual commitment is a question of law.” (Internal quotation marks omitted.) Hanks v. Powder Ridge Restaurant Corp., supra, 276 Conn. 322.
The court concludes there is no genuine issue of material fact that the exculpatory agreement expressly and unambiguously provides that parties such as the plaintiff are releasing the defendant from prospective liability for various acts or omissions. The relevant language clearly and explicitly provides that the defendant “will have no responsibility to” the plaintiff “for any loss ․ damage to property ․ from any cause, including without limitation” the defendant's “active or passive acts, omissions, negligence or conversion ․” As the court found in Hanks, “an ordinary person of reasonable intelligence would understand that, by signing the agreement, [the plaintiff] ․ was releasing the [defendant] from liability for their future negligence” and other acts or omissions.
The court next considers whether the “well drafted exculpatory agreement” is unenforceable because it violates public policy. Hanks v. Powder Ridge Restaurant Corp., supra, 276 Conn. 326. “Although it is well established that parties are free to contract for whatever terms on which they may agree ․ it is equally well established that contracts that violate public policy are unenforceable ․ [T]he question [of] whether a contract is against public policy is [a] question of law dependent on the circumstances of the particular case ․” (Citations omitted; internal quotation marks omitted.) Hanks v. Powder Ridge Restaurant Corp., supra, 276 Conn. 326–27.4
“A frequently cited standard for determining whether exculpatory agreements violate public policy was set forth by the Supreme Court of California in Tunkl v. Regents of the University of California, [60 Cal.2d 92, 98–101, 383 P.2d 441, 32 Cal.Rptr. 33 (1963) ]. In Tunkl, the court concluded that exculpatory agreements violate public policy if they affect the public interest adversely ․ and identified six factors (Tunkl factors) relevant to this determination:  [The agreement] concerns a business of a type generally thought suitable for public regulation.  The party seeking exculpation is engaged in performing a service of great importance to the public, which is often a matter of practical necessity for some members of the public.  The party holds himself out as willing to perform this service for any member of the public who seeks it, or at least for any member coming within certain established standards.  As a result of the essential nature of the service, in the economic setting of the transaction, the party invoking exculpation possesses a decisive advantage of bargaining strength against any member of the public who seeks his services.  In exercising a superior bargaining power the party confronts the public with a standardized adhesion contract of exculpation, and makes no provision whereby a purchaser may pay additional reasonable fees and obtain protection against the negligence.  Finally, as a result of the transaction, the person or property of the purchaser is placed under the control of the seller, subject to the risk of carelessness by the seller or his agents ․ The court clarified that an exculpatory agreement may affect the public interest adversely even if some of the Tunkl factors are not satisfied.” (Citations omitted; internal quotation marks omitted.) Hanks v. Powder Ridge Restaurant Corp., supra, 276 Conn. 328.
“Having reviewed the various methods for determining whether exculpatory agreements violate public policy, we conclude, as the Tunkl court itself acknowledged, that [n]o definition of the concept of public interest can be contained within the four corners of a formula ․ Accordingly ․ [t]he ultimate determination of what constitutes the public interest must be made considering the totality of the circumstances of any given case against the backdrop of current societal expectations ․ Thus, our analysis is guided, but not limited, by the Tunkl factors, and is informed by any other factors that may be relevant given the factual circumstances of the case and current societal expectations.” (Citations omitted; internal quotation marks omitted.) Hanks v. Powder Ridge Restaurant Corp., supra, 276 Conn. 330.
The plaintiff cites to two Superior Court cases in support of its position that the exculpatory provision does not violate public policy. Both cases are distinguishable from the present case. The defendant cites to the case of Wagner v. Murphy Moving & Storage, Inc., Superior Court, judicial district of Middlesex at Middletown, Docket No. CV 04 0103847 (March 6, 2006, Booth, J.). However, at issue in Wagner was a liability limitation and not an exculpatory provision. The plaintiff also cites Beaulieu v. Public Storage, Inc., Superior Court, judicial district of Hartford, Docket No. CV 05 5000596 (August 3, 2006, Keller, J.) (41 Conn. L. Rptr. 772). Unlike in Wagner, the contract at issue in Beaulieu involved both an exculpatory provision and a liability limitation. In fact, the provision is identical to the one at issue in the present case. The court in Beaulieu, however, did not perform a Tunkl public policy analysis. Instead, it held that several genuine issues of material fact existed, and thus, that summary judgment should not enter.
The court finds, based on the guiding factors of Tunkl, that the exculpatory provision does not violate public policy. In this regard, the court gives the greatest weight to the first, second and fourth factors. The first Tunkl factor is not satisfied because self-service storage facilities are generally not suitable for, or the subject of, public regulation. Although General Statutes §§ 42–159 through 42–168 concern self-storage facilities, they merely provide the owners of those facilities with lien rights over the personal property and address the sale or disposal of it. The second factor is not satisfied because self-service storage facilities do not perform a service of significant importance to the public as stated in the second Tunkl factor. Such facilities provide a valuable, but not indispensible, service to society.
The fifth Tunkl factor is not satisfied. Although the defendant has superior bargaining power over the plaintiff and the lease is a standard adhesion contract, it expressly provides that the plaintiff may protect his property against negligence for a reasonable fee. In this regard, the plaintiff opted to purchase a policy of insurance offered through the defendant to insure to the amount of $2,000 his personal property stored in the unit. Otherwise, the plaintiff assumed all risk of loss for the stored property.
The third and fourth Tunkl factors are clearly satisfied. The defendant is willing to perform its services for all members of the public and has a decisive bargaining advantage over the public in offering its storage services.
Finally, the sixth Tunkl factor is satisfied since the plaintiff left his property in the storage unit under the control of and subject to the negligence of the defendant. There is no dispute that the defendant removed and disposed of the goods in the plaintiff's storage unit; manifestly, the defendant had access to the storage unit and had control of the plaintiff's property.
Based on a consideration of the Tunkl factors and the totality of the circumstances, the court concludes that the exculpatory agreement does not violate public policy. Because the court finds that the exculpatory clause is valid and enforceable, the court does not address the defendant's claim that summary judgment should be granted on the limitation of liability clause in the storage lease.
In view of the foregoing, the defendant's motion for summary judgment (121.00) on its counterclaim for a declaratory judgment is granted.
FN1. The plaintiff has withdrawn the second count and, therefore, the court does not address the defendant's motion for summary judgment on that count.. FN1. The plaintiff has withdrawn the second count and, therefore, the court does not address the defendant's motion for summary judgment on that count.
FN2. Given the defendant's broad request for relief, and that the exculpatory provision is alleged in the counterclaim seeking a declaratory judgment, the court will construe the defendant's motion for summary judgment as based on the limitation of liability and exculpatory provision of the lease agreement.. FN2. Given the defendant's broad request for relief, and that the exculpatory provision is alleged in the counterclaim seeking a declaratory judgment, the court will construe the defendant's motion for summary judgment as based on the limitation of liability and exculpatory provision of the lease agreement.
FN3. The plaintiff could have purchased up to $5,000 in insurance.. FN3. The plaintiff could have purchased up to $5,000 in insurance.
FN4. In view of the foregoing well settled law, the court rejects the plaintiff's claim that whether the agreement in this case violates public policy is a question of fact and, therefore, inappropriate for summary judgment.. FN4. In view of the foregoing well settled law, the court rejects the plaintiff's claim that whether the agreement in this case violates public policy is a question of fact and, therefore, inappropriate for summary judgment.
Tyma, Theodore R., J.