Monday, June 01, 2020

Hester v. Public Storage (Cal. Ct. App. - May 28, 2020)

Please tell me you know which way this case is coming out just by reading the facts.  Yes, it involves a reality television show "star" (David Hester), but that doesn't matter.  In the actual reality show we call civil "Justice," cases like this only come out one way.

The question presented is whether Public Storage is entitled to void the sale of a storage locker once it discovers (30 minutes after the auction) that the owner has actually paid all the fees that are due and that the locker was accordingly auctioned in error.  Here are the relevant facts:

"Self-service storage facilities (owners or sellers) rent storage space to individuals (occupants) for the purpose of storing personal property. If an occupant fails to pay rent, an owner may sell the personal property contained within the occupant’s storage unit through a lien sale. Defendant owns and operates self-storage facilities throughout the country and conducts lien sales in California pursuant to the Self-Service Storage Facility Act. Plaintiff has made a living for the past 30 years buying the contents of storage units at lien sales and reselling the purchased items. He was featured on several seasons of the television show “Storage Wars,” which documented the lives of several individuals that make a living in this manner. In his career, plaintiff has attended about 10,000 lien sales, about 20 percent to 25 percent of which were conducted by defendant.

Defendant held a lien sale at its facility in Fountain Valley in July 2017. As a condition to participate in the sale, plaintiff signed a Delinquent Tenant Sale Sign-in Sheet and Agreement (delinquent sale agreement) containing various rules and regulations, including, among others: (1) “[a]ll bidders must read these Rules and Regulations and fill out the Bidder’s Sign-In Sheet below”; (2) “[a]t the time of purchase, Purchaser must complete a Certificate of Public Sale form . . .”; (3) defendant “reserves the right to null and void the auction and sale of any unit if, among other reasons, the District Manager verifies that the tenant has paid the outstanding balance in full while the auction was taking place”; and (4) “[a]ny violation of the above rules may result in bidders being barred from future sale at any Public Storage facility.”

At the sale, defendant accepted plaintiff’s offer to purchase the contents of a storage unit for $11,800. Plaintiff then placed two locks on the unit’s door and paid for the unit with a credit card and cash. He also signed a Certification of Public Sale for the unit, which certified he had made the winning bid for the contents of the storage unit during competitive bidding. The certification also stated plaintiff “[understood] that [defendant] reserve[d] the right to null and void the auction and sale of the unit for any reason.”

About half an hour after plaintiff signed the certification, a senior district manager for defendant learned the unit had been mistakenly listed for sale due to a technical glitch. The unit’s occupant had paid his past due balance weeks before the sale, but the system incorrectly listed the unit as delinquent and marked it to be sold. Defendant would not have sold the unit had it known of this mistake.

After discovering the error, the district manager immediately notified plaintiff that defendant was voiding his purchase of the unit. Defendant reversed the portion of the purchase price paid by credit card and attempted to refund the cash balance. Plaintiff refused to accept the sale’s rescission and declined the refund. Defendant then cut plaintiff’s locks off the unit and replaced them with its own locks. Defendant later sent plaintiff a letter explaining that it had voided his purchase of the unit and enclosed a refund of the cash balance and reimbursement for the cut locks."

What result?

It's obvious to me.  As well as to both the trial court and Court of Appeal.  Public Storage wins.  The contract and documents repeatedly said the sale could be rescinded if it turned out the owner had actually paid.  And that's in fact, precisely what happened here.  Summary judgment for defendant, and decision affirmed on appeal.

Exactly right.  Beyond a shadow of a doubt.