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Riley v. Iron Gate Self Storage

Court of Appeals of Washington, Division 2

April 18, 2017

LARRY D. RILEY, Appellant,

          MELNICK, J.

         Larry Riley entered into a self-storage rental agreement with Iron Gate Self Storage that contained provisions limiting Iron Gate's liability and maximum recoverable damages. Riley appeals the trial court's order granting Iron Gate's partial summary judgment, denying his motion for reconsideration, and entering a final judgment of dismissal with prejudice. We conclude that the trial court properly granted summary judgment on the breach of contract and conversion claims. We further conclude that the limiting provisions in the rental agreement violated public policy under the Consumer Protection Act (CPA) but not under the Self-Service Storage Facilities Act (Storage Act). We affirm in part and reverse in part.


         Iron Gate Storage-Cascade Park (Iron Gate) is a commercial business that rents storage space to the public. On December 1, 2003, Riley entered into a rental agreement with Iron Gate to rent storage units. The agreement included a cap of approximately $5, 000 on the value of personal property that may be stored in the unit. The applicable provision stated:

5. USES AND COMPLIANCE WITH LAW . . . Occupant may store personal property with substantially less or no aggregate value and nothing herein contained shall constitute or evidence, any agreement or administration by Operator that the aggregate value of all suchpersonal (sic) property is, will be, or is expected to be, at or near $5, 000. It Is specifically understood and agreed that Operator need not be concerned with the kind, quality, or value of personal property or other goods stored by Occupant in or about the Premises pursuant to this Rental Agreement.

         Clerk's Papers (CP) at 142 (italicized emphasis added).

         Another provision in the rental agreement included a limitation on liability and a $5, 000 cap on damages:

7 LIMITATION OF OPERATOR'S LIABILITY; INDEMNITY Operator and Operators Agent shall not be liable to Occupant for any damage or lose (sic) to any person. Occupant or any property stored in, on or about the Premises . .. arising from any cause whatsoever, including but not limited to . . . active or passive acts, omissions or negligence of Operator or Operators Agents [except from] Operator's fraud, willful injury or willful violation of law. . . . Notwithstanding anything contained in this Rental Agreement, In no event shall Operator or Operator's Agents be liable to Occupant In an amount In excess of $5, 000 for any damage or lose (sic) to any person, Occupant, or any properly (sic) stored . . . arising from any cause whatsoever, Including, but not limited to, Operators Agents' active or passive acts, omissions or negligence.

         CP at 143 (italicized emphasis added).

         The agreement also included a clause that stated the occupant shall maintain an insurance policy covering at least 100 percent of the actual cash value of stored personal property. Riley elected to "self-insure (personally assume all risk of loss or damage)." CP at 143. He initialed his name in each section, indicating that he understood the terms of the agreement.

         Over the course of his lease, Riley often fell behind on his rent payments. Iron Gate sent Riley past due notices in May, June, and July 2010. It sent a pre-lien notice to Riley on May 21. It then sent Riley a notice of cutting lock on June 24, followed by a certified notice of lien one week later.

         On July 8, 2010, Iron Gate mailed Riley a notice of auction. Iron Gate believed its notices complied with Washington law; however, the Notice of Auction mistakenly contained an auction date that was less than the statutorily required 14 days from the date of the notice. The auction occurred on July 15 and the winning bidder paid less than $2, 000 for items in Riley's unit. Riley contacted Iron Gate following the auction and received information that his property had been sold.

         Two days after the auction, Riley delivered a letter to Iron Gate expressing his opposition to the auction sale and his belief that the notices were invalid. Riley also notified Iron Gate that he was prepared to pay any outstanding rent. The letter also requested that his property be restored to him.

         Iron Gate recovered many auctioned items by repurchasing them from the winning bidder. In addition to the recovered items, Iron Gate continued to store Riley's remaining property at no cost until Riley retrieved it several months later.

         In March 2015, Riley filed an amended complaint alleging that Iron Gate violated the Storage Act and the CPA. He alleged that he suffered actual damages in excess of $1.5 million and sought treble damages under the CPA. Riley also alleged that the rental agreement was a contract of adhesion and that its provisions were unconscionable. He further alleged breach of contract and conversion.

         Iron Gate moved for summary judgment on Riley's claims and, in the alternative, partial summary judgment against any recovery of damages that exceeded $5, 000. Iron Gate acknowledged it mistakenly violated the Storage Act, but stated that it took steps to recover Riley's property. It argued that Riley failed to follow the terms of the rental agreement and the amount of damages he sought was barred by the agreement.

         At the hearing on the motion for summary judgment, the trial court deferred its ruling on the summary judgment motion.[1] It granted the partial summary judgment motion and orally ruled that even if Riley successfully brought a claim, he would be bound by the contractual limitation of $5, 000 in damages.

         Riley moved for reconsideration and the trial court denied the motion. With Riley's agreement, Iron Gate then tendered a $23, 000 check to Riley to be held by his attorney pending the outcome of this appeal.[2] Per Iron Gate, this amount reflected the maximum damages for which it could be liable, trebled, and with interest on the trebling, because of the CPA claim.

         The trial court entered an order on partial summary judgment and a final judgment of dismissal with prejudice. The final judgment reiterated that Riley's recoverable damages, under all of his causes of action, were limited to a maximum of $5, 000. It further stated that the $23, 000 check payment tendered to Riley represented "an amount of recoverable damages, plus interest" which was equal to or greater than what Riley could potentially recover at trial. CP at 308. Riley did not object to the form of the order or judgment.

         Riley appeals.


         I. Summary Judgment

         A. Legal Principles

         We review an order granting summary judgment de novo. Loeffelholz v. Univ. of Wash, 175 Wn.2d 264, 271, 285 P.3d 854 (2012). Summary judgment is proper if "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." CR 56(c). We construe all facts and their reasonable inferences in the light most favorable to the nonmoving party. Loeffelholz, 175 Wn.2d at 271.

         A party moving for summary judgment bears the burden of demonstrating that there is no genuine issue of material fact. Atherton Condo. Apt-Owners Ass 'n Bd. of Dirs. v. Blume Dev. Co., 115 Wn.2d 506, 516, 799 P.2d 250 (1990). "A material fact is one upon which the outcome of the litigation depends in whole or in part." Atherton, 115 Wn.2d at 516. If the moving party satisfies its burden, the nonmoving party must set forth specific facts demonstrating that a material fact remains in dispute. Loeffelholz, 175 Wn.2d at 271. "[C]onclusory statements of fact will not suffice." Grimwood v. Univ. of Puget Sound, Inc., 110 Wn.2d 355, 360, 753 P.2d 517 (1988).

         Summary judgment is proper only if reasonable persons could reach but one conclusion from the evidence presented. Bostain v. Food Express, Inc., 159 Wn.2d 700, 708, 153 P.3d 846 (2007). We may affirm summary judgment on any ground supported by the record. Blue Diamond Grp., Inc. v. KB Seattle I, Inc., 163 Wn.App. 449, 453, 266 P.3d 881 (2011).

         When interpreting contracts, we give words in a contract their ordinary, usual, and popular meaning, unless the contract in its entirety clearly demonstrates a contrary intent. Hearst Commc'ns, Inc. v. Seattle Times Co., 154 Wn.2d 493, 504, 115 P.3d 262 (2005). The contract is viewed as a whole, and particular language is interpreted in the context of other ...

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