Contractual Cap on Damages Upheld in ‘Storage Wars’ Style Case

The operator of popular self-service storage facilities in Manhattan and was sued by an individual who had stored her property in one of the client’s rooms.  After Plaintiff fell into arrears in the payment of her monthly storage fees, the client conducted a sale of the personal property maintained in Plaintiff’s storage locker, as authorized by the New York Lien Law.  Plaintiff sued to challenge the sale.  In proceedings handled by another law firm, the court ruled that the client had failed to properly notice the sale of Plaintiff’s personal property in accordance with the Lien Law, despite the fact that the client had complied with all U.S. Postal Service requirements to effect delivery of notice by electronic certified mail, return receipt requested.  The court scheduled the matter for a hearing on Plaintiff’s damages only.

ALBPC was engaged to salvage the case, and Pete Reid was brought in to help. ALBPC promptly commenced an aggressive course of discovery aimed at challenging Plaintiff’s alleged damages.  Plaintiff retained a television-personality appraiser as an expert and asserted damages of approximately $150,000, notwithstanding that Plaintiff had declared in her self-service storage agreement that the maximum value of the property to be maintained in storage would not exceed $7,500.

After the completion of discovery, Pete Reid moved for partial summary judgment to enforce the contractual damages limitation contained in plaintiff’s self-storage service agreement.  The court granted the motion.  Adopting the arguments advanced by Pete Reid, the court found that Plaintiff contractually agreed to cap her damages for lost property at $7,500.  Moreover, the court found that if Plaintiff intended to store personal property having a value in excess of $7,500, the agreement required that Plaintiff first renegotiate an increase to her monthly storage fee.  The court further found that enforcement of the contractual damages limitation was compelled by case law found by Pete Reid that interpreted identical contractual provisions.

Following the court’s ruling, Plaintiff was forced to settle the case for a tiny fraction of the damages sought, thereby avoiding what would now be an unnecessary evidentiary hearing. Attorneys Pete Reid, Colin E. Kaufman, and Scott J. Pashman represented the defendant.

2017-11-07T12:57:00+00:00 March 28th, 2012|Articles|