Bowe v. Pub. Storage, Case No. 1:14–cv–21559–UU.

• Decision Date: 18 May 2015
• Docket Number: Case No. 1:14–cv–21559–UU.
• Citation: 106 F.Supp.3d 1252
• Parties: Colin BOWE, Plaintiff, v. PUBLIC STORAGE, Defendant.
• Court: U.S. District Court — Southern District of Florida

106 F.Supp.3d 1252

Colin BOWE, Plaintiff,
v.
PUBLIC STORAGE, Defendant.

Case No. 1:14–cv–21559–UU.

United States District Court, S.D. Florida.

Signed May 18, 2015.
Filed May 19, 2015.
Order Denying Reconsideration June 25, 2015.

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Alec Huff Schultz, Andrew Benjamin Boese, James Robert Bryan, David Arnold Karp, Scott Brian Cosgrove, Leon Cosgrove LLC, David Buckner, Grossman Roth, Coral Gables, FL, Brett Elliott Von Borke, Seth Eric Miles, Grossman Roth, P.A., Miami, FL, Plaintiff.

Anjali Srinivasan, David J. Silbert, Erin E. Meyer, John Keker, Michelle Ybarra, Paven Malhotra, Quyen Ta, Steven A. Hirsch, Keker & Van Nest, LLP, San Francisco, CA, David Paul Ackerman, Elio Raul Novoa, Jr., Kristen Lee McKeever, Scott Jeffrey Link, Ackerman Link & Sartory,

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P.A., West Palm Beach, FL, Defendant.

OMNIBUS ORDER

URSULA UNGARO, District Judge.

THIS CAUSE is before the Court upon Plaintiffs' Motion to Strike Defendant's Late–Disclosed Summary Judgment Evidence and Witnesses, D.E. 241, and Defendant's Motion for Summary Judgment, D.E. 195. The Motions are fully briefed and ripe for disposition.

THE COURT has considered the Motions and the pertinent portions of the record, and is otherwise fully advised in the premises.

BACKGROUND

Very little is undisputed in this action. What few facts the parties do not dispute are recited below.

Defendant Public Storage is a Maryland real estate investment trust that, as of December 31, 2013, owns, develops, or operates over 2,200 self-storage facilities in 38 states in the United States. D.E. 206–10 at 6, 19; D.E. 196 ¶ 1; D.E. 254 ¶ 1. When a customer rents a self-storage unit from Public Storage, that customer signs a Lease/Rental Agreement and an Insurance Addendum. D.E. 201–1; D.E. 254–2.

In 2006, Public Storage began requiring tenants¹ to have insurance over their self-storage units. The Insurance Addendum further requires tenants to acknowledge that they are "solely responsible to insure my stored property" and that "the Lease/Rental Agreement requires [the tenant] to maintain insurance that covers loss or damage for the personal property" stored at the Public Storage facility. D.E. 254–2. The Insurance Addendum allows tenants to elect insurance provided by the Public Storage tenant insurance program ("PSTIP"), which Public Storage represents as underwritten by New Hampshire Insurance Company ("NHIC"), and offered through a separate servicer. Id. In signing the Insurance Addendum, a tenant acknowledges that the "insurance policy offered by this self-storage agent may provide a duplication of coverage already provided by [the tenant's] homeowners' insurance policy or by another source of coverage," but that the "facility and its employees are not qualified or authorized to evaluate the adequacy of any insurance" the tenant may have. Id. The tenant also acknowledges that she will be personally responsible for any loss or damage to her goods if she does not have insurance or her insurance lapses, and that the insurance offered through the Addendum is not required in order to store her goods at a Public Storage facility. Id.

If a tenant elects to participate in the PSTIP, the Insurance Addendum requires the tenant to "authorize [Public Storage] to conduct the administrative function of receiving the premium to send to the insurance company on [the tenant's] behalf." Id. The Addendum states that the tenant has "elected to satisfy [his] obligation to have insurance for the stored goods by purchasing the insurance protection available through Marsh" and that the tenant understands "that the insurance I am applying for [is] underwritten by New Hampshire Insurance Company." Id. The Lease/Rental Agreement requires tenants

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to acknowledge, in bolded capital letters, that Public Storage "will not insure Occupant's personal property and that Occupant is obligated under the terms of this lease/rental agreement to insure his own goods." D.E. 254–3 at 3.

The levels of coverage offered through the PSTIP have changed during its existence. Presently, the following three levels of coverage are offered: (1) $3,000 of coverage for $11 per month² ; (2) $4,000 of coverage for $13 per month; and (3) $5,000 of coverage for $15 per month. Id. Previously, the following four levels of insurance coverage were offered: (1) $2,000 of coverage for $9 per month; (2) $3,000 of coverage for $14 per month; (3) $4,000 of coverage for $19 per month; and (4) $5,000 per month for $24 per month. D.E. 254–27. Public Storage changed its coverage levels in late 2013. D.E. 201–13; D.E. 201–14; D.E. 254–28.

The parties fiercely dispute the facts surrounding the distribution of PSTIP insurance premiums to various entities. They, however, generally agree to the following facts. PS Insurance Company–Hawaii, Ltd. ("PS Hawaii"), a subsidiary of Public Storage, is a captive reinsurer to which NHIC transfers 100% of the PSTIP risk, up to $5 million per occurrence. D.E. 196 ¶ 16; D.E. 254–35; D.E. 254–4 at 82:21–25. NHIC also transfers 98% of the PSTIP premiums to PS Hawaii. D.E. 254–32 at 172:10–15. PS Hawaii then transfers 75% of the PSTIP premiums to Public Storage. D.E. 196 ¶ 16; D.E. 254 at 6. Public Storage calls this an "access fee" that compensates Public Storage for its administrative services in collecting the insurance premiums from customers, and for giving the PSTIP exclusive access to Public Storage's large customer base. D.E. 196 ¶ 16. Plaintiffs call this an unearned illegal kickback. D.E. 254 at 6. Plaintiffs contend that Public Storage deceived its customers by not disclosing that it profits from the PSTIP by receiving the access fee. D.E. 253 at 4. Plaintiffs therefore seek disgorgement of all revenues, i.e., the access fees, Public Storage received from the PSTIP. Since the fiscal year ending on December 31, 2009, Public Storage has collected over $288,268,675 in access fees from the PSTIP insurance premiums.³ D.E. 254–36.

On October 28, 2014, Plaintiffs filed an Amended Complaint, alleging that Public Storage's receipt of the access fee or, as alleged by Plaintiffs, the kickback and Public Storage's failure to disclose this access fee or kickback to its tenants, violate federal RICO laws and the Florida Deceptive and Unfair Trade Practices Act ("FDUTPA"). D.E. 79. Plaintiffs also allege claims for breach of contract, unjust enrichment, and unconscionability. Id. On April 29, 2015, the Court granted Plaintiffs' motion for class certification, certifying a national class to resolve Plaintiffs' RICO claims, and certifying a Florida subclass to resolve Plaintiffs' FDUTPA, breach of contract, and unjust enrichment claims. D.E. 305.

PLAINTIFFS' MOTION TO STRIKE [D.E. 241]

Plaintiffs move under Federal Rules of Civil Procedure 56(c) and 37(c) to strike evidence Public Storage submitted in support of its Motion for Summary Judgment, and to strike witnesses from testifying at trial. Specifically, Plaintiffs argue that the

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following should be stricken and excluded: (1) Exhibit 6 to the Declaration of Capri Haga in support of Public Storage's Motion for Summary Judgment, which Plaintiffs argue was not disclosed during discovery; (2) Exhibits 9, 10, and 11 to Ms. Haga's Declaration, which Plaintiffs argue would be inadmissible hearsay because they would be offered to prove that other storage companies require and offer similar tenant insurance on similar terms; and (3) Katie Isaac and Clemente Teng, who were disclosed as potential witnesses hours before the discovery deadline and thus could not be deposed by Plaintiffs.

Rule 56(c) provides that a party opposing a summary judgment motion may object to materials cited to support a fact that cannot be presented in a form that would be admissible in evidence. "On motions for summary judgment, a court may consider only that evidence which can be reduced to an admissible form." Snover v. City of Starke, Fla., 398 Fed.Appx. 445, 449 (11th Cir.2010) (internal quotations and citations omitted). "Authentication is a condition precedent to admissibility." Id. (internal quotations omitted). Otherwise admissible evidence can be submitted in inadmissible form at the summary judgment stage, though at trial it must be submitted in admissible form. McMillian v. Johnson, 88 F.3d 1573, 1584 (11th Cir.1996).

Rule 37(c) provides that "[i]f a party fails to provide information or identify a witness as required by Rule 26(a) or (e), the party is not allowed to use that information or witness to supply evidence on a motion, at a hearing, or at a trial, unless the failure was substantially justified or is harmless." "The burden of establishing that a failure to disclose was substantially justified or harmless rests on the nondisclosing party." Mitchell v. Ford Motor Co., 318 Fed.Appx. 821, 824 (11th Cir.2009). "In determining whether the failure to disclose was justified or harmless, we consider the non-disclosing party's explanation for its failure to disclose, the importance of...