Kocinec v. Public Storage, Inc.

• Citation: 489 F.Supp.2d 555
• Decision Date: 06 June 2007
• Docket Number: No. 2:06 CV 649.,2:06 CV 649.
• Court: U.S. District Court — Eastern District of Virginia
• Parties: Deborah KOCINEC, Plaintiff, v. PUBLIC STORAGE, INC. Defendant.

489 F.Supp.2d 555

Deborah KOCINEC, Plaintiff, v. PUBLIC STORAGE, INC. Defendant.

No. 2:06 CV 649.

United States District Court, E.D. Virginia. Norfolk Division.

June 6, 2007.

Francis John Driscoll, Jr., Law Office of Frank J. Driscoll Jr. PLLC, Barry Ray Taylor, Scialdone & Taylor, Inc., Claude Michael Scialdone, Scialdone & Taylor Inc., Virginia Beach, VA, for Deborah Kocinec, Plaintiff.

Keith Patrick Zanni, McGuireWoods LLP, Norfolk, VA, for Public Storage, Inc., Defendant.

MEMORANDUM OPINION AND ORDER

DOUMAR, District Judge.

Presently before the Court is a Motion for Partial Summary Judgment filed by Defendant Public Storage Inc. ("Defendant") against Plaintiff Deborah Kocinec ("Plaintiff') under Rule 56 of the Federal Rules of Civil Procedure. Defendant seeks to limit Plaintiffs potential recovery at trial to $5,000, pursuant to the terms of a written rental agreement executed by the parties on March 22, 2004 ("Rental Agreement"). For the reasons that follow, the Court GRANTS Defendant's Motion for Partial Summary Judgment and ORDERS judgment in favor of Defendant's First Affirmative Defense asserting that Plaintiffs damages are contractually limited to $5,000. As Plaintiff has not alleged fraud, willful injury, or willful violation of law, she may hereinafter recover damages, if any, of no more than $5,000, in accordance with the lawful exculpatory clause contained in the Rental Agreement.

I. FACTUAL BACKGROUND AND PROCEDURAL POSTURE

A. Facts

On March 22, 2004, Plaintiff entered into a written contract with Defendant to rent storage unit A04 at a Defendant's privately-owned self-storage facility located at 880 Widgeon Road in Norfolk, Virginia. Plaintiff alleges, and Defendant admits, that on August 28, 2006, Plaintiff received a rental payment receipt from Defendant reflecting a credit of $6.00 and indicating that the next payment under the Rental Agreement was due and payable on September 1, 2006. Plaintiff further alleges that she sent payment to Defendant after the due date, on September 30, 2006. Apparently, the parties made no other communications until October 21, 2006, on which date Plaintiff allegedly called Defendant to provide thirty days advance notice that she would be removing her property and vacating the unit. At that time, Defendant informed Plaintiff that the property contained in her storage unit had been sold at public auction on September 25, 2006. Plaintiff contends that Defendant failed to provide her with notice of the unpaid balance and intended auction, and that such failure constitutes a breach of Defendant's statutorily imposed duties. Plaintiff initially sought money damages of $82,225.00, but now seeks $70,000.00.¹

B. Procedural Posture

Plaintiff filed this private cause of action against Defendant in the Circuit Court for the City of Norfolk on October 30, 2006, alleging Defendant breached its "statutorily imposed duty to notify the Plaintiff ... of her alleged unpaid rental balance" and "its intention to auction her Unit and sell her property before executing such auction and sale." Compl. ¶ 7. Defendant properly removed Plaintiffs action on November 22, 2006, pursuant to this Court's diversity jurisdiction under 28 U.S.C. § 1332. Defendant subsequently filed an Answer to Plaintiffs Complaint and Affirmative Defenses on November 22, 2006, asserting, among other defenses, that "Plaintiffs damages are contractually limited to $5,000." Pl.'s Aff. Def. ¶ 1. Defendant filed the instant motion on May 11, 2007, and Plaintiff responded in opposition on May 25, 2007. As Defendant replied thereto on May 31, 2007, this motion is ripe for disposition.

II. ANALYSIS

A. Motion for Summary Judgment (Rule 56)

Federal Rule of Civil Procedure 56(c) provides that summary judgment should be granted where "the pleadings, depositions [and] answers to interrogatories ... 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 purpose of summary process is to avoid a clearly unnecessary trial," Continental Can Co. v. Monsanto Co., 948 F.2d 1264, 1265 (Fed.Cir.1991) (citing Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986)), and "it is not designed to substitute lawyers' advocacy for evidence, or affidavits for examination before the fact-finder, when there is a genuine issue for trial." Continental Can Co., 948 F.2d at 1265.

In ruling on a motion for summary judgment, a court views the facts in the light most favorable to the non-moving party. United States v. Lee, 943 F.2d 366, 368 (4th Cir.1991). The moving party has the threshold burden of informing the court of the basis of the motion, of establishing that there is no genuine issue of material fact, and of showing that it is entitled to judgment as a matter of law. Celotex Corp. v Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); see also Castillo v. Emergency Med. Assoc., 372 F.2d 348, 346 (4th Cir.2004).

Once the moving party satisfies this threshold showing under Rule 53(c), the burden of production shifts to the nonmoving party. Celotex Corp., 477 U.S. at 322-23, 106 S.Ct. at 2552. The non-movant must "go beyond the pleadings and by [his] own affidavits, or by `depositions, answers to interrogatories, and admissions on file,' designate `specific facts showing that there is a genuine issue for trial.'" Id. at 324, 106 S.Ct. at 2553. "The plain language of Rule 56(c) mandates the entry of summary judgment ... against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Id. at 322, 106 S.Ct. at 2552. Thus, to defeat summary judgments the nonmovant must go beyond the pleadings with affidavits, depositions, interrogatories, or other evidence to show that a genuine issue of material fact exists. See id. at 324, 106 S.Ct. at 2553.

B. Exculpatory Agreements

The issue before the Court is whether a private party may contractually limit its potential liability to a counterparty in Virginia, and, if so, whether an exception to this right applies to private owners of self-storage facilities. The Court finds that parties may enter into such exculpatory agreements, and that no exception at law precludes a private self-storage facility, such as Defendant; from limiting its risk as to its customers. Moreover, the Court is unwilling to create such an exception under the circumstances of this case. Accordingly, Defendant's liability is to be limited pursuant to the exculpatory provisions contained in the Rental Agreement.

In Virginia, parties may limit their risk of loss through contract, as "it is apparently not against the public policy ... for one to contract against his own negligence in some situations." Nat'l Motels, Inc. v. Howard Johnson, Inc., 373 F.2d 375, 379 (4th Cir.1967). "Virginia courts regularly enforce exculpatory agreements." Trumball Invs., Ltd. v. Wachovia Bank, N.A., No. 1:05CV15 (GBL), 2005 U.S. Dist. LEXIS 7195, at * 10 (E.D.Va. Apr. 15, 2005); see, e.g., Chesapeake & Ohio R. Co. v. Clifton Forge-Waynesboro Tel. Co., 216 Va. 858, 224 S.E.2d 317, 321 (1976) ("[W]hen a railroad is called upon to perform a service which it is not compelled to perform by the very nature of its operation as a common carrier, it may, under proper conditions, contract against its liability for negligence for the reason that it is then acting in the capacity of a private carrier."); Peninsula Transit Corp. v. Jacoby, 181 Va. 697, 26 S.E.2d 97, 100 ("The courts generally have recognized the right of the carrier to limit its liability for the loss of baggage by special contract...."); Ripley Heatwole Co. v. John E. Hall Elec. Contr., Inc., 69 Va. Cir. 69, 71, 2005 WL 4827398 (2005) (noting that a "contractual provision specifically limiting a party's liability" embodies "one of the essential purposes of contract law — the freedom of parties to limit their risks in commercial transactions"); Howie v. Atl. Home Inspection, Inc., 62 Va. Cir. 164, 167-70, 2003 WL 23162330 (2003) (upholding a contract provision limiting a termite inspector's liability to the cost of inspection); Phoenix Med. Elecs. Servs. v. Klamm, 18 Va. Cir. 128, 129, 1989 WL 646529 (1989) ("Since the contract specifically limits liability to the cost of repairing or correcting the defects, claims other than for such cost are demurrable."). However, such terms limiting liability are generally disfavored, and "should be read into a contract which shows no ambiguity on its face." Nat'l Motels, 373 F.2d at 379. Additionally, "a party ... may exempt itself from liability for negligence in a contract with a party on equal footing." Gill v. Rollins Protective Servs. Co., 722 F.2d 55, 58 (4th Cir.1983).

Exculpatory clauses are typically evaluated through a three-part test.² "[A] defendant seeking to avoid liability under an exculpatory agreement must show (1) that the agreement does not contravene public policy, (2) that it could be readily understood by a reasonable person in the plaintiffs position, and (3) that it clearly and unequivocally releases the defendant from precisely the type of liability alleged by the plaintiff." Hiett v. Barcroft Beach, Inc., 18 Va. Cir. 315, 318, 1989 WL 646461 (1989). Because the exculpatory clause contained in the Rental Agreement meets these requirements, it is valid and enforceable.. Accordingly, Plaintiff may recover damages, if any, of no more than $5,000, pursuant to the unambiguous terms of the Rental Agreement.

1. Public Policy

While Plaintiff "concede[s] ... that Virginia law has permitted ... the right to limit risk of loss through contract," she broadly asserts that "there does not appear to be any precedent whether an owner of a Virginia self-storage facility may do so by contract to the extent that the Defendant attempts to limit its liability in...