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Varasteh v. Storage U.S.A.


July 16, 2009


On appeal from the Superior Court of New Jersey, Law Division, Bergen County, Docket No. L-3491-06.

Per curiam.


Argued: June 23, 2009

Before Judges Cuff and Fuentes.

Plaintiffs Soghra Varasteh and Mahmoud Alizadehmeidani rented a storage unit from defendant Storage U.S.A. They allege that property placed in the unit was stolen and seek damages from defendant. Plaintiffs appeal from an order granting summary judgment to defendant. We affirm.

On April 19, 2004, plaintiffs executed a rental agreement with defendant. They agreed to pay $179.94 monthly for a storage unit and represented that they intended to store rugs in the unit. Plaintiffs allege they placed 170 handmade Persian rugs in the unit. They declined to obtain insurance for the contents stored in the unit. Two months after plaintiffs placed the rugs in the unit, the rugs disappeared.

The storage rental agreement contained a boilerplate limitation of liability provision which stated that a bailment was not created and defendant is not a warehouseman. The provision also provides that the tenant bears the whole risk of any loss of articles stored at the premises; it states: "No bailment is created hereunder, lessor is not a warehouseman engaged in the business of storing goods for hire, and all property stored within or on the space by tenant or located at the facility shall be at tenant's sole risk and supervision."*fn1

On May 9, 2006, plaintiffs filed a complaint seeking damages from defendant. They alleged negligence, breach of contract, negligent supervision of employees, and negligent hiring. Plaintiffs asserted that the gate controlling access to the facility broke and allowed unimpeded access to the storage facility for weeks before they discovered the loss of their rugs. Plaintiffs alleged that defendant was notified of the gate problem.

A police investigation revealed no sign of forced entry to the storage unit leased by plaintiffs. The quality and format of the video surveillance tapes provided no relevant information. A private detective retained by plaintiffs learned that there had been several thefts at the facility prior to the alleged theft of plaintiffs' rugs. Police had responded to many reports of theft at this facility.

The private detective was able to trace some of the rugs. He interviewed a person who stated that he viewed the rugs at the storage facility and purchased them at that site from Eric.

Plaintiffs produced an affidavit from a former employee of defendant who was able to identify Eric as an employee of defendant who worked occasionally at the Hackensack facility.

Both parties filed motions for summary judgment. Defendant's motion was granted and the complaint was dismissed. Plaintiffs also sought to amend their complaint to assert a consumer fraud claim. The motion judge acknowledged that the information gathered by investigators regarding the conduct of various persons employed by defendant would probably create genuine issues of material fact, if these facts were relevant to the disposition of the matter. The judge found, however, that the threshold issue was the enforceability of the exculpatory clause of the rental agreement. If so, the conduct of some employees and associates of those employees was irrelevant.

The motion judge found that defendant is not a warehouseman as defined by N.J.S.A. 12A:7-102(1)(h) or N.J.S.A. 2A:44-188. Therefore, chapter seven of the Uniform Commercial Code, N.J.S.A. 12A:7-101 to -603, which concerns warehousemen, does not govern the relationship between plaintiffs and defendant. The judge also held that the Self-Service Storage Facility Act (the Act), N.J.S.A. 2A:44-187 to -192, does not affect the disposition of plaintiffs' complaint because the statute concerns the consequences of failure to pay monthly rent.

The judge proceeded to hold that exculpatory agreements or provisions limiting the liability of a party in a commercial transaction are generally sustained as long as the transaction does not affect the public interest. He noted that exculpatory clauses in residential leases are prohibited but such clauses in commercial leases are regularly upheld. He reasoned that a self-storage contract is more akin to the lease of commercial space than residential housing and there was no evidence of unequal bargaining power by either party to the self-storage agreement. Therefore, he held that the exculpatory agreement was enforceable and barred plaintiffs' action.

On appeal, plaintiffs argue that the judge should have followed Gonzalez v. A-1 Self-Storage, Inc., 350 N.J. Super. 403 (Law Div. 2000). The motion judge acknowledged the case but also noted that it was not binding precedent. He stated that he disagreed with the Gonzalez ruling and explained the basis of his disagreement.

We affirm substantially for the reasons expressed by Judge Harris in his June 6, 2008 oral opinion. N.J.S.A. 2A:44-188 defines a self-service storage facility as "any real property designed and used for the purpose of renting or leasing individual storage space to occupants who are to have access for the purpose of storing and removing personal property." The facility operated by defendant meets this description. As such, defendant's facility is also "not a warehouse as used in chapter 7 of Title 12A of the [Uniform Commercial Code]," ibid., and the special obligations plaintiffs seek to impose on defendant as a warehouseman are not available to them.

In addition, Judge Harris correctly observed that he was not bound by the ruling in Gonzalez. See Manturi v. V.J.V., Inc., 179 N.J. Super. 300, 3006 (App. Div. 1981) (trial court judge not bound by a reported opinion of another trial court judge). We note that Gonzalez has been distinguished and limited where, as here, the storage facility meets the definition of a self-service storage facility provided in N.J.S.A. 2A:44-188. Kane v. U-Haul Int'l, Inc. 218 F.App'x 163, 166 n.2 (3d Cir. 2007). Furthermore, Gonzalez can best be considered a case holding a landlord to its obligation to provide a facility suitable for its intended purpose rather than a case that imposes vicarious liability on an owner and operator of storage facility for the negligent or even criminal acts of its employees.

We, therefore, affirm the June 6, 2008 order granting summary judgment to defendant and dismissing plaintiffs' complaint.

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