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Castro v. Sovran Self Storage, Inc.

United States District Court, D. New Jersey

July 16, 2015

JUAN CASTRO, JR., Plaintiff,
v.
SOVRAN SELF STORAGE, INC. t/a UNCLE BOB'S SELF STORAGE, Defendant

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[Copyrighted Material Omitted]

Page 206

For Plaintiff: Andrew P. Bell, Esq., James A. Barry, Esq., Michael A. Galpern, Esq., LOCKS LAW FIRM, LLC, Cherry Hill, New Jersey.

For Plaintiff: Charles N. Riley, Esq., RILEY & SHAINE, Cherry Hill, New Jersey.

For Plaintiff: J. STEWART GRAD, ESQ., Woodbridge, New Jersey.

For Defendant: Steven P. Benenson, Esq., John T. Chester, Esq., PORZIO, BROMBERG & NEWMAN, PC, Morristown, New Jersey.

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HONORABLE JOSEPH E. IRENAS, SENIOR UNITED STATES DISTRICT JUDGE.

This putative consumer class action appears before the Court on Defendant Sovran Self Storage's Motion to Partially Dismiss Plaintiff Juan Castro Jr.'s First Amended Complaint for failure to state a claim upon which relief can be granted pursuant to Fed.R.Civ.P. 12(b)(6).[1] For the reasons below, the Motion will be granted in part and denied in part.

I. Relevant Facts

Plaintiff alleges the following facts in his First Amended Complaint, Dkt. No. 9 (" Am. Compl." ).

Defendant operates more than two dozen storage facilities in the State of New

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Jersey. (Am. Compl. ¶ 20) At these facilities, Defendant " has offered, gave, displayed and entered into" three types of agreements with thousands of consumers, " which contain the same or substantially similar unenforceable provisions[.]" (Id. ¶ ¶ 20-21) First, on January 11, 2013, Defendant entered into a Rental Agreement (Am. Compl. Ex. A, Dkt. No. 9-1 (" Rental Agreement" )) with Plaintiff agreeing to lease to Plaintiff a storage space for personal property for a monthly rent of $242.00. (Am Compl. ¶ 23) Second, also on January 11, 2013, Defendant required Plaintiff to sign a Rental Insurance Addendum/Insurance Coverage Requirement (Am. Compl. Ex. B, Dkt. No. 9-2 (" Insurance Addendum" )) to obtain insurance as a prerequisite of leasing storage space. (Id. ¶ ¶ 38, 40) Third and finally, on July 2, 2014, Defendant required Plaintiff to sign a Customer Vacate Notice (Am. Compl. Ex. C, Dkt. No. 9-3 (" Notice to Vacate" )) releasing Defendant from all liability upon vacating the storage space. (Id. ¶ ¶ 71-72, 74) Plaintiff's claims in this Complaint, a putative class action, pertain to these three agreements.

The bulk of Plaintiff's Complaint challenges six provisions in the Rental Agreement: (1) a Limitation of Value provision capping the value of Plaintiff's stored property at $5,000 without " printing such declaration in bold face or underlined" pursuant to N.J.S.A. § 2A:44-193(a) (id. ¶ ¶ 28-29); (2) an Invalidity provision stating that if one or more provisions of the Rental Agreement is deemed illegal or unenforceable, the remainder of the Agreement remains in effect without specifying which provisions are void or unenforceable, pursuant to N.J.S.A. § 56:12-16 (id. ¶ ¶ 34-35); (3) a Lien Sale Preparation Fee provision pursuant to N.J.S.A. § § 2A:44-189 and 2A:44-191 (Am. Compl. ¶ ¶ 24-25); (4) an Exculpatory Clause barring Plaintiff and his guests from bringing any personal injury or property damage claims against Defendant, even if caused by Defendant's " own negligence, gross negligence and/or intentional conduct" (id. ¶ ¶ 26-27); (5) an Indemnification of Owner provision requiring that Plaintiff " hold Defendant harmless and indemnify Defendant for any personal injuries," even if caused by Defendant's " own negligence, gross negligence and/or intentional conduct" (id. ¶ ¶ 30-31); and (6) a Waiver of Jury Trial provision requiring that Plaintiff waive any rights to a jury trial on behalf of himself and third parties (id. ¶ ¶ 32-33).

With regard to the Insurance Addendum, Plaintiff makes three additional allegations. He alleges that though an entity called Bader Insurance Company provided the actual insurance coverage, Defendant received a portion of Plaintiff's $21 monthly premium from January 2013 to July 2013, even though Defendant is not licensed either to " sell, solicit, or negotiate insurance" or to " accept a commission, service fee, brokerage or other valuable consideration for selling, soliciting or negotiating insurance" in New Jersey, in violation of N.J.S.A. § § 17:22A-29 and 17:22A-41(b). (Am. Compl. ¶ ¶ 41-47, 49-52) Plaintiff also alleges that Defendant failed to provide Plaintiff with copies of the insurance contracts or with Certificates of Insurance, in contradiction with a statement in the Insurance Addendum that such documents will be provided and in violation of N.J.S.A. § 56:8-2.22. (Id. ¶ ¶ 56-58)[2] Finally, Plaintiff alleges that his property suffered at least $5000 of damage from water and mold while stored

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at Defendant's facility, which Defendant misrepresented his insurance would cover at the time Plaintiff purchased the insurance. (Id. ¶ ¶ 60-61)[3]

According to Defendant's representations at the time of purchase, the insurance " purported[] to provide coverage to 'insure the Lessee's property against fire, smoke, explosion[,] windstorm and water damage,'" including mildew and mold. (Am. Compl. ¶ 48 (quoting Insurance Addendum ¶ 1)) However, when Plaintiff filed a claim for his water and mold damages in July 2014, Bader Insurance denied the claim, informing him that his insurance covered only " accidental discharge or leakage of water or steam as the direct result of the breaking or cracking of any part of a system or appliance containing water or steam." (Id. ¶ ¶ 63-65; see also Bader Denial Letter, Am. Compl. Ex. E, Dkt. No. 9-5) Because " Defendant knew that the storage space rented to Plaintiff did not contain any water plumbing, systems or appliances," Plaintiff alleges that the protection Defendant sold him was " meaningless" and " did not comport or match with" the coverage Defendant represented was provided. (Am. Compl. ¶ ¶ 66-67)

Third and finally, Plaintiff challenges the Notice to Vacate on grounds similar to the Rental Agreement, arguing that the Notice to Vacate " unconscionably misrepresents" that customers are barred from bringing a claim against Defendant for any personal injuries or property damage sustained at the storage facility; are required to hold Defendant harmless and indemnify Defendant for any personal injuries resulting from Defendant's negligence; and have waived a right to a jury trial. (Am. Compl. ¶ 75)

Plaintiff brings his claims on behalf of himself and all members of a putative Class, which includes two Subclasses, and one Sub-subclass. The putative " Class" includes:

All persons, who since August 19, 2008 (or such date as discovery may disclose) to whom form contracts, the preprinted portions of which were identical or substantially similar to the Agreement attached hereto as Exhibit A [the " Rental Agreement" ], have been given, displayed, offered, signed and/or entered into, in New Jersey presented by or on behalf of Defendant or its agents.

(Am. Compl. ¶ 80)

The putative " Notice to Vacate Subclass," which is " subsumed within and/or a part of the Class" includes:

All Class members to whom form agreements, the preprinted portions of which were identical or substantially similar to the Notice to Vacate, attached hereto as Exhibit C, have been given, displayed, offered, signed and/or entered into, in New Jersey presented by or on behalf of Defendant or its agents.

(Id. ¶ 83)

The putative " TCCWNA Insurance Subclass," which is also " subsumed within and/or a part of the Class" includes:

All Class members to whom form agreements, the preprinted portions of which were identical or substantially similar to the Insurance Addendum, attached hereto as Exhibit B, have been given, displayed, offered, signed and/or entered into, in New Jersey presented by or on behalf of Defendant or its agents.

(Id. ¶ 81)

Furthermore, " subsumed within and/or a part of the TCCWNA Insurance Subclass"

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is a further divided putative " Insurance Subclass," which consists of:

All Class members who signed form agreements, the preprinted portions of which were identical or substantially similar to the Insurance Addendum, attached hereto as Exhibit B.

(Id. ¶ 82)

In addition to seeking monetary damages, Plaintiff seeks declaratory and injunctive relief:

a) Declaring that Defendant is estopped from requiring Plaintiff to indemnify and hold Defendant harmless (and pay Defendant's attorney's fees and costs) for losses resulting from the negligence of Defendant.
b) Prohibiting Defendant from offering or issuing contracts containing illegal provisions, in the manner described herein.
c) Requiring Defendant to provide notice to all class members that the aforesaid clauses contained in the Agreement, Insurance Addendum and Notice to Vacate issued to the Class and/or subclass members are void and unenforceable and that class members who signed such forms may still sue Defendant in Court and recover statutory attorneys fees and costs for violations of consumer protection statutes.
d) Requiring Defendant to provide notice to all Class and subclass members who may have indemnified Defendant or who may have had judgment entered against them pursuant to the aforesaid contract provisions that such indemnification or judgment is illegal and will be refunded or vacated.

(Id. ¶ 101)

II. Legal Standard

Federal Rule of Civil Procedure 12(b)(6) provides that a court may dismiss a complaint " for failure to state a claim upon which relief can be granted." In order to survive a motion to dismiss, a complaint must allege facts that raise a right to relief above the speculative level. Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007); see also Fed.R.Civ.P. 8(a)(2).

When considering a Rule 12(b)(6) motion, the reviewing court must accept as true all allegations in the complaint and view them in the light most favorable to the plaintiff. Phillips v. Cnty. of Allegheny, 515 F.3d 224, 231 (3d Cir. 2008). In reviewing the allegations, a court is not required to accept sweeping legal conclusions cast in the form of factual allegations, unwarranted inferences, or unsupported conclusions. Morse v. Lower Merion Sch. Dist., 132 F.3d 902, 906 (3d Cir. 1997). Instead, the complaint must state sufficient facts to show that the legal allegations are not simply possible, but plausible. Phillips, 515 F.3d at 234. " A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009).

Finally, the Court considers " only the allegations in the complaint, exhibits attached to the complaint, matters of public record, and documents that form the basis of a claim." Lum v. Bank of Am., 361 F.3d 217, 221 n.3 (3d Cir. 2004). A document forms the basis of a claim when it is " integral to or explicitly relied upon in the complaint." Id. (citing In re Burlington Coat Factory Sec. Litig., 114 F.3d 1410, 1426 (3d Cir. 1997)).

III. Jurisdiction

Plaintiff brings his Complaint as a putative class action. For such claims, this Court has jurisdiction ...


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