AXA Art Americas Corp. v. Public Storage

208 F. Supp. 3d 820, 2016 U.S. Dist. LEXIS 131613
CourtDistrict Court, S.D. Texas
DecidedSeptember 26, 2016
DocketCIVIL ACTION NO. H-15-3609
StatusPublished
Cited by4 cases

This text of 208 F. Supp. 3d 820 (AXA Art Americas Corp. v. Public Storage) is published on Counsel Stack Legal Research, covering District Court, S.D. Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
AXA Art Americas Corp. v. Public Storage, 208 F. Supp. 3d 820, 2016 U.S. Dist. LEXIS 131613 (S.D. Tex. 2016).

Opinion

MEMORANDUM AND OPINION

Lee H. Rosenthal, United States District Judge

AXA Art Americas Corporation, an insurance company specializing in fine art, sued Public Storage, a storage-space company, asserting a subrogated claim for violating contract and tort duties allegedly owed AXA’s insureds, Edward J. Hudson and Robert L. Hudson. (Docket Entry No. 1). AXA sought at least $849,436.00 in actual damages for paintings stolen from a Public Storage unit allegedly leased by the Hudson Partnership Ltd., an entity the Hudsons co-owned. (See Docket Entry 1, ¶¶ 8, 27; Docket Entry 10, Ex. 2 at 1 1).

Public Storage moved to dismiss for failure to state a claim under Rule 12(b)(6) of the Federal Rules of Civil Procedure, on the basis that its lease agreement, which it attached to the motion: (1) was signed by Edgar Dulaca, not the Hudsons, and so the Hudsons had no contract with Public Storage; (2) contains a specific clause prohibiting subrogation; and (3) contains terms under which Public Storage is not liable for any loss of, or damage to, property stored in the units. (Id. at ¶ 2-5).

AXA responded by arguing that it met the pleading standard by alleging facts showing that: (1) Edgar Dulaca was acting in his capacity as an employee of the Hudson Partnership Ltd. when he signed the lease; (2) the clause prohibiting subrogation in the Public Storage lease agreement is not legally binding in Texas; and (3) Public Storage is liable for failing to uphold its- tort and contract duties to the Hudsons. (Docket Entry No. 10 at ¶ 5, 8, 13,16).

Based on the pleadings, motions, and attachments; the arguments of counsel presented in a hearing as well as in their briefs; and the applicable law, the court grants Public Storage’s motion to dismiss under Rule 12(b)(6). Because further amendment would be futile, the dismissal is without leave to amend. Final judgment is separately entered. The reasons for these rulings are explained in detail below.

I. Background

A. Dulaca Signs the Lease Agreement

On July 1, 2013, Edgar Dulaca signed a lease agreement with Public Storage for one of the storage units. (Docket Entry No. 13, Ex. 1 at p. 5). The lease agreement listed an email address, “elaine@hudson partnership.net,” as the “Occupant Email Address for Electronic Communication.” (Id. at p. 1). Public Storage argues that because the lease was in Dulaca’s name, [823]*823Public Storage has no legal relationship with the Hudsons or their partnership, and they have no claim for AXA to- assert as a subrogee. (Docket Entry No. 13 at ¶ 8-12). AXA responds that Dulaca was acting as an agent for the Hudsons when he signed the lease. AXA points to the email address, which includes a Hudson domain name, and an affidavit from Dulaca. (Docket Entry No. 10 at ¶ 5).

To the extent Public Storage’s defense of lack of agency could involve examining the affidavits AXA relies on,' the court declines to do so. Considering the affidavits requires converting the motion to dismiss to one for summary judgment, which in turn would require giving notice of the conversion, perhaps an opportunity for further discovery, and time to supplement the record. Rather than converting the motion to one for summary judgment in order to consider the affidavits, see Fed. R. Civ. P. 12(d), the court assumes without deciding that Dulaca acted as an agent of the Hud-sons when he signed the lease agreement.

The arguments this court can properly consider within the motion to dismiss— that the lease terms shield Public Storage from liability for the stolen artwork and extinguish AXA’s right to sue as the Hud-sons’ subrogee—are analyzed below.

1. The Lease Agreement Terms

The lease agreement between Dulaca and Public Storage defines the relationship between the lessor and lessee by detailing the rights and obligations of each. (Docket Entry No. 13, Ex. 1). The lease agreement contains a “Purpose and Description of Premises” clause stating:

Occupant shall have access to the Premises and the common areas of the Property only during the property’s posted hours and days of operation. This access is conditioned on the Owner’s ability to maintain the business, rentability, safety, or security of the Premises and the Property, and if such ability is compromised, the Owner may take reasonable preventive or corrective measures such as, but not limited to, restricting access hours and requiring verification of Occupant’s Identity.

(Id. at ¶ 1). The lease agreement contains a further section titled “Use of Premises and Property and Compliance With Law,” which reads:

Occupant acknowledges and agrees that the Premises and the Property are not suitable for the storage of heirlooms or precious, invaluable or irreplaceable property such as, but not limited to,.. .works of art....

(Id. at ¶ 5). The lease agreement also contains this “Insurance Release of Liability” clause:

ALL PERSONAL PROPERTY IS STORED BY OCCUPANT AT THE OCCUPANT’S SOLE RISK. INSURANCE IS OCCUPANT’S SOLE RESPONSIBILITY. OCCUPANT UNDERSTANDS THAT OWNER WILL NOT INSURE OCCUPANT’S PERSONAL PROPERTY AND THAT OCCUPANT IS OBLIGATED UNDER THE TERMS OF THE LEASE/RENTAL AGREEMENT TO INSURE HIS OWN GOODS. To the extent Occupant’s insurance lapses or Occupant does not obtain insurance coverage for the full value of the Occupant’s personal property stored in or on the Premises, Occupant agrees Occupant will personally assume all risk of loss. Owner and Owner’s agents, affiliates, authorized representatives and employees (“Owner Agents”) will not be responsible for, and Occupant hereby releases Owner and Owner’s Agents from any responsibility for any loss, liability, claim, expense or damage to property that could have been insured.... Occu[824]*824pant waives any rights of recovery against Owner or Owner’s Agents for the Released Claims, and Occupant expressly agrees that the carrier of any insurance obtained by Occupant shall not be subrogated to any claim of Occupant against Owner or Owner’s Agents.

(Id. at ¶ 6). The agreement includes the following “Limitation of Owner’s Liability” provision:

Owner and Owner’s Agents will have no responsibility to Occupant or to any other person for any loss, liability, claim, expense, damage to property ... from any cause ... Occupant acknowledges that he understands and agrees to the provision of this paragraph.... Occupant agrees that Owner’s and Owner’s Agents’ total responsibility for any Loss from any cause whatsoever will not exceed a total of $5,000.

(Id. at ¶ 7). Finally, the lease agreement contains this “No Warranties; Entire Agreement” provision:

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Bluebook (online)
208 F. Supp. 3d 820, 2016 U.S. Dist. LEXIS 131613, Counsel Stack Legal Research, https://law.counselstack.com/opinion/axa-art-americas-corp-v-public-storage-txsd-2016.