# FILED
December 10, 1998 Cecil W. Crowson Appellate Cou rt Clerk 

### IN THE COURT OF APPEALS OF TENN ESSEE

AT NASHVILLE

JAMES HANCOCK and wi fe, ) BRITT HANCOCK, ) ) Plaintiffs/Appellants, ) ) Appeal No. ) 01-A-01-9801-CC-00001 VS. ) ) Montgomery Circuit Civil ) No. C11-225 U-HAUL COMPANY OF TENNESSEE ) d/b/a U-HAUL ST ORAGE FACILITY, ) ) Defendant/Appellee. )
APPEALED FROM THE CIRC UIT COURT OF MONTGOMER

Y COUNTY AT CLARKSVILLE, TENNESSEE THE HONORABLE JAMES E. WALTON, JUDGE

MART G. FENDLEY 107 North Third Street P. O. Box 925 Clarksville, TN 37

041-0925 Attorney for Plaintiffs/Appella nts MICHAEL G. MCLAREN STEPHEN C. BARTON 2900 One Commerce Square 40 S. Main Street Memphis, Tennessee 38013 Attorneys for Defendant/Appellee

AFFIRMED AND REMAN DED

BEN H. CANTRELL PRESIDING JUDGE, M.S. CONCUR: KOCH, J. CAIN, J.- 2 - 

## O P I N I O N

The plaintiffs brought suit for the loss of their furni ture an d other property, which was stolen from the def endant’ s self-st orage fa cility. The defendant contended that the contract between the parties relieved it of any liab ility for the plaintiffs’ loss. The trial court g ranted summary judgment to th e def endant . We affirm.

I.

James Hancock and his wife Britt sold their home in Clarksville because they were planning to build a new house in Phoenix, Arizona. They needed to store theirfurniture and household goods until their new home w as completed, so on July 7, 1995, Mr. Hancock went to a storage facility i n Clarksville oper ated by defendant U-Haul of Tennessee, Inc.

Mr. Hancock noted with approval the strong physical s

ecurity features at the facility, such as the nine or ten foot high chain link fence topped by serpenti ne or barbed wire, whic

h surrounded the compound, and the go od lighting. He spok

e to Paul Browni ng, the manager of the facility , who to ld Mr. H ancock that he an d his wife lived on the premises. Mr. Browning offered Mr. Hancock a contract, which inc luded a highlighted section with the following provisions:

PROPERTY IS STORED A T OCCUPANT’S SOLE RISK I underst and that this self storage f acility: 1. is a commercial busine ss r enting space, and is not a warehouseman; 2. is not resp onsible f or loss to m y property; 3. does not provid e insuran ce on my pro perty f or me; and 4. requires

that I provide for my own ins urance coverage or be “self ins ured” (pe rsonally re sponsib le for my o wn loss).- 3 - The same section included boxes for the customer to check, to indicate whether he was choosing to purc hase insurance from his own agent; choosing to be self insured; or choosing to purchase the optional Safestor package, a limited form of insurance offered by U-Haul, with maximum cover age of $15,000, and premiums of $24 per month.

Mr. Hancock signeda lease for one storage room at $94.95 per month, and checked the box for purchasi ng insurance from his own agent. How ever he did not purchas

e any su ch insur

ance. H e and his

wife subse quently moved all their household goods into the stor age room, and placed their ow n padlock on the unit.

Sho rt ly thereafter, the Brownings went on vacation. The faci lity then
came under the supervision of a manager whoremained on the premises only during off ice hours (7:00 a.m. to 7:00 p.m. on most days). On August 10, 1995, Jim Habacker, an employee of the defendant, discov ered th at ther e was no lock on the plaintiff’s storage unit. He placed a U-Haul padlock on the unit, but did not notify the
owners. On A ugust 18, 1995, the Hancocks r eturned to their unit to add a bed comforter they had purchased, and discovered that most of their property had been stolen.

F rom the quanti ty of the goods taken (all egedly over $50,000 w orth), and the nature of the goods left behind, it appeared that the thieves had the time t o bring
a large truck into the faci lity (perhaps throug h the r ear gate), to “pick thr ough” the property of the Han cocks, and to fully load the truck. There were no indications of forced entry. Suspicion naturally fell upon some employees of U-Haul , but no charges were ever brought

.

The Hancocks filed a complaint against U-Haul on December 4, 1995, alleging that its employees had eithe r been negligent in thei r management of the- 4 -

storage facility, or had partici pated in the theft. The plaintiffs filed an amended complainton August 14, 1997 to add a clai m for fraud ulent or negligent misrepresentation under the Tennessee Consumer Protection Act, Tenn. Code Ann. § 47 -18-101 et seq. The defendant answ ered the original complai nt on March 1 , 1996, and filed a Motion for Summary Judgment on August 7, 1997.

U-Haul contended that theexculpatory clause quoted above insulated it from any liability for the plaintiffs’ loss. The defendant deni ed that it had made any representatio ns at al l to the plaintiffs as to its s ecurity arrangements,and made a specific denial that th e Brown ings had represented themselv es as a 24 hour a day “security team” on the premises.

The defendant also argued that there w as no proof th at any of its own employees were involved in the theft, but contended that

even if they had been, the company

wa s not liable for the intentional conduct of employees acting outside the
course and scope of their employment. The trial court agreed w ith the reasoningof the defendant, and granted the Motion for Summary Judgment on December 1, 1997. This appeal followed.

II. The Consumer Prot ection Act

The Tennessee Consumer Protection Act off ers pro tecti on against busin esses that prey on the consuming public by the use of unfair or deceptiv e practices. A long list of such forbidde n practices is foundin Tenn. Code Ann. § 47- 18-104. In general, these involve false or mis leading representations de signed to induce the consumer to deal w ith the business making thos e misrepresentations.

In the present case, there is no evidence that U-Haul or its employees made any verbal or written representations to the Hancocks as to the natur e or quality- 5 -

of the security measures i t would employ to

protect its customers’ goods. Since Paul Browning told James Hancock that he and his wife lived on the premises of the storage facility, Mr. Hancock apparently assumed this meant that he woul d receive the benefit of 24 hour a day surveil lance of the facility. But the re was no such provi sion in the leasing contract, the Brownings did not state that this was b eing offe red, and they did not promise that they would nev er take avacation or otherwise temporarily leave the facility.

James Hancock testified in deposition tha t h e had previously stor ed goods at a U-Haul facility in Mesa, Arizona, and had been impressed by the security arrangementsthere. He observed that the defen dant’s Clarksvill e facility was physically simi lar to the one in Arizon a, and he concluded that it operated the same way. He argues that the exi stence of a formidable enclosure aro und the f acilit y amounts to an a ctionab le misrepresentation under the Consumer Protection Act, where it is not accompani ed by strin gent security measures to prevent entry by unauthorized individuals.

While the Consumer ProtectionAct can apply to non-v erbal as well as oral or written representations, we believe it is stretching the point to c ontend thatthe nature of the enclosure around the U-H aul facility amounts to an explicit promise that
an yspecific level of securi ty will be maintai ned. We also do not believe that th e existence of similar physical barriers at two different U-H au l locations creates a guarantee that the same security measures will be employed at both locations.

For example, the r

eco rd indicates that there are at least two different modes of controlling public ac cess to customer storage areas that U-Hau l employs at its various loc ations. At some f acilities , two locks are placed on each r ented unit, one byU-Haul and one

by the customer. The individual who wishes to have access to his
own unit must first sign in at the office and leave a piece of I.D. before he is given the- 6 -

key to U-Haul’s lock. At the Clarksville facility and others, only the customer’s lock is placed on his unit. Thus , an individual who is wandering around in s uch a facility without checking in at the office firs t is less likely

to be challenged. The record sh ows that Mr. Hancock never discussed the security

arrangements at the Clark sville facility with Mr. Browni ng or with any othe r employee of U-Haul pri or to renting his unit.

T he recor d further indicates that duri ng the Brownings’ absence, the defendant’s employees patrolled the enclosure daily, and k

ept the front and rear

gates locked after business hours. The appellants contend that the keys to U-Haul’s locks
were accessib le to too m any peopl e, and th at the loc k to the re ar gate was f limsy. The magnitude of

the Hancock’s loss makes it clear in hindsight that U-Haul’ s security arrangementswere inadequate , but we a gree with the trial court that the Hancocks failed to s tate a claim for a violati on of the Consumer Protection Act’ s prohibition against fraudulent or negl igent misrepresentations.
III. The Exculpatory

Clause

The courts of this state have determined that contracting parties may make agreements whereby o ne party can escape from liabi lity for its own neglig ence, and shift th e risk of l oss to the non-negl igent par ty. Chazen v. Trailmobile Inc. , 384 S.W.2d 1 (Tenn. 1964); Empress Health and Beauty Spa, Inc. v. Turner, 503 S.W.2d 188 (Tenn. 1973).

There are some exceptions to this general rule. Thus, a common carrier may not by cont ract ex empt itself from l iability for b reach of a duty imposed on it for the benefit of the public. See Parton v. Mark Pirtle Oldsmobile-Cadill ac , 730 S.W.2d 634 (Te n n. App. 1987). An individu al can contract for freedom from liabi lity for ordinarynegligence, but liabi lity for gross neg ligence c annot be contract ed away. Adamsv. Roark

, 686 S.W.2d 73 (Tenn. 1985). A doctor or other licensed practiti oner- 7 -

can not co ntract for immunity from the cons equences of professional negli gence. Olsen v. Molzen

, 558 S.W.2d 429 (Tenn. 1977).

The Hancocks argue th at the language in the storage contract w as not specific enough to notify them that by signing the cont ract, they were giving up their right to hold U-Haul accountable for property l osses caused by ordinary negligence. But we agree with th e appellee that the contract w as unambi guous, and t hat Mr. Hancock, a knowledgeable businessman who had managed several franchise operations during the course of his career, was bound by its provisions.
IV. Public Policy

The Hancocks also urge us to state that ex culpatory clauses

in contracts such as the one before usviolate Tennessee’s publi c policy. Howev er the legislature is primarily respo nsible for dec laring the public poli cy of this state. The role of the courts is limited to

interpreting the public policy that is evidenced by a constitutional, statuto ry, or regulatory pro visions. See Stein v. D avidson Hot

el , 945 S.W.2d 714 (Tenn. 1997). No such prov isions are cited here.
Appellants rely

upon the Olsen

case, supra, and the

case of Crawford
v. Buckner

, 839 S.W.2d 754 (Tenn. 1992), both of which found public policy reasons to bar enforcement of exculpatory clauses. In both cases, the court recited th e following six conditions, w hich when present in the c on tract a nd bargaining posture of the p arties, m ake enf orcemen t of excul patory cla uses inap propriat e. We believe it would be helpful to reci te these conditions once agai n: (a.) It concerns a business of a type general ly thought suitable for public regul ation. (b.) The party seeking ex culpation is engaged

i n performing a service of greatimportance to the public, which is often a matter of practical necessi ty for some members of the public. (c.) The party holds himself out as willing to perform this service for

any member of the public who seeks it, or at- 8 - least for any m e mber coming within cer tain established standards. (d.) As a result of the essential nature of the service, in the economic setting of the tra nsaction, the party inv oking exculpation possesses a decisive advantage of bargaining strength against any member of the public who se eks h is services. (e.) In exercising a s uperior bargaining po wer the party co nf ronts the public with a standardized adhesion cont ract of exculpation, and makes no prov ision whereby a purchaser

may pay addi tional reasonable fees and obtain protection against negl igence. (f.) Finally, as aresult of the transaction, the person or property of the purchaser i s placed under the control of the seller, subject to the r

isk ofcarelessness by the seller or his agents. 558 S.W.2d at 431.

The appellants in the present cas e argue that the legisl ature has indeed
seen fit to reg ulate th e self-st orage ind ustry; that such storage is a matter of prac tical necessity

for some people; that U-Haul holds itse lf out a s willing to per form its services to any me mber of th e public seeking them; that U -Haul possesses a clear advantag e in ba rgaining strength over individuals seeking its servi ces; that the contract it offered was a contract of adhesi on; and that t he t ransaction in question placed their valuable propert y under U-Haul’s control. Finally, appellants not e that the Olsen and Buckner

courts both stated that it wasnot necessary for all s ix factors to be present in any giv

en transaction for that transac tion to be deemed offensive.

U-Haul admits

that it held itself out as w illing to perform its services to any members of the p ublic seeki ng them, but rebuts, at least in par t, the appellants’ arguments on the other five cited factors . The appellee points out that t h e state’s regulation of the self-storage industry primarily involves the facility owner’s enforcement of liens on abandoned property, and is not the sort of com preh ensive regu lation which shows a significant state interest in the industry; that the se rvice s provided by self-service faci litiesare far less important to the public than the practice of medicine ( Olsen v. Molzen ) or the safety of residential housi ng ( C rawford v. Buckner ); that U-Haul did not posses s a decisive bargai ning advantage, because the- 9 -

Han cock s could easily have made alternate arrangements for storage of their furniture; that the lease in question did provide the customer with the opportunity (however

limited) to pay additional fees for insur ance against negligenc e; and that the Hancocks retained control over their property because they placed their ow n lock on the stora ge unit, a nd U-Haul did not ha ve access t o the key.

Applying the six factors to the pr esent cas e d oes not produce a result that is completely clear- cut, but we are satisfied that U-Haul has made out the better case, particul arly wi t h regard to the important q uestions of state regulation,the existence of reasonable alte rnatives for the individual who is not satisfied with th e terms pre sented t o him, an d the ques tion of c ontrol ove r the appe llants’ p roperty.

Further, we are reluctant to throw the protective mantle of a decl aration of public pol icy over a subject that our legis lature has not yet chosen t o rule upon, especiallyin view of our prev ious opinions which uph eld th e validity of simil ar exculpatoryclauses in self- storage contracts. Merritt v. Nationwide Warehouse Co. , 605 S.W.2d 250 (Tenn. App. 198 0); Pettit v. Poplar-Union Ex tended Mini-Storage , App. No. 02A01-9402-CV-00022 (file d at Jackson, January 26, 1995). We theref ore find the exculpatory cl ause at issue to be an enforceable one.

V.

The judgment of the tri al court is affirmed. Remand this cause to the Circuit Court of Montgomery County for further proceedings consi sten t with this opinion. Tax the costs on appeal to the appellants.

____________________________ BEN H. CANTRELL, PRESIDING JUDGE, M.S.- 10 -

CONCUR:

_____________________________ WILLIAM C. KOCH, JUDGE

_____________________________ WILLIAM B. CAIN, JUDGE