Court Opinion

ID: 4280149
Source: CourtListenerOpinion
Date Created: 2018-05-31 19:02:02.024804+00
Date Added: 2024-06-11T12:15:33.721906
License: Public Domain

Filed 5/31/18
                 CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                  SECOND APPELLATE DISTRICT

                            DIVISION SIX

JOHN NIST,                                    2d Civil No. B284606
                                           (Super. Ct. No. 15CV-0009)
     Plaintiff and Appellant,               (San Luis Obispo County)

v.

STEVEN HALL,

     Defendant and Respondent.

            A good faith purchaser is “[a] purchaser who buys
without notice of circumstance which would put a person of
ordinary prudence on inquiry as to the title, or as to an
impediment on the title, of a seller.” (Black’s Law Dict. (6th ed.
1992) p. 693, col. 2.) The trial court found that respondent,
Steven Hall, was a good faith purchaser at a lien sale and
acquired the contents of a storage unit free and clear of John
Nist’s claim that the sale violated the California Self-Service
Storage Facility Act (“the Act”). (Bus. & Prof. Code, § 21700 et
       1
seq.) We affirm and conclude that the action is barred by the

      All statutory references are to the Business & Professions
           1

Code unless otherwise stated.
good faith purchaser provisions of section 21711 and the doctrine
of judicial estoppel.
                     Facts and Procedural History
              In 2007, appellant rented a storage unit at Yolantra
Swiatek’s self-storage facility in Oceano. Three years later,
Swiatek served appellant with a Sixty-Day Notice to Vacate the
storage unit. Appellant claimed the notice was invalid and
refused to vacate the unit, resulting in demand letters and
notices. When appellant stopped paying rent, Swiatek instructed
her property manager to secure the storage unit and conduct a
lien sale of its contents. Appellant served Swiatek with a
document stating: “All transactions with this unit fall under
Business and Professions Code 21700 et se[q]. A body of law
which you have refused to follow.” (See post at. pp. 10-11 re
theory of trial.)
              Eight to 10 people attended the sale, including
respondent’s business partner, Burke. Burke and respondent
were the winning bidders, paid $400 for the contents of the
storage unit, and were given a “lien sale” receipt.
              Appellant sued the storage facility owner, Swiatek,
for conversion, wrongful eviction, and violation of the Unfair
Business Practices Act (§ 17200). (Nist v. Swiatek et al., San Luis
Obispo Sup. Ct., case no. CV120742.) Appellant settled the case
for $12,000 and dismissed the action with prejudice in 2014.
              In 2015, appellant sued respondent for conversion.
Respondent demurred on the ground that the action was barred
by the good faith purchaser provisions of section 21711. After the

                                 2
trial court sustained the demurrer, appellant filed an amended
complaint that made no reference to the Act.
                                                  *

              At trial, the trial court credited respondent’s
testimony that he was a good faith purchaser and found that the
action was barred by section 21711. The court ruled that “[a]ny
failures of a storage facility [owner] to comply with the provisions
of section 21712 or other provisions of the Act penalize the facility
owner, not a good faith purchaser. The only Defendant left in
this case is a good faith purchaser. . . . [¶] [¶] [¶] [¶] The point
of section 21711 is to protect a good faith purchaser ‘despite
noncompliance by the owner of the storage facility with the
requirements of this chapter.’ As a matter of law and based upon
the stipulated facts, the Court concludes that the good faith
purchaser provisions of section 21711 applies.”
                         Good Faith Purchaser
              Pursuant to the Act, “a ‘self-service storage facility’ is
real property designed and used for renting storage space (or
individual storage containers) to occupants who are given a right
of access for the purpose of storing and removing personal
property . . . . [See Bus. & Prof. C[ode,] §21701(a)] The
agreement to rent a self-service storage unit is considered a lease
of real property. [Citation.]” (Friedman et al., Cal. Practice
Guide: Landlord-Tenant (The Rutter Group 2017) ¶ 7:79.1, p. 7-
31.) If the occupant defaults on his or her rent, the storage
facility owner may bring an unlawful detainer action (Code Civ.
Proc., § 1161 et seq.) or, in the alternative, invoke the Act’s extra-

 We express no opinion on whether appellant has impermissibly
*

split a cause of action. (See, e.g., Henry v. Clifford (1995) 32
Cal. App. 4th 315, 321 [discussing primary right, res judicata
doctrine].)

                                   3
judicial remedy of a lien sale “only where the parties enter into a
written agreement containing required terms [citation].”
(Friedman et al., Cal. Practice Guide, Landlord-Tenant, supra,
¶ 7:79.1, p. 7-31.) The purpose of the Act is to provide self-
storage facility owners an “‘effective remedy against defaulting
customers.’” (Vitug v. Alameda Point Storage, Inc. (2010) 187
Cal. App. 4th 407, 415.)
             Section 21711 provides that a good faith purchaser at
a storage facility lien sale takes the property free of any rights of
persons against whom the lien is claimed even if the storage
facility owner sells the property in violation of the Act.
(Gharibian, Storage Stop: Self Service Storage Facilities Have
Clear Lien Enforcement Rights, but a Wronged Tenant May Find
Recourse, 36 L.A. Lawyer (June 2013) 28, 31; 10 Miller & Starr,
Cal. Real Estate (4th ed. 2017) § 34:268, p. 34-965; 13 Witkin,
Summary of Cal. Law (11th ed. 2017) Personal Property § 240, p.
240.) Section 21711 states in pertinent part: “A purchaser in
good faith of goods sold to enforce a lien . . . on goods stored at a
self-service storage facility takes the goods free of any rights of
persons against whom the lien was claimed, despite
noncompliance by the owner of the storage facility with the
requirements of this chapter.”
             Appellant argues that the section 21711 does not
apply because there was no written rental agreement. Section
21712, subdivision (a) states: “Each contract for the rental or
lease of individual storage space in a self-service storage facility
shall be in writing and shall contain, in addition to the provisions
otherwise required or permitted by law to be included, a
statement that the occupant’s property will be subject to a claim
of lien and may even be sold to satisfy the lien if the rent or other

                                  4
charges due remain unpaid for 14 consecutive days and that such
actions are authorized by this chapter.”
             Appellant claims that section 21712 trumps the good
faith purchaser defense (i.e., § 21711) because the rental
agreement was verbal. The meaning and construction of a
statute is a question of law and examined de novo. (People ex rel.
Lockyer v. Shamrock Foods Co. (2000) 24 Cal. 4th 415, 432.) “Our
fundamental task in interpreting a statute is to determine the
Legislature’s intent so as to effectuate the law’s purpose. We first
examine the statutory language, giving it a plain and
commonsense meaning. We do not examine that language in
isolation, but in the context of the statutory framework as a
whole in order to determine its scope and purpose and to
harmonize the various parts of the enactment.” (Coalition of
Concerned Communities, Inc. v. City of Los Angeles (2004) 34
Cal. 4th 733, 737.) Potentially conflicting statutes must be
harmonized whenever possible. (Broughton v. Cigna Healthplans
(1999) 21 Cal. 4th 1066, 1086.)
             Section 21712 governs the relationship between the
storage facility owner and occupant, but not the rights of the good
faith purchaser. Section 21711 is clear. (See, e.g., Advanced
Modular Sputtering, Inc. v. Superior Court (2005) 132
Cal. App. 4th 826, 834.) It states that the good faith purchaser
“takes the goods free of any rights of persons against whom the
lien was claimed, despite noncompliance by the owner of the
storage facility with the requirements of this chapter.” (§ 21711,
italics added.)
             The statutory purpose is obvious. Absent such an
immunity, few if any bidders would attend lien sales or risk
liability due to a technical noncompliance with the Act. Bidders

                                 5
would have to inspect the rental agreement and review all
aspects of the lien sale before making a bid. Based on appellant’s
construction of section 21712, no successful bidder could be a
good faith purchaser if the rental agreement was verbal or the
occupant was a holdover tenant with no rental agreement. This
construction of the Act would literally defeat the legislative
purpose of providing storage owners an effective remedy against
defaulting customers. (Vitug v. Alameda Point Storage, Inc.,
supra, 187 Cal.App.4th at p. 415.)
                              Void Title
             Appellant claims that the storage facility lien was not
perfected and that respondent, as the winning bidder, acquired
no greater title than the storage facility owner had. Stated
another way, a seller with void title lacks the power to transfer
good title to a good faith purchaser for value. (4 Witkin,
Summary of Cal. Law, supra, Sales, § 137, p. 128.)
             Appellant relies on California Uniform Commercial
Code section 2403, subdivision (1) which provides that only “[a]
person with voidable title has power to transfer a good title to a
good faith purchaser for value.” The Commercial Code applies to
voluntary transactions, not an involuntary lien sale under the
California Self-Service Storage Facility Act. It defines
“‘[p]urchase’” to mean “taking by sale, lease, discount,
negotiation, mortgage, pledge, lien, security interest, issue or
reissue, gift, or any other voluntary transaction creating an
interest in property. (Cal. U. Com. Code, § 1201, subd. (29), italics
added; see id. § 7102, subd. (c) [applying section 1101 general
definitions to warehouse liens].) The Commercial Code does
make an exception for warehouse lien sales, which is an
involuntary sale. (Cal. U. Com. Code, §§ 7209, 7210; Melara v.

                                  6
Kennedy (9th Cir. 1976) 541 F.2d 802, 805.) California Uniform
Commercial Code section 7210, subdivision (a) provides: “a
warehouse’s lien may be enforced by public or private sale of the
goods . . . at any time or place . . . that are commercially
reasonable, after notifying all persons known to claim an interest
in the goods.” The warehouse “is liable for damages caused by
failure to comply with the requirements for sale under this
section and, in case of willful violation, is liable for conversion.”
(Cal. U. Com. Code, § 7210, subd. (i).) The California Uniform
Commercial Code, like the Self-Service Storage Facility Act, has
a good faith purchaser defense but limits the defense to claims by
persons against whom the warehouse lien is valid. (Id. § 7210,
              2
subd. (e).)
             Appellant’s reliance on the Commercial Code and the
void-versus-voidable-title argument is without merit. The
Legislature, in enacting the Self-Service Storage Facility Act,
declared that “[a] self-service storage facility is not a
warehouse . . . . If an owner issues a warehouse receipt, bill of
lading, or other document of title for the personal property stored,
the owner and the occupant are subject to the provisions of

        California Uniform Commercial Code section 7210,
      2

subdivision (e) is more restrictive than the Self-Service Storage
Facility Act and provides: “A purchaser in good faith of goods
sold to enforce a warehouseman’s lien takes the goods free of any
rights of persons against which the lien was valid, despite the
warehouse’s noncompliance with this section.” (Italics added.) In
contrast, section 21711 of the California Self-Service Storage
Facility Act provides that a good faith purchaser “takes the goods
free of any rights of persons against whom the lien was claimed,
despite noncompliance by the owner of the storage facility with
the requirements of this chapter.” (Italics added.)

                                  7
Division 7 (commencing with Section 7101) of the Commercial
Code, and the provisions of this chapter do not apply.” (§ 21701,
subd. (a).) There is no evidence here that the self-storage facility
was operated as a warehouse or that appellant was issued a
warehouse receipt.
             Appellant opines that a storage facility lien is not
perfected unless the lien sale complies with every procedural
requirement of the Act. That puts the cart in front of the horse.
Section 21702 states that the owner of a self-service storage
facility has a lien “upon all personal property located at the self-
service storage facility for rent, labor, late payment fees, or other
charges, present or future, incurred pursuant to the rental
agreement . . . or disposition of personal property subject to the
                            3
provisions of this chapter.” (Italics added.) Witkin describes it
as a possessory lien. (13 Witkin, Summary of Cal. Law, supra,
Personal Property, § 239, p. 237.) Section 21712, subdivision (b)
states that “the lien authorized by this chapter shall not attach,
unless the rental agreement requests, and provides space for, the
occupant to give the name and address of another person to
whom the preliminary lien notice and subsequent notices
required to be given under this chapter may be sent.” The “shall
not attach” language presupposes an existing possessory lien and
does not affect the statutory rights of the good faith purchaser
“despite noncompliance by the owner of the storage facility with
the requirements of” the Act. (§ 21711.)

       Appellant argues that the lien did not attach because a 14-
      3

day preliminary notice was not mailed (§ 21703) and the lien sale
was not advertised (§ 21707, subd. (a)). That does not mean there
was no possessory lien.

                                  8
                               Conversion
             Appellant argues that the good faith purchaser
defense does not immunize respondent from a conversion claim.
This is a restatement of the void-versus-voidable-title argument.
An involuntary transfer (such as an out-and-out theft) results in
void title, while a voluntary transfer, even if fraudulently
induced, results in voidable title. (Cal. U. Com. Code, § 2403,
subd. (1); Suburban Motors, Inc. v. State Farm Mut. Auto Ins. Co.
(1990) 218 Cal. App. 3d 1354, 1360-1361; CRS Recovery, Inc. v.
Laxton (9th Cir. 2010) 600 F.3d 1138, 1145.) “[A] purchaser for
value and without notice that his or her vendor’s title to the
property is voidable, such as where the vendor obtained the
property by fraud, is not liable for conversion.” (5 Witkin,
Summary of Cal. Law, supra, Torts, § 828, p. 1133.) The same
principle applies to the good faith purchaser at a storage facility
lien sale.
             The conversion cases cited by appellant predate the
California Self-Service Storage Facility Act (Stats. 1981, ch. 439,
§ 1, p. 1677) and do not involve a self-service storage facility lien
sale, a section 21711 good-faith-purchaser, or an extra-judicial
lien sale. (Newhart v. Pierce (1967) 254 Cal. App. 2d 783, 787-788
[conversion; buyer took more cattle than sales contract provided
for and resold them]; Shahood v. Cavin (1957) 154 Cal. App. 2d
745, 747 [conversion; defendant sold real property on plaintiff’s
behalf and absconded with the money]; Culp v. Signal Van &
Storage (1956) 142 Cal. App. Supp. 2d 859, 861 [conversion;
innocent purchaser bought and resold juke boxes under a
conditional sales contract].) The Legislature tailored section
21711 to provide that “[a] purchaser in good faith of goods sold to
enforce a lien . . . on goods stored at a self-service storage facility

                                   9
takes the goods free of any rights of persons against whom the lien
was claimed.” (Italics added.) The statute means what it says
and bars appellant from suing the good faith purchaser for
conversion.
                           Judicial Estoppel
              Appellant’s action is also barred by the doctrine of
judicial estoppel which precludes a party from relying upon a
theory in a legal proceeding inconsistent with one previously
asserted. (See Aguilar v. Lerner (2004) 32 Cal. 4th 974, 986-987.)
In the first suit against the storage facility owner, appellant
claimed the owner did not abide by the requirements of the Act.
Appellant settled for $12,000 and dismissed the action with
prejudice.
              Now, appellant claims that the Act does not apply
and that respondent is liable for conversion regardless of whether
respondent was a good faith purchaser. “Judicial estoppel applies
to a litigant who takes inconsistent positions in judicial
proceedings even if the opposing parties in [the] proceedings are
different.” (Pacific Merchant Shipping Assn. v. Board of Pilot
Commissioners etc. (2015) 242 Cal. App. 4th 1043, 1055.)
“‘[J]udicial estoppel focuses on “the relationship between the
litigant and the judicial system,” and is designed “to protect the
integrity of the judicial process.” . . . The gravamen of judicial
estoppel is not privity, reliance, or prejudice. Rather, it is the
intentional assertion of an inconsistent position that perverts the
judicial machinery.’ [Citations.]” (Jackson v. County of Los
Angeles (1997) 60 Cal. App. 4th 171, 183.)
              Appellant argues that judicial estoppel does not apply
where the litigant’s first position was taken as a result of
mistake. (Jackson v. County of Los Angeles, supra, 60

                                10
Cal.App.4th at p. 183.) There was no mistake. Appellant sued
the storage facility owner for conducting a $400 lien sale and
secured a $12,000 settlement based on technical violations of the
Act. The doctrine of judicial estoppel precludes a litigant playing
“‘“fast and loose” with the courts’” by asserting inconsistent
positions. (Thomas v. Gordon (2000) 85 Cal. App. 4th 113, 119.)
That is a fair description of what is going on here.
                             Disposition
             The judgment is affirmed. Respondent is awarded
costs on appeal.
             CERTIFIED FOR PUBLICATION.

                                                 YEGAN, J.

We concur:

             GILBERT, P. J.

             PERREN, J.

                                11
                  Charles S. Crandall, Judge

           Superior Court County of San Luis Obispo

               ______________________________

            Law Offices of Eddie H. Adams and Eddie Adams for
Plaintiff and Appellant.

           Barnick ‫ ׀‬Hodges and Whitney Northington Barnick
and John F. Hodges for Defendant and Respondent.