For several years, plaintiff David Hester was a reality television star on “Storage Wars.” He now finds himself at war with defendant Public Storage over the contents of a storage unit. Plaintiff made the winning bid and purchased the contents of a self-storage unit at an auction held by defendant.
Defendant learned it had mistakenly sold the goods about half an hour after the sale was complete. The unit’s occupant had paid his past due rent weeks before the auction, but defendant’s computer system incorrectly marked the unit for sale. Due to this error, defendant immediately rescinded the deal based on two documents plaintiff had signed that contained clauses allowing defendant to void the sale for any reason (the null and void clauses). Plaintiff claimed defendant’s rescission was invalid and sued for breach of contract and conversion, among other claims.
Defendant moved for summary adjudication on the contract and conversion claims on grounds it had properly voided the sale under the null and void clauses. The trial court granted defendant’s motion.
Following entry of a stipulated judgment, plaintiff appeals, arguing summary adjudication was improper. Primarily, he contends the null and void clauses are invalid because (1) they are precluded by various statutes governing self-storage auction sales, and (2) he agreed to them under duress.
“The underlying concern of the economic duress doctrine is the enforcement in the marketplace of certain minimal standards of business ethics. Hard bargaining, ‘efficient’ breaches and reasonable settlements of good faith disputes are all acceptable, even desirable, in our economic system.” (Rich & Whillock, Inc. v. Ashton Development, Inc. (1984) 157 Cal.App.3d 1154, 1159.) But, the system disdains “the wrongful exploitation of business exigencies to obtain disproportionate exchanges of value. . . . The economic duress doctrine serves as a last resort to correct these aberrations when conventional alternatives and remedies are unavailing.” (Ibid.) Economic duress requires an unlawful or “wrongful act which is sufficiently coercive to cause a reasonably prudent person faced with no reasonable alternative to succumb to the perpetrator’s pressure.” (Rich & Whillock, Inc. v. Ashton Development, Inc., supra, 157 Cal.App.3d at p. 1158.) “Examples of such ‘wrongful acts’ include ‘[t]he assertion of a claim known to be false or a bad faith threat to breach a contract or to withhold a payment . . . .’” (Myerchin v. Family Benefits, Inc. (2008) 162 Cal.App.4th 1526, 1539, disapproved on other grounds by Village Northridge Homeowners Assn. v. State Farm Fire & Casualty Co. (2010) 50 Cal.4th 913, 929, fn. 6.)
The Callifornia Court of Appeal disagreed. The Callifornia Court of Appeal also rejected plaintiff’s argument that defendant was required to file an unlawful detainer action to retake possession of the purchased goods after it rescinded the sale.
For these reasons, the California Court of Appeal determined the trial court properly granted defendant’s summary adjudication motion and affirmed the judgment.
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