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Herrod v. Wilshire Ins. Co.

United States District Court,

D. Utah,

Central Division.

Catherine HERROD and Alan Parkinson as guardians ad litem for Scott Herrod, Taylor Herrod, Elizabeth Herrod, minors, Catherine Herrod, Niles Herrod, and Janet Herrod, Plaintiffs,

v.

WILSHIRE INSURANCE CO., Defendant,

v.

Espenschied Transport, Corp., a Utah corporation and Dats Trucking, Inc., Third-party Defendants.

No. 1:09 CV 109.

 

Aug. 5, 2010.

 

MEMORANDUM DECISION AND ORDER

 

DEE BENSON, District Judge.

 

The plaintiffs and defendant Wilshire Insurance Company both move for summary judgment. The court heard oral argument on the cross-motions on April 28, 2010. L. Rich Humpherys appeared as counsel for the plaintiffs and Nelson Abbott appeared as counsel for defendant Wilshire Insurance. At the conclusion of oral argument, the court granted the parties additional time to brief issues raised during the hearing. Oral argument on the supplemental briefing was held on July 8, 2010. Counsel for both parties argued, and the court took the case under advisement at the conclusion of that hearing. Now, having fully reviewed the parties’ written submissions and considered their oral presentations, the court enters the following Memorandum Decision and Order.

 

BACKGROUND

 

This is a case about whether an insurer that issued a motor carrier an Endorsement(s) for Motor Carrier Policies of Insurance for Public Liability under Sections 29 and 30 of the Motor Carrier Act of 1980, also called an MCS-90, is required to pay out the endorsement for a judgment entered against its client when there is more than one motor carrier involved in the incident and at least one MCS-90 endorsement has already been paid out. Because this case is before the court on cross-motions for summary judgment, the court examines the evidence that supports each party’s claims in the light most favorable to the nonmoving party. Albright v. Attorney’s Title Ins. Fund, 504 F.Supp.2d 1187, 1192 (D.Utah 2007). Accordingly, the facts set forth below do not constitute findings of fact. Id.

 

The Accident and Subsequent Lawsuit

 

Kimball Herrod was driving his car on Interstate 15 when a wheel came off the trailer of a double-wheeled semi-trailer truck driving at freeway speed in the opposite direction. The wheel flew across the median and struck the Herrods’ car, killing Kimball Herrod. At the time of the accident, DATS Trucking, Inc. owned and insured the tractor involved in the accident. Espenschied Transport Corporation owned the trailer and had leased it to DATS.

 

Kimball Herrod’s family, the plaintiffs, brought a wrongful death suit against DATS Trucking, Espenschied Transport, and others, alleging negligence by both defendants. Espenschied contacted its insurer, Wilshire Insurance, and attempted to refer the defense of the personal injury suit to Wilshire. Wilshire Insurance determined that the trailer was not listed on the schedule of covered vehicles for Espenschied’s liability policy and declined coverage for the accident. Wilshire Insurance subsequently declined to participate in defending the suit or settlement discussions.

 

The Settlement

 

The Herrods settled their claims with Espenschied on June 26, 2007. (Dkt. No. 11, Def.’s Mem. in Supp., Ex. L). In the executed settlement agreement, Espenschied agreed to an entry of judgment in favor of the Herrod family and to pay $1,100,100 with 10 percent interest for a total judgment of $1,292,499.99. (Dkt. No. 11, Def.’s Mem. in Supp., Exs. L & O). The Herrods agreed to not collect any noninsurance assets from Espenschied until the claims against the other parties were resolved and to never pursue collection against the principals of Espenschied or against Espenschied Transportation Corporation if the effect would expose the personal assets of the corporation’s principals. (Dkt. No. 11, Def.’s Mem. in Supp., Ex. L, ¶ 2). In other words, the Herrods agreed to collect the amount owed by Espenschied from its liability insurer, Wilshire Insurance Company. (Dkt. No. 11, Def.’s Mem. in Supp., Ex. O, ¶ 2). That same day, Espenschied assigned its claims against DATS Trucking, such as claims for liability, insurance indemnity, or consequential damages, to the Herrods. (Dkt. No. 11, Def.’s Mem. in Supp., Ex. N). As anticipated by the Herrods’ and Espenschied’s settlement agreement, a separate confessed judgment was entered against Espenschied and DATS. (Dkt. No. 16, Pls.’ Mem. in Supp. iv).

 

A few months later in the fall of 2007, the Herrods settled their claims against DATS with DATS Trucking and its insurers. (Dkt. No. 11, Def.’s Mem. in Supp., Ex. Q). As part of that settlement, DATS and its insurers agreed to pay the Herrod plaintiffs $2,264,000, with periodic payments extending until May 5, 2030. The DATS settlement stated that “this settlement is a compromise of a doubtful and disputed claim, and the payments are not to be construed as an admission of liability on the part of the Defendant, by whom liability is expressly denied.” (Id. ¶ 1.4) At the same time that DATS and the Herrods reached a settlement, the Herrods and Espenschied released DATS from liability by executing a separate Settlement Agreement and General Release. (Dkt. No. 11, Def.’s Mem. in Supp., Ex. P). This agreement was also explicit that it should not be construed as an admission of liability by DATS and its insurers. (Id. ¶ 4).

 

Espenschied did not have direct insurance for the trailer involved in the accident as it was not listed on Wilshire’s schedule of covered vehicles. Espenschied did, however, have MCS-90 coverage under its policy with Wilshire.

 

The Demand for MCS-90 Payment from Wilshire Insurance Company

 

Two years after the parties settled, the plaintiffs sued Wilshire Insurance Company in this court, arguing that pursuant to the MCS-90 endorsement included in Espenschied’s liability policy with Wilshire Insurance, Wilshire was liable to the Herrods for the liability policy limit, $1,000,000 plus interest.

 

The Wilshire MCS-90 Endorsement to Espenschied’s policy read as follows:

 

The insurance policy to which this endorsement is attached provides automobile liability insurance and is amended to assure compliance by the insured, within the limits stated herein, as a motor carrier of property, with Sections 29 and 30 of the Motor Carrier Act of 1980 and the rules and regulations of the Federal Highway Administration (FHWA) and the Interstate Commerce Commission (ICC). In consideration of the premiums stated in the policy to which this endorsement is attached, the insurer (the company) agrees to pay, within the limits of liability described herein, any final judgment recovered against the insured for public liability resulting from negligence in the operation, maintenance or use of motor vehicles subject to the financial responsibility requirements of Sections 29 and 30 of the Motor Carrier Act of 1980 regardless of whether or not each motor vehicle is specifically described in this policy…. However, all terms, conditions, and limitations in the policy to which the endorsement is attached shall remain in full force and effect as binding between the insured and the company. The insured agrees to reimburse the company for any payment made by the company on account of any accident, claim, or suit involving a breach of the terms of the policy, and for any payment that the company would not have been obligated to make under the provisions of the policy except for the agreement contained in this endorsement.

 

(Dkt. No. 11, Def.’s Mem. in Supp., Ex. H). This language closely tracks the model policy described in the federal regulations implementing the Motor Carrier Act. See 49 C.F.R. § 387.15.

 

MCS-90

 

In 1980, Congress passed the Motor Carrier Act, 49 U.S.C. § 10101 et seq., in order “to deregulate the trucking industry, increase competition, reduce entry barriers, and improve quality of service….” Carolina Cas. Ins. Co. v. Yeates, 584 F.3d 868, 873 (10th Cir.2009). The Act also addressed abuses in the trucking industry that threatened public safety, including motor carriers’ use of “leased or borrowed vehicles to avoid financial responsibility for accidents that occurred while goods were being transported in interstate commerce.” Canal Ins. Co. v. Distrib. Servs., Inc., 320 F.3d 488, 489 (4th Cir.2003); see also Empire Fire & Marine Ins. Co. v. Guar. Nat’l Ins. Co., 868 F.2d 357, 362 (10th Cir.1989) (noting that leased vehicles were used to avoid safety regulations governing equipment and drivers or to confuse the public about who was responsible for accidents caused by nonowned vehicles). In particular, the Act and the subsequent regulations enforcing it require every motor carrier registered to engage in interstate commerce to comply with minimum financial responsibility requirements by filing “a bond, insurance policy, or other type of security” in a specific amount depending on the type of cargo being transported. 49 U.S.C. § 13906(a)(1); 49 C.F.R. § 387. The regulations specifically require a motor carrier to have an approved self-insurance program, a surety bond, or an “Endorsement(s) for Motor Carrier Policies of Insurance for Public Liability under Sections 29 and 30 of the Motor Carrier Act of 1980,” commonly referred to as an MCS-90, issued by an insurer. It is this last guarantee of financial responsibility that is at issue in this case. 49 C.F.R. § 387.7(d); Canal Ins. Co., 320 F.3d at 489.

 

STANDARD OF REVIEW

 

Both parties seek to resolve this case on summary judgment. The court may grant summary judgment only if “there is no genuine issue as to any material fact and [if the moving party] is entitled to a judgment as a matter of law.” Fed.R.Civ.P. 56. “A ‘material fact’ is one ‘that might affect the outcome of the suit under the governing law, and a ‘genuine’ issue is one for which ‘the evidence is such that a reasonable jury could return a verdict for the nonmoving party.’’ Pelt v. Utah, 539 F.3d 1271, 1280 (10th Cir.2008) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)) (internal citation omitted).

 

In addition to its motion for summary judgment and opposition to the Herrod plaintiffs’ motion for summary judgment, Wilshire moves this court for additional time to conduct discovery pursuant to Federal Rule of Civil Procedure 56(f). Wilshire represents that in filing their summary judgment motions, the parties relied on the discovery conducted in state litigation regarding the same underlying events and that if such evidence is insufficient in this federal matter, Wilshire should be allowed additional time to gather proper evidence. In considering these motions, the court does not find that there is insufficient evidence and accordingly denies the motion for a continuance.

 

DISCUSSION

 

I. MCS-90 ENDORSEMENTS IN MULTI-CARRIER INCIDENTS

 

An “MCS-90 endorsement comes into play … only where (1) the underlying insurance policy to which the endorsement is attached does not otherwise provide liability coverage, and (2) the carrier’s other insurance coverage is either insufficient to satisfy the federally-prescribed minimum levels of financial responsibility or is non-existent.” Carolina Cas. Ins. Co. v. Yeates, 584 F.3d 868, 881 (10th Cir.2009).

 

In this case, the two circumstances above have been satisfied. Espenschied’s policy to which an MCS-90 endorsement is attached does not cover the trailer involved in the accident at issue and Espenschied has no other insurance; however, in this case, another carrier has already paid the federally prescribed minimum levels for that carrier. This raises a question of first impression: is an insurer required to pay out an MCS-90 endorsement to a third-party injured by the negligence of one its clients when there is more than one motor carrier assigned liability and at least one MCS-90 endorsement or other avenue of satisfying the financial responsibility obligation has already been paid out?

 

Wilshire argues that federal law requires that only one MCS-90 endorsement, or other satisfaction of financial responsibility, be paid out to an injured party, regardless of how many motor carriers were involved in an incident. In this case, Wilshire argues that because the Herrod plaintiffs  collected the federally mandated minimum, $750,000, in their settlement with DATS, the Wilshire MCS-90 endorsement does not apply.

 

Wilshire also challenges the Herrod plaintiffs’ standing to pursue insurance proceeds from Wilshire. This argument is without merit. “The peculiar nature of the MCS-90 endorsement grants the judgment creditor the right to demand payment directly from the insurer, and simultaneously grants the insurer the right to demand reimbursement from the insured.”   Canal Ins. Co. v. Underwriters at Lloyd’s London, 435 F.3d 431, 442 n. 4 (3rd Cir.2006); see also Carolina Cas. Ins. Co., 584 F.3d at 879.

 

In contrast, the Herrod plaintiffs contend that each individual motor carrier is responsible for judgments entered against it, and if an individual motor carrier’s insurance is insufficient to cover the federal minimum, the MCS-90 policy for that carrier should apply. Since Espenschied is liable on a judgment separate from DATS that it cannot pay, the Herrods assert that Wilshire must pay out on the MCS-90 endorsement attached to Espenschied’s liability policy.

 

Imbedded in the parties’ arguments appears to be a dispute about what amount Wilshire is obligated to pay based on its MCS-90 endorsement-the $750,000 statutory minimum or the $1,000,000 policy limit. This issue was not directly addressed in the parties’ briefs nor argued to the court; therefore, the court makes no conclusion regarding what amount an MCS-90 provider such as Wilshire is required to pay.

 

Both parties rely on Carolina Casualty Insurance Co. v. Yeates, 584 F.3d 868 (10th Cir.2009), in presenting their arguments; but this case is not directly on point. Yeates addressed the required payment of MCS-90 policies when one motor carrier had multiple insurance policies. Yeates, 584 F.3d at 871-72. In that case, the motor carrier specifically insured the truck involved in an accident with State Farm and then also carried general liability insurance with Carolina Casualty. Id. After State Farm paid its policy limit of $750,000, which was also the regulatory minimum, Carolina Casualty sought a declaratory judgment that it had no liability under its general liability policy. Id. Characterizing an MCS-90 policy as a surety obligation, the Yeates court agreed, concluding that an “MCS-90 endorsement does not apply once the federally-mandated minimums have been satisfied” by a motor carrier, whether through one insurance policy or an aggregate of policy proceeds. Id. at 879, 886. Limited to the facts of the case, Yeates in no way addressed whether financial responsibility minimums required by the Motor Carrier Act are assigned per incident or per carrier. Unpersuaded by the parties’ arguments that Yeates is dispositive, the court will start at the beginning-the statute itself and its implementing regulations.

 

Based on the language of the statute, there is no merit in Wilshire’s position. The statute and CFR require that “each motor carrier registered to engage in interstate commerce” have a bond, insurance policy, or other security, such as an MCS-90 endorsement, sufficient to pay the minimum financial responsibility “for each final judgment against” the motor carrier for bodily injury or death resulting from the negligent operation, maintenance, or use of motor vehicles. Canal Ins. Co. v. Distrib. Servs., Inc., 320 F.3d 488, 489 (4th Cir.2003) (emphasis added); 49 U.S.C. § 13906 (emphasis added). Neither the statute and regulations nor the case law interpreting them ever say, or suggest, that once the injured person received the statutory minimum from one tortfeasor, the MCS-90 protection for all other negligent parties vanishes. Instead, the regulations repeatedly refer to the financial responsibility requirement of “the motor carrier,” and other singular references to one motor carrier. This usage implicates that motor carriers are held to the financial responsibility individually and each motor carrier is responsible for each judgment against it. See, e.g., 49 C.F.R. § 387.7(a). This interpretation is also supported by Congress’s purpose in requiring a financial responsibility obligation-to combat the “use … of leased or borrowed vehicles to avoid financial responsibility….,” Canal Ins. Co., 320 F.3d at 489, and to “assure that injured members of the public are able to obtain judgment from negligent authorized interstate carriers.” John Deere Ins. Co. v. Nueva, 229 F.3d 853, 857 (9th Cir.2000). Requiring only one motor carrier to satisfy its financial responsibility would limit an injured party to collecting from only one negligent carrier.

 

Still, Wilshire argues that public policy considerations support payment of only one endorsement per incident. First, Wilshire argues that the MCS-90 endorsement should not operate to make it liable for a claim for which no premium was paid, but, this is precisely what the MCS-90 endorsement was designed to do-insure payment on a claim for which there is inadequate or no insurance. This does not rewrite the contract between the insurer and insured, instead the endorsement provides that “all terms, conditions, and limitations in the policy to which the endorsement is attached shall remain in full force and effect …” and requires the insured to reimburse the insurer “for any payment the company would not have been obligated to make under the provisions of the policy except for the agreement contained in this endorsement.” “In sum, the MCS-90 endorsement creates an obligation entirely separate from other obligations created by the policy to which it is attached.” Yeates, 584 F.3d at 884. Similarly, applying an endorsement to a claim does not rewrite an agreement between carriers as to how to assign risk. Cf. id. at 882 (“Consequently, with respect to the ultimate allocation of responsibility, the MCS90 endorsement should be irrelevant.”). That is also a matter separate from the endorsement’s application.

 

Wilshire also argues that obligating each motor carrier charged with negligence in an incident with financial responsibility will create an inequity between persons injured in accidents with one motor carrier and persons injured in accidents with multiple motor carriers. For instance, Wilshire asserts that if one person is injured in an accident with equipment owned by three different motor carriers and another person is injured in a similar accident but the equipment is all owned by one company, the first party will recover three times more from the motor carriers. This hypothetical is misleading. If the Motor Carrier Act’s MCS-90 requirement is applied to each motor carrier, the injured party would only recover more if each motor carrier was negligent. In many cases negligence is asserted against only one party. See, e.g., Royal Indem. Co., 99 F.3d 964, 966 (10th Cir.1996). And even if negligence is asserted against each motor carrier, this is a reality of tort law. A party injured by the negligence of many compared to the negligence of one has the right to recover from each negligent party. Moreover, accepting this argument would create an incentive counter to the purpose of the MCS-90 endorsement. When multiple defendants are named but the plaintiff is limited to only one financial responsibility obligation, it would be beneficial for each party to wait the others out in a “game of ‘chicken’ “ and thereby avoid being “tagged first by the injured party … [to] shoulder[ ] the entire financial liability.” Redland Ins. Co. v. Shelter Mut. Ins. Co., 193 F.3d 1021, 1022-23 (8th Cir.1999). This cannot be what Congress intended by creating the financial responsibility obligations.

 

Therefore, based on the statute and the regulations, as well as their initial purpose, the court concludes that each motor carrier is required to satisfy the financial responsibility requirements, including paying out on an MCS-90 endorsement where applicable.

 

II. APPLICABILITY OF FINANCIAL RESPONSIBILITY REQUIREMENT TO ESPENSCHIED/WILSHIRE

 

Aside from its argument that the minimum financial responsibility requirement has already been satisfied, Wilshire raises three additional arguments to avoid financial responsibility to the Herrod plaintiffs under the Motor Carrier Act. First, Wilshire argues that Espenschied was not operating as a carrier at the time (that is, Espenschied was not using, operating, or maintaining). Second, Wilshire argues that there was not a final judgment for “public liability resulting from negligence in operating, maintaining or using a motor vehicle subject to” the Motor Carrier Act. And third, Wilshire argues that there was an allocation of risk between the companies that assigned all risk to DATS. None of these arguments have merit.

 

To begin, Espenchied was a motor carrier accused of negligence in its maintenance of the trailer. The MCS-90 requires payment for injury “resulting from negligent operation, maintenance, or use of motor vehicles.” 49 U.S.C. § 13906. Wilshire argues that because DATS, via contract, was responsible for maintaining the trailer and because DATS was operating and maintaining the trailer, Espenschied’s MCS-90 policy should not apply. However, by its own admission, Espenschied is a registered motor carrier and because it owned the trailer, at some point it was responsible for the maintenance of the trailer. The Herrods sued Espenschied for negligent maintenance. Therefore, the court concludes that as a motor carrier accused of negligence, Espenschied’s MCS-90 is at issue. Additionally, Wilshire’s argument is counter to the entire purpose of the financial responsibility obligation. “Attempts to circumscribe liability by the use of leased or borrowed vehicles was the impetus behind the ICC’s mandating the MCS-90 endorsement.” John Deere Ins. Co. v. Nueva, 229 F.3d 853, 857 n. 5 (9th Cir.2000); Empire Fire & Marine Ins. Co. v. Guar. Nat’l Ins. Co., 868 F.2d 357, 3612. The requirement was created to avoid the very confusion created by the use of non-owned vehicles. Yeates, 584 F.3d at 873 n. 2 (quoting Empire Fire & Marine Ins. Co. v. Guar. Nat’l Ins. Co., 868 F.2d 357, 362 (10th Cir.1989)).

 

Wilshire’s second argument is also faulty. Settlements of actual negligence claims formalized into a consent judgment qualify as a final judgment. As explained by the Yeates court, “the provisions of [the MCS-90 policy] were designed to ensure collectability of a judgment….” The MCS-90 was not designed “to relieve the injured member of the public from the requirement that he or she obtain a final judgment of legal liability against the motor carrier….” Yeates, 584 F.3d at 875, 879. In this case, the Herrod plaintiffs have a final judgment of legal liability against Espenschied. Wilshire argues that the consent judgment did not include an admission of liability, let alone a finding or judgment of negligence. Instead, Wilshire argues this is an unresolved issue of fact. For support, Wilshire cites Green v. Royal Indem. Co., 93 Civ. 4335, 1994 U.S. Dist. Lexis 7948, at(S.D.N.Y. June 15, 1994), which held that a consent judgment was only presumptive or prima facie evidence that a motor carrier acted negligently. Id. at *9-10. This presumption, according to the Green court, could be rebutted with a showing that the judgment was obtained through “bad faith, fraud, or factual or legal error.”  The court does not find this case persuasive. The Motor Carrier Act requires only a final judgment, not a judgment on the merits. See 49 U.S.C. § 13906. Moreover, as criticized by the Eastern District of Michigan, this rule would allow parties who refuse to participate, as was the case with Wilshire in this case, to later come in and collaterally attack a final decision. Hawthorne v. Lincoln Gen. Ins. Co., 08-12325, 2009 U.S. Dist. Lexis 9329, *16-17 (E.D.Mich. Feb. 9, 2009).

 

The Green court went on to explain that a plaintiff needs only show negligence on the part of someone, not necessarily on the part of the insured. Green at *12.

 

Although the court is not persuaded by the Green court’s holding regarding a finding of negligence, the court notes that the court’s overall view of the law is in harmony with this court’s decision in this case. In describing the application of the MCS-90 policies the court stated that “where two motor carriers … were held liable for Green’s death …. [the] plaintiff is entitled to recovery from two different insurers under two endorsements.” Green, 1994 U.S. Dist. LEXIS 7948, * 17.

 

Finally, any allocation of risk between the parties is not relevant to a determination of the duty to pay out under MCS-90. This is a contract dispute between DATS and Espenschied that is independent of the MCS-90 issue. As discussed above, Wilshire is obligated to pay the MCS90 liability and then, if warranted, may seek indemnification if it agreed to allot risk differently. See Carolina Cas. v. Yeates, 584 F.3d 868, 882, 885 (10th Cir.2009) (“[W]ith respect to the ultimate allocation of responsibility, the MCS-90 endorsement should be irrelevant.” “[I]f an insurer, which otherwise has no liability for an accident but for the MCS-90 endorsement, pays out the financial responsibility minimums as governed by the regulations, that insurer is not without recourse; it may still seek reimbursement from the motor carrier.”). The determination of liability among motor carriers and insurers is separate from the financial responsibility obligation owed to the public. Thus, once the “public … [is] protected, the parties are then free, as among themselves, to allocate risk however they choose.” Adams v. Royal Indem. Co., 99 F.3d 964, 969 (10th Cir.1996).

 

In conclusion, because the Herrod plaintiffs asserted independent negligence claims against DATS and Espenschied, both motor carriers are obligated to meet the Motor Carrier Act’s financial responsibility requirements. Espenschied does not have adequate insurance to satisfy this obligation and therefore its MCS-90 policy provided by Wilshire is applicable. This policy is triggered by the consent judgment and the fact that Espenschied was a motor carrier accused of negligent maintenance. The leasing agreement between Espenschied and DATS, which included an allocation of risk, does not alter this application. Instead, Wilshire is required to pay on its MCS-90 policy and thereafter may seek to recover from Espenschied or others any monies for which it does not believe it is liable.

 

Accordingly, defendant Wilshire’s motion for summary judgment is DENIED and the plaintiff’s motion is GRANTED.

 

IT IS SO ORDERED.

Vitug v. Alameda Point Storage, Inc.

Court of Appeal, First District, Division 5, California.

Araceli VITUG, Plaintiff and Appellant,

v.

ALAMEDA POINT STORAGE, INC., Defendant and Respondent.

No. A124999.

 

Aug. 10, 2010.

 

SIMONS, Acting P.J.

 

The California Self-Service Storage Facility Act (the Act) (Bus. and Prof.Code, § 21700 et seq.)  regulates certain aspects of the relationship between owners and renters of storage units at self-service storage facilities. In this case, we address the following question: Does the Act prohibit a self-service storage facility from continuing to charge rent and late fees to the renter of a storage unit after the facility has terminated the renter’s right to access the unit due to nonpayment of rent? In the present case, plaintiff and appellant Araceli Vitug (appellant) rented a storage unit from defendant and respondent Alameda Point Storage, Inc. (respondent). After appellant fell behind on her rent payments, respondent sent her by certified mail a preliminary lien notice and then a notice of lien sale, which stated that her “right to use” her storage unit “has been terminated.” Appellant subsequently paid respondent more than the lien amount specified in the notice. Respondent took the position that appellant’s payment was insufficient because appellant owed respondent for additional monthly rent and late fees that had accrued following issuance of the notice. Respondent also threatened to sell appellant’s property at auction and denied appellant access to her property.

 

Appellant brought suit against respondent alleging, among other things, causes of action under the Unfair Business Practices Act (§ 17200 et seq.) and the Consumer Legal Remedies Act (CLRA) (Civ.Code, § 1750 et seq.) based on allegations that respondent violated the Act by continuing to charge rent and late fees after terminating her right to use her storage unit in the notice of lien sale. The trial court granted respondent’s motion for summary adjudication and respondent’s subsequent no-merit motion regarding the CLRA claim, concluding that the Act, itself, did not prohibit respondent from charging additional rent and late fees. We agree and affirm. We do not, however, decide whether respondent had a right to charge the additional rent and late fees under appellant’s lease agreement, because appellant has forfeited that issue.

 

BACKGROUND

 

Respondent is a self-storage facility located in Alameda, California. In 2002, appellant stored her personal property at respondent’s facility pursuant to a written lease agreement.

 

Appellant became delinquent paying her rent and, on April 18, 2004, respondent sent appellant by certified mail a preliminary lien notice stating that she owed respondent $124.75 for rent and $45 for late fees (at $15 per month). The notice further stated, “If this sum is not paid in full before [May 5, 2004,] your right to use the storage space will terminate, you will be denied acces[s] and an owner’s lien on any stored property will be imposed.” On May 4, 2004, respondent sent appellant by certified mail a notice of lien sale stating, “Your right to use storage unit [No.] 1510 … has been terminated and you no longer have access to your stored property. The stored property is subject to a lien in the amount of $278[.] This amount will continue to increase under the terms of your rental agreement until paid in full.” The May 4 notice indicated that appellant’s property would be sold after a certain date, but the date is not legible on the document.

 

The sale of appellant’s property did not take place because she requested that the sale be delayed. On September 2, 2004, appellant paid respondent $500; respondent took the position that she owed an additional $272 at that point. In February 2005, respondent sent appellant an “auction letter,” and in March respondent advertised a lien sale in the Alameda Journal. Respondent sent appellant another auction letter, on April 6, and appellant contacted respondent to request further delay of the sale. Appellant signed an agreement to pay respondent $950, but she scratched out language stating that she did not contest the amount and that the agreement was in full settlement of the dispute. Appellant did not pay the $950.

 

On May 20, 2005, respondent sent appellant a second notice of lien sale, specifying a lien amount of $1,282 and that appellant’s property would be sold after June 4. Appellant executed and returned to respondent a “Declaration in Opposition to Lien Sale,” which prevented respondent from proceeding with the lien sale (see §§ 21706, 21710).

 

In 2007, appellant filed her second amended and operative complaint against respondent, alleging five causes of action. In 2008, respondent filed a motion for summary judgment, or in the alternative for summary adjudication, as to the first cause of action (declaratory and injunctive relief), the third cause of action (violation of the Unfair Business Practices Act), the fourth cause of action (conversion), and the fifth cause of action (trespass to chattels). The trial court granted the motion for summary adjudication on those four causes of action. Respondent filed a separate motion, pursuant to Civil Code section 1781, subdivision (c)(3), contending that appellant’s second cause of action (violation of the CLRA) was without merit. (See Princess Cruise Lines, Ltd. v. Superior Court (2009) 179 Cal.App.4th 36, 41-42, 101 Cal.Rptr.3d 323 (Princess Cruise ).) The trial court granted the CRLA no-merit motion and entered judgment in favor of respondent. This appeal followed.

 

DISCUSSION

 

The trial court granted respondent’s motion for summary adjudication and the CLRA no-merit motion on the ground that the Act did not prohibit respondent from charging additional rent and late fees after termination of appellant’s right to use her storage unit. We review the trial court’s decision de novo. ( Wiener v. Southcoast Childcare Centers, Inc. (2004) 32 Cal.4th 1138, 1142, 12 Cal.Rptr.3d 615, 88 P.3d 517; Princess Cruise, supra, 179 Cal.App.4th at p. 42, 101 Cal.Rptr.3d 323.)

 

At the outset, it is important to clearly delineate the scope of the issues on appeal. Appellant alleged in her complaint that respondent’s notices were inadequate under the Act and that it was a violation of the Act to charge rent and late fees after termination of appellant’s right to use her storage unit. Her unfair business practice and CLRA claims, the sole claims raised on appeal, are based on those alleged violations of the Act. Critically, appellant did not allege in her complaint that the rent and late fees could not be charged under the lease agreement, and her unfair business practice and CLRA claims are not based on violation of the lease agreement. The lease agreement was not attached to the complaint; instead, it was placed into the record by respondent, as an attachment to a declaration in support of the motion for summary judgment/adjudication. Appellant did not argue below, in opposing summary judgment/adjudication, that imposition of the rent and late fees was in violation of the lease agreement. And the only argument adequately raised on appeal is that the trial court erred in concluding respondent did not violate the Act by continuing to charge rent and late fees after mailing the notice of lien sale. Appellant makes no reasoned argument that respondent violated the lease agreement by continuing to charge rent and late fees: her briefs contain no discussion of the language of the lease agreement, and she cites no statutory or case authority that the notice of lien sale had the effect of terminating her obligation to pay rent and late fees under the agreement.  Appellant has, thus, forfeited any such contentions. ( Badie v. Bank of America (1998) 67 Cal.App.4th 779, 784-785, 79 Cal.Rptr.2d 273; Dietz v. Meisenheimer & Herron (2009) 177 Cal.App.4th 771, 799, 99 Cal.Rptr.3d 464.)

 

In determining whether respondent’s conduct violated the Act, “we apply well-established rules of statutory construction. The goal of statutory construction is to ascertain and effectuate the intent of the Legislature. [Citation.] Often, the words of the statute provide the most reliable indication of legislative intent. [Citation.] However, when the statutory language is itself ambiguous, we must examine the context in which the language appears, adopting the construction that best harmonizes the statute internally and with related statutes. [Citation.] “ ‘When the language is susceptible of more than one reasonable interpretation … we look to a variety of extrinsic aids, including the ostensible objects to be achieved, the evils to be remedied, the legislative history, public policy, contemporaneous administrative construction, and the statutory scheme of which the statute is a part.” ‘ [Citations.]” ( Rothschild v. Tyco Internat. (US), Inc. (2000) 83 Cal.App.4th 488, 496, 99 Cal.Rptr.2d 721.)

 

The Act does not expressly authorize a storage facility to charge rent or prohibit a facility from charging rent in any particular circumstance. The Act does expressly authorize the imposition of late fees in section 21713.5. Under section 21713.5, subdivision (a), “[t]he owner of a self-service storage facility may assess a reasonable late payment fee if an occupant does not pay the entire amount of the rental fee specified in the rental agreement….” (Italics added.)  The dispute in this case relates to the meaning of the term “occupant,” as used in section 21713.5, subdivision (a). The Act defines “ ‘occupant’ [as] a person … who is entitled to the use of the storage space at a self-service storage facility under a rental agreement, to the exclusion of others.” (§ 21701, subd. (c).) Appellant contends she was no longer an “occupant” who could be charged late fees after respondent sent her the notice of lien sale, which stated that her right to use her storage unit had been “terminated” and she “no longer [had] access” to her property in the unit. She also points to section 21705, subdivision (c)(1)(A), which requires that notices of lien sales state “[t]hat the occupant’s right to use the storage space has terminated and that the occupant no longer has access to the stored property.” Appellant argues that, under the Act and under the language of respondent’s notice, she clearly was not a person “entitled to the use of the storage space … to the exclusion of others” (§ 21701, subd. (c)) after respondent sent her the notice of lien sale in May 2004. Accordingly, she was not an “occupant” to whom a late fee could be charged under section 21713.5, subdivision (a).

 

Respondent does not dispute that, after service of the notice of lien sale, appellant no longer met the section 21701, subdivision (c) definition of “occupant.” However, respondent points out that the term “occupant” is used many times in the Act to refer to someone who no longer has a right to access his or her unit. For example, sections 21705, subdivision (c)(1)(D) and 21707, subdivision (b) refer to the right of the “occupant” to the proceeds of a sale exceeding the lien amount. Similarly, section 21710 requires that the “occupant” be served with copies of the summons and complaint in any action to enforce an owner’s lien. Those sections of the Act use the term “occupant” in circumstances where necessarily a notice of lien sale has been sent and the “occupant” no longer has the right to access his or her unit. Respondent also relies on section 21702, which does not use the term “occupant” and which provides that the owner has a lien “for rent, labor, late payment fees, or other charges, present or future, incurred pursuant to the rental agreement and for expenses necessary for the preservation, sale, or disposition of personal property subject to the provisions of this chapter.” (Italics added.) Respondent argues section 21702 shows the Legislature contemplated that there would be “future” rent and late fees that would continue to accumulate after service of the notice of lien sale.

 

The Act is ambiguous. Looking solely at the definition of “occupant” in section 21701, subdivision (c) and the language of section 21713.5, subdivision (a) authorizing imposition of late payment fees, the Act seems to contemplate imposition of such fees only on persons with the right to access their units. On the other hand, in other sections of the Act, such as those described in the previous paragraph, the Legislature disregarded the section 21701, subdivision (c) definition and used the term “occupant” to refer to persons who no longer have the right to access their units. Furthermore, section 21702 contemplates “future” rent and late fees. Arguably, the Legislature used “occupant” in section 21713.5, subdivision (a) as it did in other portions of the Act-in a general sense, rather than as the term is defined in section 21701, subdivision (c).

 

Because there is an inconsistency between the Act’s definition of “occupant” and the Act’s use of that term, this court must determine the Legislature’s intent. We conclude that, in enacting the Act and section 21713.5 in particular, the Legislature did not intend to regulate the circumstances under which rent and late fees could be charged. Instead, the Legislature intended to provide owners with liens, establish fair procedures to enforce the liens, and determine the amount of reasonable late fees. This is apparent from the fact that the Act addresses those matters directly and in detail but does not expressly address when rent and late fees may be charged. In particular, no provision of the Act addresses whether owners may charge rent after the mailing of the notice of lien sale. The Act authorizes late fees and provides that there should be only one late fee for each late rent payment, but the Act defers to the rental agreement for determination of when the rent and associated late fee becomes due. (§ 21713.5, subd. (a)(3) [“Only one late payment fee shall be assessed for each rental fee payment that is not paid on the date specified in the rental agreement.”].) And the Act defers to the underlying rental agreement in determining the amount of rent and late fees encompassed by a lien: to wit, section 21702 provides that owners have a lien for all charges “present or future, incurred pursuant to the rental agreement.” (Italics added.)

 

The legislative history supports this interpretation. The Act, enacted in 1981, was based on a model developed by the National Self-Service Storage Facility Association. (Assem. Com. on Judiciary, Bill Dig., Assem Bill No. 750 (1981-1982 Reg. Sess.) as amended May 11, 1981, p. 4.) The purpose of the Act was to provide self-storage facility owners an “effective remedy against defaulting customers.” (Ibid.) The lien and lien sale provisions would help owners “[¶] (1) recover the storage facility; [¶] (2) collect the rent and other contractual charges owed; and [¶] (3) sell or otherwise dispose of any personal property remaining after termination.” (Sen. Com. on Judiciary, Analysis of Assem. Bill No. 750 (1981-1982 Reg. Sess.) as amended May 26, 1981, p. 3.)

 

As for late fees, the legislative history indicates that Assembly Bill No. 2263 (1999-2000 Reg. Sess.), which added the late fee provision in the year 2000, was sponsored by the California Self-Storage Coalition, which sought certainty regarding the reasonableness of late fees in the industry. A Senate Judiciary Committee analysis explained: “[Late] fees currently are not regulated by the Act. Instead, the ‘fairness’ of a particular company’s late fee has been left to the courts to resolve. The sponsor asserts that this bill would provide storage owners and operators clear statutory guidance as to what fees are permissible, thereby reducing the risk of future litigation. The sponsor argues that the bill provides a fair balance between the parties, by protecting storage customers from unreasonably excessive late fees, while providing the owners and operators with certainty in the area of permissible late fees.” (Sen. Com. on Judiciary, Analysis of Assem. Bill No. 2263 (1999-2000 Reg. Sess.) as amended May 10, 2000, p. 3.) The Legislature included a specific scale of late fees in the Act in order to avoid court proceedings to determine the legality of self-storage facility late fees as liquidated damages provisions under Civil Code section 1671. (Sen. Com. on Judiciary, Analysis of Assem. Bill No. 2263, supra, pp. 3-4.) Thus, the Legislature’s intent was to authorize late fees whenever rent is unpaid and to establish a scale of reasonable fees to avoid litigation over fee amounts. The legislative history does not reflect consideration of the circumstances governing when late fees may no longer be charged.

 

Appellant points to language in the Senate Judiciary Committee report stating, “the self-service storage facility owners contend that the fees are a fair estimate of their losses in light of the fact that they do not collect security deposits on these rental agreements, and they are unable to collect any rent for at least a month when a renter fails to pay the rent and the agreement needs to be terminated.” (Sen. Com. on Judiciary, Analysis of Assem. Bill No. 2263, supra, as amended May 10, 2000, p. 4.) Although this language suggests the Legislature was aware that at least some owners did not anticipate collecting additional rent from defaulting renters, the Legislature did not include any provisions limiting when rent may be charged to renters and it adopted language deferring to the rental agreement regarding the imposition of rent and late fees. Although it may be that rent and late fees typically may not be imposed under lease agreements after termination of access to a storage unit, the legislative history does not indicate that the Legislature intended to impose that limit through the Act. If that had been the Legislature’s intent, it likely would have done so directly, rather than through the use of a term (“occupant”) employed loosely throughout the Act.

 

If this court were to interpret the use of “occupant” in section 21713.5 as a restriction on when late fees may be charged to a renter, it would create a potential conflict with section 21702. Specifically, section 21713.5 would prohibit the imposition of late fees after termination of access to a unit, but section 21702 provides for a lien encompassing any late fees “incurred pursuant to the rental agreement,” which theoretically could include late fees imposed following a notice of lien sale. Similarly, appellant’s interpretation would create a potential internal conflict within section 21713.5, which authorizes assessment of a late fee whenever a rent payment is late under a rental agreement. (§ 21713.5, subd. (a)(3) [“Only one late payment fee shall be assessed for each rental fee payment that is not paid on the date specified in the rental agreement.”].) It would be illogical to interpret the use of the ambiguous term “occupant” in section 21713.5 as a limit on when late fees can be charged, where the Act does not purport to regulate when rent can be charged, and late fees are keyed to the rent payments. Finally, appellant’s interpretation of section 21713.5 is also in conflict with the reference to “future” late fees in section 21702.

 

Appellant argues it would be unreasonable to conclude that owners of storage facilities may continue to charge rent and late fees indefinitely. But we do not hold that the Act authorizes that result. Instead, we hold that the Act does not itself prohibit the charging of rent and late fees after termination of a renter’s access to his or her unit; the Act defers to the underlying rental agreement for determination of what charges are proper and may be included in the lien. It may be that common law or statutory authority dictates that, under month-to-month lease agreements, it is improper to charge rent and late fees after termination of a renter’s access to a storage unit. However, appellant has forfeited that issue. As noted previously, appellant did not allege in her complaint that imposition of further rent and late fees was unlawful because the lease agreement was terminated by the notice of lien sale, did not argue that ground in opposition to the motion for summary judgment/adjudication below, and has not provided reasoned argument on appeal for that proposition. Appellant’s only cognizable argument on appeal is that the rent and fees violated the Act. Accordingly, we express no opinion on the validity of the rent and late fee charges imposed following the notice of lien under general principles of contract law or any authority other than the Act.

 

Appellant has failed to show that the trial court erred in concluding that the rent and late fees imposed by respondent following the notice of lien sale were not in violation of the Act. That conclusion is fatal to the three causes of action at issue on appeal.

 

DISPOSITION

 

The judgment is affirmed. Respondent is awarded its costs on appeal.

 

We concur: NEEDHAM and BRUINIERS, JJ.

 

All further undesignated section references are to the Business and Professions Code.

 

The complaint also contains causes of action for trespass and conversion, but appellant does not contend on appeal that the trial court erred in dismissing those claims.

 

Appellant asserts in passing that “when there are no rights under an agreement, demand for further fees pursuant to that agreement can no longer be justified.” But she provides no discussion of any of the specific provisions of the lease agreement or any citation to authorities.

 

In full, section 21713.5 provides:

 

“(a) The owner of a self-service storage facility may assess a reasonable late payment fee if an occupant does not pay the entire amount of the rental fee specified in the rental agreement, subject to the following requirements:

 

“1) No late payment fee shall be assessed unless the rental fee remains unpaid for at least 10 days after the date specified in the rental agreement for payment of the rental fee.

 

“(2) The amount of the late payment fee shall be specified in the occupant’s rental agreement.

 

“(3) Only one late payment fee shall be assessed for each rental fee payment that is not paid on the date specified in the rental agreement.

 

“(b) For purposes of this section, a ‘reasonable late payment fee’ is one that does not exceed the following:

 

“(1) Ten dollars ($10), if the rental agreement provides for monthly rent of sixty dollars ($60) or less.

 

“(2) Fifteen dollars ($15), if the rental agreement provides for monthly rent greater than sixty dollars ($60), but less than one hundred dollars ($100).

 

“(3) Twenty dollars ($20) or 15 percent of the monthly rental fee, whichever is greater, if the rental agreement provides for monthly rent of one hundred dollars ($100) or more.”

 

Because the notice of lien sale was sent by certified mail, appellant did not have an opportunity to regain access to the unit; if the notice had been sent by regular first class mail, she would have had a 14-day period during which she could have regained use of her storage unit by paying the full lien amount. (§ 21705, subd. (b) .)

 

We take judicial notice of the legislative history of Assembly Bill No. 750 (1981-1982 Reg. Sess.) and Assembly Bill No. 2263 (1999-2000 Reg. Sess.). (See People v. Superior Court (Ferguson ) (2005) 132 Cal.App.4th 1525, 1532, 34 Cal.Rptr.3d 481.)

 

Appellant’s interpretation would even appear to prohibit a self-storage facility from charging, under section 21713.5, additional late fees to a renter who requests delay of a lien sale and expressly agrees to pay additional rent until he or she can pay off the lien amount.

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