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One Way Apostolic Church v. Extra Space Storage, Inc.

United States District Court, N.D. Illinois, Eastern Division

May 19, 2017

ONE WAY APOSTOLIC CHURCH, Plaintiff,
v.
EXTRA SPACE STORAGE, INC.; and JOHN DOE, [1] Defendants.

          MEMORANDUM OPINION AND ORDER

          HON. MARIA VALDEZ United States Magistrate Judge.

         Plaintiffs First Amended Complaint, premised on diversity jurisdiction, alleges breach of contract against Defendant Extra Space Storage, Inc. ("Extra Space"), and conversion against both defendants in relation to items Plaintiff had stored in a unit at Extra Space that were later foreclosed on and sold by Extra Space to John Doe. The matter is now before the Court on Defendant's Motion for Summary Judgment [Doc. No. 39]. The parties have consented to the jurisdiction of the United States Magistrate Judge pursuant to 28 U.S.C. § 636(c). For the reasons that follow, Defendant's motion is granted in part and denied in part.

         FACTS[2]

         Plaintiff One Way Apostolic Church (“One Way”) is located in Chicago, Illinois. (LR 56.1(a)(3) ¶ 2.) In November 2013, Noah Nicholson, the church's Pastor and President, entered into three contracts with a storage facility called Smart Stop located on Ogden Avenue in Cicero, Illinois. Nicholson rented three storage units - numbers 3008, 3429, and 3417 - in order to store church property. (Id. ¶¶ 5-6.) All three agreements contain the following provisions:

2. RENT: . . . Rent is due each month on the FIRST day of the month, in advance and without demand. Owner reserves the right to require that rent and other charges be paid in cash, certified check, cashier's check or money order. . . . Owner, at Owner's sole discretion, may accept or reject partial rent payments. Acceptance of partial payments of rent by Owner shall not constitute a waiver of Owner's rights and Occupant understands and agrees that acceptance of a partial rent payment made to cure default for non payment [sic] of rent shall not delay or stop foreclosure on Occupant's stored property. ALL PAYMENTS MADE TO SATISFY OUTSTANDING LIEN AMOUNTS AND CHARGES SHALL BE PAID BY CERTIFIED CHECK, CASHIER'S CHECK, MONEY ORDER OR CASH.

(Id. ¶ 7.)

         The contracts provide that a late fee will be assessed for payments made more than six days late, a lien fee for an account thirty or more days delinquent, and a lien foreclosure fee for an account sixty or more days delinquent. (Id.)

         Section 14, which is entitled “Notice of Lien, ” explains that the owner shall have a lien on all personal property stored in the space pursuant to the Illinois Self Service Storage Facility Act (“Storage Act”), 770 Ill. Comp. Stat. §§ 95/1-95/7; that the lien attaches as of the date that the personal property is brought to the premises; and that the owner may enforce the lien by selling or otherwise disposing of the personal property stored in the space. (LR 56.1(a)(3) ¶ 7.)

         Finally, the contracts state that “[a]ll notices from Owner or Manager shall be sent by first-class mail postage prepaid to Occupant's last known address or to the electronic mail address provided by the Occupant in this Rental Agreement. Notices shall be deemed given when deposited with the U.S. Postal Service or when sent by electronic mail. All statutory notices shall be sent as required by law.” (Id.)

         Nicholson reviewed the contracts prior to executing them on November 23, 2013. The occupant information listed on the contracts was Noah Nicholson, 1160 S. Michigan Ave., Chicago, Illinois. The Customer Information Form completed and signed by Nicholson the same day listed the Michigan Avenue contact address and an employer address of 5758 W. Fillmore St., Chicago, Illinois, and it noted Nicholson's agreement to provide written notification of any changes to his contact address. (Id. ¶¶ 9-11.)

         Nicholson admitted that he did not provide Smart Stop with a written notification of an address change on any of the three storage accounts until January 20, 2016, at which time he completed a form stating his new residential address was 17037 Janine Court, Orland Park, Illinois. (Id. ¶ 12.)[3]

         On August 15, 2015, a Smart Stop employee spoke with Nicholson to advise him that he was late on the rent for all three units, that a foreclosure auction was forthcoming, and that he had to pay the entire balance through certified method of payment to avoid the auction. (Id. ¶ 15.) On August 31, 2015 Plaintiff paid $3600 to Smart Stop in the form of a cashier's check, an amount that satisfied rent owed for June, July, and August plus applicable fees for all three units. (Id. ¶¶ 16-17.) As of September 1, 2015, the monthly rent on unit 3008 was $315, unit 3429 was $826, and unit 3417 was $301.50.[4] (Id. ¶ 18.)

         On October 1, 2015, defendant Extra Space took over the storage facility from Smart Stop; it continued to honor all of Smart Stop's storage rental agreements, including those with Plaintiff. (Id. ¶ 14.)

         As of October 10, 2015, Plaintiff had failed to pay the monthly rent due for both September and October, and Plaintiff owed Extra Space the following amounts in combined rental and late fees: $2067.40 for unit 3429, $898.60 for unit 3008, and $856.00 for unit 3417; the total amount owed was $3822.00. (Id. ¶¶ 19-20, 24.) That same day, Extra Space mailed three Notice of Lien and Foreclosure Letters, one per unit, to Noah Nicholson at the Michigan Avenue address listed on the agreements. (Id. ¶ 27.) The letter contained an itemized statement of the unpaid rent and fees owed on each unit; the date on which the total amount was due; the name, address, and telephone number of the Ogden facility; the date, time, location, and manner of the upcoming foreclosure auction, which was scheduled for November 18, 2015 at 10:00 a.m.; a demand for payment within fifteen days; and a statement in bold advising that if the total amount was not paid within fifteen days, a lien would be imposed, and the property will be sold at auction to satisfy the lien. (Id. ¶ 28.) An Extra Space representative, Tony Chenoweth, mailed six more letters on October 17, 2015 and received Certificates of Mailing from the postal service indicating six letters were mailed from the Berwyn Post Office. Three were addressed to the Orland Park address, three others were addressed to an address located at 5758 W. Fillmore St., Chicago, Illinois. (Id. ¶¶ 29-33.) Of the nine notice letters sent to Nicholson in October 2015, only the three sent to the Orland Park address were not returned as undeliverable. (Id. ¶ 34.)

         According to Extra Space, its employees called Nicholson six times between October 10 and November 16, 2015 to discuss the delinquency issue. However, Defendant claims that Nicholson never answered the telephone calls and did not return the voice messages left on his mobile phone. (Id. ¶ 35.) Plaintiff denies that any of these communications mentioned a foreclosure sale; he believed they were calling with regard to his September rent being thirty days late, not to tell him the accounts were in foreclosure. (LR 56.1(b)(3)(B) ¶ 35.)

         On October 28, 2015, Nicholson mailed a check in the amount of $1500.00 to the Ogden Avenue storage facility. (LR 56.1(a)(3) ¶ 21.) The check was drawn on the church's business account, and the memo line referred to “3008, 3429, 3417” and the account number. No further instructions were given as to how the $1500.00 was to be applied toward the amounts owed on the three units. (Id. ¶ 22-23.)

         Extra Space rejected the October 28, 2015 check. Its stated reasons for rejecting the check are based upon Section 2 of the rental agreement, which provides that Extra Space can reject partial payments; payments for units in foreclosure status are to be paid only by certified check, cashier's check, money order, or cash; and Extra Space reserves the right to require that rent and other charges be paid by only certified methods of payment. (Id. ΒΆ ...


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