## Facts

- Lucy R. Gonzales rented a self-storage unit from Personal Storage, Inc. to store rare furniture, heirlooms, keepsakes, and other personal belongings, and informed the facility the items had significant personal value.
- The lease required monthly rent; Gonzales placed her own lock on the unit and periodically fell behind but previously cured after notices.
- In early 1992, after Gonzales again became delinquent, the facility cut her lock, installed its own lock, and initiated lien-sale procedures under the California Self-Service Storage Facility Act.
- The facility published an auction notice describing the unit’s contents in detail, but did not notify Gonzales of the advertisement.
- Before the scheduled sale, an impostor claimed to be Gonzales, paid the past-due amount, and was allowed to remove all property without being required to present identification.
- Gonzales later paid rent in full; the facility then told her the property had been released to someone else.
- Gonzales alleged severe emotional distress and depression after learning her belongings were gone.
- In a bifurcated trial, the court directed a verdict for Gonzales on liability for negligence, statutory violation, and conversion; the jury awarded property damages and substantial emotional distress damages on the negligence claim, and additional damages on conversion.
- The trial court dismissed Personal Storage’s cross-complaint seeking to enforce lease exculpation/limitation provisions and denied Gonzales’s motion for attorney’s fees under the lease.
- Both sides appealed: Personal Storage challenged emotional distress damages; Gonzales challenged denial of attorney’s fees.

## Issues

1. Whether a storage facility that commits conversion of a tenant’s personal property may be liable for the tenant’s severe emotional distress caused by the loss.
2. Whether contractual exculpatory or limitation clauses in the storage lease could bar or reduce liability for the tortious loss, including emotional distress.
3. Whether the prevailing tenant was entitled to attorney’s fees under the lease’s fee clause despite being represented on a contingency basis.

## Decision

- The Court of Appeal held emotional distress damages were recoverable based on the facility’s conversion of Gonzales’s personal property.
- The court rejected reliance on lease provisions to avoid tort liability for the conversion in these circumstances.
- The court reversed the order denying Gonzales attorney’s fees and remanded for determination of a reasonable fee award under the lease.

## Legal Principles

- Emotional distress damages are generally not recoverable for ordinary negligence causing only property damage, but they may be recovered when an intentional tort such as conversion is established and serious emotional harm is a foreseeable result.
- Conversion is an intentional exercise of dominion over another’s personal property inconsistent with the owner’s rights; when the property has significant personal or sentimental value known to the defendant, emotional distress from its loss may be foreseeable.
- Contract provisions limiting liability will not necessarily bar tort remedies for a defendant’s own wrongful conduct, particularly where enforcement would undermine statutory protections governing the transaction.
- A prevailing party may “incur” attorney’s fees for purposes of a contractual fee clause even under a contingency fee arrangement; recovery is based on reasonable fees, not on the client’s out-of-pocket billing method.

## Conclusion

The court permitted recovery of emotional distress damages where a storage facility’s wrongful dominion over a tenant’s personally significant belongings amounted to conversion, and it held the prevailing tenant could recover reasonable attorney’s fees under the lease even though counsel was retained on contingency, requiring remand for a fee determination.


Gonzales v. Personal Storage, Inc., 56 Cal. App. 4th 464, 65 Cal. Rptr. 2d 473 (Cal. Ct. App. 1997)