By Murphy Klasing
It’s not uncommon for a self-storage operator to discover documents or records in a delinquent or abandoned unit—items such as birth certificates, diplomas, legal or medical records, and other papers that have no financial worth but still have value under the law or to the former tenant. So what do you do when you discover such paperwork? Let's take a look at some solutions.
First, be cautious when renting to a commercial customer who intends to store records in his unit. Some facility rental agreements state that storage units aren’t suitable for the storage of data, legal or medical documents, or other records. If your lease contains this language, don't rent to someone who plans to store such items. If the lease is silent with regard to records, just understand going in that your lien on the property isn’t worth much and can present a sticky liability situation.
Reach Out to Authorities
Medical records contain sensitive personal information such as Social Security numbers, dates of birth and, of course, medical information. Fortunately, the Federal Health Insurance Portability and Accountability Act doesn’t require a self-storage operator to safeguard such documents from distribution or publication. The tenant is responsible for properly disposing of such records.
Nevertheless, consider a scenario in which medical files are found in an abandoned or delinquent unit. Upon preparing for auction, you discover it’s full of sensitive documents. You know no one will bid on them, so you decide to throw them away. Someone passes by your dumpster, retrieves multiple files, and then uses the information to open bank accounts and credit cards. He also reads a file he finds humorous and posts it on Facebook. Now you have people suing you for exposing their information to the public.
Fortunately, the law is on the side of the self-storage operator, as the records aren’t your responsibility. That doesn't mean, however, that a judge will throw out the case or you won't face a tough (i.e., expensive) legal battle.
If you find medical records, call your state’s medical board and ask for help. They may request that you send them the records or even shred them. They may also call the delinquent tenant and put pressure on him to pay his storage bill and move out. If that doesn't work, do your best to protect the sensitive information in the files. Always think like a jury. Ask yourself, "If a disinterested person heard about what I did with these records, would he think my actions were justified?"
Take Reasonable Action
One of my clients recently auctioned a storage unit rented by an attorney. The lawyer had been suspended by the state bar, and the space contained the entire contents of his office, including all of his business records.
Although the unit was sold, the facility operator retained 80 boxes of what appeared to be legal files and allowed the tenant to reclaim them free of charge. This was a reasonable act on behalf of the storage company, but the attorney sued anyway, claiming the sale wasn’t performed properly. The jury was impressed that the operator went out of his way to protect the tenant's documents even though he had no obligation to do so. Wearing the "white hat" is always better than having to defend actions that, although justified by the law, seem malicious.
Once you auction a unit, any documents found among the contents are the property of the winning bidder, and it’s his responsibility to properly dispose of any sensitive information. However, in the case of an abandoned unit, it’s good practice to dispose of any documents via shredding to protect the data.
Go the Extra Mile
Self-storage operators in the throes of litigation often express things like, “But the contract says…," or "The law gives me the right to…" He’s usually correct, but juries are made up of non-lawyers. Although I have faith that most juries will follow the law as instructed by the court, they’re more likely to side with you over the consumer when you’ve taken that extra step to do the right thing, even when the law doesn't require it. When you follow the law but doing so results in an unnecessarily heartless act, juries tend to consider the consumer's complaint a little more closely.
In summary, don't just toss records because you can. Look at each situation and determine what's best for you, the person identified in the records, and your tenant—even if he’s the one in the wrong.
Murphy Klasing, an attorney with the law office of Weycer, Kaplan, Pulaski & Zuber P.C., has a wide range of appellate, arbitration and trial experience, successfully handling numerous litigation matters. With more than a decade of experience in the self-storage industry, he serves as counsel for Public Storage Inc. in Texas, and has defended matters involving allegations of breach of contract, code violations, employment issues, fraud, negligence, personal injury, premises liability, and theft. To reach him, call 713.961.9045; e-mail email@example.com; visit www.wkpz.com.