A preliminary settlement agreement has been struck that would bring a contentious class action lawsuit against Public Storage to a close, and some extra cash to up to 200,000 Florida customers.
The original lawsuit, filed by Florida businessman Colin Bowe, alleged that Public Storage engaged in deceptive practices related to its tenant insurance program. Public Storage vigorously denied those claims.
After 17 months of litigation, 27 depositions, 300,000 pages of documents, two mediations and a legal team switch for the defendant, both sides reached a settlement agreement on October 9, just three days before the scheduled trial date.
Judge Ursula Ungaro of the U.S. District Court in Miami (pictured at top) granted preliminary approval of the settlement agreement on October 20. A final hearing on the settlement is scheduled for February 26, 2016.
Reaching a settlement
The plaintiffs’ primary complaint was that Public Storage deceived customers who bought its tenant insurance policy because the company told customers that it was collecting premiums and passing them on to an independent insurance company. In actuality Public Storage retained a large portion of premiums, making the tenant insurance company a major source of profit—a fact not disclosed to those it insured.
In its defense, Public Storage argued that it did not deceive tenants, that what happened to the premiums after they were paid was immaterial to tenants, and that their insurance program complied with applicable laws.
According to preliminary settlement order, the settlement was reached after five weeks of “intensive, arm’s-length negotiations” that went on into the weekend before the trial.
Terms and conditions
Under the proposed settlement agreement, class members will be able to claim up to 50 percent of their alleged losses. The class includes more than 200,000 Florida residents that rented a unit from Public Storage and purchased tenant insurance between May 1, 2010 and June 18, 2015. Notice was sent to eligible class members in April.
Public Storage will contribute $5 million towards a settlement fund that will be used to pay the damages, as well as pay the plaintiff’s attorneys’ fees. Any funds left over would revert back to Public Storage.
Class members will be able to submit their claims using the website www.publicstorageinsurancelawsuit.com. Claims will be verified using Public Storage’s customer records.