U-Haul Loses Appeal in Decade-Old Lawsuit With Self-Storage Owner

An appeal by Phoenix-based U-Haul International Inc. and its subsidiary U-Haul Co. of California in response to a decade-old lawsuit was denied this week by the appellate court in San Francisco. As a result, U-Haul was ordered to pay the legal fees of Leigh Robinson, owner of Downtown Self Storage in Fairfield, Calif., who was sued by the company over a contractual no-compete clause in 2006.

The court ruled that U-Haul used a no-compete clause in its rental-dealership contracts even though the company knew it was illegal to do so in California. The court said U-Haul’s action indicated it would likely use the clause in the future. It also ruled the clause had hurt the truck-rental market by restricting fair competition, according to the source.

Robinson acquired his self-storage facility in 2001, inheriting a contract to operate as a U-Haul truck-rental dealer. He terminated the contract in 2006 to work with Budget, a competing truck-rental company. At the time, U-Haul had already renewed its Yellow Pages advertising for Robinson’s dealership and warned him via letter that the non-competition clause in the contract meant he couldn’t compete locally against U-Haul while the advertising was in place. U-Haul sued Robinson a few months later for contract violation, the source reported.

Dual lawsuits languished for years before Robinson prevailed in a 2013 civil-jury trial. The jury concluded U-Haul’s lawsuit had been “malicious” and awarded the self-storage owner more than $195,000. Robinson also won his counter claim that the no-compete clause violated California law. Two years later, Judge Harry S. Kinnicutt ruled U-Haul had to pay Robinson’s attorney fees, which had amassed to more than $834,000 over nine years. U-Haul appealed the Kinnicutt ruling, which led to this week’s appellate-court decision.

According to the Better Business Bureau website, Robinson is also owner of Sunset Self Storage in Merced, Calif. Both the Downtown and Sunset facilities are part of a family-owned group of four storage properties in Northern California that operate under different names.

Established in 1945, U-Haul has more than 49 million square feet of self-storage space at more than 1,300 owned and managed facilities throughout North America.