Appraiser Story: When Your Storage Unit Contents Disappear Into A Dumpster
This story is based on a true appraisal experience by Lynn Magnusson, ASA, AAA. Names & specifics of the case have been changed to maintain confidentiality; over 7 years have passed without further litigation.
I found myself sitting in a court room. I was moments away from testifying, under oath, in front of a judge and jury. My appraisal document and evidence were in several boxes next to me. The opposing counsel looked over at me from the other side of the courtroom. I smiled. I was about to blow their case to pieces.
THE STORY: Opposing counsel is representing a man we’ll call Adam. Adam & his landlord had “financial disagreements” over a storage unit rental. Long story short, all of Adam’s items in his 10’ X 20’ X 10’ storage unit ended up in the trash after he hadn’t paid rent for several years. Adam, a boutique owner for women’s designer clothing, claimed the storage unit had housed $2.5 Million in luxury fashion and accessories.
Now, I’m no fashion maven, but I did raise my eyebrows when hearing the words “$2.5 million worth of inventory in a residential storage unit.” But how could I prove, beyond a reasonable doubt, how much the contents were worth when I never saw any of the items and they no longer existed?
I got to work by taking out my calculator & applying some basic math knowledge. The only thing I knew for sure was that the storage unit was 10’ X 20’ X 10’ or 2000 cubic feet. Now, most people do not fill up every cubic inch of space in their storage unit, but I could still use this volume to create a series of hypothetical scenarios to present to the court.
The judge directed Adam to send me all of his business transaction records to help me understand his purchases and, hopefully, determine the potential contents. With that, I could extrapolate the potential monetary value he may have been holding in the unit. I received 30 filing boxes full of everything from orders to invoices to receipts. These “documents” were typically one word descriptions like “dress” or “#13579.” None were in any discernable order. I speculated that either Adam was an unorganized businessman or, perhaps, that he just wanted to make my task more difficult by giving me a mess. Unfortunately for Adam, he didn’t know about my tenacity.
With the help of a trusty assistant, I quickly organized this paper hodgepodge into coherent piles. From there, I was able to determine the quantity and quality of the clothing and accessories Adam had ordered, purchased and sold in the past. I calculated the ratio of accessories to clothing and proceeded accordingly.
Now the hypothetical scenarios: What was the least expensive item Adam could have owned and sold? For argument sake, let’s say it was stockings. What was the most expensive item Adam had sold? Let’s say it was the “Chanel” dresses.
What if the entire storage unit was filled to the brim with stockings? How many stockings were in a box? How many boxes could fit in 2000 cubic feet?
Conversely, what if the entire storage unit was packed with “Chanel” dresses in every spare crevice? How many could fit in 2000 cubic feet?
With additional research of the wholesale and retail marketplaces, I arrived at the maximum number of stockings or “Chanel” dresses that could have fit into the storage space. I could have stopped there, but I also had my likely ratio of accessories (ie: stockings) to dresses (ie: “Chanel” dresses). With my values for the stockings and the “Chanel” dresses in hand, I could use the ratio to determine the most likely monetary value of the contents within the storage unit. And that, ladies & gentlemen, is how I determined the hypothetical value of a collection I had never seen. (For the record, it was nowhere near $2 million).
So now we return to the court room scene. I’m smiling, sitting comfortably in my chair with my organized collection of Adam’s records, ready to present my case. The judge calls the court into session. Opposing counsel glances at me one more time, then proceeds to the judge’s bench. The landlord’s lawyers quickly follow suit and the parties go into the judge’s chambers behind closed doors.
After a half hour of waiting, the parties return with a verdict: Settlement substantially in favor of the landlord.
Can I say I wasn’t a little disappointed not to present my case before a court of law? No. It was a bit of a letdown. But do I know in my gut that my (potential) testimony was the deciding factor that convinced the opposition to change their tune? Absolutely.
Contact me, Lynn Magnusson AAA, ASA for your personal property litigation disputes today.
Co-Authors: Lynn Magnusson, ASA, AAA and Becky Lipnick, Communications Coordinator