Black and White Towing SCRA Case: Sold Despite Promises, DOJ Says

What happened

On July 20, 2021 the United States sued Black and White Garage, Inc., which does business as Black and White Towing, Inc., in the Central District of California, and DOJ announced a settlement the same day. The complaint describes a 24-hour towing service in Pacoima designated as an Official Police Garage for the Los Angeles Police Department. California law gives it a garageman's lien on vehicles towed at police direction, and it regularly enforces those liens through public lien sales, using an outside vendor for the documents state law requires. Its headquarters sit within a 50-mile radius of several recruiting stations and installations, including Los Angeles Air Force Base and Naval Base Ventura County (complaint paragraphs 6 to 13).

The servicemember served on active duty in the Marine Corps continuously from May 24, 2010 to January 22, 2021. In or around June 2017 she bought a used 2014 Honda Accord Sport with a Navy Federal Credit Union loan. In or around July 2018 she received PCS orders from Marine Corps Recruiting Station Los Angeles to Camp Pendleton in Oceanside, while living approximately 100 miles north of the base. During the move she left the car parked in front of her apartment complex to collect later, with one of her Marine Corps uniforms, framed military awards, her child's car seat, clothing and household items inside. On August 20, 2018 another vehicle hit it, and the Los Angeles Police Department asked Black and White to tow it (paragraphs 14 to 18).

On September 5, 2018 the vendor applied to the California Department of Motor Vehicles for permission to sell, and on September 24 it mailed a Notice of Stored Vehicle to the Florida DMV and to her former address in Jacksonville, Florida, a past duty station and still the address on the registration; she never received it. In October or November 2018 her insurer told her the car had been hit and towed. She called Black and White, identified herself as an active duty servicemember, and a manager confirmed it had the car and assured her it would not be sold. In the months that followed she called several times, each time saying she was on active duty, was working with a military legal assistance attorney to get the car back and wanted it returned, and she received repeated assurances that it would not be sold. On December 12, 2018 Black and White sold it to a third party for $4,828 without a court order, and she kept paying $390 a month on the loan (paragraphs 19 to 27).

DOJ's release adds that she told the company she would work with the other driver's insurance company to retrieve the car. The complaint alleges Black and White lacked any written SCRA policy or procedure and had no practice of searching the DMDC or otherwise checking whether the vehicles it disposed of belonged to protected servicemembers (paragraphs 29 and 30). Judge George H. Wu entered the consent order on August 9, 2021, and Black and White neither admitted nor denied what the complaint alleged (consent order paragraph 4 and page 9).

The law behind this: 50 U.S.C. § 3958

Enforcement of storage liens: read the statute , or read § 3958 in plain English, with its enforcement record .

When towing companies ignore their legal obligations under the Servicemembers Civil Relief Act, it can have serious financial consequences for servicemembers and their families.

Who was covered

Only the staff sergeant, who had left active duty on January 22, 2021, before the suit (complaint paragraph 14). The order released no claim of the United States beyond § 3958 claims involving her (consent order paragraph 20), and her release was likewise limited to § 3958 (Exhibit C). The injunction against enforcing storage liens on protected servicemembers' property unless it had a court order or a valid SCRA waiver bound the company for three years from entry, through August 2024 (paragraphs 5 and 27).

What the settlement paid

• $22,000 in damages to the staff sergeant. The order sent the check straight to her rather than through government lawyers: once told her signed release had been provided, Black and White had seven calendar days to mail it by certified mail, return receipt requested, and the United States was to give the company a copy of the release after she received the check (order paragraphs 12, 13 and 14).
• A $5,000 civil penalty, due to the U.S. Treasury no later than ten calendar days after entry (paragraph 15).
• Policies within 30 days: before enforcing any vehicle storage lien, Black and White or its agent pulls each owner's Social Security number (or, failing that, date of birth) out of a commercially available public records database, searches the DMDC under every known name variant, requests ownership information from any third party that asked for the tow, and inspects the vehicle for signs of service. Where that shows the owner is serving or was within the last 90 days, no lien sale without a court order; default motions require a freshly executed military affidavit and a current DMDC report; waivers only on the Exhibit A notice and form (paragraph 6).
• Yearly SCRA training for all employees, training for new hires within 30 days, signed acknowledgments, and written notice to the United States each quarter of any SCRA or military-related complaint, whether made orally or in writing (paragraphs 9 to 11 and 17).

Why this case matters

A tow lot's promise is not a court order. By the complaint's account, a manager and then the company assured this Marine more than once that her car would not be sold, and the company sold it anyway while she kept paying the loan. Her calls were not what made § 3958 apply; the court order is required whether or not the owner ever speaks up. The notice problem is the other half: the state lien notice went to a Jacksonville address from an earlier duty station because the registration still listed it. The order added an owner lookup and a DMDC search before any lien enforcement.