Steve's Towing SCRA Case: Deployed SEAL's Vehicles Sold to Itself

What happened

The United States sued Steve's Towing, Inc., a Virginia corporation based in Virginia Beach, in federal court in Norfolk, Eastern District of Virginia, on April 15, 2022. The complaint observes that the Hampton Roads area is home to approximately 83,000 servicemembers. A plaintiff-intervenor identified only as John Doe, described as a person aggrieved by a violation of Section 3958 by the company, later joined the case, and the consent order resolves his complaint along with the United States' (consent order paragraphs 1 and 3).

Before SEAL Team 2 deployed overseas in about October 2019, a Navy petty officer first class on the team parked his 1992 Toyota Land Cruiser and 1987 Toyota 4Runner, both with Arizona plates and registrations, in a lot across from the team's headquarters at Joint Expeditionary Base Little Creek-Fort Story. Inside the Land Cruiser were a duffel bag of uniforms and a Naval Special Warfare Development Group Sniper challenge coin. Steve's towed both on or about January 3, 2020 and requested records only from the Virginia DMV, which reported no record for either, without ever contacting Arizona's Motor Vehicle Division. On or about February 7, 2020 it filed a $970 storage lien on each vehicle, reported to the Virginia DMV that it had enforced both liens by purchasing the vehicles from itself for $500 each, and had them titled in the company's name. His parents in Arizona, where his mail was being forwarded, received nothing from Steve's in that time (complaint paragraphs 10 to 21).

The complaint says the company's policies never mentioned the SCRA, did not involve pulling records from the state on a towed car's plate, and did not presume that a car towed from a military installation, or carrying uniforms, was likely to belong to a protected servicemember. It counts at least seven servicemembers whose vehicles and personal effects Steve's sold or disposed of without court orders from April 15, 2019 to the filing (paragraphs 22 to 32).

The consent order was entered April 17, 2023 and runs five years (consent order paragraph 38). DOJ's release announcing it is dated April 7, 2023, and describes the order as still awaiting court approval; the case page labels the same release April 17.

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 .

The flagrant disregard of a law designed to protect the rights of those in military service will not be tolerated.

Servicemembers often rely heavily on their personal vehicles to commute to work and care for their families. A servicemember’s loss of a vehicle, therefore, can affect the military’s readiness.

Who was covered

Two groups. First, the seven Identified Aggrieved Servicemembers, whom DOJ's 2023 release calls the seven referenced in the United States' complaint (a count of at least seven that includes the SEAL); John Doe is one of the seven (consent order footnote 4). And additional servicemembers the United States was to identify within six months whose vehicles Steve's sold or disposed of without a court order between April 1, 2015 and entry of the order, while the owner was serving or had left service no more than 90 days earlier (paragraph 18). The United States had 24 months from entry to collect their releases (paragraph 19).

What the settlement paid

• A $67,500 judgment for the seven, with execution stayed as long as Steve's pays on schedule: $30,000 within seven days of entry, then twelve quarterly installments of $3,125 from July 1, 2023 through April 1, 2026 (consent order paragraph 12 and Exhibit C). It bears no interest unless the company falls into arrears and the court lifts the stay (paragraphs 16 and 17).
• John Doe is to be paid $21,571.57 from the first payment and $26,964.46 over the next three years, and the others share what remains according to percentages the United States assigns by vehicle value (paragraph 14). Releases go to Steve's only once the judgment is paid in full (paragraph 13), and money not distributed goes to the Treasury (paragraph 15).
• For the additional servicemembers, no more than the estimated NADA trade-in value plus $500 each, with the checks capped at $12,500 in total (paragraphs 18 and 20).
• A $10,000 civil penalty, entered as a judgment and stayed until January 1, 2024 (paragraph 22). The order puts the damages and civil penalty together at $90,000 (paragraph 29). The owner declared under penalty of perjury that he would personally make every payment if the company did not (Exhibit F), and the company agreed that if it filed for bankruptcy before paying in full, the releases could be rescinded and the United States would hold an allowed claim for $90,000 less any payments received (paragraph 29).

Why this case matters

By the complaint's account there was no outside buyer: Steve's recorded $970 liens and then reported buying both vehicles from itself for $500 apiece, putting a deployed SEAL's property in its own name between January 3 and February 7, 2020. The records gap matters as much: the company asked only Virginia about two vehicles with Arizona plates, was told no record existed, and never contacted Arizona. The order now makes every lien start with a VIN search of a commercial database followed by a DMDC check, and requires a report every three months listing the VIN and owner of each vehicle sold without a court order (paragraphs 7 and 26).