United Tows SCRA Case: Airman's Car Sold While He Was in Training

What happened

The United States sued United Tows, LLC, a Dallas towing and storage company, in the Dallas Division of the Northern District of Texas on September 28, 2020. The complaint says Texas law gave it a statutory lien on each vehicle it towed and stored, enforceable by public sale, that it regularly enforced those liens that way, and that it had no written SCRA policies and no practice of checking whether owners were protected servicemembers (complaint paragraphs 7 to 15). The Chief of Community Legal Services for the Department of the Air Force told the Department of Justice on February 14, 2018 about a complaint concerning the company's compliance with Section 3958 (paragraph 9).

An airman ordered on or about August 29, 2017 to eight weeks of basic military training at Joint Base San Antonio-Lackland left his 1998 Toyota Corolla at a Dallas martial arts school where he had taught, with the owner's permission, and kept some belongings in it after ending his apartment lease. United Tows towed it on September 28, 2017. A friend who called on his behalf explained that the owner was away performing military service and was told the car would be sold after 45 days on the lot. When the airman reached the company himself, a woman who identified herself as the owner told him she did not believe he was a servicemember and that the car would be sold unless he claimed it and paid all towing and storage fees (paragraphs 16 to 27).

Finishing basic training on October 27, 2017, he received orders to report immediately to technical training at Sheppard Air Force Base near Wichita Falls, so he signed a special power of attorney for the friend to collect his things; the laptop and laptop case were missing and the gym bag appeared to have been cut with a blade. United Tows auctioned the car on November 17, 2017 without a court order, leaving him without reliable transportation at his new base until he bought a used 2016 Toyota Corolla for $13,132 on April 26, 2018 (paragraphs 28 to 35).

The complaint lists at least four other vehicles auctioned without court orders between October 17, 2014 and April 26, 2019, registered to two Air Force members, a soldier who served in the Army from 2015 to 2018, and a Coast Guard member: a 2001 Lincoln LS, a 2000 Lincoln Town Car, a 2004 Toyota RAV4 and a 2002 Pontiac Grand Am (paragraph 36). DOJ's 2021 release dates the start of that window to October 4, 2014. The court entered the consent order on July 26, 2021, issued under the parties' settlement agreement, for a four-year term (consent order page 1 and paragraph 32).

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 .

United Tows not only disregarded the legal rights of servicemembers, it made hurtful and dismissive comments about a member’s military service.

We were appalled to learn that this Airman came home from basic training to find his car sold at auction.

Who was covered

The airman, a Senior Airman by the time of the order, paid by name, and four additional persons the United States determined were harmed, whose names and amounts it gave United Tows (consent order paragraphs 12 and 13). The four had one year from entry to return a release (paragraph 14). The release form covered only Section 3958 claims and left any claim under other SCRA sections intact (Exhibit C).

What the settlement paid

• $20,000 to the Senior Airman, payable within ten business days of entry by check to counsel for the United States, which was not to hand it over before he signed a release (consent order paragraph 12).
• Up to a total of $20,000 for the four additional persons, each entitled to a pro rata share based on the auction sale price of his or her vehicle, with each check due within ten business days of notice of a signed release (paragraphs 13 and 15). DOJ's 2021 release calls it a $20,000 fund to be shared by the four, and its case page describes a total of $40,000 to compensate five.
• Within 30 days, a request to each of the three major credit bureaus to remove negative entries resulting from United Tows' reports of, or attempts to collect, any balance; no pursuit of towing, storage or deficiency balances on these vehicles, with indemnity against third parties; and no set-off or refusal over an earlier release or waiver (paragraphs 16, 18 and 19).
• A $10,000 civil penalty within 30 days (paragraph 20). For the order's term, annual SCRA training for drivers, office staff, auction coordination staff and managers, and a report to the United States every three months of any SCRA or military-related complaint (paragraphs 9 and 22).

Why this case matters

Whether a tow lot believes the owner does not decide anything. By the complaint's account, a woman who said she owned United Tows told a recruit she did not believe he was a servicemember, and the company towed his car while he was in basic training, where restrictions kept even his friend from reaching him, then sold it while he was in technical training. The protection in Section 3958 turns on the owner's service, not the lienholder's opinion of it. The order made United Tows check what owners and third parties had told it, examine the vehicle and its contents, and search the DMDC before any lien sale, and offer a waiver only on a form that gave up any deficiency, towing and storage charges (paragraph 7 and Exhibit A).