Towing company improperly sold off troops’ cars, court rules - Army Family resources - Army Times

Towing company improperly sold off troops’ cars, court rules

The Justice Department has scored a victory for service members against a Norfolk, Va., towing company that sold off more than 20 service members’ cars without court orders in recent years.

The civil case is not over; it will go to trial next year to determine damages owed to the service members whose vehicles were towed by B.C. Enterprises Inc., doing business as Aristocrat Towing.

But the decision clarifies protections for troops under the Servicemembers’ Civil Relief Act and sends a clear message to industry, according to SCRA experts.

The decision affirms that service members “have the right not to have their vehicles sold at auction without a court order ... even if they did not notify the towing company of their military status in advance,” said Justice Department spokesman Alejandro Miyar.

Attorneys for the towing companies could not be reached for comment by press time.

The government alleged the company towed Navy Lt. Yahya Jaboori’s car from his condominium lot in June 2007, put it in company-owned storage, placed a storage lien on the property — which Jaboori couldn’t pay, since he was deployed and unaware of what had happened — and then sold the car at auction without a court order.

Jaboori could not be reached for comment, but the original complaint noted that his vehicle had a military base sticker on it.

“Even if the defendants exercised utmost care in investigating their victims’ military status, they face liability for their actions,” wrote Judge Robert Doumar of the U.S. District Court, Eastern District of Virginia, in his Nov. 6 order.

Military officials said this ruling could have a favorable impact on future mortgage foreclosure cases under the SCRA.

“This will send up an industry-wide flare,” said Army Col. Shawn Shumake, director of legal policy for the undersecretary of defense for personnel and readiness.

The key problem in this case, experts said, was the lack of a court order, a protection provided in the SCRA.

The company argued it is not always possible to determine whether a vehicle’s owner is on active duty, making strict liability an “impractical standard.”

Company attorneys also argued that some service members whose cars were towed knew about the storage lien and potential sale of their vehicles, and have no legal claim because they took no action to redeem their vehicles.

But Doumar said requiring a service member to take such action would contradict the purpose of the law, “particularly since even a service member with notice of the lien might be unable to effectively defend” his interests.

WHAT’S IN THE LAW

Section 537 of the Servicemembers’ Civil Relief Act states that without a court order, a person holding a lien on the property or effects of a service member cannot foreclose or enforce any lien during any period of military service by the member and for 90 days afterward.

The U.S. District Court, Eastern District of Virginia, ruled that Section 537 is a “strict liability” provision, meaning service members do not need to take any action to be protected.