As we have discussed in this blog, the American Rule of attorney’s fees requires each side to pay their own way unless there is a statute or contract that says otherwise. Unfortunately, consumer protection lawsuits are one of the types of statutes that carry an attorney’s fees provision. Even more unfortunate, these are exactly the type of lawsuits a tow company can expect to be hit with by a disgruntled consumer.
Kansas City, like many other cities, has a city owned tow lot where police ordered tows are stored. The City sets the tow rates which then must be paid by the owner of the vehicle before the vehicle is released. All seems pretty ordinary, right? Except it’s not. Recently, the American Civil Liberties Union (ACLU) filed a lawsuit against the City of Kansas City and its Board of Police Commissioners for what it calls “predatory impound and towing practices.”
Attorneys get asked this question so much it bears repeating: if (insert name of tow company here) sue (insert name of vehicle owner here) who stiffed me on my tow bill, I can make him pay my attorney’s bill right? Unfortunately, and it pains for me to have to say this, the answer is NO! The American rule provides that each party is responsible for paying its own attorney's fees, unless specific authority granted by statute or contract allows the assessment of those fees against the other party. What this means is that absent rare exception, tow companies are responsible for their own lawyer.
At the 2018 Florida Tow Show, Michael McGovern and I were pleased to present our seminar on human resources issues in the tow industry. Much of this seminar was spent discussing wage payment practices. In reflecting on the seminar, I was again reminded of the many unique features of the tow industry regarding the payment of wages to tow drivers. Many employees are paid on a commission. Most work is done “outside the office.” Many employees take trucks home at night and on the weekends. Add to this the fact that there are actual laws specific to the tow industry for the payment of overtime wages. All in all, human resources in the tow industry are complicated to say the least.
I heard a horror story the other day. A tow company in rural Kansas had a terrible fire that destroyed nearly every car it was storing. Within hours, the tow company was getting inundated with phone calls from vehicle owners asking for the tow company’s insurance information so they could make a claim. The tow company called its agent, who was not experienced in selling insurance to tow companies, to submit the claim. After a few anxious hours, the tow company received horrible news: the tow company didn’t have garage keepers insurance and therefore the claim was denied. In a matter of minutes, what should have been an insured claim turned into a potential financial disaster. How can this be avoided?
On May 11, 2017, tow truck driver Scott Bowles was tragically struck and killed by a passing motorist in Bell County, Texas. Scott Bowles left behind his wife, Stephanie, who is also a tow truck driver, and three children. Stephanie Bowles was fortunately able to recover a civil settlement regarding the death of her husband. However, to date, the Bell County, Texas prosecutor has yet to file any criminal charges against the motorist who struck Mr. Bowles despite protests from Stephanie and the local tow community.
I have always been impressed by tow companies’ tolerance for financial risk. The expenses in the tow business are enormous and growing every day. At the end of the line, there is one company owner who has likely financially guaranteed all of these risks and the liability for the same. It is understandable that an owner might want to mitigate these risks in any way that they can.
Some tow companies will do whatever it takes to get on a tow rotation. I’ve seen tow companies come up with all sorts of creative ways to achieve this. What I’ve never seen is the Wall Street Journal covering tow rotations. I’ve also never scene a tow company facing a high profile criminal indictment for tow rotation practices. But this was exactly the case in a February 21, 2018 article captioned “10 New York City Tow-Truck Firms Indicated.”
When Michael McGovern and I started this website in 2016, we wanted to create a place where tow companies (as opposed to tow drivers) could safely and quickly obtain accurate legal information from attorney’s knowledgeable in the towing industry. In doing so, we recognize that, maybe more now than ever, there is a big difference between tow company owners and tow drivers as much of the risk tow companies now face comes from claims made by drivers against their employers. We are careful not to publicize this information in other publications for fear that it may be read by tow companies and drivers alike. However, we feel comfortable publishing it here because our subscribers are owners or high level employees.
When a tow company is being sued for minimum or overtime wage violations, one of the first issues both parties must confront is how many hours the tow driver actually worked. Because of the unusual nature of the tow business where drivers are on shift for long periods of time but not actually performing tows, it is not uncommon for the tow company to say “I have no idea how many hours claimant worked.”