In my opinion, some tow company owners are too nice to their employees. I’ve seen many an owner pay for an employee’s mistakes (literally), such as paying for a traffic fine or for the damage an employee caused, only to have the employee fail (literally) to repay the favor. When this happens, tow companies are sometimes quick to immediately “dock” the employee’s paycheck to recover any monies that were spent on the employee.
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.
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.
When a tow company takes possession of a vehicle, a variety of legal obligations are impacted. One of these is the creation of a bailment. A bailment describes a legal relationship where physical possession of property is transferred from one person to another person. In the tow business, a bailment is established once a motor vehicle belonging to someone else comes into the possession of the tow company. The owner of the vehicle is “bailor” and the tow company is the “bailee.” But what do these fancy legal words mean?
In my neck of the woods, it is commonplace for tow companies to monitor the police radio waves with an electronic scanner. This has become even more frequent with the advent of the cell phone and download of a police scanner app. But is the use of a police scanner itself an illegal act?
In Demma v. Chicago 24 Hour Towing, Inc., the United States District Court for the Northern District of Illinois provided further clarification on the Motor Carrier Exemption to the Fair Labor Standards Act. In this case, a group of tow truck drivers contended that they were not paid overtime wages as required by the Fair Labor Standards Act, which generally requires that tow truck companies compensate any employee who works in excess of 40 hours per week at a rate 1.5 times the normal hourly wage.