OLYMPIA — As a result of a lawsuit filed by Attorney General Bob Ferguson, a Pierce County Superior Court judge recently ruled that a Tacoma-based towing company and its owner, Kristine Zachary, illegally auctioned off vehicles owned by active-duty military service members.
Judge Michael Schwartz ruled that Burns Towing Inc. violated the Servicemembers’ Civil Relief Act, or the SCRA, a federal law that provides protections to active duty service members, including the protection from having their property sold at auction while on active duty. This law requires companies to obtain a court order before selling at auction vehicles owned by active duty service members.
Military service is often associated with difficulties, including long periods away from family and friends, and frequent moves to new duty stations. Consequently, Washington service members who are called to active duty enjoy important legal protections under both the Washington State Servicemembers Civil Relief Act and the nearly identify federal Servicemembers Civil Relief Act (SCRA). In 1943, the United States Supreme Court explained that the purpose of these laws is to “protect those who have been obliged to drop their own affairs to take up the burdens of the nation.”
One of the many legal protections afforded service members under the SCRA is the requirement that a person or entity holding a lien on an active duty service member’s property — including a towing company holding a storage lien against a motor vehicle — must obtain a court order prior to enforcing the lien by selling the vehicle at auction.
Ferguson filed the lawsuit after Burns Towing ignored a complaint from an active duty Navy sailor.
Under the court order, Burns Towing will be required to pay restitution to all service members who suffered financial losses when the company towed their car. There will be a hearing at a future date to determine whether Burns towing will pay an additional penalty for violating the law.
Additionally, the court found that Burns Towing and its owner committed unfair acts and practices under the Consumer Protection Act by failing to investigate whether or not the owners of vehicles it sold at auction were active duty service members, including failing to using the free, publicly available database operated by the Department of Defense.
“Washington service members earned these important protections while they are on active duty serving our nation,” Ferguson said. “These men and women earned the right not to worry about their property being illegally sold while they’re serving us on active duty. Burns Towing disregarded these important legal protections for our military personnel. I will continue to enforce these laws to make sure service members have the protections they have earned.”
In September 2018, Ferguson filed a lawsuit in Pierce County Superior Court against Burns Towing for illegally auctioning off a military service member’s vehicle while he was on active duty. According to the Attorney General’s Office (AG), Burns Towing had no policies and procedures in place to comply with the SCRA.
After filing the lawsuit, the AGO investigated whether Burns Towing unlawfully sold other active duty service members’ vehicles at auction without first obtaining a court order. The Attorney General’s Office says that they uncovered evidence that Burns Towing sold as many as 35 service members’ vehicles while they were on active duty.
According to the AGO, local Navy sailor Petty Officer 2nd Class Alex Vaughn left his car at an apartment complex in Pierce County, while deployed on an aircraft carrier. Burns Towing legally towed the vehicle, however, the company proceeded to sell it without verifying the military status of its owner and obtaining a court order as required by law.
When Vaughn returned home and realized his car had been impounded, he contacted the Navy Legal Assistance Office. JAG attorney Sarah Trent sent a letter to Burns Towing regarding the towing company’s violation of the law. The letter from the Navy informed Burns of its legal obligations under the law, and, according to the AGO, Burns Towing ignored the letter.
After Burns Towing ignored the first letter from the Navy Legal Assistance Office, Vaughn then contacted the Attorney General’s Office. The Attorney General’s Office responded to Vaughn’s complaint by writing to Burns Towing and asking Burns Towing to respond to Vaughn’s complaint. Kris Zachary, the owner of Burns Towing, responded to the complaint without acknowledging the company’s legal obligations under the SCRA. Zachary’s response confirmed that Burns Towing sold Vaughn’s vehicle at auction without making any attempt to verify whether the vehicle was owned by a service member on active duty. The AGO maintains that Zachary did not offer to make any restitution to Vaughn, or promise to comply with the SCRA in the future.
Despite a large military presence within Pierce County — and the high likelihood that a towed vehicle may be operated by an active duty service member — the AGO claims that Burns Towing had not developed policies or procedures to comply with the SCRA prior to the Attorney General’s lawsuit. In addition, the AGO claims that Burns Towing failed to take reasonable steps to determine whether the vehicles it sold at auction belonged to active duty servicemembers.
The Department of Defense provides an active-duty service member database that companies can use to verify military status. This search, available for free on the SCRA website, requires either a date of birth or a social security number to verify a person’s military status. Without that information, a company can pay a private company about $35 to run a search for them. Debt collectors routinely use these resources to avoid violating the SCRA. The AGO maintains that Burns Towing did not use this database prior to the Attorney General’s lawsuit.
After Ferguson’s lawsuit, Burns Towing began running searches to determine whether the vehicles it planned to sell at auction were registered to active duty service members. Judge Schwartz ordered Burns Towing to continue complying with the SCRA’s protections.
