To draw upon another gambling metaphor, the towing industry’s already loaded dice are about to be weighted even more in that industry’s favor due to two bills pending in the 2023 session of the Virginia General Assembly that, at the time of this writing, appear destined for passage into law: SB 978 and HB 2392. As the adage “forewarned is forearmed” is nowhere truer than when dealing with those towing operators who take unfair advantage of trucking companies, cargo owners, and their respective insurers, this article is offered as advance notice of what is coming down the road for the trucking industry in Virginia, both figuratively and literally, when it comes to towing and recovery charges, and disputes over excessive invoices for such services.

First, the (semi) good news – SB 978. That bill provides certain amendments to Code of Virginia § 46.2-644.01, an existing statute which creates a lien against tractors, trailers, and other property on the part of towing companies in certain circumstances, including where a towing company has been summoned by the police to clear an accident scene. SB 978 strengthens a towing company’s hand even further than the present iteration of Code section 46.2-644.01 already does in terms of lien rights, as one of the amendments provided in the bill is the addition of language to the statute’s subsection F to establish that the towing company “shall have an immediate lien upon any truck, tractor truck, or combination of vehicles, including any power unit, tractor, trailer, or semitrailer in the combination.” Whereas the statute’s present language does not afford such an “immediate” lien, SB 978’s language creates an instantaneous lien in the towing company’s favor.

The “good” news, such as it is, is that the lien created by the bill’s language does not apply to cargo. For too long, certain towing operators have refused to permit trucking companies or cargo owners to access and offload cargo aboard trailers withheld by the towing companies, in order to exert greater leverage on the trucking company, the cargo owner, or an insurer to pay an exorbitant towing invoice. In the case of perishable goods, such as meats, produce, and frozen products, that tactic often resulted in cargo being ruined, representing a financial loss to the cargo owner, the trucking company, and/or their insurers. Not only does SB 978 omit cargo from the property subject to a towing company’s “immediate” lien under subsection F, but the bill specifies in language to be added to subsection E of the statute that “[a]ny lien created under this section shall not extend to any personal property or cargo that is not attached to or considered to be necessary for the proper operation of any motor vehicle, and it shall be the duty of any keeper of vehicles to permit the owner of the vehicle or cargo to access the vehicle in order to recover his personal property or cargo. . . .” (emphs. supp’d). Thus, now there will be no question whatsoever that a towing company may not refuse to allow cargo aboard an impounded trailer to be offloaded until the towing invoice is paid.

So much for the (marginally) good news. The worse news is HB 2392, which will create a new statute, Code of Virginia § 46.2-1231.2, that provides:

In any civil action brought by a towing and recovery operator to recover allowable costs pursuant to § 46.2-1212.1 or 46.2-1217 or to enforce a lien pursuant to § 46.2-644.03 related to towing and recovery services rendered as a result of a request made by any local or state law-enforcement officer or other government official acting in his official capacity, the towing and recovery operator may include reasonable attorney fees and costs for pursuing such civil action as a part of the damages. Such reasonable attorney fees and costs may be awarded if the court finds that the towing and recovery operator is entitled to any monetary award for the underlying claim.

The new statute created by HB 2392 will therefore create a one-sided right on the part of a towing company to seek recovery of its attorneys’ fees and costs whenever it sues a trucking company or cargo owner to collect payment for a towing invoice, no matter how outrageous or insupportable the charges invoiced, so long as the lawsuit results in “any monetary award” for the towing company’s claim. The statute will create no similar right for a trucking company or cargo owner that successfully defends itself against such a lawsuit, nor does HB 2392 propose the creation of a separate statute that would afford such a right to a trucking company or cargo owner. The clear intent of the statute is to bully trucking operators and the owners of cargo transported on Virginia’s highways into refraining from disputing excessive towing and recovery charges, as even a judgment only partially favoring a towing operator can now result in an award of attorneys’ fees and costs to the tow company. While such an award would be within the court’s discretion and not mandatory, the new statute, Code section 46.2-1231.2, nonetheless represents a clear and radical departure from the status quo, whereby each party in such a lawsuit must bear its own fees and costs.

There is, perhaps, one slim ray of sunshine that can be discerned through HB 2392’s gloom: by its terms, the statute does not grant a towing company the right to seek an award of its attorneys’ fees and costs if a trucking company or cargo owner sues the towing operator. The new statute’s language is precise in stating that its provision for an award of fees and costs applies “[i]n any civil action brought by a towing and recovery operator. . . .” (emph. supp’d). Thus, in the event of a dispute over a towing invoice, a trucking company or cargo owner that proactively opts to file a lawsuit against the towing company for declaratory judgment or, depending on the facts, alleging a claim of conversion, fraud, or breach of the contractual implied covenant of good faith and fair dealing might still be able to turn the tables on an unscrupulous towing operator and deprive it of a right to seek attorneys’ fees and costs. Even if the towing company were to file a counterclaim in such a lawsuit, the defendant towing company would not be instituting a new civil action “brought by” the defendant and, thus, it should not be permitted to seek an award of fees and costs.

The moral to this particular story is that now more than ever, trucking companies and cargo owners should not passively permit themselves to be bullied by towing operators who demand more than the law and equity allow for their services. In the event of a dispute over towing and recovery charges, the best policy in dealing with an intractable and rapacious towing operator is to act quickly to take the judicial high ground, choosing a forum favorable to the trucking company or the cargo owner and framing the issues in the manner most conducive to achieving a just and appropriate outcome. In order to do so, engaging competent and experienced legal counsel quickly is paramount, in order to determine whether litigation makes sense under the facts at hand and, if so, to take legal action promptly to safeguard the property owner’s rights.

If you have questions on this point or others, please do not hesitate to contact Kevin Streit (kstreit@setlifflaw.com) at 804-377-1270, or Steve Setliff (ssetliff@setlifflaw.com) at 804-377-1261.