In the ongoing annals of the trucking industry’s running battle against the asphalt piracy of excessive towing charges, all too often owner-operators of heavy trucks get caught in the cross-fire. The scenario is not unusual: an owner-operator of a truck is under contract with a trucking company to haul a load of cargo, and while en route his truck becomes mechanically disabled. The disablement might be the result of a mechanical breakdown or some other problem with the engine or tires that interferes with the truck’s drivability, but does not involve any damage to the truck. The owner-operator manages to bring his truck to a safe stop outside the lanes of travel, so that it is not blocking traffic. Police respond to the scene, and they or someone else summons a towing company. Over the owner-operator’s protest, the towing company hauls away the truck and trailer, impounds them, and presents a hefty bill to the owner-operator for the tow company’s “services,” tabulated at the rate of several-thousand dollars per mile for the towing and hundreds of dollars per day for storage. The owner-operator lacks the funds to pay his truck’s ransom, and he submits a claim to his insurer seeking relief.
Negotiations ensue between the insurer, the towing company, the trucking company, and the owner of the trailer, but they break down because of the towing company’s insistence that its charges are the “going rate.” Meanwhile, the owner-operator is out of work because he cannot recover his truck, and he is losing thousands of dollars a week in lost income. The insurer and/or the trucking company want to assist the owner-operator, but they do not want to waive their rights against the towing company. In the words of Theodore Roosevelt, they need A Big Stick.
In a situation such as this, one “Big Stick” just might be the Virginia Consumer Protection Act, Code of Virginia section 59.1-196 et seq. (the “VCPA”). As the statute expressly states, it was enacted “to promote fair and ethical standards of dealings between suppliers and the consuming public.” Va. Code Ann. § 59.1-197. As defined in the statute, a “supplier” means “a seller, lessor, licensor, or professional who advertises, solicits, or engages in consumer transactions, or a manufacturer, distributor, or licensor who advertises and sells, leases, or licenses . . . services to be resold, leased, or sublicensed by other persons in consumer transactions.” Va. Code Ann. § 59.1-198. The VCPA defines “consumer transaction” to mean, inter alia, the “sale . . . or offering for sale . . . of . . . services to be used primarily for personal, family or household purposes.” Va. Code Ann. § 59.1-198. “Services” is defined to “include[ ] but shall not be limited to (i) work performed in the business or occupation of the supplier, [or] (ii) work performed for the supplier by an agent whose charges or costs for such work are transferred by the supplier to the consumer or purchaser as an element of the consumer transaction. . . .” Id.
Under these definitions, a towing company generally qualifies as a “supplier” – a seller or professional who advertises or sells towing services offered in “consumer transactions,” i.e. the “sale . . . or offering for sale . . . of . . . services to be used primarily for personal, family or household purposes.” Va. Code Ann. § 59.1-198. But why does that matter here?
The VCPA enumerates a number of prohibited practices in connection with consumer transactions, which are set forth in Code section 59.1-200.A. That section prohibits, among other things:
The VCPA authorizes individuals who have suffered damages as a result of a supplier committing any of the prohibited acts enumerated in the statute to file a civil action against the supplier based upon such violation. See Va. Code Ann. § 59.1-204.A. If the plaintiff proves a violation of the VCPA, he is permitted to recover not only compensatory damages, but the court may also award him his attorneys’ fees and costs incurred in the lawsuit. See Va. Code Ann. § 59.1-204.B. Additionally, if the plaintiff can prove that the defendant willfully violated the VCPA, he may also be awarded treble the amount of his damages. See Va. Code Ann. § 59.1-204.A.
Clearly, the VCPA provides some powerful remedies for its violation. The first, and most fundamental elements to mounting a successful VCPA claim, however, are proof of (1) a consumer transaction involving (2) a supplier, as those terms are defined in the statute. Courts in Virginia have previously held that the VCPA does not afford relief in disputes between merchants or commercial service providers, as such disputes do not involve “consumer transactions” within the VCPA’s meaning – the “sale . . . or offering for sale . . . of . . . services to be used primarily for personal, family or household purposes.” Va. Code Ann. § 59.1-198 (emphs. supp’d). See, e.g., Microsoft Corp. v. #9 Software, Inc., No. 4:05cv106, 2005 U.S. Dist. LEXIS 36710 (E.D. Va. Dec. 15, 2005) (holding that a corporate plaintiff had failed to allege a “consumer transaction” where the corporation did not purchase certain certificates of authenticity from the defendant, also a corporation, for a personal, family, or household purpose). The statute does not define “personal” or “household,” leaving it to the courts to interpret and apply them within the VCPA’s context. Whether the kind of questionable tow charge described above might be rooted in the “personal” use of a towing service depends largely on the specific circumstances in each case.
In the proposed example, the driver of the truck is an owner-operator, i.e., an individual who owns his truck and drives under contract for a commercial carrier. Even if he is an unwilling user of the tow company’s service, he nevertheless is using it, and he is being charged for the service. Being the individual owner of the truck, without more, might or might not suffice to establish a “personal” purpose for using the service. If the driver can also prove, however, that at times he uses his truck for purposes other than hauling commercial freight, such as occasional personal errands, assisting friends who need something large hauled, or other non-commercial tasks, then such evidence might help demonstrate a “personal” purpose associated with the tow. Additionally, as a self-employed individual, the owner-operator might be able to argue that his personal income requires his possession and control of the truck, of which the tow company’s impound is depriving him. Here again, the specific facts and circumstances of each case would largely drive the plaintiff driver’s ability to prove that the VCPA is implicated.
If the owner-operator can allege sufficient facts to suggest a “consumer transaction,” the next step is to demonstrate the tow company’s commission of one of the prohibited acts enumerated in the VCPA. Turning again to the example outlined above, under the facts the Virginia Towing and Recovery Incentive Program (“TRIP”) protocol arguably is not implicated: the truck was not blocking any lanes of travel, and it was not turned over. It is not even stated in the example that the truck was being operated on an interstate highway within one of the designed TRIP zones. If none of these circumstances exist, then irrespective of whether the police summoned the towing company, the towing company arguably did not have legal authority to tow away the truck without the owner-operator’s permission. If we assume that the tow company’s personnel at the scene represented to the owner-operator that they were authorized by law to tow the truck in order to get the owner-operator to extend them even limited permission, or to persuade the owner-operator not to summon the police to intervene to prevent the tow, then the company might potentially have violated the VCPA’s prohibition against “[m]isrepresenting the source . . . approval, or certification of . . . services. . . .” Va. Code Ann. § 59.1-200.A.2 (emph. supp’d). And as tow companies approved by VDOT under TRIP are required to meet continuing education requirements on the program and what it allows and requires, such a misrepresentation might even be said to have been willful – a knowing and intentional violation of the statute. If so, then there is the potential for a treble-damage award.
Another act prohibited by the VCPA is “[m]isrepresenting by use of any written or documentary material that appears to be an invoice or bill for . . . services previously ordered.” Va. Code Ann. § 59.1-200.A.11. Perhaps the tow charge at issue is $25,000 for the tow itself, without taking into account the daily impound fee. Perhaps the tow was over a modest distance – say, six (6) miles. The tow charge would then come to approximately $4,166.67 per mile to tow a truck that was not interfering with traffic flow and was only mechanically disabled – i.e., disabled in such a way that a mechanic responding to the scene could render the truck safely operable within a reasonable amount of time. The tow company has nevertheless towed the truck and attached trailer, and presented the owner-operator with a written invoice reflecting the hefty charges demanded by the company to release the truck. Has the company in this scenario misrepresented the value of its service by use of a written invoice or bill, in an effort to force the owner-operator to pay an unreasonable charge? Once again, the determination will be fact-specific, but under the scenario proposed the answer is – maybe. What kind of evidence might exist to demonstrate the unreasonableness of the charge, other than its amount? How many tow-company personnel were needed to perform the tow? How does the charge compare to that typically charged for other heavy trucks in the local area? Is there evidence of collusion between tow companies to artificially increase the amounts they charge to owners of heavy trucks? The latter point, in particular, might go far to demonstrate not only that the charge is unreasonable, but also that the tow company knowingly misrepresented its service’s value, so as to implicate the possibility of a treble-damage award.
There is also the VCPA’s catch-all prohibition against “[u]sing any other deception, fraud, false pretense, false promise, or misrepresentation in connection with a consumer transaction.” Va. Code Ann. § 59.1-200.A.14. Even if the factual scenario outlined above were not deemed to fit the VCPA’s prohibition against misrepresenting the approval of the service at issue, or the statute’s prohibition against making a misrepresentation based upon a written invoice, the example potentially could be said to involve some “other deception, fraud, false pretense . . . or misrepresentation. . . .” Id. Thus, in the example described it would be worthwhile to allege a violation of this portion of the VCPA, as well.
It does not appear that the VCPA has been tested as a tool for combatting tow-charge fraud at this point, and whether it could be used effectively in this manner, therefore, is unknown. Given the uncertainty of whether it could be so wielded, however, it may offer a valuable mechanism for opposing the kinds of extreme tow charges which the trucking industry has faced in recent years. The prospect of an award of attorneys’ fees and treble damages, in particular, can be a daunting prospect which could make unscrupulous tow-company owners think twice about attempting to force owner-operators, or their insurers, into paying unreasonable charges. Coupled with more typical avenues of relief, such as common-law claims for conversion and fraud, the VCPA might just serve as the kind of Big Stick that allows the victims of such tow-charge schemes to speak more softly than they have had to up until now in order to recover their property and avoid significant losses of business income.
If you have any questions about this article, or about tow-charge fraud in general, please contact Kevin Streit (804-377-1270) at email@example.com or Steve Setliff (804-377-1261) at firstname.lastname@example.org.