Justice Department Reaches Settlement with the City and County of Honolulu and All Island Automotive Towing for Illegally Auctioning Servicemembers’ Cars

News Release 18-192 from US Department of Justice, February 15, 2018

The Justice Department today announced it has reached an agreement with the City and County of Honolulu, Hawaii (Honolulu or the City) and its contracted towing company, All Island Automotive Towing (All Island Towing), to remedy alleged violations of the Servicemembers Civil Relief Act (SCRA).  The Department’s lawsuit, filed Feb. 15, 2018, alleges that Honolulu and All Island Towing violated the SCRA by auctioning or otherwise disposing of cars owned by protected servicemembers without first obtaining the required court orders.  

Under the agreement, Honolulu must adopt new SCRA-compliant procedures, compensate three servicemembers who complained to military legal assistance attorneys that the City had unlawfully auctioned off their cars while they were at sea aboard Navy ships, and establish a $150,000 settlement fund to compensate other servicemembers whose SCRA rights may have been violated.

The Department launched its investigation after receiving a referral from military legal assistance officer Geoffrey Irving, now a Captain in the United States Marines, alleging that Honolulu had auctioned a marine’s vehicle while he was deployed.  Two Navy legal assistance attorneys, Ms. Sarah Courageous and Lieutenant Commander (LCDR) Lena Whitehead, also requested that the Department investigate Honolulu on behalf of servicemembers whose vehicles had been auctioned while they were deployed.  For more than five years, Ms. Courageous and LCDR Whitehead sent letters to Honolulu’s Corporation Counsel explaining that auctioning active-duty servicemembers’ cars without court orders violated the SCRA, but Honolulu continued the practice.

Marine Staff Sergeant (SSgt.) Orrin Sanford’s car was auctioned while he was aboard a U.S. Navy ship en route to Camp Foster in Okinawa, Japan.  The vehicle, which was towed from the street in front of his home, had decals in the front windshield that are distributed only to Department of Defense employees for base access.  Honolulu mailed a notice to SSgt. Sanford’s base address that it had taken his car into custody, but by the time the notice reached the ship, the City had already auctioned off the car.  SSgt. Sanford’s military legal assistance attorney notified Honolulu that it had violated the SCRA and requested reimbursement for the vehicle, but Honolulu refused.  As a result of Honolulu’s actions, SSgt. Sanford has had to continue making payments on a car that he no longer owns.

Navy Chief Petty Officer (CPO) Timothy Hartzog was also aboard a U.S. Navy ship when he learned that his car had been towed by Pinky Tows, a subcontractor of All Island Towing.  CPO Hartzog executed a Power of Attorney aboard the ship designating a fellow chief petty officer as his agent.  Pinky Tows refused to release the vehicle to that officer or to allow him to retrieve valuable tools and personal items from the trunk.  All Island Towing then disposed of the vehicle and its contents.  In addition to losing valuable tools and irreplaceable personal items, CPO Hartzog had to continue making payments on a car he no longer owned.

Navy Petty Officer Second Class (PO2) Cheri Tarbet was at the end of a six month deployment to the South Pacific when her roommate told her that her car was no longer parked on the street in front of their home.  When PO2 Tarbet returned to Honolulu the following month, she attempted to report the car as stolen and learned from the police department that the car had been auctioned by Honolulu.  PO2 Tarbet never received a notice from Honolulu that it had taken her vehicle into custody.  A military legal assistance officer sent a letter to Honolulu indicating that PO2 Tarbet was an active-duty servicemember and requested restitution, but Honolulu refused to provide any reimbursement.

The Department’s investigation revealed that between 2011 and 2016, Honolulu auctioned 1,440 cars registered to individuals who had identified themselves as servicemembers on City forms during the motor vehicle registration process.  Honolulu’s new procedures will ensure that servicemembers receive notice that their car has been taken into custody by Honolulu, even if they are deployed off island, and requires the City to obtain a court order or a valid SCRA waiver prior to auctioning a car owned by an active-duty servicemember.

“The Justice Department is committed to working tirelessly to protect the rights of the servicemembers who make great personal sacrifices in service to our country,” said Acting Assistant Attorney General John  Gore of the Civil Rights Division  “We appreciate that Honolulu and All Island Towing have been working cooperatively with the Department to reach a settlement that compensates servicemembers who lost their cars and personal possessions and that provides ongoing protections for the thousands of servicemembers stationed in Honolulu.” 

“My office will continue to work with the Civil Rights Division to ensure that servicemembers who dedicate their lives to preserving our security and freedom do not forfeit their rights in doing so,” said U.S. Attorney Kenji M. Price of the District of Hawaii.

The SCRA protects servicemembers from certain civil proceedings that could affect their legal rights while they are in military service.  One of those protections is the requirement that a person holding a lien on the property or effects of an active-duty servicemember obtain a court order prior to enforcing the lien.  By failing to secure court orders before auctioning or disposing of cars owned by protected servicemembers, Honolulu and All Island Towing prevented servicemembers from obtaining a court’s review of whether the auction should be delayed or adjusted to account for their military service.

The SCRA also provides protections for active duty servicemembers in areas such as evictions, rental agreements, security deposits, prepaid rent, civil judicial proceedings, installment contracts, credit card interest rates, mortgage interest rates, mortgage foreclosures, automobile leases, life insurance, health insurance and income tax payments. For more information about the Department’s SCRA enforcement, please visit www.servicemembers.gov.

Servicemembers and their dependents who believe that their SCRA rights have been violated should contact their nearest Armed Forces Legal Assistance Program Office.  Office locations may be found at legalassistance.law.af.mil/content/locator.php.

Attachment(s): 

Download Honolulu Complaint

Download Honolulu Settlement Agreement

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City settles SCRA claims with DOJ

News Release from City and County of Honolulu, February 15, 2018

Honolulu – Today, a Settlement Agreement between the Justice Department and the City and County of Honolulu was reached, settling the complaint filed in the United States District Court, District of Hawai‘i, by the Justice Department in United States v. City and County of Honolulu, alleging that the city sold at auction four vehicles of active-duty servicemembers protected by the Servicemembers Civil Relief Act (SCRA) without court orders or waivers from the servicemembers who owned the vehicles. The auctions occurred between January 1, 2010 and May 16, 2016.  The settlement requires the city to pay a total of $55,857.95 to three of the affected servicemembers. The city is also required to pay a $60,788 civil penalty to the United States and to establish a settlement fund in the amount of $150,000 so that other affected servicemembers, who may be eligible to receive compensation, can be compensated. The complaint and the settlement agreement are attached.

During the course of negotiating the settlement agreement with the Justice Department, the city already had taken steps to improve its procedures in the towing, storage and disposal of vehicles owned by military personnel under the SCRA. In particular, during the motor vehicle registration process, the city is now obtaining information from the servicemembers so that they can more easily be located. To comply with the SCRA, if a servicemember’s vehicle is towed, the city will issue a notice to the last known address and will provide at least 60 calendars days for the vehicle to be claimed before initiating court proceedings.

“The City and County of Honolulu is grateful for the service provided by members of the armed forces,” said Sheri Kajiwara, Director of Customer Services. “We regret our unintentional oversight with a small number of SCRA vehicles, and our department has revised its registration forms to allow for improved identification of servicemembers and the vehicles they own.”

Over the past year and a half, many vehicles were not auctioned while the city verified whether the vehicles were owned by a servicemember protected under the SCRA. As a result, the tow lots are close to full capacity.

“The city wishes to thank military leaders stationed on O‘ahu who have assisted in identifying and locating the owners of these vehicles and also in proactively disseminating information to their servicemembers regarding the proper disposal or storage of their vehicles before departing the island,” Kajiwara added. 

-PAU-