SCRA Violations Cost CA Company $160K

SAN DIEGO (FOX 5/KUSI) — A San Clemente towing company has agreed to pay thousands of dollars for allegedly illegally auctioning military members’ cars while they were deployed overseas.

The Justice Department said Tuesday that S&K Towing Inc, will pay $160,000 to resolve a lawsuit alleging that it violated the Servicemembers Civil Relief Act (SCRA)

The federal law protects active-duty service members from certain civil and financial obligations so they can focus on their military duties — like foreclosure protections on home loans, car repossession protections and protection from default judgments in civil court even when not present.

According to the lawsuit, the San Diego towing company was required to obtain a court order before selling or disposing of active-duty servicemembers’ cars under the law.

Instead, the lawsuit filed on March 25 alleges that S&K Towing towed as many as 148 cars, many from Marine Corps Base Camp Pendleton, and illegally sold or disposed of them.

In May 2024, a military legal assistance attorney contacted the towing company and explained that it was violating the SCRA.

Officials said a manager at the towing company responded, “We do this all the time,” and the company continued to sell and get rid of military members’ cars despite being registered to addresses on base or being told that the owner was in the military.

S&K Towing will pay $160,000 to servicemembers who the Department of Justice said were “harmed by the company’s conduct.”

“Members of the U.S. Armed Forces have a legal right to be protected while they serve our nation overseas,” said First Assistant U.S. Attorney Bill Essayli for the Central District of California in the news release. “This settlement will provide compensation to impacted service members and serves as notice to all businesses to comply with federal laws that protect our military.”

While the towing company is allegedly shutting down its operations, the owners have agreed to comply with the SCRA if they ever reenter the towing industry again.