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Bucks Blog: A Car Towing Tale of Woe

May 14, 2013 by Leave a Comment

A car being towed in New York City.Chang W. Lee/The New York Times A car being towed in New York City.

When we were looking for a home in a new city a few years ago, my family took a welcome break from house hunting to eat dinner.

We emerged from the restaurant just in time to see our car speed by — on the back of a tow truck. Apparently, we had mistakenly entered the incorrect parking space number in an automatic payment machine. We had paid — for the wrong space. So an alert local towing firm had pounced.

Our little adventure ended an hour or so later, after we tracked down the location of the tow lot and retrieved our car. The tow operator didn’t want to hear our argument about having paid for the wrong space, and the children were cranky, so we just paid the fee and went on our way.

But things didn’t go so easily for Robert Pelkey of Manchester, N.H., who sued a towing firm after it hauled away his car and then sold it, even though his lawyer told the towing firm he hadn’t abandoned it and wanted it back.

The towing firm invoked a federal transportation law to argue that his claim under a New Hampshire consumer law was invalid. The towing suit made it all the way to the United States Supreme Court, which this week found in Mr. Pelkey’s favor.

Here’s Mr. Pelkey’s tale of towing woe. In February 2007, a firm called Dan’s City Used Cars towed Mr. Pelkey’s 2004 Honda Civic from its parking spot because he had failed to move it during a snowstorm, per the policy of his apartment complex.

It turned out that Mr. Pelkey was ill, and ended up in the hospital to have his foot amputated shortly after the car was towed. He suffered a heart attack while in the hospital, and stayed there for nearly two months, according to a brief filed by his lawyers.

A notification mailed by Dan’s City to Mr. Pelkey was returned, according to the court’s opinion, so the firm scheduled the car for auction. When Mr. Pelkey did return home and found that his car was gone, his lawyer located the car and offered to pay any charges owed to reclaim it. But Dan’s City sold it anyway, without paying Mr. Pelkey anything for it.

Mr. Pelkey sued under a state consumer law and the state’s highest court found in Mr. Pelkey’s favor, but Dan’s City appealed to the United States Supreme Court. On Monday, the court ruled that the federal law didn’t trump Mr. Pelkey’s claim and that his suit was valid. So he may yet be compensated for his troubles.

Adina Rosenbaum, a lawyer for Public Citizen and Mr. Pelkey’s co-counsel, said the Supreme Court “affirmed that people can bring state law cases against towing companies that tow their cars and sell them against the owners’ wishes.”

Katherine Strickland, a lawyer for Dan’s City, couldn’t immediately be reached for comment.

Have you ever had a car towed? What was your experience? And how much did it cost to have it returned to you?

Article source: http://bucks.blogs.nytimes.com/2013/05/14/a-car-towing-tale-of-woe/?partner=rss&emc=rss

Filed Under: Your Money Tagged With: , ,

Case Study: Wiped Out by Sandy, an Owner Sizes Up the Risk in Starting Over

February 6, 2013 by Leave a Comment

THE CHALLENGE Deciding whether Mr. Lucci, 60, should put his house up as collateral to get a Small Business Administration loan in an attempt to revive his business, which is based in Stapleton, on Staten Island, half a block from the waterfront. Last October, Hurricane Sandy’s surge swamped the company’s 6,000-square-foot lot and garage, submerging 57 cars in salt water. (Three vehicles that were on garage lifts avoided damage.) Lost were an ambulance worth $20,000, taxi cabs that cost more than $5,000 and a police crime scene unit vehicle valued at more than $16,000.

“I have mechanics, they all say they’re totally junk,” Mr. Lucci said. “It took five hours to destroy the business.”

After the storm, he spent weeks trying to start cars and ripping out rotting plaster board from his office. The $25,000 tow truck starts but keeps slipping out of gear. He figures it will cost $400,000 to replace the cars and refurbish the office, the shop and the equipment. Unfortunately, the cars were insured only for liability — adequate, he thought, for transporting cars from Point A to Point B. (Once they are on a movie set, his vehicles are insured by the production.)

THE BACKGROUND Mr. Lucci began supplying cars to the movie industry in 1975 at age 24. Lucci Auto Props, a business he owned with his brother, was based in Red Hook, Brooklyn. After the two had a falling out, Mr. Lucci said, he walked away from the company and opened a shop that sold exotic cars. In the late ’80s, he took a sales job with a luxury carmaker.

But he never lost interest in the movie business. In 1993, he opened Automobile Film Club, renting a lot from the city’s Economic Development Corporation. Mr. Lucci said he worked hard to get production companies the exact vehicles they wanted and stayed on set to make sure everything worked.

Over time, his fleet grew to 350 cars and 14 full-time employees, mostly secretaries and mechanics. The company survived the long drought after 9/11, when the mayor’s office stopped issuing film permits. Mr. Lucci said a $45,000 S.B.A. loan helped him get by and has been paid back. In 2008, his best year, the business grossed $1.8 million.

The following year, the city ended the company’s lease. Unable to find a large, affordable parcel for his fleet, Mr. Lucci downsized, buying one 10,000-square-foot lot and renting another. He sold hundreds of cars. The payroll dwindled to him and his wife.

During Hurricane Irene in 2011, Mr. Lucci said 30 of his cars were damaged. Because he was carrying only liability insurance on his vehicles, he could not claim damages. The S.B.A. offered him a $6,000 loan at 4 percent interest. He thought the amount was too small, so he turned it down. The following year, he said, was a struggle.

When Hurricane Sandy hit, Mr. Lucci’s vehicles were still insured for liability only. His office and garage were insured, as was $30,000 in equipment. But, like many business owners, he carried no protection against floodwaters or business interruption. After the storm, Mr. Lucci said, he received $5,800 for wind damage and nothing for what was destroyed by water.

THE OPTIONS Mr. Lucci has concluded he has two options. He can close the business for good, or he can borrow a lot of money and try to make another go of it.

New York City has been offering emergency loans to small businesses of up to $25,000, interest-free for the first six months and 1 percent interest for the 24 months after that. The city approved Mr. Lucci for such a loan, but he said it would barely make a dent. “I couldn’t even fix my office,” he said.

A local office of the Small Business Administration has urged him to apply for a fixed-rate disaster loan. The agency has said businesses can obtain as much as $2 million at 4 percent interest for up to 30 years. One drawback? The S.B.A. told him he would be required to have flood insurance, and Mr. Lucci fears that could cost him up to $25,000 a year.

Article source: http://www.nytimes.com/2013/02/07/business/smallbusiness/wiped-out-by-sandy-an-owner-sizes-up-the-risk-in-starting-over.html?partner=rss&emc=rss

Filed Under: Small Business Tagged With: , ,