Justice Department settles case with North Carolina towing company over violations of Servicemembers Civil Relief Act

The owner and operator of Goines Towing & Recovery in North Carolina settled with the Justice Department this week to resolve allegations he violated the Servicemembers Civil Relief Act (SCRA) in towing and selling servicemembers’ vehicles without disclosing that fact to the court.

Billy Joe Goines based his business near Marine Corps Base Camp Lejeune, but he was accused in March of auctioning, selling or otherwise disposing of motor vehicles owned by eight servicemembers. SCRA requires towing companies to file affidavits stating if vehicles’ owners are in military service before a court can authorize selling off stored vehicles. It provides financial and housing protections to servicemembers by demanding that, if owners are serving, courts cannot authorize sales until they appoint attorneys to represent the interests of the servicemember.

If the attorney were to subsequently request a postponement, courts have to grant that request and postpone for at least 90 days.

That did not happen here. Instead, the DOJ alleged that Goines either failed to file or filed inaccurate military affidavits. More egregiously, he was accused of filing affidavits stating he was unable to discern owners’ military connections even when vehicles were towed directly from military installations, bore military decals or he was informed by vehicle owners or their spouses that the owner was in active military service.

“Goines took a Marine Corporal’s SUV from a parking lot near Camp Lejeune while he was deployed in Okinawa,” U.S. Attorney Michael Easley Jr. of the Eastern District of North Carolina said. “Then Goines asked a court to let him sell it and keep the proceeds, without ever flagging the Corporal’s service for the court. Servicemembers sacrifice a lot — and, in many cases, everything. Debt collectors and towing companies shouldn’t be allowed to take and sell their property behind their backs. The Justice Department will vigorously enforce servicemembers’ rights under the SCRA. Try to illegally take property from a Marine and find out.”

It was the first case brought against a towing company by the U.S. for violation of that SCRA provision. The settlement, if approved by the U.S. District Court for the Eastern District of North Carolina, will see Gaines pay out $66,805.06 to servicemembers for his actions, forgive storage fees assessed to them, attend SCRA training and roll out new policies and procedures to comply with SCRA.