Family Garage, Inc. v. Commissioner of Motor Vehicles
23 A.3d 752, 130 Conn. App. 353 (2011)
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Rule of Law:
A towing company may not charge fees beyond those explicitly authorized by regulation for the nonconsensual towing and release of a vehicle. A subsequent government policy letter clarifying that a specific fee, such as a "steering fee," is prohibited serves as a clarification of existing law, not the creation of a new, non-retroactive rule.
Facts:
- In October 2006, Family Garage, Inc. towed a damaged vehicle owned by Brenda and Daniel Smith to its place of business.
- The Smiths' insurer, Travelers Insurance Company, decided to have the vehicle repaired at a different shop.
- On October 13, 2006, when the owners requested the vehicle's release, Family Garage, Inc. issued an invoice for a $500 "steering fee," which Travelers paid.
- In December 2006, Family Garage, Inc. towed a damaged vehicle owned by Marie Sainvil.
- Sainvil's insurer, Progressive Insurance Company, also opted to have the vehicle repaired elsewhere.
- On December 6, 2006, when Sainvil requested the vehicle's release, Family Garage, Inc. issued invoices for a $750 "steering fee" and a $48 fee for time wasted on the phone, which Progressive paid.
Procedural Posture:
- Travelers Insurance Company and Progressive Insurance Company filed separate complaints with the Department of Motor Vehicles (DMV) against Family Garage, Inc.
- After administrative hearings, the state commissioner of motor vehicles (an administrative agency) ordered Family Garage to pay restitution to the insurance companies and to pay civil penalties.
- Family Garage, Inc. appealed both administrative decisions to the Superior Court (the trial court of first instance).
- The Superior Court issued a memorandum of decision dismissing Family Garage's appeals.
- Family Garage, Inc., as the appellant, appealed the trial court's judgments to the Appellate Court of Connecticut (an intermediate appellate court).
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Issue:
Does a towing company's imposition of a "steering fee" for the release of a vehicle, charged when the owner's insurer chooses a different repair shop, violate state regulations that permit only a standard "tow charge" for nonconsensual tows?
Opinions:
Majority - Bishop, J.
Yes. A towing company's imposition of a 'steering fee' violates state regulations because such fees are not authorized under the existing regulatory scheme governing charges for nonconsensual tows. The court reasoned that state regulations already in effect at the time of the incidents expressly provided that no additional fees beyond the authorized 'tow charge' could be assessed for the release of a vehicle. A policy letter issued by the commissioner in 2007, which explicitly banned steering fees, did not create a new standard but merely clarified the existing prohibition. The court also held that the commissioner's decision was supported by substantial evidence, including the plaintiff's own invoices, which corroborated the complaints and were not unreliable hearsay. Finally, the court rejected the plaintiff's argument that the insurance companies' own potentially illegal conduct was relevant, stating that the culpability of the complainants did not excuse the plaintiff's violation of towing regulations.
Analysis:
This decision solidifies the principle that in a highly regulated industry, any business practice or fee not explicitly permitted by regulation is likely prohibited. It clarifies that an agency does not need to issue specific guidance on every possible violation for a regulation to be enforceable, and that later guidance can be interpreted as a clarification rather than a new rule. The ruling reinforces the deferential 'substantial evidence' standard for judicial review of administrative agency decisions, showing that a party's own business records can provide sufficient non-hearsay evidence to uphold an agency's finding. This precedent puts regulated entities on notice that they cannot justify unauthorized charges by claiming a lack of specific prohibition or by pointing to the alleged misconduct of other parties.
