“Knowingly, Recklessly, or Intentionally” in Statutory Towing Lawsuits

Standard for Treble Damages + $1,000 in Towing Lawsuits Defined

For as long as Section 2308.404 of the Texas Towing and Booting Act (“TTBA”) has existed, plaintiffs in towing lawsuits have been chasing “$1,000 plus three time the cost of the removal and storage of the vehicle” as damages. In order to be entitled to the “punitive damages” provision of the TTBA, plaintiffs must allege and prove that a towing company, vehicle storage facility, or parking facility owner has “knowingly, intentionally, and recklessly” violated the TTBA. With no behavioral standard defined by a court, towing companies, vehicle storage facilities, property owners, plaintiffs, and judges were left guessing what the terms “knowingly, intentionally, or recklessly” meant under the law.

On June 11, 2015, Justice Dixon Holman issued a memorandum opinion defining these terms in the case of Ybarra v. Black Bull Towing, LLC. While not a published opinion, this case constitutes the first time that a Texas Court of Appeals, or in fact any court in Texas, has analyzed these terms. The Black Bull Towing LLC case provides valuable insight into how future courts of appeals might handle this issue as well as invaluable guidance to Justice Courts, County Courts-at-Law, and District Courts hearing lawsuits initiated under § 2308.404 of the Texas Towing and Booting Act.

Why is this Definition Vitally Important to the Industry?

Ybarra v. Black Bull Towing LLC is important to the towing and real estate industry because it clarifies standards of conduct and liability. Essentially, this case sets a standard of care below which a towing company or property owner must fall in order to be subject to treble damages plus the $1,000 penalty. Before this case, the standard of what constituted “knowing, intentional, or reckless” behavior under the Texas Occupations Code was up in the air. A plaintiff could argue any behavior, from defective signs, to sign height, to typos, constituted a knowing, intentional, or reckless violation. This case, while not entirely dispositive of these issues, clarifies burden of proof an Plaintiff must carry in a way never before seen in Texas.

What is the standard for Knowingly, Intentionally, and Recklessly?

The Texas Towing and Booting Act states, “A towing company, booting company, or parking facility owner who intentionally, knowingly, or recklessly violates this chapter is liable to the owner or operator of the vehicle that is the subject of the violation for $1,000 plus three times the amount of the fees assessed in the vehicle’s removal, towing, storage, or booting.” Tex. Occ. Code Ann. § 2308.404(c). Until Ybarra v. Black Bull Towing LLC, no definition existed for “intentionally, knowingly, or recklessly.” The drafters of the TTBA, in failing to provide a statutory definition, left judges, plaintiffs, and defendants guessing. Thanks to Ybarra, however, we finally have some guidance. A brief summary of the court’s discussion of each of these terms appears below.

1. Knowingly: It is not enough to show that a towing company should have been aware of its licensing requirements. In other words, proof of a violation is not proof of a knowing or reckless violation.

2. Intentionally: It is not enough to show that a towing company “intentionally” removed a vehicle. The “intentional” aspect of the violation relates to the violation of the statute, not the tow.

3. Recklessly. To show a reckless violation of the statute, a plaintiff must prove more than a mere violation. Recklessness generally requires proof that a party had knowledge or awareness of a condition but did not care about the result. Additionally, the risk must be of such a nature and degree that its disregard constitutes a gross deviation from the standard of care than an ordinary person would exercise under all the circumstances as viewed from the actor’s standpoint.

The court essentially confirmed what practitioners have known for years in other areas of the law. A subjective standard, such as “knowingly, intentionally, or recklessly,” requires more than just proof of a statutory violation or a bad act. A plaintiff must instead show that an actor had subjective knowledge of the violation, that such knowledge was disregarded, and that the resulting behavior was a gross deviation from what an ordinary person would do in a similar situation.

What does this case mean for Towing Companies in Texas?

It means that a clear legal standard has been laid down on two fronts. First, the court has made clear that a violation of the Texas Towing and Booting Act is subject to strict liability. In other words, a violation is a violation, and no “culpable mental state” is required. Thus, TTBA compliance will be reviewed very strictly by the courts going forward and it is a towing company, VSF, or parking facility owner’s responsibility to ensure compliance. Second, the court has made clear that the “knowingly, intentionally, and recklessly” standards in the TTBA are not simply proved by the existence of a violation. A plaintiff seeking treble damages plus $1,000 for the violation must carry a much higher burden of proof. If a plaintiff cannot carry that burden of proof, the plaintiff is stuck with only the return of the price he paid for the recovery of his vehicle for a straight violation of the TTBA.