STORAGE COMPANY TO PAY $170,000 TO SETTLE ALLEGATIONS IT UNLAWFULLY SOLD SERVICE MEMBERS' STORED ITEMS

FROM:  U.S. JUSTICE DEPARTMENT 

Monday, May 18, 2015

San Diego Storage Company Agrees to Pay $170,000 to Settle Justice Department Allegations That it Unlawfully Sold Navy Service Members' Belongings

Across Town Movers, a San Diego-based storage company, and its owner, Daniel E. Homan, have agreed to pay nearly $170,000 to resolve allegations by the Department of Justice that it unlawfully sold U.S. Navy service members’ stored goods.

The settlement resolves a lawsuit filed in March by the Department of Justice’s Civil Rights Division and the U.S. Attorneys’ Office for the Southern District of California.  The lawsuit alleged that Across Town Movers had a practice of selling active-duty service members’ storage lots without obtaining necessary court orders.

The lawsuit was filed under the Servicemembers Civil Relief Act (SCRA), which protects the rights of service members while on active duty by suspending or modifying certain civil obligations.  Under the SCRA, a storage lien may not be enforced against service members during, or 90 days subsequent to, their period of military service without a court order.

Among the aggrieved service members is Master Chief Petty Officer Thomas E. Ward, now retired, who will receive $150,000 as compensation for his auctioned personal property.  A long-time car enthusiast and 30-year veteran, Master Chief Ward placed his valuable car parts and many household items into storage when he was deployed overseas.  He entrusted Across Town Movers to keep his personal property safe until he returned to his home in San Diego.  Just before completing his final tour, Master Chief Ward learned that Across Town Movers had auctioned all of his stored personal property, including rare, vintage car parts, without providing any notice or obtaining a court order.  Moreover, Across Town Movers allegedly continued to collect payment of storage fees from the government after it sold Master Chief Ward’s goods.

“This settlement will not only provide relief to ten service members, but also will ensure that business practices change to better protect others,” said Acting Associate Attorney General Stuart F. Delery.  “I want to thank the United States Navy for referring this case to the Department of Justice.  I’m hopeful that through the department’s newly created Servicemembers and Veterans Initiative, we will continue to build on our strong ties with federal partners and protect the rights of all the brave men and women who serve in our Armed Forces.”

“We hope that this consent order will send a clear message to all storage companies that before they auction off anyone’s belongings, they should check the Defense Department’s military database and their own files to see if the customer is protected by the Servicemembers Civil Relief Act,” said Principal Deputy Assistant Attorney General Vanita Gupta of the Civil Rights Division.  “The Department of Justice is committed to protecting the rights of the men and women who serve in our Armed Forces, and we will continue to devote time and resources to make sure that they are given the legal protections they deserve.”

“Federal law protects our military service members and their dependents from businesses taking certain adverse actions against them,” said U.S. Attorney Laura E. Duffy of the Southern District of California.  “These protections permit service members to devote their full attention to defending the United States.  While Master Chief Ward was overseas focusing on defending our country, he understandably did not expect the very company paid to safeguard his valuable property to instead auction it off in his absence. Across Town Movers’ $150,000 payment provides Master Chief Ward the opportunity to repurchase his lost goods.”

Across Town Movers must also compensate other aggrieved service members for unlawfully auctioning their goods.

Furthermore, as part of the settlement, a consent order has been entered that requires Across Town Movers to make systemic changes to its business practices, including developing new policies and procedures consistent with  the SCRA and providing SCRA training to its employees.  Across Town Movers is enjoined from engaging in future SCRA violations.

A consent order incorporating the terms of this settlement was on Friday, May 14, 2015, in the Southern District of California.  This matter resulted from a referral to the Justice Department by the U.S. Navy.

Service members and their dependents who believe that their SCRA rights have been violated should contact the nearest Armed Forces Legal Assistance Program office.  Office locations may be found at http://legalassistance.law.af.mil/content/locator.php.  Additional information on the Justice Department’s enforcement of the SCRA and other laws protecting service members is available at www.servicemembers.gov.

This matter is being handled by an attorney from the Civil Rights Division’s Housing and Civil Enforcement Section and Assistant U.S. Attorneys Dylan M. Aste and Leslie M. Gardner of the Southern District of California.