MEMORANDUM - Quick Clear Professionals of Ohio

MEMORANDUM
TO:
Andy Herf
FROM:
Brian Coulter
DATE:February 10, 2015
RE:
SB274 Analysis
INTRODUCTION
Senate Bill 274, enacted by the 130th General Assembly, significantly alters the law
pertaining to the operation of towing services and storage and repair facilities. It also creates and
alters existing avenues through which said companies can obtain title to unclaimed vehicles. The
following analysis highlights Senate Bill 274’s significant substantive changes. The bill removes
very little from existing law; rather, it primarily adds to or clarifies existing requirements.
Therefore, unless new provisions directly conflict with existing law, the language below should
be understood to be in addition to—not in lieu of—existing requirements.
ANALYSIS
Senate Bill 274 either amends or enacts the following sections and subsections of the
Ohio Revised Code:
R.C. 4505.02. Duties of registrar of motor vehicles.
The only change to this section is the inclusion an exception for scrap metal dealers.
Under the previous version of the statute, if any certificate of title had been improperly issued,
the registrar of motor vehicles was to cancel the certificate. Now, if a title is deemed valid
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pursuant to R.C. 4505.191, the registrar cannot cancel the certificate. A scrap metal dealer
(defined in R.C. 4737.04) has valid title if both of the following occur: (1) the dealer purchased
the motor vehicle in the ordinary course of business, and (2) the dealer received an endorsed and
notarized certificate of title to the vehicle from the seller. See R.C. 4505.191(A).
R.C. 4505.101. Certificate of title to unclaimed motor vehicle.
The bill makes numerous changes to this section. First, it increases the maximum value
of an unclaimed vehicle, from $2,500 to $3,500, for which an owner of a repair garage or a place
of storage can obtain title should the vehicle remain unclaimed. R.C. 4505.101(A)(1). Second,
the affidavit required to be filed by an owner must conform with the rules established by the
registrar of motor vehicles, and include an “itemized statement” of the value of the motor
vehicle. Id. at (A)(2). The affidavit must affirm that all of the requirements of this section have
been met. Id.
Third, the bill adds a provision allowing an owner of a towing service or storage facility
to obtain title of a vehicle if all of the following occur: (1) the vehicle was towed under R.C.
4513.601(B), (2) the vehicle has a value under $3,500, (3) the vehicle has been unclaimed for 60
days after the date of the earliest notice required by R.C. 4513.601(F)(1) (an owner must have
evidence showing a signature of receipt by any person or notification that delivery was not
possible), and (4) the owner has executed an affidavit affirming that all the requirements of this
section have been met. Id. at (B). Upon completing the processes described above, the clerk
will issue a certificate of title free of all liens and encumbrances in exchange for the owner
paying to the clerk the value of the vehicle. Id. at (C). The bill defines pertinent language,
including “repair garages,” “towing services,” and “storage facilities,” in paragraph (E).
R.C. 4505.11. Surrender and cancellation of certificate of title - issuance of salvage or
rebuilt salvage certificate of title.
The bill makes one change to this section pertaining to the process through which an
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insurance company may receive a salvage certificate of title. If an insurance company obtains
possession of a vehicle but is unable to obtain a properly endorsed certificate of title from its
owner, the insurance company may apply to the clerk of court for a salvage certificate of title.
Previously, that application had to be accompanied by evidence that the insurance company paid
a total loss claim on the vehicle, a copy of a written request for the certificate of title on the
insurance company’s letterhead, and the original certified mail, return receipt notice addressed to
the last known owner of the vehicle and any known lienholder. The bill removes the letterhead
requirement (the written request for a certificate of title must be sent by the insurance company
or its designee) and the certified mail and return receipt requirements (the insurance company
must only submit proof that the request was delivered by a nationally recognized courier service
to the last known address of the owner and any lienholder). R.C. § 4505.11(C)(1)(b).
R.C. 4505.17. Reports and records of motor vehicle thefts.
Like R.C. 4505.02, the only change to this section is the inclusion an exception for scrap
metal dealers. Under the previous version of the statute, in the event the registrar received from
any clerk a copy of a certificate of title to a stolen but recovered vehicle and upon investigation it
appeared that the certificate of title was improperly issued, the registrar was to immediately
cancel the certificate. Now, if a title is deemed valid pursuant to R.C. 4505.191, the registrar
cannot cancel the certificate. A scrap metal dealer (defined in R.C. 4737.04) has valid title if
both of the following occur: (1) the dealer purchased the motor vehicle in the ordinary course of
business, and (2) the dealer received an endorsed and notarized certificate of title to the vehicle
from the seller. See R.C. 4505.191(A).
R.C. 4505.191. Scrap metal dealers; validity of title to motor vehicle.***
The bill adds this section to Chapter 4505. As detailed above, a scrap metal dealer is
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deemed to have valid title to a motor vehicle if both of the following occur: (1) the dealer
purchased the motor vehicle in the ordinary course of business, and (2) the dealer received an
endorsed and notarized certificate of title to the vehicle from the seller. See R.C. 4505.191(A).
The bill also shields a scrap metal dealer from a civil suit initiated by a person with valid title to
a vehicle that was transferred to the dealer by a certificate of title that was improperly issued,
unlawfully obtained, or falsified prior to its transfer to the dealer. Id. at (B).
R.C. 4513.60. Vehicle left on private residential or private agricultural property without the
permission of person having right to possession of property.
The bill makes several changes to this section. The section still allows a sheriff or chief
of police to order into storage a vehicle left on private property for at least four hours; however, a
towing service used to remove the vehicle must now deliver the vehicle to the designated
location within two hours of removal. R.C. 4513.60(A)(2). The bill removes all provisions
pertaining to the establishment of private tow away zones, as those provision have been moved
to newly enacted R.C. 4513.601. See id. at (B). If the owner or operator of a vehicle arrives
after a vehicle is prepared for removal but prior to the vehicle’s actual removal, the bill requires a
towing service to give the owner or operator “oral or written notification” that he or she may pay
a fee of up to one-half the amount charged for removal. Id. at (B).
The towing service must also give the owner or operator a receipt showing both the full
amount normally charges and the actual amount received. Id. The bill also adds a provision
allowing an owner of a motor vehicle, upon proof of ownership, to retrieve any personal items
from a vehicle that is ordered into storage pursuant to this section free of charge. Id. at (D)(2).
“Personal items” do not include any items attached to the vehicle or items necessary to a criminal
investigation. Id. The removal and storage fee amounts have not changed. Id. at (D)(1)(a). The
bill provides that this section applies to all towing services and storage facilities and that failure
to comply with the section will result in a minor misdemeanor. Id. at (E), (G). This section does
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not apply to the private tow away zones established in R.C. 4513.601. Id. at (F).
R.C. 4513.601. Private tow-away zones.***
The bill significantly changes the law pertaining to tow-away zones. First, it changes the
information that must be included on any signage demonstrating the existence of a tow-away
zone. Now, signage must include a description of persons authorized to park on the property
(descriptions such as “residents,” “guests,” “customers” are sufficient, as are addresses or
business names), the times during which parking restrictions are enforced (if applicable), and a
statement that failure to recover a towed vehicle may result in loss of title. R.C. 4513.601(A)(1).
While removal and storage fees have not changed, they no longer must be included on signage.
See id. An owner of property that is a private town-away zone who does not have a contract with
a towing service may retain preexisting signs for up to 6 months after the effective date of this
section. Id. Preexisting signs may be modified by stickers or an addendum to comply with this
section. Id.
In addition, a towing service must now ensure than any vehicle towed under this section
is taken to a location that is located within 20 linear miles of the tow-away zone unless doing so
is not practicable. Id. at (A)(2). Further, if the owner of the property that is a tow-away zone
causes the removal of a vehicle, the vehicle owner is considered to have consented to the right of
the towing service to obtain title if the vehicle goes unclaimed.
Id. at (B)(1).
Like in
R.C. 4513.60, if a vehicle owner or operator arrives after the vehicle has been prepared for
removal but prior to removal, the towing service must provide oral or written notification that he
or she may pay a fee of up to one-half the amount charged for removal. Id. at (C). The towing
service must also give the owner or operator a receipt showing both the full amount normally
charges and the actual amount received. Id. Upon its release, the owner or operator of the
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vehicle must move it so that it is not parked in a tow-away zone. Id.
Prior to towing, a towing service must make all reasonable efforts to take as many
photographs as necessary to show that the vehicle was parked in a tow-away zone. Id. at (D)(1).
The service must record the date and time of the photographs and retain all records for at least 30
days after the vehicle is recovered or at least 2 years after the vehicle was towed, whichever is
earlier. Id. Upon request, a towing service or storage facility must provide all photographs to an
owner, operator, or lienholder who contests the vehicle’s removal. Id. at (G)(2).
Moreover, a towing service must deliver a removed vehicle to the location from which it
may be recovered within 2 hours of removal. Id. at (D)(2). A towing service must also, within
the same time period, provide information to the sheriff or police department concerning the
vehicle information, removal location, date, and time, and telephone number and address of the
place from which the vehicle may be recovered.
Id. at (E)(1). When a vehicle is removed, a
towing service or storage facility from which the vehicle may be recovered must search the
records of the bureau of motor vehicles to identify the owner or any lienholder of the vehicle.
Id. at (F)(1).
The owner of a towing service or storage facility must then provide notice to the last
known address of any owner or lienholder by certified or express mail with return receipt
requested, or by a commercial carrier service that requires a signed receipt, within 5 days of
removal, and after 30 and 45 days of the vehicle going unclaimed. Id. at (F)(1)(a). After 60 days
of sending notice, and if authorized under R.C. 4505.101(B), the towing service or storage
facility can initiate the process for obtaining title. Id. at (F)(2). A towing service or storage
facility cannot attempt to obtain title of an unclaimed vehicle if it has not received a signed
receipt of notice or notification that delivery was not possible. Id. at (F)(3). With respect to
vehicles for which a towing service or storage facility cannot obtain title under R.C.
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4505.101(B), only the initial 5-day notice is required. Id. at (F)(4).
As before, an owner or lienholder of a removed vehicle may reclaim it upon presentation
of ownership and payment of fees. Id. at (G). While the fees have not changed, the bill does
require an owner or lienholder to pay a $25.00 processing fee if notice has been sent as required
by paragraph (F). Id. As with R.C. 4513.60, upon proof of ownership, the owner of a vehicle
may retrieve any personal items from the vehicle without retrieving it and without paying any
fee. Id. at (G)(3). No vehicle is to be removed from a tow-away zone other than in accordance
with this section, id. at (H), and any owner of a towing service or storage facility that fails to
comply with this section is guilty of a minor misdemeanor. Id. at (J).
R.C. 4513.61. Storing vehicles in possession of law enforcement officers or left on public
property.
Like before, this section allows a sheriff or chief of police to order into storage any
vehicle or abandoned junk vehicle that has come into the possession of the sheriff, chief of
police, or highway patrol, or has been left on a public street or other property open to the public.
R.C. 4513.91. Previously, when such a vehicle constituted an obstruction to traffic, it could be
ordered into storage immediately; however, the bill provides that such a vehicle cannot be
immediately ordered into storage if: (1) the vehicle was just involved in an accident and is
subject to R.C. 4513.66, or (2) the vehicle is a commercial motor vehicle. Id. at (A)(2)(b). The
owner or operator of a commercial vehicle must be given an opportunity to arrange for removal
within a period of time specified by the authorities. Id.
As with other sections, if the authorities issue an order for removal and arrange for
removal by a towing service, the service must deliver the vehicle to the designated destination
within two hours of removal. Id. at (B). Similarly, the owner of the vehicle may retrieve
personal items from the vehicle without retrieving the vehicle or paying any fees. Id. at (C)(2).
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“Personal items” does not include items necessary to a criminal investigation or items attached to
the vehicle. Id. Finally, the bill adds paragraph (F), which simply states that no towing service
or storage facility may fail to comply with this section. Id.
R.C. 4513.611. Civil actions against towing service or storage facility.***
The bill enacts section 4513.611, which gives vehicle owners a civil right of action
against towing services and storage facilities that violate R.C. §§ 4513.60, 4513.601, and
4513.68. Id. at (A). If it is determined that a towing service or storage facility committed a
violation, judgment will be awarded against it for $1,000 for the first violation and $2,500 for
each subsequent violation. Id. If a court finds that a towing service or storage facility caused
actual damages, it must award the vehicle owner three times the actual damages as well as
reasonable attorney’s fees. Id. at (C). After the third violation, the court will also order the
public utilities commission to revoke offender’s certificate of public convenience and necessity
for six months. Id. However, once the six-month revocation expires, a court cannot consider
any violation committed prior to the revocation for purposes of assessing subsequent violations.
Id. at (B).
R.C. 4513.66. Removal of highway obstruction.
The bill adds a provision to this section that forces authorities to allow the owner or
operator of a commercial vehicle to arrange for removal within a period of time specified by
public safety officials.
R.C. 4513.66(A)(2).
If the vehicle cannot be removed within the
specified time, the officials may order its removal. Id. As before, paragraph (B)(1) shields from
liability an official who authorizes removal of a vehicle as well as a private towing service that is
ordered to remove a vehicle. Id. However, the bill adds an exception to the immunity created by
paragraph (B) for a towing service that performs a removal in a negligent manner. Id. at (B)(2)
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(c). Previously, the statute only excluded willful or reckless conduct on the part of the towing
service. See id.
R.C. 4513.67. Operation of towing service.***
The bill defines “towing service” to mean any for-hire motor carrier that is engaged on an
intrastate basis anywhere in Ohio in the business of towing a motor vehicle over any public
highway in Ohio. R.C. 4513.67(A). The bill also provides that no person may operate a towing
vehicle for a towing service, and no person who owns a towing vehicle used by such a service or
who has supervisory authority over such a vehicle may permit the operation of a towing vehicle
used by a towing service unless (1) the service holds a valid certificate of public convenience and
necessity, and (2) the certificate number and business phone number is visibly displayed on both
front doors of the towing vehicle. Id. at (B). A Towing services is prohibited from failing to
make its certificate available for public inspection during normal business hours and including its
certificate number on all advertising, estimates, contracts, and invoices. Id. at (C).
R.C. 4513.68. Estimates of costs before towing.***
The bill requires that, prior to removing a vehicle from an accident scene on any street or
highway or any other property open to the public, a towing service must provide an estimate of
the price for the removal to the person who was operating the vehicle at the time of the accident
unless that person is incapacitated, seriously injured, or otherwise unavailable. R.C. 4513.68(A).
A towing service cannot submit this estimate to the repair or storage facility to which the vehicle
is transported unless the person who was operating the vehicle meets one of the foregoing
conditions. Id. The estimate must include all fees, services to be rendered, and the destination of
the vehicle. Id. at (B).
However, a towing service does not have to provide an estimate in this manner if: (1) the
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service removes the vehicle from an accident scene, (2) the removal is conducted pursuant to a
contract between the service and the issuer of an insurance policy covering the vehicle, and (3)
the contract requires the service to be paid directly by the issuer of the policy. Id. at (C). If a
towing service fails to provide the estimate required above, it cannot charge fees for the towing
and storage of the vehicle that exceed 25% of the fees authorized under R. C. 4513.601(G)(1)(b).
Id. at (D). Any storage facility that accepts a vehicle towed from an accident scene must
conspicuously post a notice at the entrance to the facility that states the foregoing limitation on
fees. Id. at (E).
R.C. 4513.69. Storage facilities; business hours; notice.***
The bill provides than a storage facility must remain open (1) at any time during which a
towing service is towing a vehicle pursuant to R.C. §§ 4513.60, 4513.601, or 4513.61, and (2)
between 9:00 AM and 12:00 PM on the day after any day during which a towing service is
towing a vehicle pursuant to the forementioned sections. R.C. 4513.69(A). A storage facility
must also place a notice at the entrance of the facility that states a telephone number at which the
owner or lienholder of a vehicle may contact the facility for the purpose of retrieving a vehicle
when the facility is closed. Id. at (B)(1). The same telephone number must be provided to the
sheriff or chief of police, and the facility must ensure that there is a process in place for purposes
of answering calls at all times. Id. A representative of the a storage facility must be available
within three hours of receiving a phone call to release the vehicle upon proof of ownership;
however, the facility is entitled to charge an after-hour retrieval fee. Id. at (B)(2).
R.C. 4921.25. Towing entities subject to chapter.
The bill makes several changes to this section. First, it removes the language excluding a
towing service from “any ordinance, rule, or resolution of a municipal corporation, county, or
township that provides for the licensing, registering, or regulation of entities that tow motor
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vehicles.” R.C. 4921.25(A). Second, it instructs the public utilities commission to adopt rules
that (1) establish the acceptable scope of public safety regulations that a county or township may
adopt, (2) establish safety standards for the type of equipment necessary in certain conditions, (3)
establish standards for the removal of a vehicle from a tow-away zone, (4) establish an afterhours retrieval fee, and (5) adopt any other rules necessary. Id. at (B).
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