People v. Servantes

• Decision Date: 01 February 2001
• Citation: 86 Cal.App.4th 1081,103 Cal.Rptr.2d 870
• Court: California Court of Appeals Court of Appeals
• Parties: (Cal.App. 1 Dist. 2001) THE PEOPLE ex rel. LOUISE H. RENNE, as City Attorney, etc., Plaintiff and Respondent, v. PATRICK SERVANTES, Defendant and Appellant. A089493 Filed

103 Cal.Rptr.2d 870 (Cal.App. 1 Dist. 2001)

THE PEOPLE ex rel. LOUISE H. RENNE, as City Attorney, etc., Plaintiff and Respondent, v. PATRICK SERVANTES, Defendant and Appellant.

A089493

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA FIRST APPELLATE DISTRICT DIVISION FIVE

Filed 2/01/01

(San Francisco County Super. Ct. No. 997979)

Trial Judge Paul H. Alvarado, Judge

Trial Court Superior Court of the City and County of San Francisco, Case No. 997979

Counsel for Defendant/Appellant Patrick Servantes David W. Washington, Esq.

Counsel for Plaintiff/Respondent City and County of San Francisco Louise H. Renne, City Attorney Kimon Manolius Deputy City Attorneys Ellen Forman, Rose-Ellen Heinz

CERTIFIED FOR PARTIAL PUBLICATION¹

RICHMAN, J.²

Presiding Justice Harold G. Clarke of the Georgia Supreme Court observed that "[t]he law gives the towing company a great advantage over the owner of the towed car, and creates a great potential for unfair business practices and abuse of the public." (Porter v. City of Atlanta (1989) 384 S.E.2d 631, 634.) While that observation was made 11 years ago and some 3,000 miles away, Justice Clarke was talking about Patrick Servantes (Servantes), who over a period of years committed myriad unfair business practices and abused the public, towing hundreds of cars off private property in abject disregard of applicable California law and San Francisco regulations. Such practices included towing vehicles without a permit, towing vehicles from private property without authorization from the property owners, refusing to accept credit cards as payment for towing and storage charges to allow release of the vehicle, and imposing excessive towing and storage charges.

The City Attorney of San Francisco brought suit to curtail Servantes's practices, alleging a claim for unfair business practices (Bus. & Prof. Code, 17200 et seq.) and seeking a permanent injunction, civil penalties, and disgorgment of profits. Prior to trial the city attorney obtained a preliminary injunction ordering Servantes to refrain from such conduct.

Following a six-day trial at which the city attorney presented 24 witnesses, the trial court found that Servantes had committed hundreds of violations of state and local laws and ordered him to pay a civil penalty of $74,700, representing $100 for each of the 747 illegal tows, and further ordered him to disgorge his illegal profits of $52,500 as restitution to the victims. The court also found that Servantes had violated the preliminary injunction 174 times, for which the court assessed an additional penalty of $87,000, calculated at $500 for each violation. Finally, the court permanently enjoined Servantes from towing vehicles from private property within the State of California and imposed restrictions on consensual towing by Servantes.

Servantes appeals, asserting three arguments, one with two subparts: (1) federal law preempts the laws on which the trial court relied; (2) the judgment and fines (a) violate due process and (b) are not supported by substantial evidence; and (3) the injunction is void. We conclude that none of Servantes's claims has merit, and we affirm the judgment.

I. THE REGULATORY SCHEME

We begin our analysis with the pertinent regulatory scheme, starting with Vehicle Code section 22658, by which the California Legislature has undertaken to regulate the removal of vehicles from private property by a towing service.³ That section provides, among other things, that the property owner must first notify the police (subd. (a)) and that the towing company must have written authorization from the property owner or agent, who must be present at the time of the tow (subd. (l)). Section 22658 also provides that the towing company may not impose excessive charges for towing and storage (subd. (i)), and requires that the owner of the storage facility to which the vehicle is towed accept a bank credit card or cash for the towing and storage charges (subd. (k)).⁴

The Legislature has also delegated to local authorities the power to regulate the licensing and operation of towing services and tow truck drivers. (Veh. Code, 21100, subd. (g).)⁵ Pursuant to that authority, the City and County of San Francisco (City) has enacted ordinances which require towing companies and tow truck drivers to obtain a permit before removing vehicles from private property. (S.F. Police Code, 3000.) The permit scheme requires an application to the Chief of Police, payment of an application fee, and an investigation and hearing. (S.F. Police Code, 3002-3004.) The ordinance requires the towing companies to notify the police tow desk within 30 minutes of every vehicle removed from private property, providing the tow truck driver's name and permit number and identification of the vehicle. (S.F. Police Code, 3057.) The ordinance further requires the towing companies to maintain records of each towed vehicle and to retain those records for three years. (S.F. Police Code, 3060.) Another City ordinance requires towing companies removing vehicles from private property to prominently display a copy of their schedule of fees, prohibits charging excess fees, and requires acceptance of credit cards, cash, or checks for release of towed vehicles.⁶ (S.F. Traffic Code, 172.03, 172.05, 172.08.)

II. SERVANTES'S CONDUCT

Servantes first became involved in towing in 1991 or 1992 and opened his own company, Bayshore Towing (Bayshore), in 1993. On September 14, 1993, Servantes was issued a tow operator permit from the City. Within months, specifically in June 1994, that permit was revoked based on findings that Servantes had illegally removed vehicles from public streets and then reported them as private property tows, illegally demanded payment in cash, and charged excessive amounts to release the vehicles.

In April 1995 Servantes applied for a new permit as a tow operator and owner of Bayshore, but his application was denied based on his prior misconduct. However, Bayshore was subsequently issued a permit when Servantes reported that a new general manager, Allen Lawson, had taken over the company. Later, in 1996, Lawson notified the police permit division that he was no longer associated with Bayshore, and he surrendered his towing permit.

After that development, Servantes and other Bayshore drivers were stopped several times by the police and cited for towing vehicles without a permit and for driving without a valid driver's license. Servantes applied for a new permit, and in July 1998 the application was denied on the ground that Servantes had continued to operate his towing business despite his lack of a permit by using false identification. The hearing officer further found that Servantes had refused to accept credit card payments, overcharged for towing and storage, and towed vehicles onto public streets before towing them to his storage facility.

In the meantime, police investigations were undertaken of Servantes and his towing operations based on numerous citizen complaints, which investigation eventually led to the police determination that Servantes was conducting an unlicensed towing operation.⁷ As part of the investigation, the police conducted a stakeout operation by placing a car in a private parking lot from which Bayshore had been towing vehicles. Within 15 minutes, when no attendant was at the lot, Servantes picked up the car and towed it to his storage lot.

At trial, the logs from the City's police tow desk dated from January 1, 1996, to June 30, 1999, were introduced and showed that Servantes was continuing to tow vehicles from private property despite the revocation of his permit. During that time Bayshore had conducted 747 tows, 523 of which were reported as having been conducted by Ernesto DeAlba, Martin Sexton, or Allen Lawson, at times when these drivers were not working for Bayshore. As to this, the trial court found that Servantes himself had conducted the tows and had falsely given another driver's name.

During discovery Servantes was asked to produce his business records including the written authorizations for towed vehicles, but he produced almost nothing. The trial court found that the few authorizations that were produced were inadequate in that they were missing vital information, such as the date of the tow, the vehicle license number, or the identity of the Bayshore driver who did the tow. Three police investigators testified at trial that in the course of their investigations they could find no evidence that written authorizations had been given for Bayshore's tows, illustrated, for example, by the fact that the space on the towing receipt form for the signature of the property owner was always left blank.

In addition, there was direct evidence of noncompliance with the law. One parking lot owner testified that he had contracted with Servantes to have Bayshore remove vehicles from his lot, but that many of the tows were unauthorized. Another parking lot owner reported to the police investigators that she left the towing decisions to Servantes. Three vehicle owners who had returned to the parking lots just as their cars were being hooked up to the Bayshore tow truck testified that no agent of the lot owner was present at the time. Two vehicle owners testified that they contacted the lot owner after their cars were towed, and the lot owner's agent was surprised the car had been towed.

The trial court further found that in all 747 cases Servantes had insisted on cash payment from the vehicle owners, refusing to accept credit cards or personal checks. Luis Jacques, a driver for Bayshore, gave testimony that Bayshore accepted only cash. None of the towing receipts produced by Servantes indicated payment by credit card. During the police investigation, questionnaires were sent to all owners of vehicles towed by Bayshore, and all who responded reported that Bayshore accepted only cash. Although Servantes testified he did accept credit cards, he also testified...