The owner of a storage company in San Diego will pay a total of about $170,000 to 10 service members in a settlement with the Justice Department in the wake of allegations that the company illegally sold off the troops' belongings held in long-term storage.
Most of the money, $150,000, will go to one sailor — Thomas E. Ward, a now-retired master chief. The storage company, Across Town Movers, and its owner, Daniel E. Homan, have also agreed to make changes in business practices to prevent such problems in the future.
In a lawsuit filed in federal court in San Diego in March, Justice Department officials alleged that the company had a practice of selling the stored property of active-duty service members without required court orders, in violation of the Servicemembers' Civil Relief Act.
The SCRA requires companies to get such court orders before enforcing a storage lien against a service member. That ensures troops are notified about the pending action, and can seek options such as a delay in court proceedings.
"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 Vanita Gupta, principal deputy assistant attorney general in the Justice Department's Civil Rights Division, in a statement announcing the settlement.
Ward is a long-time car enthusiast who stored valuable car parts and household items in San Diego when the Navy moved him to Yokosuka, Japan, in 2006. The Navy extended his tour from the originally scheduled return date of Dec. 31, 2009, according to court documents.
The Navy also notified Across Town Movers in late December 2009 about the extension, according to court documents.
The Justice Department press release stated: "Across Town Movers allegedly continued to collect payment of storage fees from the government after it sold Master Chief Ward's goods."
However, the storage company's attorney, Alan Brubaker, said the company "refutes any suggestion that Across Town Movers billed the government for storage."
"The government did not pay the company," Brubaker said.
That issue was not addressed in the consent order. "The settlement resolves all of the allegations in the government's lawsuit," said Dylan Aste, assistant U.S. attorney in the civil division, in San Diego.
Brubaker said there was no intentional effort by the company to violate the law or harm service members, and that "really substantial efforts were made in every instance to find information about the service member."
"There was a lack of information from the civilians in the [Navy] transportation office. The company tried everything to reach the individuals. We believed all these individuals had completed their military service."
He said the company was told by Navy transportation office employees that Ward was out of the service.
While movers are required to check the DoD database before selling items, they do not have access to service members' Social Security numbers in order to check the database, he said.
"The Privacy Act trumps, and that creates problems in this circumstance," he said.
That said, Brubaker noted that the SCRA is a "strict liability statute," and the company, which has been in business for 30 years, has taken responsibility for its mistakes.
Justice officials and company officials agreed to settle the case "to avoid costly and protracted litigation," according to the consent order.
Government officials reviewed the files of all customers who have had their goods auctioned off by Across Town Movers since Sept. 23, 2008, and found nine more service members whose goods were sold off allegedly in violation of the SCRA. Those nine people will be reimbursed in varying amounts,for a total of about $20,000.
Troops and their family members who believe their SCRA rights have been violated should contact their nearest military legal assistance office.