A Southern California towing company that worked under contract at Marine Corps Base Camp Pendleton has agreed to pay $160,000 to settle allegations that it illegally auctioned or otherwise disposed of vehicles belonging to active-duty servicemembers without first obtaining the court approval required under federal law.
According to the U.S. Department of Justice, S & K Towing allegedly sold or disposed of as many as 148 vehicles owned by servicemembers between August 2020 and April 2025. Many of the vehicles had been towed from Camp Pendleton, where the company provided towing services under contract.
The case highlights protections that many drivers, including military families, may not realize exist. While tow companies can generally enforce storage liens on abandoned or unclaimed vehicles, federal law gives additional safeguards to servicemembers who may be deployed, training, or otherwise unable to respond after their vehicle has been towed.
Rather than simply paying a settlement, S & K Towing has also agreed that if it ever returns to the towing or vehicle storage business, it will implement policies, employee training, and procedures designed to comply with the Servicemembers Civil Relief Act.
DOJ Says Company Sold Military-Owned Vehicles Without Court Orders
The Justice Department filed suit against S & K Towing in March, alleging the company repeatedly violated the Servicemembers Civil Relief Act (SCRA) by selling or otherwise disposing of military-owned vehicles without first obtaining court orders.
According to the lawsuit, the alleged violations occurred between August 28, 2020, and April 15, 2025. During that time, the government says S & K Towing auctioned or otherwise disposed of as many as 148 vehicles owned by servicemembers who were protected under the SCRA.
The Justice Department also alleged that the company failed to establish policies or training to identify whether a vehicle’s owner was entitled to protections under the law before enforcing storage liens against the vehicles. :
The complaint further alleges that even though S & K Towing’s contract with Marine Corps Base Camp Pendleton required it to comply with applicable federal and state laws, the company failed to follow the SCRA’s requirements before disposing of protected vehicles.
Military Attorney Allegedly Warned Company About the Law
According to the Justice Department, a Military Legal Assistance attorney contacted S & K Towing in May 2024 and informed the company that it was violating the Servicemembers Civil Relief Act.
The DOJ alleges that a manager responded, “We do this all the time.”
Federal prosecutors further allege that after that conversation, the company continued to auction or dispose of vehicles owned by protected service members without obtaining court approval. In some cases, the government says vehicles were registered to Camp Pendleton addresses. In other cases, prosecutors allege that vehicles were sold even after the company had been informed that the owner was serving in the military.
Those allegations were contained in the federal complaint. Under the settlement agreement, S & K Towing does not admit or deny the allegations. Why the Servicemembers Civil Relief Act Requires a Court Order
The Servicemembers Civil Relief Act provides legal protections to active-duty military personnel whose service obligations may prevent them from handling certain financial and legal matters while they are away.
One of those protections applies to vehicles that have been towed. Before selling or otherwise disposing of a vehicle owned by a protected servicemember, a towing company generally must first obtain a court order.
That process gives a judge an opportunity to determine whether the owner’s military service affected their ability to retrieve the vehicle or respond before permanently losing the property.
The settlement also requires S & K Towing to adopt written SCRA compliance policies, employee training, and procedures if the company ever resumes towing or vehicle storage operations. According to the agreement, the company has represented that it is currently winding down its business.
$160,000 Settlement Will Compensate Affected Servicemembers
Under the agreement, S & K Towing will place $160,000 into a settlement fund that will be distributed to servicemembers identified by the Justice Department as having been harmed by the alleged violations.
The settlement notes that the amount was negotiated based on the company’s financial condition. It also requires S & K Towing to cooperate with the compensation process and comply with additional reporting requirements if it ever reenters the towing business.
The agreement resolves the civil case without a trial, but it is not an admission of liability. S & K Towing expressly denied the government’s allegations as part of the settlement, while agreeing to resolve the lawsuit and compensate affected service members.