New Ohio Law on Towing Disputes: What Companies Need to Know about HB 403

If you're in the towing and recovery industry in Ohio, significant changes are on the horizon regarding towing disputes. House Bill 403 (HB 403) has passed the Ohio Senate and is awaiting the Governor's signature. This bill includes important updates to the Ohio Revised Code regarding disputes over towing and storage fees for commercial vehicles. This blog post will break down what these changes mean for you.

What is HB 403?

• HB 403 is a bill designed to address several issues, including:

  • Creating a new process for disputes between trucking and towing companies.

  • Modifying regulations for motor vehicle dealers regarding tampered vehicles.

  • Expanding exceptions to window tinting prohibitions.

  • Requiring transportation network companies (TNCs) to conduct annual background checks on drivers.

This post will focus on the most important changes for the towing industry, which is the new dispute resolution process for towing fees.

The Problem: Costly Towing Disputes

Currently, disputes between trucking companies and towing services over fees can lead to significant delays and financial burdens. When a commercial vehicle is involved in an accident and towed, the towing company may hold the truck, trailer, and cargo until the full bill is paid, even if the trucking company believes the charges are unreasonable. This can disrupt business, causing missed deadlines and lost revenue. Previous methods of resolution, such as replevin actions, are costly and time-consuming. Further, as the truck and trailer are typically the only asset securing payment for towing and recovery services, there is a strong resistance to releasing in the absence of a suitable security to protect payment.

The Solution: Expedited Civil Action

HB 403 creates a new expedited civil action process to address towing and recovery disputes. Here’s how it works:

• Initiating a Civil Action: A "motor vehicle owner," defined as someone who holds a certificate of title or is a lessee of a towed commercial motor vehicle (excluding lienholders or leasing companies), can initiate a civil action in a municipal or county court to object to the amount billed by a towing service. This action can be on behalf of the owner or a third party for whom the owner commercially transports cargo.

• Paying the Undisputed Amount and Posting a Bond: The trucking company must pay the undisputed portion of the bill to the towing company and post a bond equal to the disputed amount.

• Quick Release of Property: Within two business days of receiving the payment and bond, the towing service or storage facility must release the motor vehicle, cargo, and personal property. This is a crucial change that allows commerce to keep moving while the dispute is resolved.

• Court Determination: The court will review the evidence to determine whether the towing charges are reasonable. If the charges are deemed reasonable, the court will order the trucking company to pay any remaining balance. If the charges are deemed unreasonable, the court will determine a reasonable amount. The court can also impose monetary penalties.

• Payment from the Bond: Any money owed to the towing company is paid from the bond posted by the trucking company. Any remaining amount of the bond is returned to the trucking company.

• Reciprocal Privilege for Towing Companies: Towing services or storage facilities also have the option to commence an expedited civil action against the vehicle owner if the bill is not paid within 45 days of being presented to the vehicle owner.

Why This Matters

This new process is a significant improvement because it:

• Ensures a faster resolution for disputes, preventing prolonged delays and disruptions to commerce.

• Provides a clear path to dispute resolution, with set procedures and deadlines.

• Balances the interests of both the trucking and towing industries.

• Offers a more equitable alternative to previous methods of dispute resolution.

• Keeps the roadways safe by ensuring that vehicles and property are moved quickly, especially after accidents.

Important Note: Lienholder Protection

The original version of HB 403 included lienholders in the definition of "motor vehicle owner," but an amendment removed them. This change means that banks, leasing companies, and other lienholders will not be automatically involved in civil litigation over towing fees. This was an important change because those parties do not have direct control over the vehicle itself or its operation. Lienholders will receive notice of any action filed.

Additional Provisions

Beyond towing disputes, HB 403 also:

• Exempts motor vehicle dealers from tampering prohibitions when selling tampered vehicles to other dealers through auctions if certain disclosure conditions are met.

• Expands exceptions to window tinting prohibitions for certain school buses used to transport children with disabilities.

• Requires transportation network companies (TNCs) to conduct annual background checks on all authorized drivers and terminate any driver who does not meet initial authorization standards.

What’s Next?

HB 403 has been passed by both the Ohio House and Senate. It is now awaiting the Governor’s signature to become law. If signed, these changes will bring significant improvements to the process of resolving disputes between trucking and towing companies.

Conclusion

HB 403 represents a significant step forward in creating a fairer and more efficient process for resolving disputes over towing fees. By understanding the new rules and procedures, trucking companies can better protect their interests and ensure the smooth operation of their businesses. Stay tuned for updates as HB 403 moves through the final stages of the legislative process.

Additional Resources:

• Link to HB 403 in the General Assembly

• Link to HB 403 Documents

• Link to HB 403 Status

• Votes on HB 403

• Committee Activity on HB 403