MODZELEWSKI'S TOWING & STORAGE, INC., ET AL. v. COMMISSIONER OF MOTOR VEHICLES, SC 21039

Judicial District of New Britain

Administrative Appeal; Statutory Construction; Motor Vehicles; Whether Rates for "Exceptional Services" Allowed by Regulation to Be Charged for Nonconsensual Towing and Storage Services Exclude Equipment-Related Costs. In December, 2014, the plaintiffs, Modzelewski's Towing & Storage, Inc., and Modzelewski's Towing & Recovery, Inc., who are licensed motor vehicle dealers and repairers, were summoned by law enforcement to perform recovery and towing services involving a tractor trailer that had become wedged beneath a guardrail on Interstate 84. Using multiple pieces of heavy machinery, the plaintiffs cleared the trailer and debris from the highway within an hour and towed it to a storage facility, where it remained for nearly a month. The plaintiffs invoiced the trailer owner over $29,000 for their services, which was paid by the owner's insurer, the defendant Sentry Select Insurance Company (Sentry). Sentry subsequently filed an administrative complaint with the Department of Motor Vehicles (department), alleging, in relevant part, that the fees charged by the plaintiffs were out of line with the state's regulatory standards for nonconsensual towing of vehicles. In 2020, after a hearing, the department's hearing officer concluded that the plaintiffs had overcharged Sentry for certain fees categorized as "exceptional services" and ordered them to pay Sentry over $24,000 in restitution. The hearing officer determined that the plaintiffs had improperly based their rate schedule on the equipment used to render their services. In so finding, the hearing officer determined that, although § 14-63-36c (c) of the Regulations of Connecticut State Agencies permits towers to charge an additional fee when they provide "exceptional services," the fees must be based on the towers' hourly rate for labor. On appeal to the Superior Court, the court agreed with the hearing officer's determination that charges for exceptional services must be based on labor only and that the "pro rata cost of equipment may not be a factor." The court concluded that there was substantial evidence presented to support the hearing officer's findings that the plaintiffs had failed to post a sign that complied with the regulations in that the sign posted by the plaintiffs included fees that "included not just those [charges] for labor" but also charges that "reflected the cost of the [plaintiffs'] machinery." The court further concluded that there was substantial evidence to support the hearing officer's determinations as to which of the plaintiffs' charges to Sentry were permissible and which were not. The plaintiffs thereafter appealed to the Appellate Court, claiming, in relevant part, that the trial court had improperly concluded that the charges they levied in connection with the tow at issue in this case violated §§ 14-63-36b (4) and 14-63-36c (c) of the regulations in that they were not based on an hourly labor rate. The plaintiffs argued that, because the regulations allow towing companies to charge "additional fees for exceptional services" and "exceptional services" is defined as "the use of special equipment," their inclusion of the cost of procuring, maintaining, repairing and insuring the special equipment used for the tow at issue was appropriate. The Appellate Court (225 Conn. App. 386) disagreed and affirmed the trial court's judgment, concluding that the regulations clearly and unambiguously do not provide for the inclusion of equipment-related costs in setting the hourly rate for exceptional services but, rather, only permit an hourly charge for exceptional services that is specifically based on labor. In so concluding, it noted that § 14-63-36c (c) specifically requires "additional fees for exceptional services" to be "itemized in accordance with the hourly charge for labor." Upon the granting of certification to appeal, the plaintiffs appealed to the Supreme Court, which will decide whether the Appellate Court correctly concluded that the rates for exceptional services pursuant to § 14-63-36c (c) exclude costs associated with the use of special equipment to accomplish the exceptional services provided.