Towing company could lose license amid allegations of overcharging customers for years

A Runway Towing truck operates during an accident on the westbound Staten Island Expressway in 2018. (Staten Island Advance/Jan Somma-Hammel)
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STATEN ISLAND, N.Y. — A Queens-based towing operation that has the exclusive right to operate on the borough’s highways in a system overseen by the NYPD could lose that privilege after the company’s license renewal was denied amid allegations it overcharged customers for years.

The allegations of overcharging were detailed in court documents tied to a bombshell lawsuit filed against Runway Towing Corporation last year.

New documents provided to the Advance/SILive.com state the reason for denial is the alleged overcharging of Staten Islanders and other city residents. Those documents include a transcript of a court hearing between Runway’s lawyers and the city Department of Consumer and Worker Protection (DCWP), the agency responsible for licensing.

A DCWP spokesperson said Runway Towing was issued a temporary operating letter that allowed the company to continue towing — even though its license was denied — while Runway appealed the agency’s decision.

The spokesperson could not comment further due to pending litigation.

JUDGE SAYS LICENSE DENIAL IS ‘TOO HARSH’

A City Hall spokesperson said the operating letter, which permits Runway to continue operating on several of the city’s highways, including the Staten Island Expressway, was extended for a final time until Sept. 7.

“The NYPD has a backup plan awaiting implementation to ensure that stranded motorists receive towing services on the affected highway segments,” a City Hall spokesperson said about Runway -- at the time -- about no longer being able to tow motorists on the Staten Island Expressway and other highway areas.

However, the day before the temporary operating letter was set to expire, a judge responded to Runway’s lawyer’s appeal of DCWP’s decision and annulled the decision, which he called “too harsh.”

“The court is persuaded that respondent’s assessment of the ultimate penalty, the denial of renewal is too harsh in this instance,” said Judge Debra James in a motion.

“Given its operation as a licensed tow trucking company for 17 years, now employing 35 vehicles, 30 drivers and nine managerial staff, 14 years of which petitioner operated free of any adjudicated violations, the court finds the punishment of non-renewal shockingly grave in its consequences,” James continued.

In court papers, James said DCWP should consider other appropriate penalties, such as, “probation during which on a monthly basis, petitioner would submit invoices/receipts for all tows, and verification of maintenance of electronic records, for review by respondent; revision by petitioner of its invoices to provide notice to customers of the maximum legal tow charges and prohibited charges, which revisions would require review and approval by respondent; and restitution/refund to customers of overcharge amounts, plus a monetary fine for each violation to be paid by petitioner to respondent.”

DCWP said it was reviewing its options on how to proceed, but is appealing the decision, as the agency does not wish to renew the license.

“We are appealing the decision so they will receive temporary operating letters pending the outcome,” the DCWP spokesperson said.

City Hall did not return a request for comment when asked if Runway would still be permitted to tow on behalf of the NYPD if a judge rules to reinstate its license.

THE ARTERIAL PROGRAM

“In the past, NYPD issued permits to approved towing vendors selected by a competitive application process,” a recent copy of an NYPD application for tow services states.

Of the 17 arterial highways in the city, Runway has operated on seven.

While DCWP licenses and regulates tow truck companies, the NYPD runs and regulates the city’s tow program for highways, a DCWP spokeswoman told the Advance/SILive.com in January.

But even after receiving a license from DCWP, not every towing company is allowed to tow vehicles on the 17 New York City highways, which are all part of the “Arterial Program,” according to regulations from the NYPD.

A private towing company must receive a license from the DCWP and then apply to become part of the program, which the NYPD oversees.

When asked about the city’s process to award a contract to one company -- ultimately giving it a monopoly -- and informed about the alleged overcharging and the city’s decision to give Runway a temporary operating letter, Mayor de Blasio said, “Look, if a company is not doing right by the people, then they shouldn’t be able to do business with the city of New York and we have lots of examples of that. Over the last eight years, we have many, many times, disqualified companies that were doing the wrong thing or punished them further… If a company that should not be doing business with us anymore, or a company that’s abusing the people in the city, then you know, we will cut them off if that’s the right thing to do.”

DENIAL NOTICE ALLEGES OVERCHARGING

Drivers who operate passenger vehicles and require a tow on Staten Island highways are supposed to be charged $125 for the first 10 miles and $4 for any additional mile after, according to towing and NYPD regulations.

Should a vehicle be between 10,000 pounds and 18,000 pounds, the price would rise to $175 and $10 for each additional mile, according to NYPD regulations.

In the case of vehicles between 18,000 pounds and 26,000 pounds the towing price would jump to $250, while for vehicles over 26,000 pounds it would be $300, the regulations indicate.

Regulations indicate no tow company can charge a fee for towing, storage or any charge indirectly related to towing and storage of a vehicle.

Yet, documents given to the Advance/SILive.com detail how the city alleges dozens of drivers were charged by Runway more than permitted for distance towed, charged credit card fees, storage fees and other excess fees.

RUNWAY DENIES CHARGES

Errol Margolin, the attorney representing Runway Towing, has continued to challenge DCWP’s determination, stating the company did not illegally overcharge consumers and the additional charges cited are authorized by the contract with the NYPD.

“Runway performed services for consumers and is entitled to be paid for its services. If it overcharged consumers it should have paid a fine pursuant to a penalty schedule, not have its license revoked,” Margolin.

Margolin says Runway was not afforded an evidentiary hearing, “which is fundamentally unfair and smacks of prosecutorial misconduct.”

Because DCWP did not revoke Runway’s license but denied its application renew, the city states it was not entitled to an evidentiary hearing, but was instead entitled to notice, which it was given.

Margolin, on behalf of Runway, continued to deny the overcharging and any wrongdoing.

“Had there been a hearing, a judge would have determined whether pull out fees, highway service fees are authorized by Runway’s contract with the NYPD,” he said.

The NYPD declined to comment on the case and deferred questions to DCWP.

DCWP told Runway it could pay a $220,000 penalty and receive a temporary license, which could be revoked at any time. Runway said it would be unable to pay and proposed a $125,000 penalty payable immediately instead, which was denied by DCWP.

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