Mass. high court considers whether insurer must pay tow-storage costs beyond vehicle value

The Supreme Judicial Court on Oct. 12 heard oral argument in Toady Service Inc. v. Liberty Mutual Insurance Company, a dispute over whether Liberty Mutual must pay towing and long-term storage charges for a vehicle involved in a March 1, 2016 crash that killed two people and injured several others.

Attorney Ralph Caffarelli, representing Toady Service Inc., told the court that Liberty Mutual was liable “for these costs” on three theories: “promissory estoppel, quasi contract, and . . . chapter 159B, section 6B,” and argued that the insurer became the vehicle’s owner after it paid the insured about $13,000 and took title in early January. “This vehicle had evidence in the criminal case and in the civil case,” Caffarelli said, arguing that the car’s evidentiary value justified recovery beyond the vehicle’s market value.

Justice (questioner) pressed the defense on the statutory remedy, asking, “What words in the statute give you a right to go after the insurer of the vehicle that you're holding on behalf of the police?” The court noted that the statute provides a lien and a maximum recovery for involuntary towing and storage (discussed at $35 a day in the record) but questioned whether that remedy displaces or limits common‑law recovery.

Owen Gallagher, counsel for Liberty Mutual, disputed elements of Toady’s theory and emphasized factual and legal limits. Gallagher told the court that the claims record shows Liberty Mutual “received home office approval” and that the insurer “reserved the policy limits,” while contesting that an actual tender of policy limits appears in the record. Gallagher also argued that, after the district attorney and law enforcement directed preservation of the vehicle, the insurer had less responsibility for conservation costs charged by the towing vendor.

The attorneys debated whether the appropriate measure for quantum meruit or unjust enrichment is the market value of the vehicle (the insurer’s payment and salvage figures) or the value of the service conferred in preserving evidence for criminal and civil proceedings. The court and counsel discussed a disputed chronology: the criminal conviction was recorded in the transcript as Oct. 29, 2018; the towing company moved the car to outdoor storage and billed on Feb. 5, 2019; and the record contains references to a tender or claim‑note entries in January and to a later tender or transfer in March 2019, though the parties disagree about what those entries legally signify.

Counsel and the justice also debated the practical effect of the statutory cap on daily storage charges. The statute’s $35‑per‑day cap for certain storage was invoked repeatedly; the defense argued it leaves room for common‑law recovery in special circumstances, while the insurer cautioned against a rule that would permit storage‑service recovery that substantially exceeds the stored item’s value.

Both sides relied on precedent. Caffarelli distinguished prior cases the insurer had cited and argued that circumstances here — a totaled vehicle retained for evidentiary purposes, voluminous claim‑file notes reflecting promised payment, and an insurer that later acquired title — support recovery beyond the vehicle’s market value. The insurer countered that existing authority and the statutory framework counsel against overturning the statutory remedy’s limits and that the record does not support Toady’s claim of an unequivocal tender or promise.

The justices asked detailed questions about chronology and valuation: whether storage charges after law‑enforcement release until any tender were limited by the $35 statutory rate; whether Toady could have moved the vehicle to different protective custody; and how to value the benefit conferred when the vehicle’s market value was effectively nil (the record references a salvage valuation of about $3,000, later possibly under $1,000). Counsel identified several other actors in the record — the City of Newton, the Middlesex district attorney’s office, and in‑court testimony from Toady’s proprietor Dave Donahue — who factor into the factual matrix the court will assess.

The argument concluded without a decision. The court will issue a written opinion resolving whether, and to what extent, a towing vendor may recover storage and preservation costs from an insurer under promissory estoppel, quasi‑contract, or the statutory lien provisions described in the record.

Context: the dispute follows a high‑speed crash in Newton that prosecutors and counsel later investigated; the case raises questions about the interplay between statutory lien limits, common‑law unjust‑enrichment remedies, and the responsibilities of insurers when vehicles are retained as evidence for criminal and civil proceedings.