A state agency ruled this week that local tow operator Beard’s Towing failed to operate with honesty, trustworthiness, and integrity. The same day, the city of Arlington approved a $150,000 three-year contract with the towing company.
The Texas Department of Licensing and Regulation issued a notice of alleged violation against Beard’s Towing on Sept. 13. The department offered Beard’s Towing a reduced penalty of $7,500. If the company asks for a hearing, that penalty could grow to $10,000 and a one-year full suspension of the company’s towing license.
The contract was included on Arlington City Council’s consent agenda. The motion to approve the contract passed unanimously.
A clause in Arlington’s contract with Beard’s Towing allows the city to terminate the agreement if Beard’s Towing were to lose its license, said Susan Schrock, a city spokesperson.
Beard’s Towing did not receive notice of the alleged violation first, the company’s lawyer Matthew Bobo said. Instead, the notice was sent to the Fort Worth Police Department, eventually reaching Arlington City Council, Bobo said.
“It seems that we’re always the last to receive information from TDLR,” Bobo said. “Luckily, the (Arlington) mayor and City Council saw past all that and said, ‘Whatever’ and granted the contract.”
The state department disputed this claim. Bobo received notice of the alleged violation, said Tela Mange, chief spokeswoman for the Texas Department of Licensing and Regulation.
The department also notified the Fort Worth police detective who investigated alleged criminal violations against Beard’s, a Fort Worth police department assistant chief and Fort Worth’s associate city attorney, Mange said.
Fort Worth previously suspended its relationship with Beard’s Towing on March 31, pending dual state and local investigations into the alleged fraudulent activity. The suspension is indefinite, subject to the results of any appeals, said Assistant City Manager Fernando Costa.
The Fort Worth Police Department recently completed its criminal investigation into a Beard’s Towing employee. The Tarrant County District Attorney’s office accepted the case.
The Texas Commission of Licensing and Regulation is the governing board and policy-making body for the Texas Department of Licensing and Regulation. It has the authority, under Texas law, to adopt rules, impose sanctions, penalties and issue final orders in contested cases.
Beard’s Towing files a lawsuit against TDLR
Beard’s Towing filed a lawsuit Sept. 13 in the 250th Civil District Court in Travis County against the Texas Department of Licensing and Regulation, Texas Commission of Licensing and Regulation and Training of Wrecker Services, a provider of continuing education for the state department, asking for monetary compensation between $250,000 and $1 million.
“This is a combination of Fort Worth PD and TDLR thinking they had something, and it turns out they don’t and they don’t know how to get out of it,” Bobo said. “It’s basically just a witch hunt against Beard’s, and we will find out in the course of this litigation who started it.”
The company claims the department’s investigation into the company cost it a contract with the city of Fort Worth, resulting in $568,458.06 in lost revenue from March 31 through August 2022.
The Texas Department of Licensing and Regulation is not aware of any lawsuit filed against it by Beard’s Towing, Mange said in a statement.
A Fort Worth Police Department arrest affidavit obtained May 11 by the Fort Worth Report accuses Jennifer Gaither, an instructor for Training of Wrecker Services and a dispatcher for Beard’s Towing, of falsifying training records to obtain a state license.
The lawsuit alleges that it was Training of Wrecker Services, not an employee of Beard’s, who falsified information on Beard’s Towing’s employees’ attendance sheets. The lawsuit accuses the training company of fraud and breach of contract.
The Texas Department of Licensing and Regulation is not currently investigating Training of Wrecker Services. It previously investigated the company in 2017; that case against the company was closed the same year.
The lawsuit also accuses the Texas Department of Licensing and Regulation and the Texas Commission of Licensing and Regulation of “overzealous, arbitrary, discriminatory and legally unsupported enforcement actions.”
The lawsuit goes on to state that the Texas Department of Licensing and Regulation previously opened an investigation into Training of Wrecker Services but later turned its investigation to Beard’s. The department accuses Beard’s of violating the Texas Administrative Code, by way of Training of Wrecker Services negligence, the complaint alleges.
Beard’s Towing cannot be held responsible for administration of continuing education courses and participant attendance, the lawsuit claims.
“Despite the responsibility for providing continuing education services being only on TOWS, the only investigation and pending enforcement actions involving this matter have exclusively targeted Plaintiff (Beard’s Towing),” the lawsuit states.
Beard’s Towing alleged offense of failing to operate with honesty, trustworthiness, and integrity is too vague to be enforceable, the lawsuit argues.
The standard of honesty, trustworthiness, and integrity is “inappropriately subjective and vague, and could create inconsistent barriers to licensure for otherwise qualified applicants,” the Sunset Commission during their review of the Texas Department of Licensing and Regulation said.
“A prosecutor’s whim was the only element of this alleged offense,” the lawsuit states. “This … allegation has been a powerful tool of abuse that has been used to revoke licenses, destroy small businesses, and relieve the state of proving any mindset elements in what is essentially a fraud allegation.”
Training of Wrecker Services could not be reached for comment.
Fort Worth PD ends investigation, charges are filed
Following two arrests on May 9 and June 24, Gaither was charged by the Tarrant County District Attorney’s office with tampering with a government record.
Gaither, an instructor for Training of Wrecker Services and a dispatcher for Beard’s Towing, allegedly signed the names of eight Beard’s Towing employees on a sign-in sheet for a Training of Wrecker Services course without informing workers, according to the warrant.
She is still employed by Beard’s Towing, an attorney for the company said.
Shawn Tallant, a former employee of Beard’s Towing, was one of the employees whose name was signed. He submitted a police report March 8, alleging that employees of Beard’s Towing knowingly forged signatures to avoid completing mandatory training to maintain a Towing Operator and Incident Management Certification Licensing, according to the warrant.
Beard’s was one of at least 23 approved towing companies the city of Fort Worth uses. AutoReturn, a national company based in San Francisco, manages the companies as subcontractors for about $525,000 each year. The company first entered into an agreement with the city in 2018, and the current contract expires in September.
Under the contract with AutoReturn, the city has several disciplinary options for subcontractors, including mentoring the company, issuing temporary suspensions for up to 90 days and permanently suspending the company from the city’s list of approved towing providers.
Originally, the city’s contract with Beard’s extended into 2023, according to assistant city manager Fernando Costa. The contract was suspended after the city learned of the allegations against the company.
Beard’s has been in business since 1954, and city records show the company has secured contracts with Fort Worth since at least 2012.
Gaither’s last court date was scheduled for Sept. 15. It was a preliminary hearing, said Steve Gebhardt, Gaither’s lawyer.
Editors note: This story was updated Sept. 16 to reflect the correct origin of a study on the Texas Department of Licensing and Regulation. A previous version of the article incorrectly identified its origin.
Rachel Behrndt is a government accountability reporter for the Fort Worth Report. Contact her at firstname.lastname@example.org or via Twitter. At the Fort Worth Report, news decisions are made independently of our board members and financial supporters. Read more about our editorial independence policy here.