## Facts

- A bank courier, Ronald Armstead, parked a bank-owned station wagon in a clearly posted “No Parking Rush Hour Zone” while making a delivery to a branch office.
- The vehicle’s rear compartment contained four locked, clearly marked bank dispatch bags holding checks and other valuable documents; the bags were visible through the vehicle.
- Armstead had repeatedly parked illegally at the same location, had received multiple tickets, and had been warned by enforcement personnel; the bank did not discipline him for the conduct.
- A parking control aide began ticketing the vehicle, and a tow truck operated by the District’s private contractor, Transportation Management, Inc. (TMI), arrived shortly thereafter.
- Armstead protested the tow and attempted to remove the dispatch bags, but TMI employees proceeded with the tow and did not allow him to retrieve the bags.
- The vehicle was towed to the District’s impound lot and reclaimed about 90 minutes later.
- One dispatch bag was missing when the vehicle was returned; the driver’s door was unlocked, with no signs of forced entry.
- The bank sued the District and TMI for breach of bailment and conversion; after a bench trial, the court treated defendants as gratuitous bailees requiring gross negligence, found no gross negligence, rejected conversion, and also found contributory negligence and assumption of risk based on repeated illegal parking.

## Issues

1. Whether towing and impoundment created a bailment for hire (ordinary care) or a gratuitous bailment (gross negligence).
2. Whether the bailment covered the visible dispatch bags and their contents even without precise knowledge of their value.
3. Whether the bank’s illegal parking practices constituted contributory negligence or assumption of risk barring bailment recovery.
4. Whether the unexplained disappearance of the dispatch bag supported a claim for conversion against the District or TMI.

## Decision

- The court affirmed judgment for the District and TMI on the conversion claim.
- The court reversed the judgment on the bailment claim and remanded.
- The court held the District and TMI were bailees for hire and owed a duty of ordinary care, not merely liability for gross negligence.
- The court held the bailment encompassed both the vehicle and the visible dispatch bags and contents.
- The court held the bank’s illegal parking and failure to correct Armstead’s conduct did not bar bailment recovery because it was not the proximate cause of the loss while the property was in defendants’ custody.

## Legal Principles

- A tow-and-impound arrangement that provides mutual benefit (traffic enforcement for the government and compensation/fees for the tow contractor) constitutes a bailment for hire subject to an ordinary-care standard.
- A bailment of a vehicle generally includes visible contents whose presence indicates value; the bailee need not know the precise nature or exact value of those contents to owe a duty of care for them.
- Contributory negligence or assumption of risk does not bar recovery where the plaintiff’s prior wrongdoing merely furnishes the occasion for the bailment but is too remote to be the proximate cause of a loss occurring during the bailee’s exclusive custody.
- Conversion requires proof that the defendant intentionally exercised dominion or control over the property inconsistent with the owner’s rights; an unexplained loss, without evidence of wrongful appropriation by the defendant, is insufficient.

## Conclusion

The court held that towing and impounding an illegally parked vehicle created a bailment for hire requiring ordinary care, that the bailment extended to visible dispatch bags and their contents, and that the bank’s illegal parking practices did not preclude bailment recovery because the loss occurred during defendants’ custody; however, the bank failed to prove conversion.


First Am. Bank, N.A. v. District of Columbia, 583 A.2d 993 (D.C. 1990)