Read and BRIEFLY and SHORTLY explain First American Bank v. District of Columbia

Appellant First American Bank employed Ronald Armstead as a courier whose duties included making deliveries between the bank's various branch offices and the main office. One afternoon, at approximately 4:20, Armstead parked the bank's station wagon near the entrance of Branch 13 on 7th Street, N.W., in violation of "No Parking Rush Hour Zone" signs, which were in clear view of Armstead. Four locked bank dispatch bags, marked as such, which Armstead had just picked up from four different branches, were in the rear luggage compartment of the station wagon and in plain view of anyone looking into the vehicle. The dispatch bags contained checks and other valuable documents.

Armstead had received tickets for illegal parking at this particular spot on at least five prior occasions and had been warned against future violations by traffic enforcement personnel. Traffic enforcement personnel had counseled Armstead to park across the street during rush hour to avoid being ticketed or towed. Armstead, who had received numerous parking tickets during his employment with the bank, would simply give the parking tickets to a supervisor for payment. The bank did not reprimand or discipline Armstead, nor did it dock his pay, for the parking tickets.

Within a short time after Armstead entered Branch 13, a parking control aide approached the bank's station wagon and began writing up a ticket for illegal parking. Almost immediately thereafter, a tow truck owned by Transportation Management, Inc. (TMI) arrived at the scene. While the parking control aide was completing the ticket and the tow truck operator was simultaneously preparing to tow the car, one of the employees at Branch 13 alerted Armstead that the bank's vehicle was being towed. Armstead, carrying a dispatch bag, ran out to the vehicle and told the tow truck operator that, as the driver of the vehicle, he was prepared to drive the vehicle away immediately. When the tow truck operator ignored his request to return the vehicle, Armstead asked that he be allowed at least to remove the dispatch bags from the vehicle. The tow truck operator, however, also ignored this latter request, and instead entered the truck and began to drive away with the bank's vehicle in tow. The crane form filled out by the tow truck operator indicated that the doors, trunk, and window of the bank's station wagon were locked when it was towed from 7th Street. When the tow truck operator arrived at the Brentwood impoundment lot at 4:45 p.m., the dispatch bags were still inside the luggage compartment of the vehicle. The tow truck operator observed the District's lot attendant test all the doors and the rear gate of the vehicle. The lot attendant found them all locked and so certified on the same crane form.

One and a half hours later, the bank's supervisor of mailroom couriers paid for the vehicle's release and retrieved it from the impoundment lot. The bank supervisor found the driver's door unlocked and one dispatch bag missing. There were no signs of forced entry, nor were there signs of the tape which is customarily affixed to car doors at the impoundment lot. The dispatch bag was never found, nor have the police identified or apprehended anyone who may have removed it from the vehicle. The value of the checks and other papers contained in the dispatch bag was determined to be $107,561

The trial court ruled that the District and TMI were gratuitous bailees and therefore liable only for gross negligence. The trial court further ruled that First American did not meet its burden of proving that the District and TMI were grossly negligent, and that even if the defendants had been grossly negligent, First American was precluded from recovering because it was both contributorily negligent and assumed the risk. As for the claim of conversion, the trial court ruled that there was no conversion because the initial seizure of the vehicle was lawful. We affirm the disposition of the claim of conversion, but reverse on the bailment issue

There is no dispute here that TMI and the District had sufficient possession and control of the bank's vehicle to establish a type of bailment. he question we must resolve is whether the bailment was gratuitous or for hire. A bailee that takes possession of goods solely for the benefit of the owner is a gratuitous bailee and liable only for gross negligence, willful acts or fraud.A bailment for hire relationship may be created even in the absence of an explicit agreement

The District and TMI actively took possession of the bank's vehicle with the expectation of deriving benefit therefrom. In addition to furthering its interest in insuring the smooth flow of traffic, the District tows and stores illegally-parked vehicles for compensation. Likewise, TMI is under contract with the District for the purpose of towing illegally-parked vehicles to impoundment lots. Owners of vehicles, on the other hand, receive the direct benefit of having their vehicles safeguarded in the city's impoundment lot until they are ready to retrieve them. As users of the District's roads and highways, they also benefit indirectly from the District's practice of towing illegally parked vehicles that impede the flow of traffic.

We hold, therefore, that the District and TMI are held to the standard of ordinary care when they tow and impound illegally-parked vehicles

In view of the foregoing, we reverse and remand this case for a determination of whether the city and TMI exercised ordinary care in safeguarding the bank's vehicle and its contents