ARA has been made aware that Westlake Financial Services has recently adopted a policy denying agents’ requests to produce keys for repossessed and stored vehicles. In place of granting such requests, Westlake has begun issuing hold-harmless agreements to agents. While this may seem like an acceptable alternative, ARA maintains that this approach is neither appropriate nor sufficient.
The hold-harmless agreement currently issued by Westlake does not provide true indemnification for agents and contains contradictory language. Specifically, it states that Westlake will “indemnify and hold harmless [Agent] and its employees, agents, representatives, and affiliates (collectively, ‘Indemnitees’) from all claims, demands, damages, lawsuits, or liabilities arising out of or in connection with transporting, releasing, or accepting delivery of the above-described vehicle without fully inventorying any personal property therein.” However, it immediately contradicts that statement with the clause: “except for any claim out of or in connection with not completing or fully inventorying any personal property therein.”
Additionally, several states do not permit the use of hold-harmless agreements as a substitute for proper inventorying and storage of personal property.
To gain further insight, ARA contacted Mike Peplinski, Vice President of Harding Brooks Insurance Agency. Mike advised, “There are some concerning red flags in the Westlake hold-harmless that need clarification. Westlake is not allowing anyone to cut keys but has yet to clarify their indemnification regarding inventory and debtors’ personal property. Please do not sign this HH until Westlake responds and you’ve discussed it with your attorney. Signing contracts without understanding what you’re agreeing to puts your company at risk.”
ARA has requested a meeting with Westlake Financial Services to clarify this change but has not yet received a response. In the meantime, ARA strongly recommends that all agents consult with legal counsel before signing or accepting any such agreement. ARA also urges clients and financial institutions to reconsider the use of hold-harmless clauses in place of allowing agents to produce keys and conduct compliant property inventory and handling procedures. Regardless of intent, these agreements fail to provide adequate protection for agents and their businesses.
ARA remains committed to fostering collaboration among lenders, forwarders, and the agent community to develop solutions that are both legally compliant and operationally sound. ARA encourages Westlake and all industry partners to work collaboratively toward resolving these concerns to ensure agents can continue performing their duties safely, efficiently, and in full compliance with applicable laws.
Todd Case
President, ARA
