Protected Small Business From Out-of-State Auto Dealer’s Aggressive Litigation Tactics

Who do you call when you’ve been in a crash and your vehicle is inoperable? You call a tow truck. 

Our client, a Colorado towing company, responded to a tow request after an accident. The driver signed a tow and store agreement, standard protocol for “consensual tows” like this. 

Unfortunately, this typical tow call for our clients became a legal fight, with aggressive threats from an out-of-state car dealership demanding the wrecked vehicle. Here’s how our litigation attorneys protected this Colorado small business from financial harm.

Colorado Law Allows Tow Companies to Recover Costs

Towing companies often store damaged vehicles until drivers can make arrangements for them. If a driver doesn’t return for their vehicle, state-registered Colorado tow truck operators can have possessory liens placed on vehicles for the costs and fees associated with recovering, towing, and storing cars. C.R.S. 42-4-2105 

The only way a towing company can be sure who owns a vehicle is to run a Vehicle Identification Number (VIN) check through the DMV. A VIN search is standard protocol for nonconsensual tows and considered a best practice by the Colorado Public Utilities Commission for all tows, even consensual tows following car accidents like the one in this case.

When the driver of the wrecked vehicle in this case never returned for it, the towing company took steps to sell it to recover storage fees and the valuable storage space the wrecked car occupied.

Tow Company Questions Validity of Surprise Ownership Claim 

When the towing company fulfilled the required public notice to sell the vehicle, an out-of-state car dealer contacted them, demanding the car. The dealership claimed to be the car’s rightful owner because it was a leased vehicle. 

The towing company requested the following from the dealer to release the vehicle: 

• A hold harmless agreement: A signed liability waiver for any damage to the vehicle or financial losses during storage.

• A certificate of title: The legal document proving ownership of the vehicle. 

• Storage fees: Payment for the balance due.

While the dealership paid the storage fees, it only submitted a partial image of the certificate of title. As a result, the towing company declined to turn over the vehicle, and the car dealer’s attorney threatened to have the towing company’s license revoked. 

Out-of-State Car Dealer Takes Legal Action

The car dealer filed a replevin action against the towing company for not forfeiting the damaged vehicle. People use replevin actions to recover personal property wrongfully taken or detained by another person or business. The complaint alleged our client damaged the car dealer by not returning the leased vehicle. 

In response to the legal action, the towing company retained Robinson & Henry.

After the first court hearing, the car dealership received a pre-judgment order allowing it to reclaim possession of the vehicle. 

But the case didn’t end here.

Opposing Counsel Ignores Facts of Case 

Our litigation attorneys engaged with opposing counsel through mediation, hoping to reach a settlement and avoid court. Negotiations fell through, and opposing counsel tried to convince the court that our client did not have permission to tow the vehicle. The dealership asserted the towing company’s VIN search indicated a nonconsensual tow, when in fact, the driver authorized the tow at the accident scene. 

Opposing counsel unsuccessfully tried to have this piece of evidence removed from discovery before trial because it provided context for our client’s due diligence in running the VIN check. 

Trial Judge’s Verdict Favors R&H’s Client

The VIN check results showed the vehicle’s registered owner was the driver, not the auto dealer. Therefore, our client had every reason to question the dealer’s intentions and no reason to hand over the vehicle without the full certificate of title.

As a result, the judge found in favor of our client, ordering the dealership to pay our client for storage fees, attorney fees, the value of the vehicle, and other costs associated with the lawsuit. 

Now that this matter is resolved, our client can continue to assist Colorado drivers with inoperable vehicles without baseless threats hanging over them.