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Wednesday, June 3, 2009

Bank Seeks Role In IL Towing Fight

Here's the story from The Republican:
Sunday, May 31, 2009

SPRINGFIELD - An area bank is seeking to intervene in a court battle between the city and its terminated towing contractor, due to the contractor's defaulted loan of more than $70,000.

United Bank of West Springfield recently filed a motion in Superior Court, seeking to intervene in the civil case involving the city and CF Inc., doing business as the Springfield Towing Alliance.

CF Inc. owes the bank $70,619, plus interest, and the bank "is trying to protect its rights in terms of repayment of the defaulted loan," said bank lawyer Jerry B. Plumb Jr. on Friday.

The city terminated its contract with the alliance last November after accusing it of 17 significant contract violations, including owing the city more than $142,000 in fees.

In addition to the funding dispute, the city claims that the alliance's towing forms and weekly reports were incomplete, payments were repeatedly late, and the firm failed to provide final invoices as required by contract. The city also claimed, following its own audit, that there was under-reporting of tows and unauthorized credits taken by the alliance.

The city also stated that the company initially failed to submit criminal background checks on tow-truck drivers, and that a performance bond was deemed invalid by the city.

The alliance, through its president, Robert L. Jones, and its lawyer, Mickey E. Harris, has repeatedly defended its past performance and compliance with its contract. The loan from United Bank helped establish the alliance and helped it "stay afloat" before the termination, Harris said.

Under a temporary arrangement, four local companies have shared towing duties, as hired by the city since the alliance was terminated.

Both Harris and City Solicitor Edward M. Pikula said on Friday they will not object to the bank's motion to intervene.

"CF Inc. has no objection to United Bank intervening," Harris said. "The reality is that the city of Springfield, in terminating this contract, disrupted several business arrangements in the city, which certainly impacted United Bank, each of the nine members (subcontractors) of the towing alliance, CF Inc. itself, and certainly is responsible for the reduction in the quality of service being provided the citizens of Springfield."

Pikula said the termination of the contract and termination of the alliance's lease and use of the city's storage yard on Chandler Street "was in the best interest of the city."

"The only issue now is how much the city is owed, and how it collects the money," Pikula said. "With regard to towing, we are moving closer to having a new system in place which will protect consumers as well as taxpayers."

The city has secured a temporary court order preventing the towing alliance from removing about 600 cars from the city's storage yard, that were towed by the alliance but remained unclaimed by motorists. The fate of those cars, including some held as police evidence, remains in dispute, officials said.

Pikula said the bank's intervention, if allowed by the court, may help resolve what happens with the stored cars. The city has kept watch over the lot with at least one on-duty police officer 24 hours a day since November, officials said.

Harris said he believes an ongoing state review of the towing contract termination "will reflect that CF Inc. is owed a substantial amount of money associated with the contract." The city has disputed claims of funds owed.

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