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Wednesday, June 3, 2009

New MI Law Makes It Harder For Drivers To Appeal To Judges After Vehicle Is Impounded

Here's the 5/24/09 story from the Detroit Free Press:
Judges and consumer advocates are sounding a warning about a new state law that makes it harder for Michigan drivers to appeal to a judge after their cars have been impounded as abandoned vehicles.The law, enacted last year at the behest of the state's towing industry, requires vehicle owners to post their entire towing and storage bill before they can ask a judge to determine whether the tow was proper and the storage fees reasonable.

In many cases, that could mean having to pay hundreds or thousands of dollars in towing and storage fees.

The Michigan Towing Association said it pushed the law to prevent drivers from walking away from their financial responsibilities and vehicles -- especially clunkers -- after judges invariably deny the drivers' appeals and order them to pay the towing and storage bill. It said many of the appeals were frivolous.

"Many people were simply rolling the dice in hopes of getting their cars back," said Lansing lobbyist Bill Zaagman. "They either didn't show up for court, or showed up and lost. Either way, the towing and storage companies were stuck with a largely worthless vehicle."

Previously, some courts allowed drivers to pay as little as $65 to get a hearing.

But consumer advocates and some judges say the new law will make it harder for people with legitimate grievances to get their day in court.

"Poor people aren't going to be able to afford this," said Mark Plawecki, chief judge of the 20th District Court in Dearborn Heights. "This law closes the courthouse door to some people. I think it's very unfair."

Angel Reed, 25, of Detroit found out about the new law last month when a 36th District Court judge in Detroit dismissed her appeal of a $1,075 towing and storage bill on her 1995 Mercury Villager.

The judge told Reed she could refile her petition after posting the towing and storage fees -- which Reed said she can't afford.

"My vehicle was important to me, and it was not abandoned," Reed said. "This is so unfair."

Leave your car unattended on public or private property and you could wind up like Reed.

Reed, 25, a single mother of two and a medical assistant at a Detroit clinic, said she left her 1995 Mercury Villager on an east-side residential street in October 2007 so a friend could troubleshoot a mechanical problem. A couple of days later, her vehicle disappeared.

Unbeknownst to Reed, the police had ordered her van towed, possibly in response to a neighbor's complaint. Three months later, authorities notified her that her van was sitting on a private storage lot, accumulating $8 per day in storage fees.

Faced with a $600-plus towing and storage bill she couldn't afford to pay, Reed appealed to 36th District Court and waited for a hearing that never came -- because she had improperly filed the paperwork and didn't realize it until more than a year later. Reed refiled her claim in April.

But at a hearing April 28, Chief Judge Marylin Atkins dismissed Reed's appeal and a dozen others because they were filed after a new state law took effect requiring owners of abandoned vehicles to post their entire towing and storage fees before they could be heard by a judge.

Reed, heartbroken, said she later discovered that her van had been heavily vandalized. She blames the police and the storage lot, saying her van should never have been towed. The police and the lot owner say the van was damaged before it was towed.

"I'm going to have to suck this up as a loss," Reed lamented, saying she has had to rely on friends, relatives and taxis to get around. "There's nothing else I can do."

Atkins said she had no choice but to dismiss Reed's appeal.

"As a judge, I'm absolutely bound to follow the law," she said.

Atkins and other judges said the new law makes it more imperative than ever that drivers -- especially the newly unemployed and others who are struggling to pay their bills because of Michigan's economic meltdown -- park where they won't get towed.

And if they do get towed, the judges said, they must immediately redeem their vehicles to prevent the daily storage fees from escalating.

The Michigan Towing Association, which lobbied for the new law, said that's precisely what Public Act 539 of 2008 was designed to achieve.

The law, which handily passed the Legislature with little fanfare last year and was signed by Gov. Jennifer Granholm on Dec. 31, is the latest installment in an eight-year crackdown on abandoned vehicles.

Sometimes the vehicle is a newer model worth thousands of dollars that angry owners are eager to redeem. But more often then not, they're older cars that, while possibly valuable to their owners, rarely are worth the price of the towing and storage fees. In other cases, owners ditch them on the side of the road after a mechanical breakdown.

"Abandoned vehicles are a terrible problem, especially in Detroit," said Warren Police Chief William Dwyer, a former Detroit police executive. He said the vehicles are a target of vandals, pose a safety hazard to neighborhood children and are eyesores. They also distract police from crime-fighting.

In 2008, the Michigan Secretary of State sent abandoned vehicle notices to 79,500 vehicle owners. It has sent out 26,700 notices so far this year.

The towing association said it lobbied for the new law because its 200 members were tired of losing money disposing of the state's vehicle litter.

Under the old law, the group said, car owners had to pay $65 to contest towing and storage fees and post a $40 abandoned vehicle fee.

"It became a crapshoot because they had so little invested in the hearing," said Bill Giorgis, owner of Mike's Wrecker Service in Saginaw and former towing association president. So, they'd file an appeal on the outside chance that a judge would rule in their favor.

When the judge rejected their claim, Giorgis said, drivers refused to pay their towing and storage bills and walked away from their cars, which were in such poor condition, they didn't attract any bidders at subsequent police-supervised vehicle auctions and had to be sold as scrap for $200 -- too little to cover the towing company's costs.

"Towers are one of the few entities that provide 24-hour emergency service, whether we get paid or not," Giorgis said. "Whenever we incur legal delays in disposing of vehicles, we can't turn cars into money to pay our employees and our fuel, insurance and equipment bills."

Requiring drivers to post accrued storage and towing fees will force drivers, especially those who own clunkers, to decide early on whether they're serious about redeeming their vehicles or letting the towing and storage companies auction or sell them as scrap, he added.

"It's not a very profitable line of work," added Sheila Gismonde, owner of H&B Land, a Detroit towing and storage company where Reed's vehicle wound up. She said she likely will assign Reed's case to a collection agency if Reed doesn't redeem her vehicle.

Gismonde, one of two-dozen towers for the Detroit Police Department, said she relies on more profitable police towing assignments, which often involve more valuable vehicles that are towed because of accidents, criminal investigations or illegal parking.

Many judges are bothered by the new law. Several Wayne County judges shook their heads in a briefing last month.

Some told the Free Press that, while all but a few motorists are to blame for their vehicles being towed, the law will prevent low-income motorists, including those with legitimate grievances, from getting into court.

"It's outrageous," Lorray S.C. Brown, consumer law specialist at the Michigan Poverty Law Center, a nonprofit group at the University of Michigan, said of the new law. "Talk about the denial of access to the courts. Poor people will find it difficult to pay those fees upfront."


Contact DAVID ASHENFELTER: dashenfelter@freepress.com
The law on abandoned vehicles

A vehicle is considered abandoned in Michigan if it's left on a city street or other public property for 48 hours, on a state highway for 18 hours or on private property without the owner's consent. It can be towed immediately if it's on a state highway without a license plate.

The law also says:

# Abandoning and failing to redeem a vehicle is a civil infraction that can result in a $50 fine. The last titled owner is presumed to have abandoned the vehicle unless the owner can prove otherwise.

# A private property owner can have a towing company remove a vehicle left without permission. But commercial property owners or operators must post warning signs.

# The police must notify the Secretary of State within 24 hours of towing by making an entry in the Law Enforcement Information Network computer. The state has seven days to send a notice to the vehicle owner and the finance company. The owner has 20 days to redeem the car or appeal the towing and storage fees to a municipal or district court.

# To appeal, the vehicle owner must pay a $65 filing fee, a $40 abandoned vehicle fee and the accrued towing and storage fees, which enables the owner to retrieve the car.

# The court must conduct a hearing within 30 days and decide whether the police, private property owner, towing company or storage lot should reimburse the vehicle owner if the fees were improper. If the vehicle owner loses, the car must be redeemed within 20 days or it can be sold at auction or as scrap.

# The finance company can redeem the vehicle if the owner doesn't by paying the fees.

# Auction or scrap proceeds are applied to towing and storage fees and other expenses. Any surplus goes to the car owner or the finance company. If the auction or scrap sale doesn't cover the costs, the towing and storage company can pursue the vehicle owner to collect the rest.

# The maximum storage fee is $1,000.

# Car owners can run the license plate or vehicle identification number on http://services.sos.state.mi.us/autolostandfound to find out whether their cars have been towed.

Sources: Michigan State Police and Free Press research

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